Andy Gan Lai Chiang
Singapore
“Given that Singapore is building more sporting facilities and moving the country towards being a sports hub, physiotherapists are needed here. They are healthcare professionals and ought to be treated as such in order to attract them here.”
“The difference in hospital fees will come in only from the choice of class of beds. So all taxpayers and non-taxpayers are given the same medical attention at the subsidised rate applicable according to the different medical conditions that the patient is in.”
“Tied to the insurance service providers for the maritime industry, a question remains as to what measures have been implemented to make Singapore a more attractive base for specialist insurers to take root in Singapore, for example, regulatory changes and specific GST and tax incentives, to make it conducive for specialist classes of unde…”
“The way for us to move then is summed up by the Prime Minister in the Budget Statement, ie, for there to be "Singaporeans' support for a social compact that looks after the vulnerable in society that will make us a caring and inclusive community". Sir, I support the motion.”
“It is noted that underlying the changes to the TCA, protection of the beneficiaries and social conscience is apparent. Given the foregoing, it is suggested that unless the aims of the TCB are to benefit all persons, a change to the TCA with the implementation of the TCB may not be useful to the wealth management sector of our economy.”
“We are blessed with a good and strong Prime Minister, together with his capable Ministers, who will require our utmost support and loyalty to lead us towards a country that is family-centric, successful and prosperous. Let us all be reminded that no one knows what the future holds for tomorrow, but we can be prepared for it.”
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“I hope that an enlarged entity will provide the requisite resources that will further the development and encourage a culture of good governance and reward systems for good behaviour in the regulation of companies. This will result in immense benefit to the corporate and business scene in Singapore. Furthermore, potential synergies or other efficiencies that will arise from the merger of the various functions may provide for a more efficient regulatory and administrative service. I would like to express my support for the proposed Accounting and Corporate Regulatory Authority Bill. However, Mr Deputy Speaker, Sir, there are some areas that I would like to seek further clarification from the Minister. The former Registry of Companies and Businessess served a mainly administrative function. But it appears from the provisions that the new authority is meant to be granted greater policing powers. I would like to know how the authority is meant to exercise its powers in a regulatory manner when other bodies, like the SGX and SIC, already administer and enforce certain elements of the aforementioned Bill. How is the authority supposed to complement the existing regulatory authorities with regard to the Bill? Second, although I understand that the administration of a company is very much linked to that of accounting practices, I would like to hear from the Minister the specific advantages for merging an accounting regulatory body with a corporate regulatory body. At first glance, these roles are as different as chocolate and cheese. I would like to ask the Minister how he proposes to implement these two distinct roles into one body.”
“Looking at the countries around us and the competition posed, we have to ask, how much attention will East Asia play to the rush to be more transparent and to take corporate governance seriously. I believe that a lot will depend on the political will of each government. But the introduction of this Bill will hasten the need for other countries to follow suit, not because it is a legal requirement but because good corporate governance will help to draw new capital. Take, for example, when CalPERS (California Public Employees Retirement System), one of the largest institutional investors, in February 2002 pulled their investments out of companies in Indonesia, Malaysia, Thailand and the Philippines, citing concerns over corporate governance, badly needed capital dried out. I believe that the competition for new capital will push the need for good corporate governance among the countries in this region. Finally, when ACRA exercises its role in the marketplace, we must not allow it to remove the risks associated with investing. Capital market works well with the presence of risks, and ACRA should instead ensure that every corporation play by the rules with investors having access to reliable information needed to make prudent decisions, and that everyone who violates the law is held accountable. Sir, I look forward to a more dynamic marketplace with the passing of this Bill. Dr Gan See Khem (Nominated Member): Sir, with the introduction of ACRA, I would envisage that the authority will enhance and improve the grounds for greater corporate governance that is the order of the day.”
“Legal requirements should be viewed as a necessary minimum, while self-regulation should still be encouraged wherever possible. Statutory regulation still has a part to play but should not be the mainstay of the new Authority. Primary legislation, for example, should contain a general (rather than a specific) obligation on the part of listed companies to make continuous disclosures. All these can also lead to less bureaucratic costs when transparency is not via the legalistic route but instead by self-regulatory market mechanisms. There is also the question of speed in introducing new laws. It has been known that lawmakers and standard setters have been engaging in a catch-up game in the mushrooming use of innovative derivative products. While the time taken to produce innovative derivative financial instruments may only take months, the time taken to implement new security legislation to govern their use, and accounting rules to determine how one should report them in the company accounts, can take years. Thus, putting excessive confidence in a legalistic approach may lead to a less innovative business environment when corporations fear using new instruments without the comfort of the law. Furthermore, under the legalistic approach, there may be a reduction in performance reporting from companies to investors as they do not try to understand what information is needed to communicate to investors, in order to most effectively explain their business model. Instead, they focus on what regulators have set out as important to investors. In such a reporting environment, there is little room for best practice since satisfying regulatory requirements is all that is needed.”
“14 pm The formation of ACRA will mean that the Government regulatory arm will be far-reaching in respect of influencing how businesses report their financial performance and as to how businesses govern their affairs. The collapse of corporate icons of Enron and WorldCom has shown that corporate disclosures in the US and other jurisdictions are lacking and that there is plenty of room for improvements. Furthermore, the ACRA will no doubt be emphasising more on matters such as corporate disclosure in response to the introduction of the Sarbanes-Oxley Act of 2002 in the US. The next question on everyone's mind would now be on the style and manner which ACRA would take in influencing changes and enforcement of regulatory requirements. Public reporting is a public interest activity and places the responsibility on all participants in the process. These include corporate management and board of directors who have the primary responsibility in public reporting. Auditors, standard setters and regulators all have a part to play to improve the information process to the public. Let us also not forget the lawyers, investment bankers, analysts and credit agencies. It is only when everyone places primary importance on this role, and subsequently a change in attitude to responsibilities, will the credibility of financial information be raised. Such recognition will also lead towards better business ethics and a strengthened business culture. Sir, I would like to suggest further that the Singapore approach to greater responsibilities in public reporting be much less dependent upon regulation, but to try to strike a balance between regulation imposed by authorities and reliance on market mechanisms.”
“Mr Speaker, Sir, I stand in support of the Accounting and Corporate Regulatory Authority Bill. In these days of complex business environment governed by various laws and regulations and, in some ways, confusing to our new businesses, it will be convenient for corporations to refer to one authority for answers on company matters and for accountants to refer to it for clarification when circumstances require it. Since businesses have to follow the frequent changes to the Companies Act as well as the rules governing accounting and its reporting, the Accounting and Corporate Regulatory Authority should be the agency to reach out to for clarification. The formation of ACRA will also help the Authority understand the business risks that accountants and businessmen take, as well as the regulatory web that businesses have to go through in their pursuit for profits. This is now possible as clause 6(1)(a) allows ACRA to administer both the Accountants Act and the Companies Act together. Reaction to changes in the Companies Act will influence the way accountants advise their clients, especially when it comes to external reporting. Complying with the latest standards in financial reporting would be easier to encourage when it becomes enforceable under the powers possessed by ACRA. In the United Kingdom, statutory standards in accounting are set by the Companies Act, which provides detailed provisions governing accounting and auditing of companies. Such close correlation between the Companies Act and its reporting requirements makes it easy to respond to market changes and demands. [Mr Deputy Speaker (Mr Chew Heng Ching) in the Chair] 5.”
“The latter has a political objective and has far-reaching consequences as compared to the former which is purely for personal gain. Should we not consider imposing different penalties in accordance with the severity of the offence? I propose that penalties should not be restricted to jail terms but also include the forfeiture of ships, cargoes, goods, or equipment employed during the offence or had facilitated the offence. What is noticeably absent from the Bill is with regard to the disposal of cargo or loot derived from the offence. The Bill should make provision to penalise those who are responsible for disposing of such content. The effectiveness of any law enforcement agency in curbing maritime offences will depend greatly on cooperation among governments as piracy respects no territorial waters. Since 1992, Singapore has signed bilateral agreements with Indonesia and Malaysia to coordinate periodic anti-piracy exercises in the Malacca and Singapore Straits. Under these agreements, navy and marine police units from the three countries coordinate their activities and exchange more information on piracy. To be more effective, our laws and neighbours must have the powers to allow our coastal patrols to apprehend culprits who seek shelters on the waters of another country and have the flexibility to overcome such legal constraints and uncertainties. Sir, combating maritime violence is now as much a part of national security, as is defence against military threats. Such efforts will facilitate Singapore's cooperation with the international community in suppressing maritime violence and terrorism, and in ensuring safe passage for ships which ply our waters. Sir, I support the Bill.”
“Arms of various types may also be used and concealed in cargo or baggage and timed to detonate while in port or when it is already inside a vessel and at sea. I call for a more specific reference to any device or substance that is likely to destroy or damage a ship to be included in clause 4(2). In other words, anyone other than a peace officer engaged in the execution of his duty who takes on board a ship an offensive weapon or any explosive substance shall be guilty of an offence under this Bill. Clause 5, I am happy to note, covers offences committed in relation to damages and interferences to operational navigation facilities on land that could result in serious interference to maritime safety. Such indirect threats would require strong preventive measures and legal deterrence in the fight against destructive elements. However, clause 5, on the other hand, should also state that any reasonable acts to protect the person, ship, or offshore installation, against piracy or maritime violence shall not itself be an offence, as defined under the Maritime Offences Bill. Clause 5(3) states that it is an offence to give false information that endangers the safe navigation of a ship and is liable to life imprisonment. This, I see, is a double edged sword. The harsh penalty proposed will act as a deterrent against would-be hoaxers but might discourage the public from coming forward for fear that they might run foul of the law. Clause 9 of the Bill states that any person guilty of an offence under the Act shall be liable on conviction to be punished with imprisonment for life. In today's context, we need to draw a difference between sea robbery and maritime terrorism.”
“The fear among ship owners and port authorities is that it is a matter of time before an oil tanker, or a large ship, is left running without guidance because its crew members are killed, kidnapped or locked up. This fear of unchecked piracy has become a reality on Sunday, 2nd November this year when, for the first time, an oil tanker nearing the busy Singapore Straits sailed unmanned for nearly an hour after pirates tied up the crew. Had there been a collision, an inevitable environmental disaster would have taken place. Clause 4(1) states that any person who unlawfully and intentionally (1) destroys a ship; (2) damages a ship or its cargo so as to endanger, or to be likely to endanger, the safe navigation of the ship; or (3) commits on board a ship an act of violence which is likely to endanger the safe navigation of the ship, shall be guilty of an offence. This clause seems to cover a broad range of possible intentions by a guilty person. However, a rash act by a person may also lead to the same consequences and may fall out of the law by pleading unintentional acts. I feel that this clause should also cover persons who are reckless in their behaviour, thus causing danger to the ship or safe navigation of the ship. Clause 4(2) states that any person who unlawfully and intentionally places, or causes to be placed, on a ship any device or substance that is likely to destroy or damage a ship or its cargo and endanger its safe navigation shall be guilty. In many instances, maritime terrorism has been committed using small arms, grenades and rocket launches, or other improvished weapons that have been in common use in land based terrorist activities.”
“Mr Speaker, Sir, I stand in support of the Maritime Offences Bill. This Bill is long overdue and it is important that it be implemented early. Since the early days of maritime activities when sailing ships plied the trade routes, the security of these vessels had been threatened by criminal or terrorist elements, either in port or at sea. Today, a large and vital part of the global trade passes through the ASEAN countries. 80% of the world's goods are moved by sea and about 47% of the world's trade taking place within APEC. The Southeast Asian region is the area of convergence of most maritime activities in ASEAN, particularly the Straits running through Malaysia, Indonesia and Singapore. Having visible maritime law enforcement patrol is vital to maritime safety, as deterrence is the key element in preventing the conduct of any criminal activities whether on land or at sea. As such, Singapore must play its part in tackling illegal maritime activities by having appropriate legal powers to deal with these threats. Clause 3 of the Bill deals with hijacking of ships which is a bigger threat than just ordinary robbery at sea. The South China Morning Post in Hong Kong on 17th May 2003 states that vessel hijacking rose to 25 last year from 16 the year before. Some had their markings repainted and super structures altered to conceal the identities when they went back to sea. Only a few had been recovered. Goverments in the region had been holding their breath for fear that Southeast Asian terrorists would join the hijackers and create a giant blockage to disrupt Asian trade. The International Maritime Bureau said that the terrorist attack on the French supertanker, Limburg, off Yemen in October 2002 showed maritime terrorism has become a reality.”
“Individual members have tried through various schemes to improve the return on their CPF balances, but not all achieved the same desirable results. At the end of 31st December 2002, three million CPF members have a total of $89.1 billion in their CPF balances. I believe, with this huge sum of money, the CPF Board has the skill, and is in a better position, to achieve better returns than individual members themselves. So I believe that this is possibly one way to increase or enhance the returns on members' CPF balances. Mdm Deputy Speaker, I support the measures.”
“If we look at it in perspective, Singapore Airlines had announced on 30th July that it had suffered a loss of $312 million as compared with a profit of $478 million in the first quarter of last year. The savings from CPF cut will definitely help SIA to reduce cost, while it continues its efforts to increase traffic and revenue and to contain costs. Even then, it will be an uphill task for Singapore Airlines to match last year's financial profit of about $1 billion. As we can see from this example, companies like SIA may not be able to share its savings from CPF. For those companies that are profitable, and the CPF cut represents a real windfall, I fully agree that they should share the savings with their workers through bonuses, performance linked incentives and so on. Perhaps we can even encourage these companies to continue to pay the 16% CPF with the Government giving incentives to them such as double tax relief on this extra 3%. The cut of 3% will help companies to some extent, but not sufficiently to really bring down business costs. I agree with several of the Members who spoke before me that we need to look at other ways to lower business costs, such as fees, rates, rents, land and transport costs. I believe these have been sufficiently dealt with by DPM Lee and Minister of State Mr Raymond Lim earlier. My next point is really on the return on CPF balance. Currently, interest paid on the Ordinary Account is 2.5%, and 4% on other accounts. Can we do better than the 2.5%? I am quite confident that this is possible. I would, therefore, urge the Government to look at better ways of managing the CPF fund and to give a better return to CPF members. And, if we are able to do so, then it will certainly help to mitigate the cut in CPF rates of our workers.”
“The cut from 36% to 33% will save $1.3 billion a year on employers' wage bill. While the extent of savings will differ from company to company, it could mean the difference between profit and loss, survival or failure and, ultimately, translating into job retention and creation or job loss. It would also mean that Singapore will be more attractive to foreign investments. Several MPs have urged companies, which will enjoy a windfall, to share the CPF cut with the workers. I fully support this notion. Companies that do not look after their workers cannot enjoy their loyalty and are doomed to failure. However, I would like to put in a word of caution, lest we raise unrealistic expectation. The retuning of CPF is necessary to help reduce costs and make our companies more competitive. Companies will use this to lower their costs and make their products and services cheaper or better so that they can compete better and remain viable and, in the long run, help to retain jobs or even to create jobs. They will have, in their own way, to make the most efficient use of this saving, while competition with China, India and the rest of the world will continue. I am not certain that many will enjoy a real windfall from this CPF cut. Let me illustrate. In the Straits Times' article dated 21st August, it was reported that big firms stand to save millions if CPF is cut. It said that if there was a cut of employer's contribution from 16% to 10%, then, for example, SIA's after tax saving could be as high as $46 million. Since there is only a 3% cut, the assumed saving would be half or $23 million. Will Singapore Airlines make enough money this year so that it can share the saving from the CPF cut with their workers? I am not certain.”
“The Business Times reported on Monday, 25th August 2003, that despite far higher labour cost here, total business overheads in Singapore may be only slightly higher than almost comparable wage levels in China, the much vaunted cheap workbench of the world, according to consulting firm Political and Economic Risk Consultancy (PERC). Assuming that this report is correct and Singapore reduces its cost of labour and thus overheads further, we should then be able to compete for a bigger share of the economic pie internationally. Mdm Deputy Speaker, I support the Prime Minister's call for retuning of the CPF. Mr Ng Ser Miang (Nominated Member): Madam, many businessmen that I have spoken to fully appreciate and support the decision of the Government to retune the CPF, cut contribution rate to 33% from 1st October and to bring the range of CPF contributions to 30-36%. I am sure Singaporeans and businesses alike also welcome the package of measures announced by DPM Lee earlier, with about $900 million going to support businesses and another $132 million that will go to support Singaporeans in need. Companies in Singapore have, in the past years, survived in extremely difficult economic conditions and tougher and tougher competitions. Even when we thought that we were turning the corner, we were hit by the impact of the Iraqi war and SARS. I can say that most companies have tried all they could to reduce cost, increase productivity, retain and redeploy workers, and as a last resort, some had to retrench workers. I believe that the Government's decision to retune CPF is also a recognition that companies have done all they could to reduce cost and a more fundamental change to wage structure has to take place to ensure that we can compete globally.”
“The range of employer's contribution stated by the Prime Minister lies between 10% and 16%. This, I believe, should be a comfortable band for most businesses to work within. However, if the employees need to top it up, and it is possible for them to do so, they should resort to using other financial tools such as instrument products to supplement retirement savings. Employers should also be encouraged to set up a second source of retirement fund to reward employees, and build up a second pillar of savings in addition to their CPF savings. Another mindset change for employers would be for them to recognise that total pay package includes the quantum of employer's contribution to CPF. This portion should not be regarded as a benefit on top of the salary, but an amount earned through the course of employment. So, if a person earns $30,000 a year, his total pay package will be $33,900, inclusive of the 13% employer's contribution. The additional $3,900 should not be regarded as an employee benefit but as part of his gross salary for the year. Any additional amounts of CPF paid through performance bonuses are benefits accrued. A distinction between the two will help employers and employees better plan the use of CPF as an incentive tool to increase productivity. The feedback I received from the ground is that a reduction in employer's CPF contribution is tolerable, but a pay cut is not. But if it is necessary to do so, I would not advocate that salary levels be cut down to that comparable to, say, China, for us to remain competitive. We must, however, structure our salary scales inclusive of employer's contribution to a level comparable to our productivity. In this way, we get to enjoy a reasonable standard of living and still be competitive.”
“Minister of State Raymond Lim has also acknowledged today that competition in many industries - and it is a common trend now - has forced prices down and margins are under tremendous pressure as fixed overhead cost remains high. With the lowering of the CPF rate from 16% to 13% for employer's contribution, overheads will drop tremendously for companies, and especially so for those that are labour intensive, allowing them to match lower prices and keep the business going and thus preserve jobs. In fact, some of the savings in CPF contribution will be a saving grace for companies that are facing losses. For those companies that will enjoy greater margin in their profit statements, staff bonuses should be encouraged. Saving jobs in an economic downturn is the Government's primary objective and attracting new investments and creating a conducive business environment for business to trade will be on top of the agenda. Without jobs, there will be no CPF contribution for the workers. Therefore, as Government adapts to the changing environment to save jobs, so must the people. This will include a mindset change as to how we perceive the amount that should be in the retirement fund. A fair amount of savings has to be set aside for the future. But with inflation, CPF savings will not be sufficient to meet old age requirements when a person retires. So what future quantum should this fair amount be? Should it be $120,000 as the Minimum Sum or more? It all depends on the standard of living that one desires. It may not be attainable but whatever the amount is, the future rate of savings in the CPF should be an affordable amount for both the employers and employees, that should be flexible enough to move in line with economic trends prevailing.”
“Mdm Deputy Speaker, we have often heard that a large number of potential jobs may be lost in Singapore as more companies contemplate moving their operations to countries that have lower labour costs. This, I believe, is unavoidable. Among the ASEAN countries, the attraction of lower labour costs, such as in Indonesia, Malaysia and other neighbouring countries, is irresistible to investors. Many businesses in Singapore, whether local or foreign, have been and are still producing traditional goods and services that provide employment for a large number of people. Their products are of high quality and some may even have the potential of expanding overseas with their products. However, they are currently facing heavy competition from overseas companies with lower cost of operations, and especially those that are labour intensive may be forced to cease operations here if nothing is done about the cost of labour. I am happy to note that the Government recognises this problem and that the Prime Minister is now taking action to remove one of the financial obstacles in the path of businesses, and that is the high statutory CPF contribution rate for employers. The current rate of employer's contribution rate of 16% has not been sustainable for a long period of time, and has been an inflexible reward instrument for employers to use in managing their payroll. Flexibility has now been brought into the formula by the Prime Minister to make CPF contribution move in tandem with the economic climate. This move, I note, is a significant signal to employers that the Government is serious about creating a robust economy. And the relief measures that the Deputy Prime Minister has just announced will further make our economy more nimble and aggressive.”
“Clause 5 seeks to amend section 9(1) to provide more powers to the Land Transport Authority of Singapore to enter upon and take possession of any land, not being State land, and construct or improve street, or install or improve road structure and road related facility thereon. While it is a good intention of the Authority not to do anything that shall alter the ownership of the land that is affected, the owner may still face great inconvenience and a loss of income in some cases as a result of the road works. This is especially so when the Authority has the right to give them the minimum of only two months' notice, under section 9(2), of its intention to enter private land to construct new streets. Most land owners would take a while to overcome the shock of knowing that their land would be encroached upon; thus leaving a few short weeks after the news to prepare for the time when the bulldozers start going into their property. Knowing that this is the feeling of land owners, I trust the Authority will exercise fairness and compassion in the enforcement of its powers. Finally, the amendment to section 20 (under clause 11) which seeks to regularise the practice of accepting security bonds from banks and insurance companies in lieu of cash is timely, especially when businesses are seeking ways of making their cash balances work harder for them. Sir, I support the amendments to the Street Works Act.”
“I hope it does not require another amendment to the legislation to provide a commonsense solution to such a problem. Another example, which is the opposite extreme, also arises from matured trees. But, this time, the trees are not obstructing the public streets. It was to my horror that I discovered on Friday last week, 27th June 2003, that the Land Transport Authority, in the name of street works, cut down 10 healthy Casuarina pine trees along Dunman Road, in front of the Guillemard military camp, after the proposed Tanjong Katong MRT station that will form part of the new MRT Circle Line. Those trees have been there for about 35 years. They provided good shade and beauty, and are not obstructing any public street or footpath, nor are they in the way of the construction of the underground MRT station. I understand that more will be chopped off as I speak now. These examples show the exercise of powers without due consideration to other factors that do contribute to a neighbourhood rich in history. The serenity and beauty that took so long to achieve have now been destroyed. Again, a commonsense approach could have saved those trees rather than treating them as an obstruction. Clause 17 introduces a new section 29A that clearly states that, "The Authority shall be responsible for the management, maintenance and repair of back-lanes vested in the Government." This is a welcome move as it will ensure that the back-lanes are well looked after and provided for because additional common space for residents living along the lanes will benefit from them, rather than letting these lanes become homes for unwanted animals and undesirable characters.”
“The new section 32A, subsection (1), states that: `No person shall - (a) deposit or cause or allow any article or thing to be deposited on any public street, five-footway or private footway; or (b) cause or allow any article or thing to remain on any public street, five-footway or private footway, so as to create any obstruction or inconvenience to the passage of the public on such public street, five-footway or private footway." Does "obstruction" here extend to young saplings which over time will grow to become huge public trees blocking the path of a public footway? Let me explain. Along East Coast Road, in front of the Katong Shopping Centre at Mountbatten, is an overhead pedestrian bridge which has been in existence for many years. About a metre away at the foot of the steps leading down from the bridge to the footpath, which leads to the bus stop, stands a huge Angsana tree obstructing pedestrians from having a clear passageway. One has to be nimble in his footwork when stepping down from the steps onto the footpath to avoid the roots of the tree that have protruded from the ground. In fact, one could literally hug the tree after stepping down from the steps of the bridge. Furthermore, while making a swing round the tree, one has to, at the same time, make sure that he does not step onto the busy street before walking towards the bus stop. I am not too sure whether it was the tree that was planted after the overhead pedestrian bridge was built or the other way round. But, clearly, an obstruction is in the way of a busy passageway. Will this proposed amendment then allow the LTA to cut down the tree which, I believe, comes under the National Parks Board's care? Or does it mean that LTA will have to move the pedestrian overhead bridge away from the obstruction?”
“Mr Speaker, Sir, I rise in support of the Street Works (Amendment) Bill. Many a time when I see street works in progress, I wonder how much more public streets and their related road structures and facilities can Singapore conti- nue to bear without encroaching onto private land or State land that has already been built upon. As a country progresses and aspiration increases, new buildings for offices and homes will continue to sprout up. Street works then become more complicated as demand for common space in a limited land area increases. A sensible and fair handling of plan for the construction, improvement, repair, maintenance and management of streets and back-lanes and the prevention of obstruction of footways are necessary. Clause 3 introduces new definitions to section 2 of the Street Works Act (Chapter 320A). Public streets are now clearly defined to mean only streets that are vested in the Government. This is important as otherwise any street which is privately owned but through the goodwill of the owner allows public to use may over time be wrongly classified as "public streets". Such clarification will also help in the valuation of private properties. The addition of a new section 32A (under clause 18) is certainly a necessary power for the LTA to ensure that Singapore's public streets, five-footways and private footways are clear and clean. However, I would like the Minister to clarify what does "obstruction" mean.”
“Sir, at the moment, the Ministry of Health is organising step-down health services for the elderly around three zones, ie, the west, central and east. Each zone will be anchored around an acute regional hospital with geriatric department, for example, Changi General Hospital in the east, Tan Tock Seng in the central zone, and Alexandra in the west. As the needs of the elderly change over time, with some having disabilities that require extended care and step-down facilities, may I ask the Minister what are the future plans the Health Ministry has in healthcare for the elderly? Are there plans to increase the number of community hospitals to meet higher demands as well as more trained doctors and care-givers? Still in keeping step-down care facilities affordable and attractive to all sectors of the population, more has to be done, especially in attracting private sector initiatives in such services. I believe that private hospitals may be encouraged to venture into such an area and develop their own wing or subsidiary companies to handle this service. Image will improve and more people will be encouraged to opt for such services that will eventually help ease bed shortages in acute hospitals. Upgrading the standards of step-down care services has to be given greater priority if the total health industry, from primary care up to tertiary care and recovery, is to be of world-class standard.”
“However, should he eventually receive a complaint by not listening to the customer, or attract a fine for stopping illegally, the driver can now be assured of a fair hearing to his problem. A taxi driver once told me that, apart from having to pay a traffic fine and receiving demerit points on his driving licence, he has to, on top of all this, also pay a penalty amount to the taxi operator. The D&R panel will provide a listening ear for taxi drivers instead of leaving them at the mercy of the taxi operators or traffic authority and risk having their licence withdrawn. The panel will discourage one from being too litigious. It is a less expensive, less punitive and non-adversarial method of dispute resolution. Setting up the panel allows taxi operators to concentrate on providing good taxi services rather than to spend their resources in resolving conflicts, in the process eroding its image as a good provider of public transport.”
“Sir, with the taxi industry now being liberalised, it is with hopeful anticipation that standards of services will rise with competition. Taxi operators, instead of just renting vehicles out, can now be expected to do more for their taxi drivers who, in turn, will be encouraged to give a better personalised service. Apart from granting rebates and incentives to drivers, I would like to ask the Minister for Transport if he can consider a scheme where taxi operators can improve the industry by working with the Ministry of Transport to create a dispute and resolution (D&R) panel from which players within the taxi industry can have their problems heard and resolved before being penalised by the authorities and taxi operators. The members of the dispute and resolution panel can be independent from the taxi operators and report to the Ministry of Transport. Fellow members may consist of members from the taxi operators and taxi drivers as well as other professionals nominated by the Ministry of Transport. In a liberalised industry where manpower moves freely from one company to another, we must try to separate the actions involved in disciplining taxi drivers from those hearing the complaints. The panel can take up complaints and disputes between individual taxi drivers and the taxi operators, customers and other road users. For example, one of the common woes that taxi drivers have is being asked to stop at places where it is in violation of traffic regulations. If an unreasonable passenger insists, the taxi driver has little choice but to comply, worried that he might receive a complaint against himself. His action puts him in a difficult position as he might risk chalking up demerit points with his compliance as he would have violated traffic regulations.”
“This happens when the value of the assets in the estate declines drastically in value, leaving an insufficient amount to make tax payable. Let me quote an actual case. The father of a volunteer in my ward passed away on 10th May last year. He was not a wealthy man, but a modest businessman. He had a will to distribute his assets upon his death. However, 10 months after, even the valuation of his assets has not been completed and a grant of probate has yet to be issued. The total estate amounts to about $760,000. A quick calculation shows that after some tax deductions, the family will have to pay an estate duty of about $8,000. However, during this period of waiting, the beneficiaries have lost $60,000 as the notional value of shares left in the estate has declined. Furthermore, this declining value cannot be used to offset the taxable amount of the estate. To add further misery, legal cost is mounting. The family is now living on other income while waiting for the final distribution of the father's estate. Most family businesses also face great difficulty surviving in the event of the principal owner's death. Some families may have to borrow against equity to pay the estate duty. Some even resort to selling the business away if there are no other means of paying the estate duty. So, to make Singapore an attractive place to create wealth, I would support the case for the abolition of estate duty before wealth is being transferred to countries like Malaysia, India and Australia where they have already done so.”
“Sir, our push to have more entrepreneurs must be followed by moderating our tax laws to allow successful entrepreneurs, who would have paid their fair share of income tax and other forms of taxes in their lifetime, to pass their wealth on or after death without their estate having to pay taxes again. Today, estate duty does not just affect the rich and wealthy. Over the last decade, assets of many average Singaporeans have also grown. Even those with modest income can now expect to have assets exceeding $600,000, the base now which is tax free. Some taxpayers resort to using trust vehicles to achieve the maximum tax savings possible during their lifetime, while others use them to avoid estate duty. These are expensive vehicles for many, in general, to utilise, and some may find themselves disadvantaged as well. Then there are others who resort to transferring their assets to nominated beneficiaries well before they pass away, leaving themselves with some money and no assets to spend for the rest of their lives. This plan works well when circumstances happened the way it is planned. But when it does not, the originator of the wealth may not have his assets and money back from the beneficiaries so easily. The deceased's estate is subject to the probate process which may be long and costly, especially to those without a will. The process of ascertaining the deceased's assets and the valuation of assets may take time, and in some cases, years. Each step of the process, such as securing of letters of administration, will have a cost. Sometimes, the beneficiaries are left with very little or none of the assets at all as the estate duty could well be more than the value of the assets.”
“When you get a greater part of the population in Singapore lifting their present meagre ratio of savings to consumption, you will have a nasty impact on demand and ultimately on the health of the corporate sector. The size of the economy will shrink. But I am happy to note that the Budget this year has started the process of managing the rising cost of factors of production, mainly, the cost of land, which in the longer term will help businesses and individuals to be prudent and match better their assets against their liabilities. When more businesses and individuals are less highly geared with assets greater than liabilities, then the ratio between savings to consumption will be more manageable and demand will rise again. Looking ahead, Mr Speaker, Sir, Singapore can overcome its problems in restructuring its economy as long as we have political stability and the will to overcome difficulties. The ability for a country to achieve a robust and vibrant economy need not necessarily be from a country big and rich in resources as past economic theory shows. In this digital world, size is not a barrier to achieving prosperity. Intelligence, education and training, a stable pro-business Government, the ability to adapt to a changing environment and to capture opportunities are now the key to national prosperity. I support the motion.”
“Firstly, interest will be tax free in the hands of taxpayers irregardless of which financial institution is used and the amount of money deposited. Secondly, promoting the development of world-class trustee and custodian services by improving the tax environment for trusts. However, Singapore will still find it difficult to compete with other countries if it does not address the tax laws relating to estate duty. I would advocate that in developing a vibrant trust industry, consideration should also be given to the possibility of abolishing death duties. Beneficiaries will then have the incentive to reinvest their wealth in Singapore; thus, in turn, benefiting the economy. Having said this, for the present, capital preservation must be foremost in the minds in a declining economy. This is a time when most corporations and individuals face a mismatch between assets and liabilities. In a period of growth, most businesses and individuals are less concerned if their liabilities exceed their assets as capital appreciation will soon reduce the gap when their assets increase in value. However, when the economy reverses downwards, businesses and individuals suffer from the deflationary effect and the national economy will be pulled down as a result of debts. For individuals, most of their savings have been in the CPF. Over the good years, many have over-extended their housing needs by utilising their CPF savings on properties or properties which would have declined in value and, in some cases, below the amount of their mortgage. The same applies to those who have invested in declining equity markets. The immediate response to such circumstances will be to reduce spending and lift savings, if any.”
“The move to exempt from tax all foreign income in the form of dividends, branch profits and services income from 1st June 2003 is a good example in making the case for local corporations with international operations to have its base in Singapore. The promotion of continuing training and retraining of Singapore workers as the economy restructures itself is a commendable move by the Government. It must continue even when things get better. As an example, nursing, though a very important function in the medical profession, has not been popular among Singaporeans. However, through good collaboration between the private hospitals and training grants from the Government, this profession has now gained popularity as many educated and mature workers, who have been displaced due to the restructuring of the economy, are now turning to this job. This bold move is a far-reaching step with great implication for our economy, as corporations seek to move towards countries that are more educated and have a skilled labour force. Another example which I would like to bring to Members' attention is this. Although Chrysler had its headquarters in Detroit and Matsushita was based in Osaka, neither would necessarily care about the government or labour force of its home country. Each would go wherever the money, the market, and skilled workforce drew it. To quote Robert Reich again, "In an age of global corporations, a nation's well-being rises or falls with the skills of its workers". In line with increasing the wealth of its citizens, Singapore must be a place for present and future wealthy individuals to park their savings and assets. These individuals can be role models for budding entrepreneurs to emulate and overtake in wealth creation. The Budget strives to achieve this.”
“Furthermore, a longer term lowering of cost for entrepreneurs includes certain exemptions from statutory audits and the use of limited partnership and limited liability partnership structures. As Singapore moves towards a mature economy, it becomes harder to achieve growth based on its domestic economy which is constrained by the small size of its population. Our economic interest must then be to extend our economic boundary beyond our shores to the world markets. When this happens, our national economic interest is at threat as Singapore companies will move their plants overseas to areas where labour and land are cheaper. As pointed out by Robert Reich, a former Secretary of Labour in the Clinton Administration in his book called "The Work of Nations", corporations had grown past the point where they could be considered American, German or Japanese. With headquarters in one country, research centres in another, factories in yet other countries, and customers all around the world, big diversified corporations could be loyal only to their own economic interests. Roger Porter, who was then President Bush's chief domestic policy adviser in 1990, gave a speech about America's outlook on world trade. Some people, he said, clung to the "old notion of nations, companies, and markets rigidly defined by national borders". But in this modern age, he concluded that such a notion was "outdated and dangerous". In order to still benefit from the scenario, we must continue to refine our tax laws in ways that will be attractive for holding companies and their headquarters to be sited in Singapore.”
“Consumerism got out of hand, which was what happened during Japan's bubble economy in the 1980s, leading to the eventual collapse of the economy in 1991 and 1992. In Korea, the late 1980s were heady, pro-consumer years. The 1988 Seoul Olympics did for the country what the 1964 Tokyo Olympics had done for Japan. Anything seemed possible. By 1990, the trade surplus was heading for the cellar, and the government had to fight back with a huge "anti-luxury" campaign. Fortunately, beyond all these economic cycles - and here I would like to assure Senior Minister of State Khaw Boon Wan - the human spirit is still strong and resilient. Singaporeans have more in mind than getting the cheapest possible price and highest possible salary. There are people who like to work hard and save and make sacrifices. Even lottery winners, who typically do not have society's most desirable jobs, do keep on working even after having cashed in. In fact, people who own small businesses behave in a self-exploitative, economically irrational way. They typically work longer hours than normal employees and earn less money than they could if they sold their assets and invested the proceeds. This work culture must be preserved in order that our economy continues to grow and help spur on the spirit of entrepreneurial drive in our people. I am glad that this drive is getting strong support from the Government, starting from our education system right up to a committee looking into entrepreneurship led by Minister of State, Mr Raymond Lim. For a start, some cost-cutting measures have been adopted, such as the employers' contribution to CPF being capped at 16% for another two years, property tax rebates and certain rental rebates among others.”
“Mr Speaker, Sir, in our pursuit of leisure and the good life, we must not only raise consumers' standard of living, through proper management of the economic system, but more in line with a young country's approach to increase the collective national strength of our nation. Our goal is to ensure that the nation remains independent and self-sufficient, and not for the sake of being materialistic only - a self-defeating habit that we too often fall into. The recent Budget, revealed by the DPM and Minister for Finance, reflects the right path that our country is taking, especially in the light of a slowdown in the world economy and a foreseeable difficult economic climate ahead. The biased slant in the Budget towards helping existing businesses grow and encouraging more to take the step of starting new businesses, will surely spur the economy towards the path of generating new income through goods and services which, in turn, would then generate more job opportunities. The fundamental purpose of any economy is to develop the productive base of the country - the industries no matter where they may be, within the country or under the control of the country's citizens around the world. This way, economic development will mean having more choices for the people, more leisure, more wealth, more opportunities to pursue happiness, and society as a whole will be successful. Our experience in the past years has taught us a dramatically clear lesson that we must not forget, ie, giving consumers too much and producers too little. Our wages were rising too quickly while our businesses were battling to make ends meet. Easy credit over the years has encouraged spending.”
“While this is good news to the commuters, it translates into lower income for drivers, but not necessarily taxi operators. Finally, when regulating the taxi industry, fines and punishments, as stated in new section 111H for both taxi operators and taxi drivers for offences, need not necessarily be made in haste for the sake of efficiency, through imposing heavy fines according to the book. But options must be in place for a dispute resolution and mediation process, which may eventually lead to either a waiver or reduction of the fine. This avenue can help taxi drivers who find that the cost of doing the business in driving a taxi already too high. The Ministry, in planning for a well- run taxi industry, should have a market mechanism, such as a dispute resolution and mediation panel that is fair and unbiased for taxi drivers and operators to turn to for help when faced with unfair practices. Mdm Deputy Speaker, I believe this Bill will provide a foundation for the Ministry of Transport to allow healthy competition in the taxi industry which, in turn, will be more responsive to changes in the transport needs of the commuters.”
“This help scheme is even more necessary, as the relationship between drivers and operators is no longer that of a cooperative, where the drivers are shareholders of the cooperative and owners of their cars. Another point which regulators need to note in regulating a robust taxi industry is the taxi operators' way of handling taxi drivers' welfare after road accidents. Let me illustrate. For NTUC Comfort drivers, a deposit of $1,500, excluding GST, has to be paid irregardless whether the driver was at fault or not. Deductions would then be made from the deposit for repairs when he is at fault. However, if the driver is not at fault, it takes up to a year for the refund to be made. The driver is further disadvantaged as he would be out of pocket during the period of repairs to his vehicles. New section 111C(3)(d) of the Bill states that the Ministry will consider "the existence of other taxi services", which is the supply side, "and the demand for taxi services" to determine whether to grant a licence to operate a taxi service. I would like the Minister to clarify what are the considerations the Ministry will take into account to determine the number of taxi drivers and operators in the market, and what are the guideposts that will signal the Ministry that the market may be saturated. NTUC Comfort started with a fleet of 1,200 taxis in 1970, rising to 11,000 in 2002. TIBS taxis started with 50 taxis in 1990 and, in 2000, it released its 2,000th taxi on the road. This steady increase in the number of taxis has been even felt by passengers. A grassroots leader told me that 10 years ago, one has to wait at least 20-30 minutes for a cab. Today, according to a survey conducted by NTUC Comfort, 90% of passengers say they can get a cab within 10 minutes.”
“The Land Transport Authority, which I assume will continue to regulate the taxi industry, should take into account new incentives to encourage taxi drivers to be proud of their vocation, in which this new legislation has not taken into account. Provisions, such as relief packages for taxi drivers in the event of an economic downturn, can be mandatory for taxi operators to set aside. This safety net provided for by the industry players will be more and more crucial when commuters have more choices of transport to choose from, causing the earnings of taxi drivers to fall heavily during bad times. As an illustration, a taxi hirer pays about $100 per day as hirer's fee, which is usually borne by the hirer and his relief driver. In addition, diesel cost per day comes up to about $15, after discount. This means that, each day, a taxi driver has an overhead cost of at least $115 to recover before seeing any profits. In order to make a decent income each month, a taxi driver has to drive long hours to earn more, in order to cover his fixed overhead costs. This may be at the expense of maintaining a safe level of concentration for themselves and other road users. A relief package during poor economic conditions will help in reducing business costs to the taxi drivers. NTUC Comfort, as a responsible taxi operator, has already extended a relief package to taxi drivers since November 2001, which will last till August 2003. This package consists of a monthly rental rebate of $40 in cash and $20 worth of diesel, adding up to a $60 relief package. It has also promised to sell diesel to cabbies at a discounted price. However, I urge the Ministry to monitor such relief schemes, in order to do more to help taxi drivers tide over tough times.”
“An industry that merely consists of two players is certainly not healthy for our public transport system. Perhaps, the Transport Ministry may, as a start, promote a scheme to encourage successful taxi drivers to band together to form their own corporations to hold licences as taxi operators. Next, I would like to raise some concerns relating to taxi drivers. Taxi drivers are the frontline faces of the industry. How they carry out the services to commuters will determine the success of the taxi operators that rent the vehicles to them. Collectively, they are a potent force in promoting goodwill to tourists and a conduit for the latest news in town. They work long hours and, most of the time, in heavy traffic conditions under wet and hot weather. It takes stamina and endurance to drive a taxi for eight to ten hours a day. As such, regulations must be in place to monitor the taxi operators' house rules, which have to be observed by the taxi drivers and which may, at times, be onerous to the taxi drivers when these rules are taken in addition to the usual regulatory obligations of the industry. Such monitoring would go a long way in making sure that the taxi operators give due consideration to the taxi drivers in their pursuit to provide better and competitive services. New operators who are successful should also be encouraged to provide assistance schemes to taxi drivers. NTUC Comfort has a retirement scheme which has begun this month. Taxi drivers with at least ten years of service will receive a lump-sum ranging from $300 to $1,400. They will also receive annual amounts ranging from $100 to $400. TIBS taxis also has an incentive and progressive bonus of up to $1,300 every year for its drivers.”
“Mdm Deputy Speaker, on the Road Traffic (Amendment) Bill, I will touch mainly on clause 11 which refers to the new Part VA of the Bill that sets out the framework for the licensing of taxi operators with the aim of bringing about better taxi services for commuters. In putting a licensing framework in place, the amendments will provide a direction for further possibilities in deregulating the taxi industry, such as allowing it to respond to market forces that determine the supply of taxis. The new section 111A defines a person who operates a taxi service as one who owns more than one taxi and leases them to individual drivers for the purpose of providing taxis for hire or booking. The insertion of Part VA is timely for the taxi industry. This is especially so in view of NTUC Comfort's plans to merge with Delgro to form a huge transport company with the potential to monopolise the market. With the merger, NTUC Comfort will be the market leader with 17,000 taxis, or 90% of the market, leaving TIBS taxis as the other operator with only 2,000 taxis to compete. This Bill will then allow other players, be it big or small, to enter the market to compete. However, I wish to highlight that, while the legal framework allows players to compete within the rules, it must not be stifling to participants who are comparatively of smaller organisation sizes. We must try to create an environment for competition to be fair, irrespective of the size of market participants. Competition should be based not only on cost but also on services. New section 111D(1)(g) states that the Ministry must specify codes of practice and standards of performances in connection with the preservation and promotion of fair competition.”
“Can the Minister of State please elaborate on the extent of upgrading that is going to be provided?”
“Question No. 2, Sir. The Minister of State for National Development (Dr Vivian Balakrishnan) (for the Minister for National Development): Mr Deputy Speaker, Sir, the decision to upgrade Sennett Estate is based on the eligibility of the estate as well as the Prime Minister's promise made at the last General Election. All private estates which apply for upgrading under the Estate Upgrading Programme will be ranked and selected based on factors such as the age and condition of the estate, the level of community bonding and the level of support for the programme. At the last General Election, the Prime Minister promised that Sennett Estate would be considered for upgrading if residents showed that they supported the programme offered by the PAP candidate for Potong Pasir. After the General Election, both candidates for Potong Pasir publicly affirmed that the majority of Sennett Estate residents had given their votes to the PAP.”
“The Government should have tax laws that not only encourage the creation of wealth but also discourage measures taken in avoiding estate duty, especially when Singaporeans have to resort to transferring their wealth to other countries like Malaysia, India and Australia, where estate duty has been abolished. Mr Speaker, Sir, I support the amendment with the hope that this action by the Government will be the start of a series of bold steps to examine the Estate Duty Act again and, perhaps, at the next Budget exercise, all Singaporeans can look forward to the day when they can be spared the trauma of having to live with this form of outmoded tax law.”
“Thus, if during his lifetime, a person plans his estate in such a manner that what he leaves behind is within the limits of the exemption granted, his estate would not have to pay any duty. However, the fact remains that the surviving family members will still be required to file a return to prove that the deceased's estate is fully exempted from estate duty. And that is a long tedious process by itself. Section 35 of the Act requires the personal representative to file particulars relating to all the properties of the deceased, including the value thereof, in respect of which estate duty is payable. Furthermore, under the Estate Duty Act, the Commissioner is empowered to assess the estate of a deceased person, even when no estate duty return is filed. In the meanwhile, the beneficiaries, if dependent on the deceased's money, could not use it for their day-to-day purpose. There is nothing wrong for a taxpayer to pass his assets on to his loved ones without being taxed again. Hence, many are at a loss as to why such a discriminatory taxation law still exists when the majority of Singaporeans has been spared such an ordeal. Another point which may be of interest in determining the benefits of keeping the law on estate duty is the question of the amount of estate duty collected each year, as compared to the cost of collecting it. If the sums collected do not justify the cost incurred, and if the amount is negligible as compared to other forms of taxes, then we should be looking at also extending section 11 of the Estate Duty Act to resident taxpayers who are Singaporeans. This will help alleviate the burden of taxes on those with substantial movable assets that are above the exemption limit.”
“Mr Speaker, Sir, thank you for allowing me to speak. The move to refine the Estate Duty Act by amending section 11 to provide that estate duty be exempted in respect of any movable property passing on the death of a person dying on or after 1st of January 2002 who is not domiciled in Singapore at the time of his death, is laudable, as it will encourage foreigners to invest more in Singapore. While it is necessary to draw more expatriates to put their money into our banking sector, we should also bear in mind the effects of the Estate Duty Act on Singaporeans. While foreigners are building their wealth with no fear of having to pay estate duty, those domiciled in Singapore have to prepare for another round of taxes on their estate before the beneficiaries are able to receive the proceeds. As we aspire to improve our economic well-being, more and more citizens may reach the tax range of the Estate Duty Act, as their assets, both movable and immovable, build up over their lifetime and, in the course of which, they already pay taxes. Having to levy estate duty on top of that is a very traumatic way for the Government to raise money from a family which, while suffering from the loss of a loved one, also has to cope with the uncalled for hardship to pay estate duty. This is especially so in a depressed market and the family suddenly has to sell its assets to raise cash to pay the estate duty, plus interest on late payments. But it can also be said that most people do not have to worry about estate duty, as there is an exemption of $600,000 in respect of the deceased's movable assets which include CPF money, plus an exemption of $9 million in respect of all dwelling houses.”
“Their business decisions, including acquisition or divesting businesses, should be based on increasing the shareholder value and return on assets. But where economies of scale of non-strategic businesses can be harvested and given to an external service provider, GLCs should readily do so to nurture the local sectors. In conclusion, we need to enhance the value of our private sector businesses by keeping them trim, efficient and focused so that they can maintain their competitive edge. These measures are necessary antibodies for Singapore to build up and have an immunity against the ever changing global economic conditions. GLCs have a national role to play in building a robust economy for Singapore. And since Star Wars was mentioned, may I borrow a phrase from it - may the force be with you?”
“Government policies on land and labour must be cost-effective and should apply to GLCs as well. For a start, Government agencies controlling such important factors contributing to the success or failure of business must be conscious of not pushing up costs through their pricing policies. Instead, they should seek only to service the public with a minimum of fees necessary to cover their services. It is equally important that GLCs should concentrate on the external wings of our economy and not be perceived by the people as the big fish out to gobble up the market share or to take over the smaller fishes on their home turf. Mr Deputy Speaker, Sir, please allow me to highlight the success of GLCs extending its external wings to build global businesses. Keppel FELS, Energy and Infrastructure is a world leader in the building of harsh environment jack-up rigs. It designs, builds and repairs the complete range of mobile offshore drilling units, floating production systems and specialised vessels. In 1996, it has 60% of the world's jack-ups on order. Another example is SembCorp Logistics which has formed a strategic alliance with Kuehne and Nagel, one of the leading global freight forwarding and logistics providers with offices in 85 countries. The success of these two companies only serves to highlight the salient advantage of competing in the international arena. It raises the overall value-added to the industry concerned and acts as a catalyst to other related trades and services. The Government should, while seeking to remain in businesses that are strategic to the country, such as the supply of water, electricity, banking, aviation and other facilities and services that are low in competition, continue to improve the performance of the GLC sector.”
“As world globalisation takes off, small countries will be able to ride on this wave to overcome the disadvantage of its limited domestic market. Singapore is no different. Local companies, which by nature are more entrepreneurial in character, may not necessarily follow the traditional multi-national structure, with a corporate headquarters in Singapore controlling subsidiaries around the world. These companies have a network character that allows them to take advantage of the new opportunities presented by the inter-linkages of the global economy. Our corporate governance guidelines may not also necessarily be applicable. For example, with a minimum of internal bureaucratic machinery, Acer, which started out as an assembler of IBM equipment, quickly moved to selling its own computers. It has been able to move quickly to take advantage of opportunities. This company's understanding of local demands and developing markets overseas are good because of their network with locals in the foreign lands. This example also suggests that it may not be advantageous to partner a larger GLC when venturing overseas as the company culture to be adopted may not suit the GLCs. The cluster approach, as recommended by the EISC, whereby GLCs, MNCs and SMEs together venture overseas may not be a good idea where market conditions are volatile. In addition to efforts to nurture and strengthen local companies, I feel that levelling the playing field between the GLCs and the private sector is as important. On the one hand, as we spend efforts to nurture new local businesses, we must not put obstacles in its path that will lead to its ultimate demise. I urge the Government to allow the private sectors space in the local market to grow and excel.”
“It is based on the belief that saving is the factor to wealth creation and that savers are the impetus to wealth creation and the nation. While it is good to hold these values, we must however recognise that today, challenges are different. It is the risk-takers and not savers who spawn wealth. I urge the Government to actively promote private sector initiatives in the production of goods and services that are competitively healthy and can be done effectively by private enterprises. It should minimise undue influence of GLCs and big foreign players in such markets where the growing local companies will not stand a chance of competing, for example, in the building construction industry. That way, local companies get to grow, be stable and be able to provide jobs to the people. The Government may even wish to even consider providing seed money and tax incentives to the private sector to encourage the birth of new businesses that may require a long gestation period before profits are seen, as in life sciences. I urge the Government to also look into strategies to sustain local businesses. I would suggest a review of the cost of doing business by the private sector and, if necessary, for all of us to change our mindset. Many corporations face great difficulties in coping with hostile business conditions. One major factor is the rigidity of the local wage system. Wage cost forms a major challenge of the total cost of a corporation. If we are able to allow corporations more leeway in shedding costs, we will end up with a more efficient private sector that will be able to react to hostile market conditions. Looking beyond, local companies can and must be encouraged to become multi-national corporations.”
“Mr Deputy Speaker, Sir, thank you for allowing me to join in this debate. First of all, I would like to declare my interest as a Director of the Energy Market Company, a subsidiary of the Energy Market Authority. The GLCs have provided much needed jobs and supported economic growth during the early years of Singapore's independence. With a growing private sector today, we must now address the role of both these two groups of companies. Much has been said about the pros and cons of GLCs during these two days of debate. Mr Deputy Speaker, Sir, allow me to make some comments on a few of these points. The Entrepreneurship and Internationalisation Sub-Committee (EISC) has made some recommendations to the Government to help promote private enterprises. While this would be good for Singapore as businesses driven by the private sector will have a better chance of meeting their challenges in today's rapidly changing environment, there is still room for GLCs and SMEs to co-exist. I believe together, they will be able to adapt to the different sectors of the economy, thus responding better and faster to market changes as demands from consumers would increasingly be a constant factor and businesses would have to cope with such short-lived demands. The constant factor will not be a factor which will be long-lived. Some examples of short shelf-life are electronic products such as televisions, cameras and some household products. Cultivating and strengthening the private sector are critical to the proposed restructuring efforts unleashed by the Government. The success of Singapore economy to-date has been based on a pro-investment and export-growth model. A high level of savings has allowed such a policy to reap results.”
“The rationale for the move was to assist workers in this age bracket, as they are viewed to be at greater risk of being retrenched, but will also have more difficulty of finding work at their last drawn pay. I beg to differ. The proposed reduction alone will not achieve its good intention of retaining jobs for the 50-55-year old workers. Workers in this age bracket will have to change their mindset in order not to be left behind in a changing business and social environment. In this respect, I hope that the Government will speed up its efforts in retraining this group of people, such as in the Skills Redevelopment Programme and the People-for-Job Traineeship Programme. Moreover, the decrease in employee's contribution from 20% to 16% eventually will mean less CPF savings and a higher income tax bill for high-income earners. This may lead to employees asking for lower monthly salary with a higher year end bonus. This is because bonuses have no limits in CPF contribution as long as total CPF contributions do not exceed 40% of total income for the year. If this trend catches on, then the change in contribution rate for those in the 50-55 year brackets to 32% will not make any difference to this class of people, thus neutralising the effect of changes to CPF contribution. In conclusion, I support wholeheartedly the recent changes by the Government to mark the broad path to CPF rate in the future by introducing fine adjustments to the system, rather than drastic changes, allowing a stable transition from a high asset based savings fund to one that has a wider investment base that will keep pace with inflation and achieve a higher liquidity ratio. We must be prudent in our investment and not allow a high dependency to occur in any one class of assets.”
“Total funds still available for investment in the Ordinary and Special Accounts are $52 billion and $12 billion respectively. Furthermore, the balance in the Special Account of $80,000 - the Minimum Sum to be maintained in the CPF account - will not meet the needs of most Singaporeans as the standard of living rises and people tend to live longer. To counter this vulnerability, the Government has recommended to increase cash available at retirement by raising CPF contribution to members' Special Accounts by one percentage point once CPF rates are restored to 40%, requiring the CPF to pay a higher and more appropriate long-term interest rate on Special Account balances and raising the Minimum Sum to be kept in CPF accounts beyond the current level of $80,000. These efforts may be too late and too little for some. As most Singaporeans have a home now and as income potential drops, as one gets older or is retrenched, the temptation to convert their property to cash to supplement their CPF increases. This then may result in a whole new spectrum of housing problems for this group of people, as they have to find alternative housing. What I foresee is a class of rental housing may eventually have to be created to meet this possible future need. Last but not least, I would like to voice my concern on the CPF rate for older workers. Under the proposal, older workers will see their total CPF contribution capped at 32%, down from the current 36%. Their own contribution rate will also be down from 20% to 16%. This will be implemented when the Government restores the targeted CPF contributions. The Deputy Prime Minister has assured us that this will not likely to happen until 2-4 years later.”
“However, to attract banks to participate in this sector, a strong resale market must be in place to allow banks to have a second hand market to dispose of properties in the event of a default by the borrowers. Here, HDB will have to monitor carefully the supply side of the market and avoid an over supply, thus encouraging buyers from choosing new flats as opposed to old ones in the resale market. Some Singaporeans have voiced concern over the banks taking on their role. They are worried that banks, being what they are, profit-making corporations will be less lenient and less ready to help the man-in-the-street during economic downturns as compared to the Government. Banks are accountable to their shareholders and are concerned about their bottom line. I would like to ask the Minister whether safety nets will be put in place to help families whose homes might be seized by the banks and left homeless. Sir, another problem I wish to highlight is the availability of cash if the balances in CPF savings are not going to be sufficient enough to cater for retirement needs. Statistics from the CPF Board in the year 2000 show that more than 600,000 CPF members have less than $80,000, the Minimum Sum required to be maintained in their accounts by July next year. As more responsibilities in managing CPF savings are passed down to contributors to the Fund, a liberal use of CPF for investment in the Ordinary Account must surely be reduced gradually. The Ordinary Account should be encouraged to grow in the same proportion, if not more than the Special Account. This is to ensure that savings in the CPF are close to sufficient for old age. Total CPF funds invested as at 31st March 2002 stood at $26 billion.”
“At present, some Singaporeans have already experienced a permanent depletion of their CPF savings as a result. The value of their properties has fallen and may not rise again to the level of their purchase price. Today, the ownership of this form of asset, if not fully paid for, may prove to be a liability if there is insufficient balance in one's CPF account. To curb such excessive spending, we must go back to the original purpose of our CPF savings - that of meeting our retirement needs. We need to avoid a situation where Singaporeans are cash poor and asset poor when they retire. We must therefore create a public awareness programme to dissuade Singaporeans from spending on property in anticipation of a double digit growth in our economy, as was seen in the late 80s and a good part of the 90s. Those years saw the value of properties rising beyond the reach of most Singaporeans. But the booming property market has led many to throw caution to the wind. To expect such time again is but an illusion. With Singapore becoming a more mature economy towards a developed nation, growth rates of a single digit such as 3-5% will become a norm. Future growth in property prices will follow economic trends, and we will not see fast rising property market for some time to come. The need to fork out cash under the new recommendation would help Singaporeans to be more realistic in buying a home not beyond their means. Sir, next, I wish to draw DPM's attention to the move to allow banks to participate in granting housing loans to HDB property owners. This is indeed a bold move by the Government. Not only does it allow interest rates to be pegged to market rates, it also allows banks to have first claim against the property before the CPF Board.”