Cedric Foo Chee Keng
Singapore
“Chairman, indeed digital technology will be a key enabler for a brighter future for Singapore. Listening to Senior Minister of State, Ms Sim Ann, Senior Minister of State, Dr Janil and Minister Iswaran, I am sure my colleagues share my view that we are in good hands.”
“Chairman, some months ago, we had a healthy discussion between Mr Pritam Singh and myself about POFMA; whether the Judiciary is best party to act, or whether the Executive branch is better placed to act on the issuance of Correction Notices. I think the recent COVID-19 outbreak is a good example of when to use POFMA.”
“Mr Chairman, my cut is to ask about the tangible benefits to citizens and local businesses arising from our Smart Nation initiatives. Digitalisation has opened up new possibilities for businesses and for our society.”
“I am also particularly concerned with school children from lower income families who may not be able to afford a computer or broadband access at home. In today’s learning environment, a computer and broadband access are like "paper and pen" of the past and, therefore, no child should be denied that.”
“Chairman, this question is for Minister Chan. Historically, many Government agencies and Ministries design systems and processes from their points of view. I think the public will be well served if Government agencies can think "the other way around" and try to design processes from the citizens' or businesses' points of view.”
“Yes, probably the last engagement to give others a chance to speak. POHA is for private matters, and if somebody felt that they had been harassed, as a private individual, they will go to the Courts.”
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“These could have been forecasted with reasonable confidence. If we do this well, we can avoid HDB flat price volatility and therefore maintain a reasonable Debt Service Ratio (DSR) so that first-timers can continue to afford HDB flats. I would like to ask the Minister about the past trend of new flat sale prices. Over the last 10 years, for each class of new HDB flats, are they sold at prices that have grown faster than the median household income? How has this debt service ratio changed over the last 10 years? How does it compare with DSRs in other developed cities? This will give us a sense of whether or not HDB flats continue to be affordable by Singaporeans. More importantly, will the Minister assure prospective first-time buyers that new HDB flats that are coming on-stream will be priced at a level that will be within their reach and if need be, a higher subsidy (compared to resale market prices) will be provided so that the DSR will remain largely the same as in recent years? There is another concern for buyers of new HDB flats; that, the time taken to obtain one is about three years. This is considered too long. Could, for example, the Minister consider that the BTO threshold be lowered to, say, 40%-50% instead of 70% before construction can begin? Also, could the construction time be shortened by way of piling in advance of need or pre-fab fabrication construction methods that are faster, more productive in order to bring new flats to the market more speedily? I think this would allay a concern of many.”
“That is why while they were taken as scapegoats, we must continue to enable our new migrants, PRs, citizens, to own homes even if they had caused prices to creep up. My plea to the critics of MND and HDB is a simple one. Let us see it in the right perspective. Put it in context and do not politicise the issues. The mission of the HDB is to provide affordable housing, but I believe that allowing HDB flat prices also to appreciate gradually over time, must also be one of its objectives and desired outcomes. In fact, what sets public housing in Singapore apart from public housing in the rest of the world is the "wealth creation effect" of HDB housing over the years. Consider the converse – a crash in HDB prices, that will be a disaster! If we over-correct the current situation of a creeping up of prices and over-built right now, we run this risk of creating an even bigger problem. This is exactly what is happening in the US sub-prime market which has sparked off a world recession. So, broadly speaking, a gradually appreciating HDB flat is a good thing and we really do not want "falling prices". To achieve this objective though, we must do a better job at forecasting demand so as to match the supply accordingly. After all, prices are determined through supply and demand interactions. I recognise that this is not easy. For example, some of the factors contributing to the recent spike in resale HDB flats. Prices are high liquidity in the marketplace, very low interest rates and the lack of attractive alternative investments. These factors are very difficult to forecast, even sentiments. However, other factors like the number of couples getting married each year, number of new citizens and PRs expected and number of upgraders to bigger units etc.”
“Sir, I beg to move, That the total sum to be allocated for Head T of the Estimates be reduced by $100. Sir, my first cut is on the "Affordability of HDB flats." This issue is of great public interest. We must discuss it, we must debate it. But at the same time, we need also to put the issue in its right perspective. Before I begin, let us revisit the history of the Housing Development Board (HDB). HDB was set up 50 years ago, back in 1960, during a period when Singapore faced a housing crisis. At that time, many Singaporeans were living in slums. Only 9% of Singaporeans lived in flats. Since then, the HDB has constructed and made available some 880,000 homes to Singaporeans. This was no happenstance. It was the result of a bold vision, meticulous planning and swift execution. Our achievements in public housing can be attributed to the strong Government support and financial commitment. HDB has subsidised, financed and housed an entire nation. In the last 10 years, from financial year 1999 to 2008 alone, HDB ran a total home ownership deficit of $7.3 billion. That means the sales revenue where it collects from selling the flats, fall short of its cost for land and construction by $7.3 billion in the last 10 years. HDB also carries a housing loan of $47 billion as of the end of last financial year and these are the amount that were used to finance HDB flat owners. When compared to public projects, say in Bronx, Manhattan or Hackney in East London or Mong Kok in Hong Kong, our public housing estates are envied by many. And it is not just about flats. It is our ability to provide every migrant family then, who had arrived here from many shores, a stake in the country – a reason for them to sink their roots here and call Singapore home.”
“Mr Speaker, Sir, I share the Minister's concern and I note that the trend of our children not supporting aged parents is a worrying one. I am also concerned and I suspect that this problem will grow as Singapore faces this ageing population situation. I would like to ask the Minister if he has studied the root causes for such a phenomenon and also what insights can be gleaned from this. Is there a particular group? And, thirdly, have we looked at other societies, how have they fared and what can we learn from the measures that they are taking?”
“And I am not taking about thousands of foreign talents competing with Singaporeans for jobs but, let us say, a few hundred per year of the very top from all different fields. They will add dynamism to Singapore and we will do well to welcome them. They would help create jobs instead of destroying jobs or competing for jobs, with a net plus for Singapore. To do this well, let us re-consider dual citizenship or other forms of pull factors to bring these talent to our shores. Mr Speaker, Sir, indeed, the future landscape will be more uncertain. Singapore's success is more assured if we take a long-term view. Often, the expedient and path of least resistance would suppress the symptoms but they will not provide the cure. Instead, we need to do whatever is necessary, however difficult, to help Singapore emerge from this crisis stronger. Sir, I support the Prime Minister's proposal to form the Economic Strategies Committee, and I am confident Singapore will once again triumph over these challenges. Sir, I also support the motion to thank the President. 2.16 pm”
“Singapore economy has grown in the past few years by way of a larger workforce. In fact, more foreign workers reduced the urgency and motivation for our industries to upgrade and to improve productivity. Labour expansion is, therefore, in my view, the easier solution to grow an economy but it does not create higher value jobs for Singaporeans. As the Prime Minister pointed out, we have reached the social limit with one million foreign workers in Singapore, and I am a host MP to many of them at Pioneer Division. We will still need them but we cannot push this lever much further. We must therefore seek other growth levers. If our economy is likened to a car, we cannot rely on just higher engine capacity alone to increase the power output. We must think of better fuel injection systems, perhaps a turbo charger, higher pressure combustion chamber or higher revs per minute and so forth. The F1 car, for example, has only an engine capacity of 2,400 cc. This is similar to a family sedan, like the Toyota Camry. But it revs at 18,000 revs per minute and produces an awesome 700 horsepower, that is exhilarating! Sir, when we have insufficient resources, like top human capital, we can attract them to Singapore since Singapore is a highly liveable city. Japan, with its cultural and language barriers, will find this strategy very challenging. So this is Singapore's competitive advantage and we will do well to work it. The current crisis is a great opportunity to re-double our efforts to attract top talents to Singapore. Major dislocations are taking place around the world as this crisis deepens. Top talents, whose companies and governments may become hard pressed to fund their enterprises, will look to relocate to other countries. Now is the time.”
“The Jobs Credit Scheme has worked well to allow employers and employees time to think through what needs to be done. It was a useful 'painkiller', given the speed, the breadth and the depth of economic tsunami. However, if the prognosis is that this recession is expected to last longer, then we cannot continue to prescribe painkillers alone, we need real medicine, however bitter, however painful they may be. Unlike the human body, economies do not have natural immunity and inherent defence systems. They must be actively managed and restructured or they fail. The Jobs Credit Scheme masks the symptoms of an economy in need of change. It retards the re-allocation of human capital. The consequences of such government intervention, if prolonged, acts as friction against the re-allocation of human capital. This will impede productivity improvements in the long run. Just like the stock market which allows financial capital to flow freely from companies with poor earning prospects to those with good earning prospects, the job market should be free for human capital to flow. A continuation of the Jobs Credit Scheme will increase the rigidity of human capital flow to the detriment of productivity which is, in the end, the real medicine. The Prime Minister's fourth strategy is creating high value jobs for Singaporeans and I agree with him. Without higher value jobs, as I said before, our wages will remain low and our quality of life will stagnate or regress. I hope Singapore can soon showcase how our investments in R&D can translate to industrial applications and therefore yield higher value jobs. The Prime Minister's fifth strategy is maximising resources. This is also a productivity measure. How do we harness and optimise our limited resources to maximise value for Singapore?”
“That is the only sustainable way that wages can grow. Wage growth must be supported by productivity growth. The Americans found out that debt-financed consumption cannot last. US automakers now face bankruptcy because they failed to match their foreign competitors in productivity. They were also beset by demands for ever higher wages and benefits from its unions, and I fear that many in this industry will soon lose their jobs. Productivity and innovation underscore the Prime Minister's outline of what Singapore's economic strategies ought to be. The first strategy that the Prime Minister spoke about is seizing growth opportunities. This requires a landscape scan. Where are the new addressable markets which we can have a fair chance of success? To answer this question, we need to ask, "How can we evolve our economic ecosystem, including productivity and innovation capacity that are relevant to these new industries, these niches and these new markets?" The Prime Minister's second and third strategies are strengthening corporate capabilities and growing human and knowledge capital. These are key success factors to improving productivity and innovation, both at the corporate and worker level. To build capabilities often require the application of technology and intellectual property. Training is also critical. In this regard, the SPUR programme is an excellent one. Without doubt, putting managers and workers to training is not easy. I commend the WDA, the NTUC and e2i for persevering in this programme. This will become even more critical in the New World Order where demand and growth are expected to remain low for some more years to come. Companies will be forced to restructure and I fear that retrenchments in Singapore will rise.”
“Our people are honest and hardworking. We have a sizeable reserve which allows us to keep our tax rates competitive. Our diversity and use of English keep us plugged into the world. We are at the crossroads between India and China, and as the Prime Minister and others have pointed out, taken as a whole, the Singapore 'system' is hard to beat. We have, through the years, gotten our basics right. While many countries are still grappling with political stability, corruption and deficits, Singapore is starting from a very sound base and we have every chance to pull ahead. The route to economic reforms, however, would not be an easy one and it will test the cohesiveness of Singapore as a people. The Prime Minister has outlined five economic strategies to position Singapore for long-term growth. I believe these strategies are relevant to the times and draw on our strengths. Let me attempt to extract the essence of these strategies and frame them into one statement. The statement goes as follows: – "To enhance Singapore's economic ecosystem, including productivity and innovation capacity so as to capture new markets and grow a diversified economy." Only the words "markets are new", the rest of this statement boils down to good old-fashioned productivity and innovation. Let me elaborate why I believe that productivity and innovation remain key to our future success. We have seen in the current economic crisis that the only means – unless you receive an inheritance – to achieve a higher quality of life, is through innovation or productivity growth. Why do I say that? If one wants to buy a bigger house, a faster car or a more exotic holiday, one has to produce goods or services that are of a higher quality or at a lower cost, or better still, both.”
“Mr Speaker, Sir, in his Opening Address to Parliament, the President spoke about building our future Singapore in an uncertain world. The Prime Minister followed up on Wednesday to outline five key economic strategies to position Singapore for the future. Sir, I would like to discuss these strategies and add my own views. Let me first survey the competitive landscape which will set the stage for my points. Most analysts believe that economic power will shift from the west to Asia and, more specifically, to China and India. Some analysts went further to declare this era as the "Asian Century". In the aftermath of the current financial and economic crisis, the US economic model has lost some of its cache. This economic model which is underpinned by light regulations and heavy credit is no longer upheld as the pre-eminent way to prosperity. However, lest we get too carried way with the "Asian Century", the US and western economies cannot be ignored because I believe they will continue to account for a large share of the world's creative and high technology industries. Trade flows and globalisation may also be temporarily hampered by protectionism, but it will not just grind to a halt. These concepts are founded on sound economic principles. Every country is better off to focus on what it does best. Enterprises which resist trade or globalisation or are prevented from them will lose competitiveness over time. Against this background, our strategies will have a good chance of success if we also leverage on our strengths. Singapore's strengths are well-known. Our island state is safe, secure and stable. We have an excellent infrastructure. Our leaders are committed, competent and capable. We are governed by rule of law and offers intellectual property protection.”
“Mr Deputy Speaker, Sir, I recognise that separating the functions of CAAS makes strategic sense. But nobody can fault the current CAAS, in its current form, for having done things poorly. In fact, it has done very well. Therefore, I see this as an important step but it is not really an urgent step. Would the Minister agree that if we can take longer than three months to ensure that the transition takes place in an orderly manner, we will all be better off for it?”
“Mr Deputy Speaker, Sir, can I ask the Minister again what she envisages as the period of transition between the single CAAS and NewCAA, NewCo?”
“Although there are safeguards in place for employees and the preservation of existing contracts, there does not appear to be any published safeguards for the other stakeholders which may result in higher airport taxes for passengers, higher levies for airlines, landing charges, higher charges for ground handling companies, etc. I would like to ask the Minister to enlighten this House on whether there will be any immediate effect on the fees that these stakeholders are paying today. Sir, in conclusion, subject to the matters of concern that I have raised, I support the Bill.”
“Mr Deputy Speaker, Sir, another key success factor for Changi has been the close collaboration among all the various agencies working the airport. From Day One, as a team, these agencies realised that if they do not work cohesively and just guard their narrow interests, the impact would immediately filter down to the passengers. Sir, if we lose this teamwork, we lose our competitive edge at Changi. Splitting up CAAS creates a new division and, if we are not careful, many issues can fall between the cracks. I would like to ask the Minister how long the Ministry would monitor the transition from one single agency as CAAS to the split functions of the new CAAS and NewCo, and if she could assure the House that the high standards of customer service that passengers have come to expect of Changi will not be impaired with NewCo's formation and its new profit objective following corporatisation. Sir, I had previously also asked the Minister on how the corporatisation of CAAS would impact the other stakeholders. I am heartened to note that the proposed corporatisation is not intended to be a cost-cutting exercise. No jobs will be cut and, in fact, new jobs will be created as there is a need to split corporate functions, such as human resource, finance and legal. I also note from the Bill that CAAS employees will be retained in the new structure on terms no worse than their current packages. Under the Bill, I noted that CAAS property will, where relevant, be transferred over to the new entity and contracts with CAAS will similarly be carried over to the new entity.”
“In other words, Terminal 3 which opened last year was conceived and provided for in the original Changi masterplan some 30 years ago! And with the construction of each terminal, new capacity was added well ahead of demand. That is why Changi has been such a success and an oasis for so many travellers. It provides visitors to Singapore with "first impressions" that few cities can match. The goodwill and externalities it creates for Singapore cannot be measured by a simple financial ratio like "return of capital employed". If the Government had gone about planning and constructing Changi as a self-contained commercial enterprise insisting on maximising asset utilisation and short term returns, the "Changi story" would not have been worth telling and it would go the way many airports around the world had become – congested and uncomfortable. Sir, my concerns with this separation of functions is whether the NewCo will take a different view by focusing on short term returns and therefore conserve capital and allowing our terminal capacity to be fully exploited before investing in new capacity. This tendency to maximise returns will become even more pronounced when this NewCo is subsequently privatised and eventually listed. Sir, I am glad to hear from the Minister that the privatisation and listing decisions have not been made. Sir, could the Minister enlighten this House how would the Ministry ensure that Changi's advantage is not eroded over time if the NewCo would indeed take a shorter investment horizon? In this regard, how would the board and executives of NewCo be compensated or incentivised? And how would we ensure that Singapore's strategic interests are not relegated to some Annual Economic Profit or bottomline measures?”
“Mr Deputy Speaker, Sir, I rise in support of the Bill. I would like to highlight some execution risks with regard to the separation of functions of the CAAS. Sir, I agree with the Minister when she said that the corporatisation would allow the new commercial arm of CAAS to be more proactive, to be nimble and innovative. Also, it will help to retain and attract talents and to also venture abroad. Sir, the intent of separating CAAS makes sense and could work but there are nevertheless significant execution risks in the separation of functions of the CAAS. Unless these risks are identified and managed properly, they will negate the potential benefits of such a move. The key risk of corporatisation, as I see it, is whether or not the new commercial arm which we will call "NewCo" would pursue short-term commercial objectives at the expense of the externalities that Singapore enjoys as a nation from the broader success of Changi. Sir, let me re-trace the history of Changi. Changi was successful because of the vision and long-term planning of the Government at that time. Its beginnings date back to the 1970s when the Government made the bold decision to shift from the old airport at Paya Lebar to its current site at Changi. At that time, the additional airport capacity that we needed could have been met by building a second runway at Paya Lebar. This would cost less and would have significantly lower risks. Relocating to Changi, on the other hand, would cost over S$1 billion, a princely sum even now but a mega investment in those days. The Government decided to relocate the airport because they had a vision which cannot be fulfilled at Paya Lebar. That vision, even in the 70s, called for three terminals.”
“Sir, a follow-up question for the Minister. The Minister describes the CPI and the WI, the average, and then there is a productivity extraction, which basically forms the basis of the formula. If the WI and the CPI were to drop because of sustained or prolonged economic downturn, would fares be decreased?”
“Sir, does this not mean that fuel price has an impact on fare adjustment?”
“Sir, supplementary question for the Minister. Is it correct that the price of fuel affects the operating cost of the public transport operators? And is it also correct that the second order consideration for the PTC, after having applied the formula which the Minister described, is to test the proposed increase against the returns that the public transport operators are getting and, therefore, make adjustments in accordance to that?”
“Sir, this year's debate on transport in the Committee of Supply is less heated than previous years, I think for three or four reasons. One, COE prices, I believe, are at a record low and contrary to what Mr Low Thia Khiang said, from our interactions, more people are accepting the ERP. Also, the public transport operators have voluntarily said that they will not apply for any fare increase this year. I think this shows that they are with the people. On behalf of the GPC, we applaud this gesture. But I think, more importantly, it is the fact that the Minister has laid down the long-term Masterplan and it is beginning to show early signs of working and creating a Singapore that will be more liveable, and I am confident that that will take place. I want to thank Minister Lim, the Senior Minister of State and the Senior Parliamentary Secretary for their very comprehensive and convincing replies. Sir, I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. That the sum of $389,297,400 for Head W ordered to stand part of the Main Estimates. That the sum of $5,004,798,300 for Head W ordered to stand part of the Development Estimates. Head R – Ministry of Law”
“Sir, first, I would like to thank the Minister for making me very pleased and not disappointed about the off-peak car scheme. For my colleagues, it is good for them to note that if you press on, sometimes you get what you ask for. But there are many other colleagues that have asked for one particular point and have made this particular appeal, and that is, the polytechnic student concession fares. So he will please many of them to avoid disappointing many of them. In the last count, up to 10 MPs have spoken on this subject. The Minister's response was that there are, amongst the polytechnic students, some who come from wealthy families and some from less wealthy families, and so we should not allow them to enjoy this same concessionary rate as other JC students. But I think that argument fails to recognise that even among the JC students, some of them are from wealthy families and some from poorer families. Even among the senior citizens, some are very wealthy and some are less wealthy. I think the cut-off point is: are they full-time students? Indeed, JC students are full-time students; ITE students are full-time students, and so are polytechnic students. I recognise that any concession we give to a particular group means a cross subsidy from all the rest of them who are not enjoying the concession. But I think we have come to a point where the public supports it. That is my belief, and I hope the Minister will state his stand. Although it is beyond him to make those adjustments – it is up to the Public Transport Operators (PTOs) – I think, with his statement, it will help a long way when the PTOs are reviewing this subject. The Chairman: Can I ask Members not to make new speeches but just clarifications? Mr Raymond Lim.”
“I would like to ask the Minister to update the House on whether there are other initiatives and if the difficulties in the sector deepens, is the Ministry preparing more initiatives to help this particular sector. Sea Transport”
“How are we promoting more P&I clubs to set up offices here and better still to have their corporate headquarters relocated to Singapore? These are difficult times for the clubs and they are looking to fundamentally reduce their cost of operations. Singapore, with its low tax base made one percentage point lower through the Budget this year, and its excellent infrastructure, can be a very attractive option for these P&I clubs. Sir, in order to achieve the aim of enhancing Singapore's position as a maritime hub, we will also have to take steps to continue to develop a pool of skilled personnel to support these activities such as marine insurance, marine arbitration and so forth. I would like to ask the Minister also to update the House on whether there are specific manpower development initiatives to help enhance Singapore's position in this very aspect? Mr Chairman, with the current economic slowdown, it is inevitable that the stakeholders in this industry will also feel the brunt of it. One recent example is that of an international mutual club, this is an insurance club, which has recently transferred its entire underwriting and claims servicing activities for Southeast Asia region from Singapore to its Hong Kong office. Another more recent example is the collapse of Armada Shipping which was granted approved international shipping (AIS) in 2006 in Singapore but it is now seeking protection from the Singapore court under a scheme of arrangement. I note that the Government intends to grant a 20% concession in port dues for all harbour craft engaged in commercial activities and about 2,000 such craft will benefit from it. I fully support this move but at the same time I wonder if it is sufficient to help the stakeholders who are undergoing a very difficult period.”
“Sir, my final cut is on sea transport. Let me first declare my interest. I work for a shipping company. Mr Chairman, Sir, the maritime sector has served Singapore well for many, many years and shipping will continue to be a principal mode of cargo transport for many more years to come. Yes, the financial turmoil, sharp drop in consumer demand have affected trade flows and therefore shipping, ports and related businesses are all undergoing a very difficult period. It is difficult to predict how long and how deep the recession will be but the storms however perfect must subside at some point. It is therefore of great importance that Singapore is able to see beyond the economic fog and continues to invest in its maritime cluster. This sector comprising ship financing banks, shipping lines, marine insurers, classification societies, shipbrokers, bunkering operators, ship agents, shipping lawyers, arbitrators and so forth, can potentially contribute much to our economy. To this end, it is encouraging to note that there has been some success brought about by MOT's initiatives. For example, I was told that four international group Protection and Indemnity clubs, P&I clubs for short, are now represented in Singapore and the market talk is that two more clubs will be setting up office here this year and some of the European banks have also set up dedicated shipping desks in their Singapore office. Could the Minister update the House on what steps are being taken to enhance Singapore's position as a maritime hub? For example, what is the progress of plans to construct more container berths at Pasir Panjang? Would we let up because of the current slowdown? Would we press on?”
“Sir, there are concerns that the proposed CAS, which is the commercial part of the present CAAS, will be narrowly focused on just short-term profits. If this were the case and if it were not regulated properly, the risk is that the externalities, that of an efficient and cost-effective airport operation will bring to Singapore as a whole, will be lost. Could the Minister assure us and explain how the regulations for CAS would be promulgated? There are also discussions on what the next steps would be following the corporatisation of CAAS. Does it mean that privatisation would be a logical next step? Would CAAS or any of its assets such as Changi or Seletar airports be privatised? And if so, when are such steps expected and what considerations will MOT have to take into account before making such a big move, as clearly there are many risks associated with a complete privatisation of CAAS. 5.00 pm”
“Mr Chairman, Sir, I would like to discuss air transport in this cut. In the second half of 2008, Changi Airport handled a higher volume of passenger traffic of about 37.7 million passenger movements, up 2.7% from the same period in 2007. But, at the same time, the airport has continued to win numerous awards, including the Best Airport in the World by Business Traveller (UK) for the 21st consecutive time. However, we should note that there was a drop in passenger traffic in September, November and December 2008. On the air freight side, for 2008, the total movement was 1.86 million tonnes, a drop of 2% year-on-year; and for the month of December 2008 alone, a drop of up to 21.4%. All these are, of course, attributable to the global difficulties facing the aviation industry. I would like to ask the Minister if he would share with us his views on the expected passenger and cargo performances for Changi Airport this year, and what measures the Ministry is contemplating to ameliorate the expected fall. Sir, in August 2007, the Minister announced plans to corporatise Civil Aviation Authority of Singapore (CAAS), with its regulatory functions being vested in a new regulatory body, and its commercial functions corporatised. This plan was to enable Changi Airport to compete more effectively and to enhance Changi Airport's position as a premier air hub. Consultants were to have been appointed to advise the Government on this corporatisation plan. I would like to ask the Minister to update us on how the corporatisation would impact airlines, ground services companies, tenants like duty-free shops and staff of CAAS? Also, would this lead to landing charges and rentals for DFS shops going up?”
“On a separate note, the current OPC day licences are outdated. It requires very large paper coupons and it is very prone to tampering. Also, confrontations are often ugly when the traffic police has to stop people accused of tampering. I have many residents who have come to me. Much hardships have been actually caused by this system which is not robust. It is too prone to tampering, too prone to temptation. Some have gone to jail because of it. I hope the Ministry would look at it and see if technology can be used to improve the system. Sir, next, traffic information with the use of GPS. In Melbourne, for example, there is real-time information that tells us about rubbernecking, traffic, icy roads, accidents, and so forth. They use a technology called Radio Data System which transmits traffic message channel format, or TMC format. These are then fed into the GPS system in the car so that motorists, on a real-time life basis, can adjust their journeys. I think this has a lot of benefits and I want to ask if LTA intends to explore such technology. Sir, no transport discussion at COS would be complete without discussing Singapore's favourite past-time, the ERP. Under the Land Transport Master Plan, the LTA refined the method of measuring traffic speeds – they changed the average mean speed to 85th percentile. I just would like an update from the Minister to see if he finds the ERP changes effective and what are his views on any new initiatives or adjustments that may come about from this experience. Also, the ERP rates are revised currently every three months. Can the Minister comment on whether there is a need to change the frequency of such rate changes so that they will better reflect the traffic conditions on the roads? Public Transport Services”
“In determining the number of COEs to issue in a forthcoming year, LTA makes a forecast on the number of vehicles expected to be deregistered, either due to scrapping or exporting. Such forecasts have inherent inaccuracies and the net vehicle growth rate may turn out to be higher or lower than the targeted 3%. Can the Minister comment on the actual net vehicular growth rate last year versus the target growth rate of 3% per year? Also, does the Ministry intend to have more frequent forecasting on the number of deregistered vehicles, say, on a quarterly basis? The Ministry also announced that it intended to halve the allowable annual vehicle growth rate in 2009 from 3% to 1.5% for three years. Has this changed? Could the cut be deeper since the road kilometre growth rate is only 0.5% per annum compared to 1.5% target growth rate over the next 15 years? And given that COE prices are expected to remain low, could a deeper cut be considered? Sir, my next point concerns off-peak cars. If the various schemes introduced by the Government under the Land Transport Masterplan are successful, then some motorists will switch to public transport during the peak hours. And these motorists may still wish to retain their cars for off-peak use. I have asked the Minister in last year's COS if his Ministry would allow for more liberal conversion of cars, bearing the normal licence plates, to off-peak cars. And the reply then was that there is presently a carefully calibrated balance of tax concessions which must go hand-in-hand with the usage restrictions of Off-peak Cars (OPCs). 2.15 pm Sir, I believe however, that it would be appropriate for the Government to revisit this balance so that more motorists would convert their vehicles into OPCs.”
“So I would like to ask the Minister if he has a view on the extent of ridership increase he expects on the trains as well as the buses over this year and next, and whether there are specific plans to make sure that we seize this opportunity, give commuters who have switched from private to public transport an experience which they like to maintain, so that we can increase the share of public transport commuters. Sir, my next point is on the progress of MRT lines' construction. I am very glad the Government decided to push forward with the construction of MRT lines despite the economic slowdown. It has announced two new lines to be built – Thomson Line from CBD to Woodlands, and the Eastern Region Line which will serve the estates running from Tanjong Rhu to Changi. These lines were initially scheduled to be completed by 2018 and 2020 respectively. It was also announced that extensions to the North-South Line to serve Marina Bay and East-West Line into Tuas would be completed by 2015. And these planned lines and extensions are over and above the Government's investments in the Boon Lay Extension. On behalf of my residents, I would like to thank the Ministry for constructing the Pioneer Station, the Circle Line as well as the Downtown Line. Sir, I would like to ask the Minister for an update on the progress of the work for these new lines and extensions. My next topic is on the COE system. The vehicle quota system was implemented on 1st May 1990 to manage and control long-term vehicle population growth at 3% net rate per year, which means net of scrapping and exports. Under this system, LTA determines the number of new vehicles allowed for registration while the market determines the price of COE through bidding.”
“They take a longer time because they wait at the transfer points, and yet they are being penalised for making a transfer. Steps should be taken to address this problem if we are to attract more Singaporeans to take public transport. Such commuters should be enjoying a full rebate of the boarding charge for any subsequent leg of their journey. Therefore, I would urge the Ministry to quickly remove the remaining 20 cents' transfer penalty. According to the Ministry, a distance-based through-fare system is to be introduced in 2009 to address this particular transfer penalty problem. Sir, I would like to ask the Minister if Ministry of Transport has any plans to remove it totally this year and, if so, how and when it will be addressed. Sir, my next point is about the adequacy of bus and train services. I would like to touch on the adequacy of the capacity of these two very important public transport modes. In the difficult times that we are anticipating currently, we can expect more people to choose to use the public transport instead of taxis or cars. The next couple of years actually presents a great opportunity for the Ministry of Transport to realise its stated aim of increasing the share of commuters on public transport. The Ministry of Transport will succeed only if we can offer buses and trains that are comfortable, that are not overly crowded, that will meet the service expectations of those who make the switch from private to public transport.”
“Sir, I beg to move, That the total sum to be allocated for Head W of the Estimates be reduced by $100. Sir, my first cut relates to land transport which concerns many in Singapore – commuters and motorists alike. I will raise various topics to follow up on the land transport masterplan that was unveiled by the Transport Minister last year. Firstly, LTA's role as master planner and contestability in the bus sector. During last year's COS debate, the Minister had informed the House that over the next year or so, LTA will work closely with consultants to build up its capabilities for bus route planning and the tendering out of bus route parcels, so as to create contestability. This is an important undertaking by LTA which would have a significant impact on bus commuters both from the quality of service as well as bus fare level standpoints. Could the Minister update the House on how LTA is preparing for its new role as the master route planner, and when will commuters begin to see the benefits of contestability in the bus sector? Sir, my next point is about transfer penalties. Designing a transport system, comprising mostly of direct journeys from origins to destinations, is an extremely costly proposition, and this is not practical for Singapore as the Transport Minister has pointed out. Therefore, a hub-and-spoke system is the inevitable outcome. However, currently, commuters who make a transfer in the hub-and-spoke system face a transfer penalty. The current transfer rebate of 40 cents does not fully offset the boarding charge of 60 cents for the subsequent leg of a journey involving a transfer. As I highlighted previously, these commuters who need to make transfers are already inconvenienced.”
“Sir, Jurong West, or Pioneer Division for which I am the MP, has a very different problem. Our facilities are very modern and we have a new $760 million Jurong Point extension. But the problem is that all the food facilities are air-conditioned and with the economic outlook being poor, my residents are asking if MND can provide hawker centres or food centres that are not air-conditioned so that they have a choice whether or not to patronise those lower cost non air-conditioned food centres or the spanking new Jurong Point.”
“Sir, it is reassuring to hear from the Minister that our banks are sound and the guarantee was really necessitated by the actions of other central banks. But the various banks in Singapore obviously have different balance sheets and different credit standing. Would the Government be charging the banks and financial institutions a guarantee fee and, if so, on what basis would it do so?”
“Sir, I would like to urge the Ministry, when considering how to apportion the drop in revenue as a result of removing the transfer penalty, not just to look at the marginal change but to look at the overall net effect on the financial return of the public transport operators. As our parliamentary colleague, Mr Ong Kian Min mentioned, it is a dynamic situation and, as we remove the transfer penalty, there would be a resultant increase in ridership and so forth that would also benefit the transport operators. So it is not a static situation and it is also not just a case of apportionment based on marginal change but what is the overall net effect on the transport operators' returns. I think that would be a more relevant point to look at. [Mr Deputy Speaker (Mr Matthias Yao Chih) in the Chair] 5.09 pm”
“On the Government's part, what is being done to improve our hub-and-spoke system further, especially the capacity of our bus and MRT terminals which act as transfer hubs today because we can envisage that these terminals would be handling much more traffic than they are currently handling? Also, the Bill seeks to enable the PTC to take various enforcement measures, including imposing a financial penalty of up to $100,000. The Minister did mention there are other measures that the PTC can take, like revoking the licences of the PTOs. But such measures are draconian in nature and have public interest implications. Can I ask the Minister whether the $100,000 penalty is sufficient to ensure compliance of PTOs without resorting to more draconian measures? Sir, in conclusion, I strongly support the Bill because the new framework will pave a more equitable way forward as part of MOT's strategic thrust of making public transport a choice mode. At the same time, the hub-and-spoke system has to be further improved in tandem and the new framework should not come at the expense of commuters who make direct journeys. Sir, I support the Bill. 4.13 pm”
“If the PTOs want to rationalise the public transport system to reduce overall network cost, it should, at the same time, pass such savings on to those who are affected by such rationalisation. The proposed amendment is, therefore, an equitable and efficient way forward as part of MOT's strategic thrust of making public transport the choice mode. Moreover, Sir, I think there are other potential benefits beyond what we see, based on today's travel patterns. The benefit of distance-based through fares does not stop here. There are many other commuters who are currently not making transfers because they do not wish to pay the transfer penalty. With the removal of the transfer penalty, more commuters will take to the hub-and-spoke network which will further enhance its efficiency and make it work better. Also, hopefully, concession fares (monthly concession season fares and so forth) can be rationalised and offered seamlessly for commuters of both bus and rail. Sir, while I support the Bill, I would like to ask the Minister a few questions regarding the Bill. Firstly, could he highlight the number of commuters who could potentially benefit from the distance-based through fares? Secondly, would the majority of six in 10 commuters that make direct journeys today be made to bear the burden of removal of the transfer penalty? And if so, does MOT have any plans to ease such a burden? Thirdly, for commuters to reap the benefits of a distance-based through fare system, the hub-and-spoke system needs to work better.”
“Mr Speaker, Sir, I rise in support of the Public Transport Council (Amendment) Bill introduced by the Minister for Transport. Currently, commuters who make a transfer between buses, or bus and MRT, or the LRT and the MRT, face a transfer penalty, as the Minister pointed out. This arises because the current transfer rebate, a misnomer, of 25 cents, does not fully offset the boarding charge of 60 cents for the subsequent leg of a transfer journey. These commuters are effectively cross-subsidising direct journeys. It has been reported that four in 10 commuters today make at least one transfer journey each day and they are not a happy lot. The need to make a transfer is inevitable in a hub-and-spoke system, as the Minister also pointed out. The alternative to hub-and-spoke system is to have direct services but the cost will be too prohibitive for a small city like Singapore. The proposed introduction of distance-based through fares and the removal of transfer penalties is therefore long overdue and represents a sensible and positive move. Commuters who need to make transfers are already inconvenienced as their total journey time would be longer and yet, these commuters are being penalised for having to make a transfer. This should be stopped if we are to attract more to take public transport. Such commuters should be enjoying a full rebate of the boarding charge for any subsequent leg of their journey. In the shipping or the airline business, if you ship something from Perth to Los Angeles and the container has to be transhipped in Singapore, you cannot charge the customer more. In fact, you might have to charge lower because of the time delay in transhipment.”
“Sir, let me first thank the Minister and the Minister of State for their very comprehensive replies. When the Land Transport Review was first announced, many were sceptical and thought that changes would only be at the periphery. I am happy to say that the feedback the GPC has received so far is that the plans coming out of the Land Transport Review are promising, bold and imaginative. Sir, ERP gantries will be unpopular. But I believe Singaporeans are thoughtful and well travelled, and they know that this is the right thing to do if Singapore is to remain a liveable city. I believe Singaporeans will accept it, albeit reluctantly. Sir, I commend the Minister and his team for a very bold plan. I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. The sum of $388,424,600 for Head W ordered to stand part of the Main Estimates. The sum of $2,990,457,700 for Head W ordered to stand part of the Development Estimates.”
“Sir, I would like to clarify what I said about the issue of tendering out and making the bus or rail sector contestable. Sir, I mentioned that in tendering out different parcels of the bus routes, there are two ways the Ministry could think about. The first way is for the PTOs who are bidding for such parcels of routes to take the risk of revenue changes or fare increases. That is one way. The other way is for the Government to take the risk of the fare changes. I have not advocated a system whereby the Government should not be paid or should not increase fares when warranted. I think that discipline of the marketplace should continue. Just like every worker that puts in an effort requires to be paid, anybody who puts in capital requires to be paid too. I think Singaporeans understand that concept. But if we make the prospective PTO assume fare risks and in structuring his bids, he would have to calculate how much it costs for him to meet the prescribed standards, and then he has to guess whether or not he would get fare increases in year one, year five or year seven. When there is risk associated with such fare uncertainties, he has to price into his bids and, therefore, chances are you will receive higher bids (or a higher operating cost) than if the Government agency takes over the fare risks. So, I would like to seek the Minister's inputs as to whether or not such a system would work better in reducing overall fares for the public transport network in Singapore.”
“I also know of a MINT fund, which was launched some years back, to promote research, particularly in the maritime sector. I would like to ask the Minister what is the original size of this fund, when was it first established and how much has been invested out of this fund to-date? Sir, apart from these initiatives, does the Minister also have other plans to promote training, research and development as well as innovation in the maritime sector.”
“In terms of container cargoes, Singapore managed to retain her top ranking as the world’s busiest container port, just ahead of Shanghai, by a very narrow margin last year. It would not be long before Singapore loses out to Shanghai as the world’s busiest container port. However, what is important for Singapore, apart from being ranked the busiest, is to grow its maritime cluster. This cluster is huge and comprises of not just shipping lines but also ship financing companies, marine insurance companies, classification societies, ship brokering, ship bunkering, ship husbandry, shipping logistics, shipping law and so forth. In these and other areas like the AIS and ASL schemes as well as the recently launched Maritime Financing Initiative Scheme, could the Minister update us on how Singapore has fared in 2007 compared to 2006? Training, R&D and Innovation in the Maritime Sector Sir, in order for the maritime sector to thrive in Singapore, we need to train skilled managers and have skilled manpower. To remain in the forefront, the Government also has a role to promote R&D and innovation in this sector. I am pleased to note that the MPA has the state-of-the-art facilities, such as the Integrated Simulation Centre, to offer maritime training and for R&D in terminal development. It also has maritime risk assessment, crisis management and investigation into shipping incidents. MPA has also established a $80 million Maritime Cluster Fund in 2002 to help promote and strengthen the maritime cluster in Singapore. More recently, in July 2006, the Singapore Maritime Training Fund was launched by SMOU in an attempt to equip sea-faring officers with up-to-date skills.”
“Sir, from cars, we have moved to aeroplanes. Now, I would like to move to ships. Sir, let me first declare my interest as an Executive in the shipping line. It was recently announced in January that MPA will be taking active steps to address environmental concerns related to shipping. These steps include MPA's revision of its "Gate System" for licensing of bunker tankers, and from April 2008 it will issue new harbour craft licences to bunker tankers that comply with limits on nitrogen oxide emissions from ships, as provided for by the IMO MARPOL Convention No. 2. I would like to ask the Minister if there are any other initiatives to be taken this year to protect our environment in addition to those that he has just announced. On the security front, it was also recently announced that (1) Singapore is participating in a trial project under the US Secure Freight Initiative Programme; (2) Singapore is leading an APEC group to develop a Trade Recovery Programme; and (3) the launch of the Secure Trade Partnership Programme by the Singapore Customs. Can the Minister update us on the progress of implementation of these various programmes and how successful these programmes have been? International Maritime Centre Sir, the maritime sector has served Singapore well for many years. Although often touted as “old economy” shipping was, is and will continue to be the principal mode of cargo transport. In fact, without shipping, there would be no order fulfilment and the modern world of globalisation, as we know it, would not have happened. I am pleased to note from the Minister’s speech in January that Singapore continues to grow, both in terms of vessel arrivals, container and cargo throughput and ship registrations.”
“Yet Australia and the US have recently signed an open-skies agreement that will allow for vast expansion of air travel and competition on the busy trans-Pacific route. Can the Minister share with us his thoughts on whether he believes Singapore will ever reach a Fifth and Sixth freedom rights agreement with Australia and when will that take place? Civil Aviation Authority of Singapore Sir, in August 2007, the Minister announced plans to corporatise CAAS (Civil Aviation Authority of Singapore) with regulatory functions invested in the new regulatory body and its commercial functions separated and corporatised. This, he said, was to enable Changi Airport to compete more effectively and to enhance Changi Airport's position as a premier air hub. It is noted that consultants were to have been appointed to advise the Government on this corporatisation effort. Can the Minister update us on the status of the review, and elaborate more on the rationale behind his plans and the next step beyond corporatisation? Would the commercial arm of CAAS be eventually privatised or sold? And if that should happen, what would be the implication of such a move, and how would the strategic imperatives of Changi Airport be safeguarded under a purely commercial entity?”
“Sir, I am pleased to note that Singapore and Malaysia have finally agreed to liberalise access on the Sin-KL route, thus, allowing for more flights including low-cost carriers to operate between Singapore and Kuala Lumpur. I also note from the MOT press release that transport officials from Singapore and Malaysia were scheduled to have met in January this year to discuss further liberalisation of air services between Singapore and other Malaysian cities, other than Kuala Lumpur. Such liberalisation is obviously good for consumers, both in Malaysia and in Singapore. I would like the Minister to give us an update on these discussions. There was also an initiative from ASEAN to liberalise air travel among all the capital cities. This initiative was first mooted in 2004 and was called the ASEAN Roadmap for Integrated Air Travel Sector, or RIATS. May I ask the Minister what additional benefits would RIATS bring to Singapore, and Singapore carriers, and how soon can we expect the roadmap to be realised? Sir, connectivity for an airport is the cornerstone for its success and this, in turn, depended on the air rights that each country can negotiate successfully each year. Could the Minister update the House on the number of ASAs (Air Services Agreements) and OSAs (Open Skies Agreements) that Singapore has concluded recently, and what are its plans for 2008 as far as ASAs are concerned? Air Rights for Singapore Carriers to Fly between Australia and USA Sir, there is one particular ASA that Singapore has tried to negotiate for many years but had been in vain. Our many attempts at obtaining Fifth and Sixth freedom rights with Australia appear elusive.”
“Could the Minister also update the House on his plans to maintain Singapore's position as a regional air hub for passengers, cargoes, ground handling, catering, and MRO (or Maintenance, Repairs and Overhaul) services? Performance of Singapore Changi Airport Sir, my next cut is on Changi Airport itself. Changi Airport is an oasis and a treat to many who visit Singapore. In 2006, Changi Airport welcomed 35 million passengers and handled 1.9 million tonnes of cargo. Sir, how have we fared last year in terms of Changi Airport for passenger and cargo performances as compared to other airports like Bangkok and Hong Kong? Managing Singapore as an Aviation Hub”
“Singapore has done well to establish itself as a regional air hub. However, many other cities have also invested heavily in their airports. Bangkok, as we discussed earlier, has natural advantages. Many South-East Asian cities also have a lower cost base than Singapore. I understand that one of our key strategies in developing Singapore as an air hub is to anchor airlines in Singapore, including low cost carriers (or LCCs). However, I also understand that Changi Airport has lost some airlines last year. Could the Minister elaborate on the number of airline flights that Changi Airport has lost last year, compared to what it has gained? Sir, EU countries have done away with embarkation and disembarkation forms for all visitors. It is paperwork that visitors have to do when they visit Singapore. Also, I am told that our visa application process, especially for Middle-East visitors, takes much too long to process. Many other airports have also positioned themselves to attract premium passengers with dedicated security and immigration lines for such passengers. These may be details but they are not lost on airport managers around the world. They illustrate the efforts that many cities are making to attract tourists and visitors. Changi Airport, therefore, must keep up or our competitive edge may be chipped away gradually. How can we make coming to Singapore as frictionless and as seamless as possible? Have we studied customer touch points and evaluate how we could improve for each of these touch points? Sir, more recently, CAAS has constructed a Budget Terminal to serve low cost carriers (or LCCs). I would like to ask the Minister how successful we have been in attracting LCCs to anchor in Singapore.”
“I can understand why higher ERP charges and more ERP gantries are unpopular. We all like smooth-flowing roads without any ERP charges. But is this possible for our small island state? Do they add up? If we reflect on the issue and give it more thought, we would see that there is no other solution for a small compact island like ours but to regulate vehicle usage. Without proper ERP charges, roads will become congested, motorists will spend more on fuel, their vehicles will emit more CO2, they will be late for appointments for some, and there will be victims of road rage. Supply chains will also break down. Companies will think twice before investing, tourists will be deterred, and so forth. So, therefore, I think one way or another, motorists are paying for it. It is just that, without ERP and the consequential congested roads, the costs related to it are not so obvious. Sir, I support the ERP system and I support recalibrating the benchmark speeds. Traffic Management”
“Sir, the second thrust of the masterplan is to regulate road usage, as the Minister has said. And one of the key regulatory instruments is the ERP. ERP charges are expected to rise as LTA has reset the benchmark speeds to 85th percentile and also has set up more gantries. The reason to recalibrate the benchmark is to ensure, as I am told, that a large majority of motorists will experience benchmark speeds of 45 kilometres per hour on expressways and 20 kilometres per hour on arterial roads. Previously, when the average speed was used, half the motorists were experiencing speeds below these benchmarks. That is not desirable considering that our expressways were built to cater for speeds up to 90 kilometres per hour and the arterial roads 50 kilometres per hour. Even with this new 85th percentile benchmark, we can expect statistically some 15% of the motorists still experiencing speeds below this benchmark. Therefore, really the crux of the issue is whether these speeds are calibrated correctly or not, and not so much the ERP charges. The way I see it, the ERP increases are only a consequence of recalibration. I believe the intent of MOT is not to increase ERP charges arbitrarily. Also, the intent of ERP charges is not to generate revenues for the Government, as Mr Low has suggested, but rather to ensure smooth-flowing traffic, especially in our CBD. 1.30 pm Can the Minister confirm what ERP is really meant to do and what it is not meant to do? To test this, let me ask the Minister if he would reset all ERP charges to zero for any of our expressway or road that has traffic flowing at better than the benchmark speeds of 45 kilometres per hour and 20 kilometres per hour respectively 85% of the time?”
“Sir, I would like to ask the Minister if he could consider enhancing the benefits for OPC Scheme so that more motorists will switch to the OPC Scheme. Land Transport System”
“Incentives for Motorists to Switch to Public Transport Sir, other than supply management which we discussed earlier, demand management is equally important. Both measures are necessary and each measure on its own is not sufficient. Road usage is one such form of demand management. ERP rates are likely to rise, given that we will soon adopt the 85th percentile speed benchmark in lieu of the average speed benchmark. For expressways, the optimal speed is set at 45 kilometres per hour, and for arterial roads 20 kilometres per hour. If we are successful, some motorists may wish to switch to public transport during peak hours but still retain their cars for off-peak use. LTA introduced the Off-Peak Car (or OPC) Scheme in 1994. For newly registered cars, a combined reduction of $17,000 in COE and ARF has been offered. In addition, there is a reduction in annual road tax of $800, subject to a minimum of $50. For conversion of normal cars to OPC Scheme, a proportionate reduction in COE and ARF is currently disallowed. Instead, a back-end additional PARF is granted when the car is de-registered.”