Ahmad Mohd Magad
Singapore
“The participants were proudly spoilt and present their national attires, the mainland Chinese would tell stories about the differences in their culture and practices from ours and the Indians would cook their best sumptuous dishes for us.”
“Sir, anecdotal data suggest that there is an increasing number of families who have sold their flats twice but are unable to afford another flat from the open market due to cash flow or other financial problems. There are also others, for one reason or another, who are no longer eligible to purchase another subsidised flat.”
“I would also like to know whether HDB could process applications for sales of balance flats faster as feedback received suggests that applicants are frustrated by the long waiting time and the uncertainty of whether or not they are going to get their flats allocated. Income ceiling for HDB flats”
“Furthermore, for single mothers who are working, many of them are possibly unaware of the childcare schemes that they can make use of. I hope that MCYS, with the cooperation of Malay/Muslim organisations, can spread the message about the choices available to fulfil this need.”
“Many small and medium enterprises (SMEs) in the manufacturing industries face challenges in sending their workers for training and skills upgrading.”
“Sir, 2009 also saw quite a significant shrinkage in maritime activities in Singapore. With the economy on the mend, could the Minister provide an update of MOT's efforts to prepare and capitalise on the economic upturn and enhance Singapore's position as a global maritime hub?”
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“It will generate higher business volume, bring greater critical mass, which translates to higher corporate tax collections, increase in the pool of wealthy people, which in turn would enable the Government to collect more individual taxes and, therefore, hopefully contribute to budget surpluses in future years. To conclude, Sir, I would reiterate that this Budget is indeed a landmark budget in that it delivered on the Government's promise to plough back the fruits of the past two years' economic success while at the same time, it introduced innovative initiatives to develop fresh industries and build on our country's own intellectual property. I am confident that it would go a long way in reinforcing to Singaporeans of the Government's endeavour to build a strong, caring and inclusive society as we forge ahead to enhance our relevance to this globalised world. On that note, Sir, I support Prime Minister Lee's Budget Statement. 1.02 pm”
“The expectation is for the specific scenarios or circumstances to include: (1) Dividend income remitted from foreign holding companies which, although not subject to foreign tax at the holding company level in the foreign country's jurisdiction, is subject to foreign tax at its subsidiary level in that jurisdiction. Consequently, the underlying income would be subject to double taxation, both at the foreign level and, once again, at the Singapore parent level, on remittance to Singapore; (2) Foreign sourced income, which is not subject to tax in the foreign jurisdiction but significant business activities are carried out in the foreign jurisdiction. Sir, these are just a few examples where further fine-tuning or removal of uncertainty would help in the process of creating a higher degree of dynamism in the wealth management environment here. Being the most politically stable country in the region, coupled with our diverse language ability in English, Chinese, Malay and Tamil, Singapore is well-positioned to reach out to the rapidly increasing number of wealthy people throughout Asia who will want to invest their excess funds to generate good returns. Increased vibrancy of the wealth management industry which is robustly regulated, will also bring with it a whole spectrum of ancillary services such as more sophisticated legal and accounting functions, custodian services, etc, and also with it, the much sought after top talent that will develop and equip more Singaporeans with a new set of financial and corporate management skills.”
“The recent Budget further proposed relaxation of tax treatment of qualifying Islamic financial products, which is certainly laudable. However, Sir, the gains or profits earned by the financial institutions in lieu of profits will be recognised as interest. Unfortunately, the concept of regarding them as interest in the books of the financial institutions is insensitive to the belief of Islam. Interest or riba is haram or forbidden in Islam. It may be quite all right for a conventional bank with an Islamic finance window to record such earnings as interest, but I would like the Minister to consider being more liberal in allowing pure Islamic institutions desirous of setting up here to use another suitable terminology other than "interest" without changing the accounting treatment. Such flexibility will go a long way in attracting more Middle East funds to Singapore. Next, under Qualifying Foreign Trusts (QFTs) which are taxed at the concessionary rate of 10%, while the incentives would be enhanced in the proposed change, the current position is that a trust would be regarded as a qualifying foreign trust if its settlers and beneficiaries are individuals who are neither Singapore citizens nor resident in Singapore, or foreign companies. I feel the current definition of QFTs is rather restrictive. Its expansion to include other forms of legal entities would further enhance the effectiveness of this incentive in exempting income derived from trust arrangements. On Foreign-Sourced Income Exemption (FSIE), the proposed change would grant tax exemption to the current FSIE regime, if they are remitted under certain scenarios or circumstances, with details to be announced in due course.”
“Sir, as I noted last year, if the SRS could be repackaged and section 5 could be revamped taking into consideration the points that I just raised, these could draw economic benefits beyond just meeting the needs of Singaporeans. They would have positive implications on the wealth management industry as well. If long-term products with attractive tax benefits could be offered, they would not only attract foreign talent who would be satisfied with a flexible pension package available to him, but also foreign nationals who are always on the look-out for safe and tax-incentivised environments to park their funds. I would like to repeat the proposal made last year, that a Special Task Force be formed to conduct a holistic review of the SRS and section 5 to enable more channels to be opened for retirement savings. Sir, reverting back to the other changes unveiled to improve the competitiveness of our tax regime for businesses, many of these changes were hailed as innovative and forward-looking. However, some of them could be tweaked for better clarity or to make them more attractive. First, Sir, on Islamic finance and banking. I am glad that there has been quite intense activity in this area since the Minister for Finance announced the removal of double imposition of tax duties on Islamic transactions involving real estate, and also accorded concessionary tax treatment on Shariah Bonds during last year's Budget. Senior Minister Goh's several visits to the Middle East, coupled with a series of signing of FTAs with a number of Middle Eastern and Gulf state countries, further underscore our seriousness in seeding Islamic finance and banking in Singapore.”
“It appears that the main way forward to ensure sufficient provisioning for retirement, other than people undertaking to save more for their own future needs, is to encourage employers to contribute to it. In this regard, several employer groups that my GPC members and I met with, strongly advocated that existing legislation governing tax approved schemes are widened and made more flexible so as to enhance their appeal to both the employer as well as the employee. This would entail a re-examination, Sir, of section 5 of the Income Tax Act. The lack of implementation of schemes at the company is attributable to seemingly complex approval procedures and the high establishment and administrative costs. It also currently prescribes that each company implementing such a plan operates its own trust fund, which makes it expensive to manage. Basically, I would like to propose that this section be amended to permit companies to establish retirement schemes that will allow employers and/or employees to contribute directly to a retirement savings plan. It could be loosely modelled after the US section 401(K) scheme. The contributions would be in addition to CPF and should be structured such that employee contributions are simple to make, are tax-exempt, and that the accumulated benefits are portable. To keep costs low, companies, especially SMEs, should be allowed to pool their funds under a common trust manager for economies of scale. Participation of the fund should also be extended to foreign employees, especially executive talent, as such people cannot participate in the CPF scheme.”
“Sir, let me now move on to the subject of retirement funding. With increasing life expectancy of Singaporeans and the Government's position of steering clear of state welfare programmes for retirement, it is imperative to ensure that Singaporeans have sufficient funds to carry them through this uncharted phase of their lives. The majority of Singaporeans can only look up to the CPF - for whatever little there is to look up to - for their retirement. It is now more evident than ever that the CPF, with the lowering of employer CPF contribution ceiling caps based on salary level and contribution rates based on age, has resulted in reduction in retirement saving rates as a percentage of salary for many employees. Similarly, the Supplementary Retirement Scheme (SRS), unless revamped, is stagnating, because its contribution cap is stringently tied to declining CPF contribution and it is also stifled by its own complex mechanisms and restrictions. Several Members of this House, including Miss Penny Low and myself, spoke on the need to thoroughly review this scheme and proposed the urgent need to set up a task force, but our calls went unheeded. With this second call, I hope that at least some attention could be given to the SRS which, in fact, started as a promising scheme but now appears to be heading for a natural death. Sir, the adequacy of the retirement nest-egg for Singaporeans is in a serious state. Looking at current demographic trends, it can only get worse, if nothing is done at this juncture. With this current state, we are not even referring to provisioning for retirement enjoyment, save those in the high-income bracket, but merely having enough to survive the twilight years.”
“The economic difficulties we were confronted with as we entered the new millennium have encouraged many young Singaporeans to try new and different approaches. This is encouraging because, as our economy matures, the job market profile will change radically and, therefore, entrepreneurship should be looked upon as a serious alternative to full-time employment. I am encouraged, for example, to note Douglas Foo's Sakae Sushi chain of restaurants has spread to cities like Beijing, Bangkok, Jakarta, Surabaya and Manila. This is an example of a Singaporean capitalising on a market niche. Owing to their limited resources, we need to equip our small companies with the skills to focus on very specific areas where they can develop sustainable competitive advantage in. They can develop strong competencies when their resources are focused in narrow areas. I know the Government is creating as supportive an environment as possible to foster entrepreneurship. But if we are serious in wanting Singaporeans to take on entrepreneurship as a career option, we must make sure that, from secondary school, our students learn to think beyond Singapore due to our small market. As Minister George Yeo puts it, "Our minds must be much larger than our geographical confines. If we are too home-bound in our thinking, we will not succeed." Sir, recognising the need for entrepreneurs to look beyond Singapore, they have to put up with greater risks when venturing abroad and, more often than not, will require financial staying power to get their ventures to take off. In this regard, Sir, they could certainly benefit from more tax reliefs, such as more generous treatment of carry-back of tax losses beyond the $100,000 relief that was granted in last year's Budget.”
“Considering that many SMEs are supporting large MNCs in many aspects, the centre could also play a catalytic role in bridging collaboration between the two parties in terms of participating in some of the R&D needs of MNCs, so that our SMEs could continue to meaningfully support the needs of the MNCs. Sir, the PM also mentioned that IPR protection is a crucial factor for R&D to sink deep roots here. I agree with the PM that Singapore has built a name for itself as a trusted party for foreign businesses to locate their high content activities in our country. I have no doubt that this will further boost high-end activities here but, again, my concern is for small and budding entrepreneurial businesses here. The IPR concept is alien to many of them. With the Government strongly emphasising entrepreneurship as an alternative to jobs, the education on IPR should also begin at the school bench and permeating through the rest of the SME community. To foster and speed up innovative activities among new entrepreneurs, it would be beneficial to provide an IPR infrastructure that is relatively inexpensive, less cumbersome and accommodative of inventions with short commercial life. This will help to promote and support a culture of innovation and enterprise and assist start-ups. Australia has two systems of second-tier patents: petty patents and innovation patents. The development of the Australian second-tier patent protection is premised on the need for a quick, less expensive and more easily obtainable patent protection for product inventions with short product life cycles. I would like to suggest that we look at these models and modify them to suit Singapore's evolving entrepreneurial needs. This brings me to the subject of entrepreneurship per se.”
“MNCs know very well what to do to take advantage of the funds, but how do we make the schemes more easily accessible to our SMEs so that more could become the MNCs of the future? We must never forget that they form an integral part of our enterprise ecosystem and provide significant employment to our workforce. I know there are the long-standing LETAS and LEFS schemes to support technical upgrading and provide low-cost financing respectively, and the more recently introduced schemes, such as the GET-UP Programme and the Operation and Technology Roadmapping (OTR) and the Technology for Enterprise Capability Upgrading (T-Up), to help SMEs develop Technology Roadmaps and enable them access to researchers in research institutions. But let me ask: how many have taken up such schemes, particularly the technology-related ones? I am quite confident the numbers are low. We need to do more for the SME sector to have them leverage on technology so that they remain relevant in this increasingly competitive business environment. I would like to propose that we establish a coordinating body where SMEs could readily approach to assist them in assessing their technology gaps and pairing them with appropriate research institutions to help them move up the technological ladder. Strong incentives should be given in key technology areas, such as precision engineering, food manufacturing, photonics and logistics, to spur them to innovate and deepen their capabilities. The incentives should extend to include product and process development and commercialisation of their R&D efforts.”
“I am comforted that over the last week after the Budget was unveiled, there was significant analysis being done by the finance and accounting fraternity about the benefits that lie behind the Budget, and it is my hope that these are cascaded down to the business community, particularly the SMEs. The budget adjustments this year also demonstrate the Government's readiness to adjust and implement innovative changes not only in response to the competitive landscape but also to continually position Singapore as far ahead of the curve as we can get. But, Sir, beyond the much welcome changes, there are improvement suggestions to some of the measures that I would like to make here and a few more specific ones during the Committee of Supply debate. First, in spelling out the main objectives of the Budget, I am pleased to note that a slew of measures have been announced by the Prime Minister to propel our economy forward. Tied to positioning Singapore to become a knowledge hub in Asia is our extensive investment in research and development (R&D). Apart from the announced $5 billion R&D Trust Fund, the current Science and Technology Plan 2005 has $6 billion set aside, which includes $4 billion to boost local R&D capabilities and $2 billion to promote local private-sector R&D. In the very recently released S&T Plan 2010, the Government is earmarking a whopping $13.55 billion to several agencies to propagate R&D at various levels. This is truly serious business to set us ahead in the economic marathon that has no finish line. While this pursuit will undoubtedly make Singapore an increasingly attractive knowledge hub and create high-end activities and correspondingly high-quality jobs, my concern again is how our SMEs could reap a fair share of these huge funds set aside.”
“We should endeavour to understand the extent of how well our SMEs are benefiting from the many schemes and measures devised specially for them and educate them of how these can translate into tax savings for them. Sir, notwithstanding our low effective tax rates, I would like to draw attention to the fact that we are behind Hong Kong, in terms of the fiscal burden ranking, based on the Heritage Foundation's 2006 Index of Economic Freedom. This means that companies that are here or are intending to locate here, which could not benefit from our host of tax measures and incentives, are subject to headline tax higher than that of Hong Kong's. While this is not the most efficacious issue, it is a significant link in the decision-making process. I would like to propose that the Ministry of Finance take a protracted approach to reviewing this matter by projecting this over a period of, say, five to 10 years, to understand its medium to long-term impact on the fiscal burden of companies operating on our shores. Sir, more significantly, the Budget did not introduce any increase in tax in spite of its large projected deficit. On the contrary, it is worthy of mention that a slew of changes and measures were crafted with the aims of (i) strengthening our foundation as a knowledge and innovation-driven economy, and (ii) preserving our competitiveness amidst increasingly aggressive regional and global competition. If one studies each of the 30, or so, elements in the newly announced changes and refinements of the existing taxation frameworks closely, it is apparent that they are targeted at maintaining "our first mover advantage as a nation and increasing the gap between the first mover and the second mover", if I may quote Pok Soy Yoong of Ernest and Young.”
“Money spent for such causes for sure will not go to waste. Sir, let me now turn to what the Budget means for the business community. In the several meetings my GPC had with the Resource Panel and industry groups, there were some murmurs of disappointment but overall, the majority of them expressed understanding that the budget focus this year is about sharing surplus with Singaporeans, particularly those who are most in need of help. Furthermore, a large number of measures and incentives have been put in place in the past few years to strengthen our economic foundation, whose effect has yet to permeate through the economy. On taxation, Sir, many SMEs were hopeful for a tax break, arguing that the tax savings could be ploughed back into the business for more meaningful purposes. However, the Prime Minister highlighted that Singapore's headline corporate tax rate of 20% is already among the lowest in the region and the effective tax rates of 5.8% for manufacturing and 6.6% for the service sector are near the lowest in the world, based on the 2005 Tax Competitiveness Report of the C.D. Howe Institute. In fact, Singapore ranked lowest with a 6.2% average with Hong Kong, our regional competitor being third lowest at 8.1%. Turkey was surprisingly second lowest, in spite of having a 30% headline tax rate. In this regard, I would advocate that Singapore should capitalise on this as a major selling point to foreign investors, beyond the multitude of advantages that Singapore has to offer as an investment location. The tax rate averages are obviously based on aggregated data. I would also like to propose that the Finance Ministry break this down into sectoral tax statistics to understand the tax effect on various sectors and especially the SMEs.”
“59 billion in the current fiscal year) and the generous handouts coming from special transfers totalling $3.59 billion is setting the Government back by $2.86 billion - the largest budget deficit as far back as one could remember. Election year as it may be, it highlights the Government's willingness to periodically share the fruits of economic success with its citizens and doing so in such a manner that the lower income strata and the needy will be the primary beneficiaries of the handouts. I am proud as a Singaporean that we are in a position to be able to conduct such an exercise to the envy of many nations in the world that can only afford to dream about. Sir, the key question here is whether this year's landmark Budget represents a departure of our budgeting policy in that the Government will continue to narrow the widening income gap by way of such top-ups at the expense of budget imbalances. I know the money has to come from somewhere but our goal must be to continue to find ways and means to pull the lower income strata up so as to prevent the emergence of a community that lives on the fringe - an underclass that loses hope entirely. Hence, the Progress Package is appropriate from time to time if there is money in the kitty to be distributed but what is important is to ensure that we continue to invest in schemes and put in measures that will enable all Singaporeans to remain relevant to the changing needs of the economy, as we fit and flex ourselves to the ever shifting profile of globalisation. It is about skills and knowledge upgrading so that employability is sustained and enhanced, and also job creation and redesign so that low paid workers can upgrade their jobs and be kept motivated to remain employed.”
“Mr Speaker, Sir, allow me to first congratulate the Prime Minister and Finance Minister, Mr Lee Hsien Loong, for presenting a Budget hailed as generous, compassionate and inclusive for all Singaporeans. "$2.6 billion help package for all" was the headline of the Straits Times on Saturday, 18th February, in addition to having a special "Progress Report" segment. The Business Times captioned its publication with "Rewarding work, promoting growth", but acknowledged it was less generous for corporate Singapore in its editorial. The Today paper flashed "Windfall for all", while Berita Harian dubbed it as "Belanjawan 'murah hati'". Similarly, the Lianhe Zaobao impressed with "Zhen Zhang Pei Tao; Yu Suan An - Er Shi Liu Yi Yuan Quan Min Fen Hong". It is indeed a Budget aimed at balancing between sharing the fruits of success with Singaporeans while also recognising that growth stimulants are needed for the longer term health of the economy to keep ourselves in tandem with the rapid changes of globalisation. Generous as the Budget may be for the people - one critical thing needs to be borne in mind: The ability of the Government to allocate such a substantial package to the people is only possible because of our policy of fiscal prudence. Without the funds generated from two years of successive economic growth, such a comprehensive social package could only remain a dream. And good economic growth can only occur with witty economic and fiscal management by a responsible Government - this is something that Singaporeans must always bear in mind. Looking through the Budget book, one could not help but noticed that projected operating expenditure at $24.48 billion (as compared to $21.”
“My final comment, Sir, is that while this Amendment Bill primarily provides for the accounting profession to form or convert to LLPs, what may be missing is the provision to address specific features of the LLP's structure under the LLP Act which may not be suitable for the accounting profession. In this regard, the accounting profession should make a study of the LLP Act of 2005, as was the case with the legal profession, and consider what changes perhaps could be made to their own Accountants Act to address some of these issues relating to LLPs which are unique to the accounting profession. On that note, Sir, I support the Amendment Bill.”
“If a firm converts to LLP, it may no longer be possible to exclude such salaried partners from exercising their rights to inspect accounts under section 25(3) of the LLP Act 2005. The breach of this provision is an offence. I wonder whether this poses a serious issue for the accounting profession in terms of getting accounting firms to convert to LLPs, or to set up as LLPs. Next, Sir, LLPs need to appoint a manager, as provided for by section 23 of the LLP Act. This manager has certain statutory duties, such as lodging an annual declaration of solvency or insolvency, lodging changes of particulars with the Registrar and several others. The manager has personal liability for these obligations. Unfortunately, the definition of "manager" under the LLP Act is very wide, and I quote, "The manager is any person (whether or not a partner of the LLP) who is concerned in or takes part in the management of the LLP (whether or not his particulars or consent to act are lodged with the Registrar)." I feel that the use of the term "manager" is too broad and unfortunate and could lead to a confusion as to whether other managers who are not appointed to perform the statutory functions of the manager of a LLP are or are not caught by this wide definition. The accounting profession needs to consider their current application of the term "manager" and has to be clear that no one, whether intentionally or unintentionally, is caught by this wide definition. The professional managers who do fee-earning work rather than take part in management should not, in my view, be caught by this definition. What is less clear is the general manager and administrative manager, finance manager or other manager who may be concerned with or is taking part in the management of the LLP as well.”
“I have been told that a major reason for a lack of willingness for a CPA firm to convert to LLP is because of this specific requirement. Consequently, I imagine that many small to medium sized accounting firms may not want to convert to LLP because of this requirement. I understand, from a legislative viewpoint, that professional indemnity insurance is required and important to safeguard the public interest as under a LLP, all partners would generally enjoy limited liability. A suggestion I would like to make is for the level of the professional indemnity insurance requirement to be lowered. A tiered insurance requirement could perhaps be stipulated. This would make it more appealing for smaller accounting firms to consider embracing LLP while at the same time ensure that the public interest is adequately protected. The next several comments pertain to the changes provided in this amendment Bill relative to the umbrella statute for LLPs, ie, the LLP Act of 2005. This is made clear by the new section 30A addition as provided in this Amendment Bill which states that nothing in the Accountants Act shall affect the operation of the LLP Act of 2005 in relation to an accounting LLP. Sir, it is stipulated under section 25(3) of the LLP Act that limited partners in a LLP are entitled to inspect the accounts of the LLP. This provision appears to be mandatory and not subject to the terms of a partnership agreement unlike certain other provisions. I understand that some accounting firms currently do have salaried partners and they may not be entitled to inspect the partnership accounts under the terms of "partnership".”
“Mr Speaker, Sir, speaking on this Bill, I would like to, first, declare my interest that I am a member of the Accounting and Corporate Regulatory Authority (ACRA). I am delighted that one of the key provisions of this Bill is for public accountants to form LLPs. This was indicated at the ICPAS/ACRA seminar held in the calendar quarter of last year. And the Government, by provision of this Bill, is delivering on its promise. Sir, in going over the provisions of this amendment Bill, I have a few comments and concerns which I would like the Minister of State, Mrs Lim Hwee Hua, to address. First is with respect to clause 9(c) of the Bill. I would like the Minister of State to clarify why the clause, inter alia, should prescribe that at least two-thirds of the partners in an accounting LLP should be public accountants. While this requirement may mirror that of some professional bodies of certain European countries, I feel that such a qualified majority provision may hamper the development of strong multi-disciplinary practices, such as the combination of accounting and legal practices which would be beneficial for Singapore. I would, therefore, advocate instead that a simple majority, ie, just above 50%, should be adequate to ensure that public accountants control the accounting LLPs. My next point, Sir, pertains to clause 18 which sets out the amendment of section 28. It prescribes, among others, that one of the requirements of setting up or converting into a LLP is a minimum level of professional indemnity insurance or PII. It appears that the PII requirement is on the same scale as that for public accounting corporations, or PACs. It is my understanding that there are only a handful of PACs which currently number less than 10.”
“The Ageny operates on the tenet of public money or, specifically, money deposited by Scheme members. I feel that the public, as well as Scheme members, should have some form of recourse to address concerns that may be deemed necessary in the event of a violation in procedure. Failure to provide for an unbiased accounting or arbitrating conduit for the Scheme members, and particularly depositors, will not bode well for the Agency, which may be subject to the magnifying lens of public opinion. It may, therefore, be prudent not to include such an overarching and over-protective clause to protect the agency and its direct associates. On that note, Sir, I support the Bill.”
“To build confidence on the proposed Deposit Insurance Scheme and the agency to be formed to administer the scheme, I would suggest that the MAS require that both members and non-members clearly state in some form, of their status of membership of the Scheme. On clause 24, while this provision is useful as it provides recourse for the Authority to seek additional premium contributions in the event of a shortfall of funds, it falls short of addressing a worst-case scenario, such as in a remote event where a number of banks and financial houses may collapse simultaneously, calling for a demand of a large amount of payout beyond the targeted fund of $120 million. I may sound a bit pessimistic here but I think there is a need to be comprehensive. I would like to ask the Minister whether the Government would step in in such a scenario to make up for the difference in payout requirements. Moving on to clause 30, occurrence of events precipitating payment of compensation should preferably have an enactment date as well as a cut-off date. The Bill should make it clear that the Agency is required to disburse payments within a specified timeframe, say, three months from a Court order date or when a Scheme member is made insolvent and stipulate that it would cease payments within a specified time period too. This would ensure a systematic procedure to process disbursements and claims, as well as frame a limit on depositors requiring time to gather evidence on their claims. My final point, Sir, is with respect to clause 52 concerning the protection from liability of the Agency and its officers. I feel a fundamental issue of transparency is being circumvented in this particular clause.”
“44, taking the assumption that our per capita GDP is US$27,000 and the prevailing exchange rate being $1.65 to the US dollar. In general, wealthier countries have a higher ratio due to the existence of larger deposit balances. On the basis of this simple computation, I believe Singapore too could afford a higher ratio to provide for greater protection to its depositors. The second point related to this clause is that a fixed quantum, as proposed in the Bill, will potentially be quickly overtaken by events and may become irrelevant when the Scheme fully matures in 10 or 11 years. It may attract controversy if it is not adjusted to the prevailing appropriate protection value. I would like to advocate that the coverage limit be adjusted for inflation, at least on an annual basis, so as to retain the value of the deposit insurance amount at the prevailing point of time. Sir, it could generally be argued that proper insurance coverage provides confidence that spills over into other sectors. The same can be said of the potential effect of a deposit insurance scheme, such as the one being proposed, on the wealth management industry that we are trying to nurture here. While this point is mute during relative periods of calm, its influence during troubled times cannot be under-estimated. My next point pertains to clause 6. While this clause provides under exceptional circumstances for a full bank or finance house to be exempted from membership of the Scheme, the clause is silent on the need for such exempted institutions to clearly notify depositors as such.”
“Ideally, banks should look at the cost of such premiums as a business cost to them rather than passing part of, or worse still, the full cost on to depositors. Since the determination of premiums will, among others, also be based on the risk profiles of the banks, I would like to suggest that the MAS consider the publication of a profile rating of the banks here so as to enable depositors to make an informed decision of where their deposits will be safest. Members of the public should also have a clear understanding that the limit of $20,000 applies to each depositor per institution that they have their funds deposited in. This is important to enable depositors to decide whether they place all their eggs in one basket or spread them over several banks, if doing so makes them feel more secure. Sir, in going over the Bill, I have a few comments and concerns which I would like Minister Tharman to address. First is with respect to clause 3. I would like the Minister to clarify how the protective sum of $20,000 is arrived at. According to a publication of the Federal Reserve Bank of San Francisco on deposit insurance programmes in Asia dated March this year, the Federal Deposit Insurance Corporation, which is analogous to the proposed Deposit Insurance Agency as provided for in this Bill, each depositor account is insured for approximately US$100,000. In Taiwan, the insurance amount under the Central Deposit Insurance Corporation is US$32,000. In Japan, the corresponding amount is US$95,000. In Korea, it is US$50,000. It appears that all the nations noted here have a ratio computed as Insured Coverage over GDP per capita of 1.3 to 3.4 - a broad but reasonable range. Singapore's ratio is 0.”
“Mr Deputy Speaker, Sir, thank you for allowing me to speak on this Bill. This legislative move to compensate depositors should the bank they place their funds in fail is quite overdue, considering that a number of Asian countries already have such a scheme in place for quite some time. At the same time, the Bill should dispel any misperception by depositors that their money is guaranteed by the Government in the event that the bank they have their deposits in goes bankrupt. Sir, as we go more up-market in our banking sector, become more sophisticated and attract more banks to operate here in our endeavour to position ourselves as a truly international financial hub, it is inevitable that such moves expose depositors to a higher degree of risks. While the MAS is responsible to ensure that the banks operating here are subject to stringent rules and checks, it cannot guarantee that no banks or finance houses, local or foreign, will not fail. The collapse of Britain's Barings Bank in February 1995 is perhaps the quintessential tale that should still be fresh in the minds of many people, particularly those within the financial circle. The failure was completely unexpected and occurred over a course of days, all arising from the action of a single trader here by the name of Nick Leeson. While the circumstances may be different considering the fact that Barings Bank was a merchant bank, there is no guarantee that it cannot happen to any full-fledged bank. Hence, while depositors should hail the introduction of the Deposit Insurance Bill as their deposits will be guaranteed a return of up to $20,000 in the improbable event that their bank faces liquidation, the first big question that is in everyone's mind is how much of this protection cost will be passed on to depositors.”
“Considering the much higher quantum of transactions in today's context, should the Minister not consider increasing the minimum paid-up capital to reflect the current context? Fourth, Sir, some reforms that countries like the United Kingdom have implemented are to require most transactions by financial institutions, including money remitters, to be fully computerised. In doing so, the disclosure of full details of originator information, such as name, address, telephone contacts and account number on money transfers, are required to enhance traceability in situations where fraudulent activities are suspected. I would like to suggest that MAS consider the implementation of such a system if it has not already done so. Finally, I would like to ask the Minister the extent of how the amendments proposed in this Bill are connected with the customs regime, considering that money could also be represented by items of monetary value which may not be transmitted via the financial system but through land borders, ports and airports. In conclusion, Sir, I know for a fact that our country has done much in regularly reviewing and revising our financial legislation to keep abreast of global changes and the dynamics of the international financial system. But legislative changes in the prevention of money laundering, particularly in areas which are prone to terrorism financing, are certainly an area that we cannot afford to neglect. I applaud the initiatives aimed at addressing existing shortcomings and therefore wholeheartedly support this Bill.”
“In broad terms, deterrence could be achieved by increasing the penalties for illegal remittances, whether conducted by licensed money changers or remittance agencies, controlling and streamlining the methods employed to ensure legality of remittances and by enforcing greater degree of compliance among the hawala businesses which also include a large segment of the SME community. I believe this is what this amendment Bill seeks to also implement. In this regard, Sir, I would like to ask the Minister whether the amendments to sections 13 and 16, as provided by clauses 10 and 13 of this Bill respectively to increase the penalties from $10,000 to $50,000, represent sufficient deterrence, considering the large sums of floating "black" money that I cited earlier. Considering that hundreds of thousands or even millions of dollars may be involved, particularly in financing terrorism activities, should a corresponding jail term also be considered in such cases? Second, in the interest of the livelihood of existing money changing and remittance business owners, I would like to ask the Minister to clarify how the MAS, under the newly re-enacted section 7(3) and section 7A(3) respectively would render an existing money changer or remittance business owner ineligible to have his licence renewed. The new sections provide MAS with the full authority to "consider the application and may grant a money-changer's licence vis -a-vis a remittance licence with or without conditions or refuse to grant a licence" without assigning any reasons. Third, Sir, the minimum sum of $100,000 for a remittance licence holder remains unchanged since the last amendment in 1996, except for the requirement that the holder must now be incorporated as a company with a corresponding amount in paid-up capital.”
“Sir, the demand for money-changing and remittance services in Singpaore has increased quite significantly in the last 25 years since the Act was first introduced in 1979. Singapore's growth as a leading regional and international business centre, the increasing number of tourists visiting Singapore, more Singaporeans travelling overseas on business or leisure, the large number of foreign workers among other factors have helped the industry to grow and remain healthy. Traditional money-changing and remittance services under this Bill predate modern or western banking regimes. Prior to the development of a comprehensive banking system here, the operations of money changers and remitters were a fundamental component of the commercial and financial infrastructures. The Chinese system is referred to as chop shop and terms used in the Indian sub-continent include chitty, hundi and hawala. For the purpose of brevity, I will refer to all these regional remittance practices as hawala. Not all hawala operations fall on the wrong side of the law. "White hawala" is used to refer to legitimate transactions and remittances, while the term "black hawala" concerns illegitimate transactions such as money laundering and narcotics trafficking. As this Bill is aimed at fortifying the existing legislation to prevent the abuse of services offered by "white hawala" business owners, it is fair to expect that the MAS does this by alerting the relevant community of changes in its scope of surveillance and supervisory functions while also providing ample time for current operators to embrace the proposed changes.”
“Mr Speaker, Sir, thank you for allowing me to speak on this Bill. Sir, I believe the proposed amendments in this Bill are timely, as it contains several elements aimed at tightening the legislation and the supervision of money transaction activities that may potentially lead or be linked to money laundering by financial institutions. Sir, I also see such amendments as critical in maintaining the equanimity of our financial system and in protecting the interest of bona fide financial institutions and their respective customers in the light of money laundering activities increasingly posing a threat to the international financial system. Singapore, in its endeavour to position itself as a leading global financial centre, must keep in tandem with changes in the international financial system, which has been active in reviewing and imposing new anti-money laundering regulations. A recent report in the Straits Times dated 29th July this year indicated that a startling $85 million in dirty money was seized by the Singapore authorities since the year 2000 against a backdrop of increasing suspicious transactions which may be connected with money laundering and terrorism financing. This is in spite of intensive efforts by our authorities to clamp down on such menaces. The stated seized amount is a trickle compared with US$800 billion to US$2 trillion estimated by the International Monetary Fund in potential global funds that money launderers and terrorists have in their chests. Today's Business Times reported that while the cost of prevention of money laundering can be costly for banks and financial institutions, the potential cost of failure could lead not only to devastation of a bank but also the entire country.”
“Mr Speaker, Sir, I think it is a no-brainer to figure out that many of the measures announced by the Minister earlier would inject a greater degree of vibrancy to the property market and shore up prices. However, Sir, my concern here, and my heart goes out to the new, young prospective property buyer, who has been contemplating on getting a property and now suddenly finding it more expensive and a little more far-fetched to own a property as a result of increased property prices. I would like the Minister to comment on this. Second, with regard to the measures just announced, how would this affect current property prices directly from HDB, in other words, prices for properties that are going to be sold directly by the HDB to the public?”
“It may lead to a drop in work efficiency in such areas. Sir, another concern I have is the extent of casino advertisements that would be allowed by the Government. We should not allow casino advertisements to target innocent people and the compulsive gambler through slogans, flashy advertisements and various publicity stunts. Such marketing techniques trigger the subconscious mind. In particular, it affects people who may have stopped gambling and also introduces gambling subconsciously to others. Triggers are obstacles to the environment that can cause one's subconscious to override rational thought. Once a compulsive gambler makes the conscious decision to stop gambling, such triggers could continually influence their rational thought. I would urge the Government to carefully consider the regulation of advertisements to be allowed for casinos. The preference is to completely ban casino advertisements. I would like to particularly applaud the move to enact legislation that will enable Singaporeans to exclude themselves or empower family members to exclude their loved ones from the casinos. On that note, Sir, I support the proposal to develop IRs in Singapore.”
“It will also particularly benefit those who are currently already trapped in this vice, even as we do not have any casinos at this juncture. I understand, Sir, that there are only 15 gambling addiction counsellors in Singapore. While training or importing more practitioners will help alleviate the short and medium-term problems, an entirely different set of problems arises when it comes to classification of gamblers. Vulnerable groups from adolescents, the elderly, retirees and the poor, will all require customised and dedicated care. There is, unfortunately, no "one-size-fits-all" type of treatment or cure. An approach to consider would include a comprehensive plan to develop the preventive measures and support services to deal with the problem of gambling. The resources and sector capacity to deal with these are, unfortunately, lacking at this juncture. I hope the Government will immediately begin looking into these areas, now that the decision has already been made to go ahead with the IRs. Moving on to the specific measures targeted at casino gambling, while I feel that a $2,000 annual membership fee would only appeal to serious gamblers, I have reservations that the $100 daily membership fee is sufficient enough deterrence for curious young professionals to give it a go in a casino. Once inside, who knows what will happen and no sooner than one realises, the poor chap may be a few thousand dollars in deficit. If $100 proves to be insufficient deterrence, would the Government be in a position to review and consider upping this amount? The close proximity of the business district to Marina Bayfront is also a bit of concern as it may lure business executives and people working in the area to squeeze time out from work to gamble.”
“The jobs in this sector will be increasingly more complex and value creation in nature, and will require professionals and people with higher knowledge and skills to fill them. Considering that we still have more than half a million secondary educated workers who will remain economically active for some time, the projected 35,000 jobs are therefore very meaningful to keep our workers employed. Social implications Sir, in regard to the social implications of the gaming component, I am delighted that the range of measures announced by PM and Ministers Dr Balakrishnan and Mr Wong Kan Seng are comprehensive to tackle potential surges in gambling addiction and increases in crime activities. It is apparent to me that much thought has been given by the relevant Ministries to bring forth the announced measures. While the measures are laudable, there is no better approach than first to operationalise the preventive measures rather than finding ourselves having to do fire-fighting at a later stage. Hence, I would urge MCYS to quickly embark on a comprehensive public education programme to strengthen our social safeguards and forewarn people of the detrimental effects of gambling. Prevention in this respect is certainly better than cure. Families, religious and social organisations should also play their part in inculcating and further strengthening moral values within family units, particularly among the young. I am also enlightened that the Government is spending $20 million to set up the National Framework on Gambling and $40 million annually to maintain the infrastructure. This is demonstration of the Government's seriousness in wanting to control the ill-effects of gambling.”
“My colleagues there regularly remind me to let them know in advance of my visit schedules or run the risk of having no hotel rooms. Such is the intensity of regional competition these days. Therefore, our choice ahead is whether we truly become a vibrant and bustling cosmopolitan city, as we have collectively envisioned, or be left as just another ordinary Asian city. Besides giving us the platform to become the former with world-class attractions, theme parks and resort hotels, the IRs provide the opportunity to rebrand Singapore with new eye-catching icons with a fresh look essential to attract more tourists. The highly respectable and experienced international resort operators, with their global marketing experience and prowess, can help transform Singapore into a "must visit" destination. Sir, the creation of 35,000 jobs, including 10,000 direct ones, must have also weighed heavily in the Government's decision to proceed. This is significant job creation, considering the increasingly competitive and uncertain business environment that prevails today. Much of it is likely to be service jobs, which will be here to stay. Unlike manufacturing jobs, which could be quite easily uprooted and transferred elsewhere, mega resorts cannot be simply dismantled and taken to another location. With many billions of dollars expected to be sunk in, the investors will do everything within their means to make the project successful. And this means the jobs are more secure. Sir, in spite of the Government's repeated stance that manufacturing will remain a key pillar of our economic strategy and is expected to contribute 25% of our GDP, jobs in the manufacturing sector will be scarcer due to the changing profile of the investments.”
“The IRs, with their potential of stimulating a wide array of tourism-related industries as well as convention and exposition-related businesses and enhancement of our aviation hub position, represent an outstanding platform to complement existing pillars of growth. Its anticipated sustainability will lessen the pressure to operate on budget deficits, as we have done so in the last several years. And, as noted by Mr Nizam Idris of IDEAglobal in the Business Times today, the IRs will help widen our revenue base, and the more robust fiscal structure would provide the Government with leeway in the future to consider further reductions in tax rates and potentially use it as a tool to address our competitiveness. What is also very important for Singaporeans to bear in mind, Sir, is the fact that opportunities for such mega-scale foreign-invested projects without the call-out for any Government subsidy do not often come knocking on our doors. If we do not seize it at this opportune time, others will be more than willing to take it, leaving us with the risk of being left behind. The time to seize it is now, while the window of opportunity is open for us. Many nations and cities have realised the meaning and power of the tourism dollar and have embarked on many measures to attract tourists to their shores. Apart from well-known cities mentioned by PM yesterday that have re-engineered themselves to remain preferred tourist destinations, there are many other small and large, new and old cities that are also sprucing themselves up to attract the tourist dollar. Suzhou and Ho Chi Minh City which I travel regularly to on business have both become very attractive tourist destinations.”
“I believe the majority of Singaporeans adhere to the values of our parents and forefathers and have exercised our responsibility, in spite of pervasive gambling already occurring around us. However, bearing in mind the clarification given by PM Lee and several Ministers that the casino represents only a small part of the Integrated Resorts proposal - 3% to no more than 5% - is it appropriate for the Government to completely do away with this multi-billion dollar project to be poured in by foreign investors which has the potential to create up to 35,000 jobs, beef up the highly competitive tourism industry and the prospect of adding at least $1.5 billion to our GDP, not to mention the multitude of other peripheral games arising from it? No responsible government in the world would give a pass to an investment project of such magnitude without serious consideration of its humongous economic benefits and spin-offs while weighing it against the social impact arising from the gaming component in the proposal. The Government's decision must be in the national interest, and our Government has decided accordingly. Sir, I am convinced that it was a very difficult decision and that thorough consideration of all the pluses and minuses would have been given before arriving at this historic difficult decision. Economic considerations Given the recent volatility of our quarterly economic performance, it is apparent that dependence on traditional sources of growth, such as manufacturing and financial services, has become increasingly difficult. New sources of growth, especially one which provides relative stability, need to be considered to complement existing efforts.”
“Mr Speaker, Sir, the fact that Prime Minister Lee and four other Ministers spoke for almost two-and-a-half hours yesterday clearly underscores the importance the Government attaches to the proposal to develop integrated resorts with a gaming element in it. In browsing through the Singapore Parliamentary Report, I was not able to find another occasion in the past where the Government had been so thorough in addressing an issue or a Bill in such magnitude and intensity as it did yesterday. The issue which has attracted considerable concern and a more than year-long intensive public debate, Sir, is undoubtedly the incorporation of a casino within the resort. Had casino been the only issue, I am sure the Government's response would have been obvious and swift. However, the nub of the issue is whether a fully integrated resort project, with investments of several billion dollars, should be denied because of the incorporation of a gaming component. As a Muslim, Sir, my heart goes out with the many Singaporeans of all races and religions who have expressed reservations over the casino because, for one, Islam and most major religions forbid gambling and, secondly, that gambling could inflict considerable harm to society and erode the values that we have painstakingly built as a society. Muslims and, for that matter, followers of other religious faiths, can and should abstain from gambling. We are all entitled to our beliefs and free to exercise our choice as we see appropriate. Gambling in many forms is not new to Singapore. Lotteries, Toto and horse racing have been around for quite a while. Our religion and values keep us in check.”
“Among others, the statutory goals include setting aside 23% of prime contracts for small businesses, 5% of prime and subcontracts for small disadvantaged businesses, 5% of prime and subcontracts for women-owned businesses, and 3% of prime and subcontracts for service-disabled veteran-owned small businesses. In Taiwan, Articles 37 and 38 of the Small and Medium Enterprise Development Statute state that where the government at any level or a state-owned enterprise undertakes publicly-announced procurement, public construction or commissioning of R&D work, they shall assist SMEs to obtain the business opportunities created by this. Sir, the success of entrepreneurship and of SMEs in these two countries needs no further elaboration. I believe we can learn from what these countries have done as we move forward in fine-tuning our policies, if we are truly earnest about creating a thriving entrepreneurial and successful SME environment in our country.”
“Sir, I beg to move, That the total sum to be allocated for Head V of the Estimates be reduced by $100. I would like to reiterate what I said during my Budget Statement speech, that the Government should give due consideration for a slice of its outsourced activities to be set aside for our local SMEs. They should also apply to the general provision of goods and services to the Government. 00 pm Sir, I know Prime Minister Lee has explained, at length, about the important need to pursue market-based policies and not unduly protect our SMEs from competition. I have no disagreement with such a policy. I agree that the principle of providing a level playing field for all companies should be upheld. But is there truly such a level playing field? We have many capable and competent SMEs, but they lack the clout and branding that the MNCs and GLCs have and, as a result, tend to often lose out to these players when it comes to bidding for Government jobs. There are just too many stories where SMEs just do not have a glimmer of hope in getting through a tender process involving many Government agencies. Sir, the practice of ensuring that small businesses get a fair share of Government procurement is not isolated. In the United States, the world's largest economy, the Small Business Act provides that all small businesses have the maximum practical opportunity to participate in providing goods and services to the Government. The US Small Business Administration (SBA) negotiates annual procurement preference goals with each federal agency and reviews each agency's results, and also has the responsibility for ensuring that the statutory government-wide goals are met in the aggregate.”
“Sir, to foster and speed up innovative activities among new entre preneurs, we need among a host of other measures to provide intellectual property (IP) protection that is relatively inexpensive, less cumbersome and one that can accommodate inventions with short commercial life. This will help to promote and support the culture of innovation and enterprise and assist start-ups. The current IP registration process is quite costly and ranges from about $30,000 to more than $100,000. This cost is prohibitive for the majority of start-ups and even for some established SMEs. I believe, Sir, that our existing system could benefit from the consideration of a second-tier patent system to provide cheap, fast, limited rights for lower level or incremental inventions. SMEs and start-ups would be the main beneficiaries of such a lower level system. In a mini research I conducted, I found that Australia has two systems of second-tier patents - petty patents and innovation patents. I would like to suggest that we should look at these models and modify them to suit our needs. The development of the Australian second-tier patent protection is premised on the need for a quick, less expensive and more easily obtainable patent protection for inventions with a short commercial life. It also provides an avenue to protect functional innovation, that is, innovations which lack the level of inventiveness required for patent protection and whose functionality was not protected by design laws. Land Acquisition Act”
“Sir, I agree with Minister Wong that it is indeed enlightening in the sense that it does allow us sufficient time to ask some questions and get further clarification. Sir, in spite of taking a well-deserved rest from what I imagined to be a very colossal task of putting together and delivering the Budget, and subsequently responding to the multitude of issues raised by many Members, I appreciate Prime Minister and Finance Minister Lee's attentiveness in both the PMO and MOF Committee of Supply proceedings. I would also like to take this opportunity to thank the three Ministers for their detailed answers to the various issues raised by several hon. Members. I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. The sum of $357,738,290 for Head M ordered to stand part of the Main Estimates. The sum of $418,207,200 for Head M ordered to stand part of the Development Estimates. COMMITTEE OF SUPPLY REPORTING PROGRESS”
“Sir, I read with concern an article in the New Paper dated 13th February with the caption "Broke but must pay $30,000 GST". The article is about a charitable organisation which has to fork out the said amount in GST despite being $100,000 in the red. I suspect that many charitable and voluntary welfare organisations (VWOs) which do not come under the umbrella of the Community Chest are currently experiencing a serious plight. The majority of them have difficulties meeting their donation targets, especially in the last several years of the uncertain economic climate and unforeseen events such as SARS, and the more recent tsunami disaster. The increased competition for the charity pie among more than 1,700 charities here is also stiff. Donors are also fatigued by the many repeated requests for donations from the same sources. As a result, many VWOs also went into deficits. Sir, part of the problem here stems from VWOs not being able to claim GST incurred in their operating expenses from the Government, unlike commercial business organisations. Also, a $5 million input GST grant which was meant to cushion the impact of GST of VWOs and small charities has lapsed quite sometime back. Charities and VWOs play an important role in rendering meaningful services to Singaporeans and complement many services rendered by the civil service, particularly by social agencies. In view of the current economic difficulties faced by many VWOs and small charity organisations, I would like to ask the Minister if he could consider reviving a similar GST grant for another five-year period to ease the burden on such organisations. Charities and Voluntary Welfare Organisations”
“Sir, owing to excessive prudence by our local banks, which do not number too many, to lend to our SMEs, I would like the MOF to consider being more liberal in terms of opening up the banking sector to allow foreign banks to provide financing for SMEs. This will spur more competition among banks and, therefore, enable the SMEs to benefit from lower borrowing rates and more efficient banking services. Local banks have provided excellent services to our SME community for many years. However, with the consolidation and merger exercise these banks underwent in the late 1990s, our SMEs are finding it harder to obtain financing due to a limited number of banks they can go to. I believe foreign banks can step in to fill this void. However, it is my understanding that foreign banks are restricted in their product offerings, even if they have a full-fledged service licence to operate here. Many are eager to expand their local operations and want to extend a wider range of services to the business community here. I am confident that they will bring with them more innovative products and services that will ultimately benefit more businesses. Foreign banks could also help SMEs expand into overseas markets where they already have an established presence. Fund Raising”
“I would like to therefore propose that the MAS continue to exercise and extend flexibility in granting special exemptions in approving innovative Islamic banking products and services. Over time, as the Islamic banking industry develops the critical mass of players and customers, and as the banking environment becomes more complex, the MAS could consider the formulation of our own Islamic Banking Act. Creation of a central Syariah board. As Islamic Banking is governed by Islamic Law, the role of MUIS is critical. I would like to propose that MUIS establish a National Syariah Advisory Council that will be empowered as the sole authority to issue opinions and decisions in Islamic Banking and Finance. Although the Islamic Bank and the non-interest bearing banks may also appoint their Syariah advisers to advise them on day-to-day operations, they should be required to refer to MUIS through MAS on policy-related Syariah issues. This Council can also advise MAS on Syariah issues pertaining to Islamic banking. Fund Management”
“To support the Islamic equity market, Singapore's conventional stockbroking firms could be encouraged to offer Islamic stock-broking services and develop an Islamic index for listing of Syariah-approved counters. 4.15pm Sir, Phase 2 is the development of Islamic banking window. Islamic banking industry needs some renowned financial institutions to make it viable and operational. Towards this end, MAS could consider inviting reputable full-fledged Islamic banks from the Middle East and neighbouring countries to set up their banking operations in Singapore, in addition to encouraging existing financial institutions to offer banking services through an Islamic banking window using their existing infrastructure and branches. Sir, Phase 3 is the development of an Islamic banking infrastructure. To provide adequate infrastructure for the development of a robust Islamic banking system, Singapore needs to consider the introduction of an Islamic Banking Act in the long run, to govern the operations of Islamic banks and financial institutions. Models already in existence in the UK and Malaysia could be used as a basis for us to develop our own Act. However, I believe Islamic banks could still operate within the existing Banking Act, as it has several provisions that empower the Minister for Finance to respond to the changing financial landscape. The Minister, under the existing Act, could grant approval and exemption to banks that wish to introduce unconventional banking products and services to the public. The granting of approval to OCBC to operate an Islamic banking window several years ago is a case in point.”
“Sir, I beg to move, That the total sum to be allocated for Head M of the Estimates be reduced by $100. Over the last several years, Islamic banking and finance is rapidly emerging as an alternative to conventional banking and finance. Its applicability is not just confined to Muslim countries. In the UK, the Financial Services Authority has recently given the go-ahead for the launch of the first totally Islamic British bank providing banking facilities to Britain's 1.8 million Muslims, in accordance with Islamic Syariah principles. In Malaysia, a significant number of non-Muslim customers access Islamic banking products and services. In the light of its increasing popularity, I would like to propose that the Ministry of Finance and MAS consider the development of a full-fledged Islamic banking and financial system alongside our established conventional banking system in three phases: First phase, Sir, to enable Islamic banking to operate and function smoothly, it requires the support of Islamic financial markets and a critical mass of players. The financial market is required to provide a broad variety of instruments and an inter-bank market that, in turn, will provide the matching mechanism between the deficit and surplus units in the Islamic banking system. Typically, the Islamic money market comprises the trading of Islamic papers, the Mudharabah (or profit sharing) inter-bank investment and the Islamic clearing and settlement system. One approach is for the MAS, in collaboration with the Singapore Muslim Religious Council, or MUIS, to create this market by issuing Government Treasury Bills based on Islamic principles. On the Islamic capital market front, more local and foreign companies could be encouraged to issue Islamic corporate securities out of Singapore.”
“Sir, I would like to thank both the Minister for Defence and Minister for Home Affairs for their very comprehensive and penetrating answers to the questions and clarifications requested by Members. On that note, I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. The sum of $151,115,490 for Head U ordered to stand part of the Main Estimates. The sum of $58,580,300 for Head U ordered to stand part of the Development Estimates. Head M - Ministry of Finance”
“People, particularly top talent, must feel comfortable that they are compensated at market rates in order to retain them. I would like the Prime Minister to clarify about the thoroughness of the compensation management system in the civil service to ensure that we will not face an exodus of talent from the civil service and also that it is capable of attracting new talent necessary to maintain and continually improve service quality within the civil service.”
“Sir, I beg to move, That the total sum to be allocated for Head U of the Estimates be reduced by $100. Sir, the Government's continued push on the economy drive in the civil service, amongst others, is seeing an additional 3% budget cut of all Ministries, except MINDEF. Including last year's 2% cut, the total permanent reduction is now 5%. I applaud this move, as just like in the private sector, the public sector should also find ways and means to be cost-effective, minimise waste and increase productivity. However, Sir, just like Mrs Lim Hwee Hua said in this House last year, we have painstakingly built our civil service to the level today, renowned for its integrity and efficiency. It is evident from what the Prime Minister has just explained in his closing Budget Statement's speech that the move to implement the additional 3% cut has been carefully thought through and taken into account that last year's 2% budget reduction for all Ministries has not had any negative impact on service quality to our citizens. I would appreciate it if our Prime Minister could provide this House with a better understanding of some of the measures that the civil service has put in place to ensure that service quality, including counter services, is not jeopardised as a result of the additional 3% budget cut and also the recent operationalisation of the five-day work week in the civil service. Sir, another concern I have is also potentially the signal that the Government is sending that the budget cuts may translate to lower salary increases and lower starting salaries in the civil service. Retention and attraction of talent, Sir, requires a rigorous compensation management programme to be put in place.”
“Here, I see also an urgent need for the Government to work on these challenging issues with the NTUC and employers in order to make all categories of workers relevant to theirorganisations and the economy. To conclude, Sir, I would like to congratulate Prime Minister Lee, who is also the Finance Minister, for a well-crafted and innovative Budget. The theme for this year's Budget"Creating Opportunity, Building Community" should well position us to respond and adapt ourselves to the constantly changing global environment. When more opportunities open up for everyone, it erases the sense of doom and gloom and creates a sense of achievement in each of us. It enhances a sense of belonging and breeds rootedness. This is what we all should work towards. On that note, Sir, I support Prime Minister Lee's Budget Statement.”
“To be effective, REAP, apart from redesigning jobs and training workers to take up the jobs, should also have some flexibility to customise programmes to specific needs, provide on-going support to help workers stay on the job, tie income benefits to re-employment assistance, link training with job opportunities, and monitor performance and evaluate the effectiveness of the programmes. Sir, we need to find better ways to equalise supply and demand within private and public sector organisations to best use people of all ages, including elderly people. A mechanism to prevent the pricing out of older workers arising from seniority-based pay increases, needs to be worked out quickly. In today's context, salaries and wages must reflect the value of the job, or organisations risk losing their competitiveness, if they are stuck with highly paid senior and older workers. Mindsets and attitudes need to be quickly changed to get people to accept that salaries and compensation can go up and down, based on job assignments and also the prosperity of the companies they work for. Elderly employees are generally more at risk of losing their jobs when employers are forced to restructure to address their competitiveness because of the seniority-based wage system. This is where a clear definition of job competency expected of individuals becomes meaningful. Then only can we do away with labels, such as "young" or "old" workers. When there is clarity of the competency and capability of each employee in the organisation, it eliminates age biasness as it becomes clearer that each employee makes a contribution to the organisation.”
“If long-term products with attractive tax benefits could be offered, the scheme would also be an additional advantage to foreign talent who may be considering a posting in Singapore, and also for foreigners who are searching for a safe haven to park their retirement savings. It could blossom over time and gradually be positioned as one of the pillars of our wealth management industry. I would like to advocate that a committee be formed to review the SRS and how the scheme could be made more attractive for Singaporeans to look upon it as a viable vehicle to park their retirement nest eggs. Employability of workers Finally, Sir, let me dwell briefly into measures to ease joblessness and help Singaporeans stay relevant to the changing needs of the economy. While the $500 million top-up to theLifelong LearningFund will bring more programmes to reskill workers and help job seekers, ultimately, it is real and meaningful jobs that count. Reaching out to the jobless and those at risk of losing their jobs is the real challenge of the Workforce Development Agency (WDA). The Re-Employment Assistance Programme (REAP), aimed at helping low and less-skilled job seekers cross over into new jobs, must be made easily accessible to workers who need the assistance most. I have had a number of cases at my meet-the-people session where workers were turned away feeling disappointedwhen they inquire about getting training.”