Chay Wai Chuen
Singapore
“As a result, some enterprising businesses and grassroots people have even come up with better ideas on equipment and machines designed to suit our HDB estates, HDB rubbish chutes and our older workers, to make the equipment easier for them to handle. 3.00 pm I give this as an example.”
“Since there are so many anomalies administered by the two agencies up to now, and because so many retailers will be affected, I urge the Ministry to freeze this scheme and review the procedures and policies entirely and put up the designated land for tender to be administered by one agency.”
“Sir, I would like to ask the Minister to give more choices, in terms of compensation or alternatives and flat type allocation for those people who are affected by the Selective En-bloc Redevelopment Scheme. Children should be, as best as possible, allowed to help pay for their parents in some of these choices that they have to choose.”
“Sir, the MUP Programme has been in place for some time and it applies to units which are 17 years and above. I would like to ask the Minister why are 40-year old flats still not upgraded.”
“Mr Chairman, there is an increase in the operating expenditure of $648 million this year for the Ministry of Defence. I would like to know what is the rationale for this increase.”
“Sir, the SAF has been involved in peacekeeping missions on several occasions, in East Timor and the Middle East, typically in the area of logistics and medical services. I wonder whether the Minister can enlighten me on what kind of role the SAF can play in this area of peacekeeping missions.”
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“Will the Minister review the LRT projects on its economic viability and efficiency? MRT Monopoly”
“I urge the Minister to do a review in order for money to be well spent here. Although the Government pays for the LRT system and operators recover operational cost, we must realise ultimately in all these that it is not the Government who pays. It is always the people who pay, and they pay and they pay. Rail operators and bus operators sometimes think that they are so efficient and so good. But it is the public who is providing the ridership, as pointed out by the previous speaker, and the road factor that makes the operation viable. And when they cannot balance the cost, they go to the Government to raise the fares. The Government owes it to the people to build systems which can be efficiently operated with minimum cost and maximum benefit. Such a system should also be flexible and speedy in delivery, with minimum waiting and travelling time. Considering all the ---”
“Sir, I share some of the views of the previous speaker, Mr Ong, on the rail system. The question I want to raise here is whether the light rail system is economically viable and efficient as a mode of transport feeding to the main line MRT system. Can the Minister give us his views on whether the present light rail system is an anachronism of public transport technology and system? I am not a user of the light rail. But having travelled a few times in Bukit Panjang, my observation is that it is quite inflexible and uncomfortable, especially when crowded, as there is only a limited number of two coaches running at one time. Then there is the hassle of walking up the stairs and crossing the rail line to get to the right side, depending on where you are heading. There is also the big loop that one has to go when one has to travel in different directions to get to a nearby point. The time taken to get nearby to connect seems like eternity when crowded. In principle, I believe that there is something wrong with this LRT system. It is a rather inefficient way of ferrying people, I believe, collecting more and more people on the undersized coaches, longer than necessary, and therefore, causing over-crowding on the LRT, and everybody ends up paying for nobody to go nowhere. Will the Minister not think that a simpler and more direct feeder bus service which costs a fraction of the LRT system will do the job, and giving the LRT some competition of private bus operators even now at this stage may do the trick? Competition is good for the consumers and the economy. This will give choice to the consumers. Then we can truly value the so-called quality of service and lifestyle things that is so wanted in the current LRT system. I understand there are further LRT projects in view.”
“X is a small percentage to account for various cost factors such as wages, charges and gains from productivity that will influence fares. This has been capped at 1.5% for five years, from 2001 to 2005. As this Budget covers up to March 2005, does the Minister have any plan to review the model to factor in efficiency and equitable rewards and payment?”
“Sir, I beg to move, That the total sum to be allocated for Head W of the Main Estimates be reduced by $100. Sir, the Public Transport Council (PTC) has been charged with the duty of administering the service standards of public transport operators and the approval of routes and licensing among other things. It also has the not very welcome task of approving applications for fare adjustments and hikes from time to time by operators. To maintain a world-class transport system, the Government must harness technology and equitable rules to the area of public transport operations so that there are benefits and gains to both the public and operators. The public is understandably always unhappy whenever there are fare hikes. Operators, however, need to perform to certain overall service standards and in certain sectors of routes to ensure their role as universal operators. If the operators fail to perform to service standards in overall performance or in certain sectors of the routes, how does the Minister hope to impose penalties or fine the operators so as to nudge them to do better? If operators do not manage cost well with the rise in cost of operation, will allowing them to raise fares be fair to the public? On the other hand, if the bus operators do well and achieve productivity gains which result in lower cost of operations, should the operators not be rewarded fairly? Somewhere in this web of technology, service standard criteria, efficiency and productivity yardsticks, the transport operators' performance will be evaluated and rewarded. If the quality of service is good, the public will be less unwilling to pay. Using the CPI plus X formula with a cap of 1.5% for X, as in the current model of fare adjustments, seems workable.”
“If these unscrupulous traders continue to indulge in this kind of unfair practices, should not they be punished? Otherwise, they will just simply ignore the law and do as they please. While I fully support the Bill, I hope that the authority will consider the points that I have mentioned, and incorporate some provisions in future amendment Bill to deal with such unscrupulous traders. ADJOURNMENT OF DEBATE Resolved, That the debate be now adjourned. - [Mr Mah Bow Tan].”
“According to my estimate, the total value stored in all these cards in circulation in Singapore is more than $100 million. The operators are getting all the cash, free of interest. On top of it, they save on labour cost, but what do the consumers get? The operators do not pass on the benefits to the consumers. Take the ez link card, for example. The consumers are asked to pay for the cost of the ez link cards. For every card they purchase, they have to pay $5. That means the consumers have to pay EZ Link in helping the MRT and bus companies to save on their operational cost. I think this is very unfair. If the card malfunctions, the consumer loses all the value stored in it, as the card company will confiscate all the remaining money stored in the card. How does this differ from an act of daylight robbery? On one occasion, when I put my trousers in the washing machine, I forgot to take out the cash card from the pocket. The cash card was damaged. I filled up an application form and sent my cash card, together with the form, to the cash card company. The company never responded and the cash card, together with all the remaining money stored in it, was gone forever. The cash cards and ez link cards are designed for the benefit of the companies and it is unfair for the consumers to pay for the cost of the card and lose the money stored in the card, if it should be damaged. All these instances which I have mentioned are not covered by this Bill. I hope, and I believe, that this law will soon come up for review, and I hope that those unfair practices which I have illustrated would be covered in the new amendment Bill. There is no provision in the Bill to punish those traders who are involved in unfair practices.”
“In my view, this is an unfair transaction for the consumer. Secondly, the parking coupons, cash cards and ez link cards which we use are also examples of unfair practices. All these coupons and pre-paid stored-value cards are the means deployed by their respective operators to take advantage of the motorists and commuters. They are operated under a monopoly, and cater mainly for the convenience and easy administration of the operators. There is no law to compel them to pass on the savings from these devices to the consumers. In parking, the motorists are made to do the work for the car-park attendants. The motorists have to tear the tabs in the coupons to indicate the time of commencement of their parking. When the wrong tab is torn, the coupon is immediately invalidated, and no refund on the unused coupon will be entertained. If a mistake is made on the time or date on the coupon, the consumer has to face the punishment of paying car parking fine. When the parking rates are adjusted, the old coupons showing the old rates will no longer be valid if he does not exchange the old coupon for a new one. Coupon-parking is a device aimed at cutting car park operation cost for the URA and the HDB. But the savings are never passed down to the consumers. Consumers are doing the job of the car-park attendants, free of charge, and any mistake made in the process will render the coupon invalid, and they have to face punishment if they make a mistake and they also will have to suffer the loss incurred if the coupons become invalid. To me, this is a form of unfair practice! In the case of cash card and the ez link card, consumers have to pay upfront and store the value in the cards.”
“In my many years as a Member of Parliament, I have come across a lot of cases where consumers were victimised by unscrupulous traders with unfair practices. Yet there is hardly any law in Singapore to protect our consumers. The only thing they could do is to go to CASE. Under pressure from CASE and fearing adverse publicity, some of these errant traders may compromise and pay some damages. Some house-owners who have refused to pay their contractors because the renovation work was not carried out according to the agreed conditions were sued by the contractors, and ordered by the court to pay damages to the contractors. Thus, it is necessary for some legislation to be enacted to protect the consumers. This Consumer Protection (Fair Trading) Bill before us is indeed a very timely piece of legislation, I am fully in support of this legislation. The new law is to provide for the victims of unfair practices to claim against the errant traders and to prevent these traders from perpetrating the unfair practices. But, the definition of "unfair practices" under this Bill is quite narrow, as it covers only deceit, misleading, and cover-up acts. Unfair trading should include other types of transaction where the consumers are visibly placed in a disadvantaged position. First, the banks, credit card companies, insurance companies or even big electrical shops often practise forced selling, and mislead their customers into signing some lengthy contracts printed in grey colour and using very small print. The consumers were asked to sign those documents without much time in digesting the contents and under some rather suspicious conditions. Once the contract is signed, the unsuspecting consumer will have to honour the terms of the condition, whether they like it or not.”
“I agree with the Member of Parliament, Mdm Halimah, just now that the approach to do it must be simple enough so that the effect of the action is felt. If the procedure is too difficult or too long-winded, then the efficiency and effectiveness for consumers to complain and to get the results of the action will be difficult. I want to clarify one more point. With regard to some of these market shop operators who sell financial futures or whatever, what is the recourse for consumers who fall prey to these practices, and what are the resources of claim that they have? Very often, this kind of financial scams or financial schemes which are marketed by cowboys, or what we call bucket shop operators, may actually cause more damage, and $20,000, as they claim, is admissible under this Consumer Protection (Fair Trading) Bill. Finally, I would want to compliment the Ministry for coming up with this Bill. I can agree it is difficult to administer. But the first step is being taken. For many big retailers of brand names in Singapore, I do not think that there is a problem to comply. For a lot of smaller operators, ie, market shop operators, I think they will have to really start cracking. But even for many retailers or suppliers with established names, they will have to really think about some of the consequences of the claims that they make, the discounts that they promise and the quality of their goods. And I think that in that direction, the Consumer Protection (Fair Trading) Bill will let them take more considered actions to even improve further. In general, I support the Bill. Assoc. Prof. Low Seow Chay (Chua Chu Kang) (In Mandarin): Mr Deputy Speaker, Sir, I am a consumer myself.”
“Sir, I welcome the Bill as it provides a first comprehensive set of rules as well as practices which oblige traders and consumers. I, however, want to cover three main points on the Second Schedule which specifies a list of unfair practices. They relate to (1) overcharging, (2) representation, and (3) quality of goods and services delivered. For some of these categories of overcharging, I think the rules and regulations for certain trades may be difficult to judge. Specifically, as has been mentioned just now, in areas of professional services, eg, doctors or lawyers, they have their own professional bodies. If there are cases of complaints about overcharging by doctors/GPs and lawyers, then there may be problems in trying to figure out the quality aspects of such services, so that judgment on their fees and so on may be difficult. In cases like these, what happens? Another example is that many people would have experienced charges of service by plumbers. It varies. I personally have experienced plumbers who charged me $100 for 10 minutes of service. That kind of situation, I think, is quite obvious. There again, if you want to prove it, I am not sure whether the existing process in the Small Claims Tribunal would allow for this. I hope the Minister would want to consider the suggestions brought forward by many of my colleagues about policing by the Fair Trading Office, which could help patrol some of these practices. The existing proposed mechanism of the Small Claims Tribunal (1) and (2) specified body approach does not seem to be very clear to me how one, through the Small Claims Tribunal system, would be able to effect this claim. Two is through a specified body, and through the specified body getting the Injunction Proposals Review Panel to work.”
“It is not clear to me whether any of these provisions in the Bill covers this aspect of danger to navigation of the sea lanes around us. Clause 3 provides for any person who unlawfully uses force or by threats seize a ship or control a ship and shall be guilty of an offence, whatever his nationality or citizenship, whatever the state in which the ship is registered and whether the ship is in Singapore or elsewhere. This makes it an offence under the Bill for any offence of this nature committed by anyone on any ship anywhere. While we can agree to the spirit of its intent, are we able to enforce legal proceedings as such on anyone, any ship, anywhere, as clauses 3 and 4 seem to imply? I hope the Minister can clarify these points.”
“Sir, I wish to speak in support of this Bill in the name of the Minister for Transport. This Bill is important and necessary in that it makes clear the offences committed, such as for hijacking or for damage or destruction of ships, and this includes maritime navigational facilities, as pointed out by the Minister just now. It is timely that, given the current concern, especially after 911, about terrorism that we take proper steps to build into our legal system such maritime offences. My question is, given our port's pre-eminence in maritime businesses, why such safeguards have not been done earlier. Hijacking of air passengers, damages to ships and maritime facilities or vessels have occurred too many times. Are there special reasons for the delay or special circumstances for its urgency? The Minister just now mentioned that the Rome Convention was signed in 1988. It has been quite a number of years since that we are now acceding to this Rome Convention condition. I would like to ask how many countries have signed or ratified the Rome Convention, and the Minister may want to inform the House. No one can quarrel with these safeguards. By this Bill, it would be an offence, irregardless of his citizenship, the registry of the ship, or regardless of where the acts are committed. This Bill, however, makes no mention of damages to people on board the vessel. Is it the passengers or crews? I refer particularly to theft or robbery at sea by pirates. We have quite a bit of this as reported in the press. Does the Minister not see it fit to include acts of injury, robbery, or theft, to passengers or crews of vessels who ply our neighbouring waters?”
“(2) In addition to having pre-assigned contribution rates and maximum ceilings for the Minimum Sum and Medisave scheme, introduce a separate category called Home Financing Scheme, with appropriate maximum contribution rates also. This would prevent CPF members from over-using the Ordinary Account for housing purchases. (3) Stress to CPF members that their CPF retirement funds are meant for minimum sum of expenditure and that they should supplement them with additional means of financial support. (4) Moderate our expectations about our own standard of living, be realistic about them, have financial planning for ourselves. (5) Review our life priorities, be less materialistic and less obsessed with making money as main goal in life. (6) Strengthen our relationship with our families and community for therein lies our real strengths and resilience. With a major remake of our social security system, we should be able to move forward with renewed trust, hope and having the warmth of the sun with us again. This requires us collectively - Singaporeans, the Government, the unions, the corporate sector and the community - to stand side by side with each other at the crossroads of change to meet the challenges of globalisation and to fulfil a new Singapore Dream together as a nation. I believe that this is possible. At the end of the day, Sir, we do have a credible and competent Government that will not let us down. And to paraphrase the Acting Health Minister in his press releases and speeches, however, the Government cannot do so on its own. We Singaporeans must also be willing to cooperate and do our part. With that, Sir, I support the Prime Minister's Statement.”
“Therefore, I shall be brief and focus only on the CPF issue, in the interest of time, although I am just as interested with the other social safety net measures discussed in this House. Retuning the CPF actually provides a silver lining among the dark clouds. The CPF reforms need not bring about unnecessary insecurity over the social security changes. In effect, we are really undertaking the retuning of the psyche of Singaporeans in the light of dynamically changing times. How so? In my observation, there are four related practices leading to the present predicament. (1) We have over-relied on the CPF scheme as the main lever to fulfil a number of social objectives; (2) We are not happy with the past high overall CPF contribution rates as they reduce the cash component of our salaries for discretionary use; (3) We have over-estimated our ability to use CPF funds to become affluent through speculative property and other investments, at the expense of building sufficient capital for our retirement years; (4) We make incremental changes to the CPF scheme or tinkering with it, as some say, when in fact a major overhaul of our social security system is needed and overdue. Speakers before me have explained these factors, so I need not elaborate on them. Instead, I have the following suggestions, most of which were also brought up by Members of this House. The suggestions are intended to bring about are mindset change for every Singaporean, especially for younger CPF members. (1) Modify the proposed CPF-based model of social security to include a mixed model of CPF and private sector arrangements, as recommended again by my fellow MPs.”
“I have almost forgotten the meaning of petty hawking in agriculture until I saw it again - a few pieces of vegetables and fruits from a garden patch by the village path. I mean a few pieces. I also saw European traders there in this, I thought, god-forsaken place. This is globalisation at work on its feet. Although I have read in newspapers and journals about the extent of rural poverty and unemployment in China, I am convinced, now it is full steam ahead for the Chinese. From the Central heartland of China - and the Chinese call this place the Tang Yuan area - perhaps they need to rely on us for capital, some skills and modern management for about five years or less - that is, if we are fast enough. An expressway runs from this heartland of China to the port of Lianyungang, on the Yellow Sea, a distance of more than 1,000 km. Chinese trucks filled with goods ply this route day and night. Very soon it will be trucks with international containers. This tide is inexorable in spite of the many problems in the Chinese economy. This anecdote is to underline my concern that we must address the larger issue of employment generating growth urgently. This passing window of opportunity for us to retune and catch on to the mainstream of employment generating growth is a very short one. Assoc. Prof. Ngiam Tee Liang (Nominated Member): Mr Speaker, Sir, thank you for the opportunity to speak on the statement. Being the last person among the backbenchers, after almost four days of parliamentary sittings, obviously has its drawbacks. Much of what I had in mind to include in my original speech has already been well covered by hon. Members earlier. I am also aware of the pressure to keep my speech short and succinct.”
“The second is whether red tape in the bureaucracy can be minimised in order to facilitate more entrepreneurial activities for business, either in starting up new business from novel ideas or to speed up existing requirements for approval, which can really be trying as many of us running businesses have all experienced. Perhaps we should have a Cut Red-Tape and Waste Committee, which will really be more productive - killing two birds with one stone. I want to share some anecdotal experience with Members. Two weeks ago, I was in China in Henan Province. Henan is in the central part of China, with a population close to 100 million, more than the population of France, UK or Germany. The people are engaged mostly in agriculture and in primary production. It took about 12 hours from Singapore to reach this place, including inter-modal transport and transfers. I was in the area bordering Shanxi Province, with the Yellow River flowing in between Henan and Shanxi. You cannot get more provincial and heartland in China than there, which is the fons et orgio - the fountain and origin - of the Chinese people. There are people who live there in caves today, dug out of the yellow-earthed hills, which are supposed to be warm in winter and cool in summer. I was not there for a vacation but I was there looking for business opportunities for NTUC Fairprice. The people were mostly farmers, and poor by Chinese standards. But, in this provincial heart of China I saw no hunger. I saw no idle people on the roadside or the villages, and I was travelling for four days. I was not staying in a hotel room and having meetings. Everyone seems busy, planting and harvesting, digging roads and canals with hammers and shovels, transporting things or doing petty hawking.”
“If we are always looking at how we compare in wage costs with other countries, whether it is the United States, China or India, we are missing out the other more important half of the picture of economic growth. Costs alone cannot determine business and prosperity. It is the creation and the unlocking of values from the conjoining of ideas, technologies and entrepreneurship, whether high-tech or low-tech, that lead to business, employment and prosperity for all. The Prime Minister identifies the problem faced by the economy as demand. The CPF and other reductions in costs affect demand for investments. As we have lowered costs, the demand for investments will increase. However, the demand that is necessary for addressing our economic growth and employment in a competitive world economy must be raised by other efforts and other policy changes. It is the typical 101 economic problem of discriminating between a slide along the demand for investment schedule versus a shift of the demand for investment schedule. The tools for the job are different and not quite the same. What we need now is a shift upwards of the demands for investments. We must have sufficient policy instruments to tackle the required policy objectives and we must assign them correctly. I would like to highlight two important concerns by many ordinary Singapore people. The first concerns the adequacy of the CPF savings for the future when they retire. Many of them are quite worried that they may not have enough. One suggestion, as proposed to me, was whether the Government would allow employees voluntarily to contribute more into their CPF. There is a tax benefit for them as well.”
“I believe many of the investments we have been attracting in the past few years are very sizeable plants employing few workers. Have we forgotten to attract perhaps less lumpy, high-tech investments, or smaller firms who may have niche processes and have special technologies which need not necessarily be in big billion dollar plants? Such medium-size investments may use more labour and have more linkages with the economy. Although we may not have so well-educated older workers, we must not forget that they were the workers during the period we made the most rapid growth. We can still employ our older workers usefully and it would be wrong to think that they cannot contribute to the economy. Of course, there has to be training and retraining, which should be specially tailored for them. For example, have we asked ourselves why and how our shipyards, ship-repair and offshore sectors are still doing fine in spite of all similar problems of wage costs and demand they have been faced with for so many years? Of course, there had been consolidation in that industry earlier. Which industry does not face this kind of consolidation problem of players at some stage or another? But they are still hiring now. We need business investments from more diverse sectors with their own special niches. But these investments we need must help us in employment for workers. Diversity in investments in size and industry sectors will give Singapore an added insurance and buffer in its future growth strategy. Because we are a small open economy and a nation-state, we need this diversity to balance off sectoral risks. We are unlike a big country or any economy where they can aggregate out the risk by different regional developments within their country.”
“I had actually visited the Tata Consultancy Services Company of India four years ago in Chennai (Madras) India, and knew that they were doing back-end process work for a certain Western European airline there. The Western European airline company is still around. There were rows of tables for young Indian men and women, some of them, not all, are graduates. I did not get the impression of active productivity, but it was very cheaply done. Cost advantage was evident to me. That is why competitive airline companies and others move there to do their labour intensive and routine work. I am sure by now they would have made a few good notches up in productivity because companies from other industries have also moved there. What we can hope from this exercise is a window of opportunity to readjust our costs and to generate demand in the economy so that more growth can take place in the economy, especially employment generating growth. We cannot talk glibly about the jobless growth in the economy and pretend the problem, like the poor, will always have to be with us. We have to solve it with so many talented people that we have. This window of opportunity we have to battle is a passing window. If what we can achieve with these proposed CPF cuts is to buy time, then we must seriously ask what we must do to raise demand. It may be that some of our economy's investments in the past few years have been in sectors that are slackening away, like electronics and construction, and we have to raise demand across the board. For demand to be raised, in order to generate growth, consumer spending must be raised, as well as investments, local or foreign. Tax burden accordingly, including statutory costs, have to be lowered.”
“Mr Speaker, Sir, thank you for letting me join in the debate. At this stage, where so many speakers have spoken, I just want to highlight a few points. The Prime Minister identified the critical cause of this slack growth in Singapore last week as that of demand. He said that we have to cut costs in order to be competitive with the other growing economies in Asia, such as China and India, and in the neighbouring countries. Assuming that wages for SMEs and smaller businesses constitute 50% of business cost, I think, overall in Singapore it is nearer 30-40% for the average business unit in Singapore, which includes a lot of MNCs, a 3% reduction in the CPF rate by employers as proposed will only lead to about 1-2% of overall savings for businesses. Hence, it is not likely to be the solution for employment generating growth in the economy that we have to tackle. Of course, other costs - rentals, statutory costs, transport - have to be adjusted downwards as well, and many of these cost packages and reductions have been mentioned by DPM a few days ago. As my colleagues have argued, no doubt these have to be reduced significantly to have any major impact, but it is only half the solution. The other possibly more important half has not been addressed in this debate, and it is how to generate more employment growth. What the current measures as proposed can do is to buy us some time. There is a window of opportunity for us to adjust and to retune our economy. And we have to make good use of that time that we are buying for companies to postpone giving up and closing down and moving overseas to China or the neighbouring countries, or even moving some processes to India.”
“Sir, I would like to ask the Minister a question on the Home Quarantine Order. Presently, under the Home Quarantine Order, a person who is quarantined, the children are not allowed to go out of the home, but the spousal members are allowed to. In a situation when the Home Quarantine Orders are very limited or small in number, I think that makes sense, because we have to balance the economy and activity going on. But when the number of Home Quarantine Orders is 2,000-plus, as it is now, and we have adult members of the family going about their work, is there not quite a high possibility that there may be some cases which might lead to infection or to situations which may not be truly watertight, as mentioned by the Deputy Prime Minister just now?”
“It is industry-wide changes which drive dinosaurs out of business when they react too slow. IBM lost the key business because it thought the contractor Microsoft was offering something that would not be a challenge to it. Port management is also changing. For the past four years, I have been arguing in this Committee for the privatisation of some of our port terminals. The answer has always been that PSA is different, or we are doing a good job, we are the transhipment port, and so on. Last year, the answer was we would consider it. Are we collaborating with industry players and building alliances to avoid being muscled in, as the episodes in the last two years showed? Are we a world-class industry player or just a world-class transhipment centre?”
“Sir, we have been told that PSA has done it again. It increased its twenty-foot equivalent units (TEUs) by, I think, about 7% or 9% last year, amidst all the hullabaloo about losing its top two customers. We also read that PSA has been giving severe discounts to its customers and extra service during this period under review. What does all this show? It shows that sensitivity to customers is very important in attracting customers and sales revenue. If we had been more responsive earlier, perhaps we would not have lost the top two customers which account for at least 20% of the business and so much of the downstream businesses in the economy. How does the Minister ensure that the port is responsive to industry-wide and global changes? We are not talking about IT, or network, or good management, etc. Big time shipping companies and private port operators or terminal operators with sales revenue bigger than PSA earned possibly in a more difficult environment also have good IT systems, good network and good management. We are talking about listening to the voice of the customers and repositioning ourselves to anchor and serve our customers to collaborate with partners in new ventures under changing industry environment. The shipping industry and the global manufacturers are moving towards network connections, just-in-time logistics to maximise efficiency. Supply chain efficiency and just-in-time logistics can power the port customers, shipping lines, the terminal operators to be partners. And private port operators can also manage a network of ports and this can drive shipping lines to adjust routes and schedules for mutual gains. Not even IBM or Microsoft can control the forces which drive industry-wide changes.”
“Of course there will be rebates that flow both ways, but I am sure there will be a lot of gains for the SMRT lines. Assoc. Prof. Chin Tet Yung (Sembawang): A clarification. On the complaint procedure, I understand that the new complaint procedure ---”
“Sir, the Minister raised an important point and I want to just clarify. I did not ask for the fare structure of SMRT to be raised. I said there should be feeder rebates between the systems so that when the North East Line passes passengers over to the SMRT line there will be certain gains for SMRT. Therefore, for such gains, there should be a rebates scheme whereby the cost is defrayed on the NE Line. This kind of mechanism has to be looked at before we straightaway go for fare increases, just because there is some additional cost. We must look for economies of scale and I am sure SMRT will benefit a lot by the feeder of passengers from the NE Line.”
“If we do not do this, then it is patently unfair to the residents of the North East region to pay for the operation of the line - efficient and built at a huge cost by the Government with the state-of-the-art equipment, which perhaps they do not need, if given a choice. The second point I want to raise is with regard to the safety features of the North East Line system. I raised this point last year and I want to raise it again. Could the Minister assure the House that safety features for this driverless train system will be quite thoroughly looked into, especially with the supplier of the control system as well as the rolling stock? Given the fact that, in recent months, there have been quite a number of accidents, we would like to assure the members of the public that such a driverless train system will be thoroughly safe.”
“Madam, I beg to move, That the total sum to be allocated for Head W of the Main Estimates be reduced by $100. Madam, I was told that the North-East Line was built at a cost of $5 billion, and it is supposed to be a state-of-the-art driverless train system. Its opening has been anxiously expected by many residents in the North East, who will be likely users of the line. However, they are quite anxious about the cost of the fares. Can the Minister explain why the fare structure has not been announced up to now? Preliminary indications are that the fares will be higher than the SMRT lines. The rationale for having such a different fare structure is that the North East Line, supposedly, has a higher operating cost. Naturally, as the line is new and the traffic build-up is not fully completed, there will be a higher per passenger operational cost. On the contrary, the SMRT lines - East West and North South lines - have already been running for 14 years, and traffic and development build up along the lines have been stabilised. The strong argument, I believe, for having a uniform structure of fares, even though there are two operators, is that both lines feed into each other and form an integrated system. The original investor of the system is the Government, serving the people's needs. It is not as though the lines are owned by different investors looking to maximise their own different returns. The North East Line is as much a part of the integrated existing lines, just as the North South Line is integrated with the East West Line. If a uniform fare structure does not yield the needed rates of return in spite of efficiency criteria, then some way of compensation, through feeder rebates, can be devised.”
“I think we should go a step further in identifying the value chain and the production/research or design processes in these segments of the chain to make business successes out of them for our local businesses and start-ups. A mapping of this should be done. The Government has the resources to do it. The Government should invest in such a service agency and get private sector people who understand business to do it. I believe there are a lot of local talents in the employment market and many of them used to work for the MNCs. We have a lot of advantages, especially in the educated young graduates from our universities and polytechnics, who are very good. I have met many of them and I am really proud of them. We should do the right thing by opening the avenues. They will do it right, once the trail is blazed. The problems facing the economy are indeed challenging, to say the least. I believe the Minister has got the issues well covered. Frankly, many of the issues mentioned by the Minister in the Budget Review - high business costs, the need for an entrepreneurial economy, GLCs crowding out private sector in businesses, which properly should be left to the local SMEs, high statutory costs - all sound very familiar, and have been said by many of us who have been long enough here on this side of the House. Let us hope that the remedial actions will be implemented with speed and efficiency. With this, I support the motion. 12.26 pm”
“We ask our workers to brace for the challenges - tighten up for the competition by lowering wage expectations, CPF and so on. What can our GLCs and bigger Singaporean companies do? Can the Government get GLCs to spearhead this overseas business drive by setting the management to work and achieve X% of their revenue from overseas by year Y by developing viable overseas businesses? By setting targets and time-lines for them? Any management team that achieves the target by year Y should be given both bonuses and/or tax breaks. Introducing the right incentives for them is the only true way of getting things done. Otherwise, we will be talking with insufficient sense of urgency as what our colleague, Mr Inderjit Singh, mentioned yesterday. A lot has been said about helping SMEs and taking them overseas. To me, the national economic strategy, if there is one, is to get the bigger ones, with the potential to go transnational, such as the GLCs, because they have bigger resources, or the bigger local companies, and then to get the SMEs to latch along. Although I agree that it is difficult, it is important for us to do and important for our Government agencies to assist the SMEs. In all these, it is important to understand that speed and simplicity are important criteria for SME businesses. One-stop service centre and meaningful value adding assistance will be of great help to them. We should cut down the red tape for them. Our plant/factory focus approach to attracting investment should give way to more process focus and value chain focus approach to base MNCs here. I believe steps are already being taken in attracting MNCs to base their OHQs here. But the linkages in the economy to exploit this presence may not be sufficiently developed.”
“There also has to be quality. For example, some years ago we started this idea of "incubators" for research and design in Singapore. The best example of incubators is, of course, Silicon Valley. But recently we hear of incubators by the hundreds all over China. Is this the real thing? I am not sure. Some young talented research students may be there, but the facilities for research, the resources, the marketing and business network connection, the international trust and respect for Intellectual Property Rights, the efficient legal infrastructure system, are not there in China, or even in India, by a long mile. So these are actually competitive advantages for Singapore, which we should exploit. If input investment under FDI for growth is not sustainable, what then should the new Singapore economy be aiming for? We should be aiming for growth from Research and Development, Design, Innovation, Knowledge and Quality Control. These are growth factors but, by themselves, spending on them may not yield returns. The productivity of these factors will also be determined by how well our businesses in the economy can synergise and how well we can blend these elements and market them for business. Here is where the assistance to SMEs and outsourced businesses can be developed to service technical processes. This type of growth in the economy is different from the input growth we have been so familiar with. Economists call this endogenous growth and such growth derives from total factor productivity gain. I am glad SPRING has last year finally embarked on measuring total factor productivity in our economy. It will take time to systematically monitor this, but it is an important step in the right direction.”
“We should remember that when we went into the FDI growth strategy many years back, many of our competing countries were not awakened yet. Later, as more of them were awakened to the challenges, the EDB had to attract so-called higher technology content and higher value-added industries to base them here. The employment creation in many of these investments is low, and our competitiveness in terms of business cost or wage cost is only temporary as the technology of these processes is often embodied in the machines. As the costs get higher, these factories move in search for lower wages. What we should be aiming at in growth at this stage of our economic development is to move to businesses where the technology or knowledge resides in the heads of our people, not just in the machines. With technology in machines, labour ends up working for the machines. We always think that the machine is working for us. Capital gets higher rate of return and labour gets paid in low wage. With technology or knowledge invested in the head, the table is turned, and the knowledge and technology workers get more decision-making and get the first cut of the value-added. So we have to reposition ourselves and the investment we attract. I believe this knowledge based in the head investment approach for growth rather than machines or plants is more sustainable for us. These investments in knowledge and technology in our heads can also be lost if our able men go away or migrate. I assume it is harder to move the men than the machines. But that is another issue. The investments in the heads have to have quality and content. It has to have complementary resources to get the correct soup - good brains and environment and research facilities in universities or private research units.”
“Mr Speaker, Sir, I just want to speak in support of this motion in the name of the Minister for Finance. Members of the House have been speaking and have spoken at length on the various issues in the Economic Review Committee Report on entrepreneurship and the present economic difficulties we are facing. I want to focus specifically on the investment issues and business related issues to growth. First, on the foreign direct investment issue. Our economic strategy over the past three decades or more has been on attracting foreign investments that will lead to growth and employment. We had been very fortunate. We embarked on this path in the sixties, just about the time when the MNCs were going transnational. We betted on the MNCs and the export growth strategy and that would help us clear our unemployment problem then and our growth into the future. We were right. Today, however, the other giants have awakened, chiefly India and China. And, today we all know China is absorbing the major share of the FDIs from the world. This foreign direct investment (FDI) growth strategy here is characterised by a lumpy or plant size investment in manufacturing products, which can be a final or an intermediate produce, which is usually exported overseas. The gain we expect from the manufacturing process is derived from the employment generated and the value-added for the investors. Is this FDI growth strategy still the way to go for Singapore? I am not saying the foreign investment is no more useful. It is a source of technology and jobs. My question is: can FDI growth be an effective strategy for us, whether it is in the current electronics industry or some other manufacturing sector?”
“So, in implementing these regulations, I urge the Ministry to apply the light regulatory touch. We should give market forces more play and more room to play. The more regulations we put in, the less room there is for competitive market forces to be at work, and the net result is a loss of consumer welfare. Statutory costs should be minimum so that the consumer does not end up paying for all these. While I am a firm believer in relative pricing mechanism to draw out the allocation, I am not urging for heavy fees to be slapped on in a non-discriminatory way. That way will not allow for the allocation mechanism to work. The price mechanism must give room for differentiation in the price level for allocation. Slapping on additional licensing fees alone is not necessarily the solution. In the same way, any cost of administration or audit, or for compliance, should not be passed on to the operators. This is important. In times like this when we are concerned about the competitiveness in our private and public sectors of the economy, we should not pass down costs from administration, which properly should be part of the bureaucracy, to the private sector. Because the efficiency of the bureaucracy and the public sector must also be subject to the rigours of audit and performance and to the yardsticks of efficiency. Madam, I support the amendments.”
“These amendments also pave the way for the liberalisation of the taxi industry and the Minister has said that it will probably be the final touch to the completion of this liberalisation effort. I welcome this. However, while deregulation is welcomed, basic standards of deliverables must be set with rules to comply. New sections 111(g) and (h) of the Bill spell out the need for the operators to meet the guidelines on codes of practice, performance standards and fair competition. In the past, I understand there had been half-yearly performance yardsticks by which operators have to fulfill and I would like to ask the Minister whether operators, in general, up to now meet these yardsticks. I suppose these include utilisation rate, the engaged mileage rate, radio despatch rate, and so on. If so, what are the further yardsticks or performance indicators that he has in mind that the LTA will need to target. In developing these performance indices (KPIs), we must not tilt the index list so that the operators in fulfilling them end up giving a buyer's product and output which will not benefit the larger group of consumers. What do I mean? If a KPI list is drawn up for monitoring and it has too much weight given, for example, to measuring booking performance, then operators will play this game. Or the LTA might want to put heavy weight on utilisation rate such as, for example, paid mileage out of a total mileage plied by the taxis. Then, we may end up with most taxis waiting around for calls. If that happens, this would work against the benefit of the public who need taxis for street hire. So the end result is that the poor hirer on the street suffers and taxis will not be available to the people on the street, while meeting the demand for those who want to book.”
“So I wonder whether the Minister, in this taxi operating licence and service standard framework, will also instruct the LTA to think along that line. We should allow for the price loading interesting enough for the taxis to ply into the city, not just to attract the flow of taxis into the city but also to offset the additional cost of coming into the city because of ERP charges. And a price loading must also be sufficiently attractive for taxi drivers to come into town because there are so many other demands for their services in other places at those times. But having said this, it is possible that too many taxis are changing shifts during certain hours. This actually can be adjusted by administrative rules for operators so that they do not change shifts at one time, taking away taxis during a certain time window. The authority can ask operators to actually smooth out the availability within a certain band or plus or minus certain percentage so that the changing of shifts can be actually distributed across a day period. Then you smooth out this aberration in availability of supply during those changing shift periods. Another thing to regulate the supply is actually to require a certain minimum logging of mileage by taxis, which I think is presently being done by the LTA. While I support these new amendments for taxi operators, I would also caution that we should let market forces more play and more room to play, so that choices can be offered to the customers. Customers should also be realistic about service standard at peak times and be prepared to bear with increased charges for delivering services at those hours.”
“But I suggest that we should try to understand the problem of delivering service to satisfy peak demands in its proper context. This kind of heightened peak demand is not something new. Just a heightened peak demand, epitomises by the long queue outside Centrepoint's taxi stand, cannot be satisfied within that window, especially when the holiday shopping season is coupled with a rainy period. It is the same, whether we are talking about waiting for a taxi in Centrepoint or waiting for a taxi outside Harrods in London. It is the same problem. I am not trying to explain away the problem of taxi operators' service standard. But it is only logical to say that when the demand within the window period is heightened, as is expected during rainy or holiday seasons, some mechanism for rationing and allocation must be allowed to operate, to solve this problem of the frustrated long queue wait. We have to solve such a problem in micro-management terms as best as possible. And it is not fair, I would say, to blast away the overall transport system and decry the world's standard service that we have delivered. Actually, economists have been talking about this and the answer comes from the time of Adam Smith. It is called the price mechanism in allocating of limited resources. Whenever there is a long queue waiting for taxis and the taxis are not available, we should be wondering where they are. If the taxis are fully occupied in servicing all the other parts of the island, and if we are so concerned about that particular belt or shopping point in town that must be serviced, then the answer is to put in a price differential factor through a proper pricing mechanism sufficiently enough to attract the supply.”
“Mdm Deputy Speaker, I wish to speak in support of this amendment Bill. There are several areas of amendments listed out by the Minister and, in general, I support these amendments. In particular, I want to focus today on this issue of licensing of taxi operators. This is an important feature in this list of amendments, and it focuses mainly on the legislative framework for licensing of taxi operators which will come in place. We have heard a lot of complaints and we read about them regularly in the papers from the public concerning this call for taxis during peak hours or rainy period, and this is one of the issues which I suppose the Bill addresses, ie, service standards of taxi companies. I agree that while there are certain conditions which are attached to this legislative framework for the licensing of taxi operators within the context of more competition, as spelt out in section 111, I am not, however, entirely persuaded that by licensing conditions alone, we can properly and adequately tackle this question of service standards during periods of heightened demand, such as during holiday season or during peak hours and rainy season, and so on. While I can understand public sentiments when taxis do not respond during holiday seasons and the attempts made by the Minister to try and correct them, we can think about issues or instances of airport service standards during Chinese New Year, or shopping centres, and so on, during rainy periods. I remember a journalist wrote a long piece decrying the transport service standards in Singapore when she had to wait for hours for taxis at Centrepoint during the Christmas season or rainy period. I appreciate the frustration of any member of the public waiting at a stand for a taxi which does not turn up.”
“There will always be the bright students who will manage to score best in the test or the key performance indices, but the output may not be the ones we should be looking for, if addressing the challenges of the future in education is what we are trying to do. The average pre-university student today will, in all probability, know more facts about the world or the solar system than Galileo in his time. But we would be kidding ourselves if we think they are all little Galileos, because the creative genius is not about knowing facts and mastering content alone, but new ways of imaginatively thinking about them. With this, Sir, I would like to support this motion. 4.45 pm”
“It is in the things and the ways we teach that will be more critical. The curriculum we develop for this structure and the way we teach and evaluate them are equally, if not more, important. What do I mean? When we study a subject in school in Singapore, I dare say we often do not bother or know about the history of a subject - whether it is a science subject, the history of some scientific theory on a subject, or the history of economic thought or theories. We are interested to learn the current vocabulary and not bother about the background of how these theories or concepts came about. Yet, understanding how these current ideas came about is most important, to know the underlying assumptions, the beliefs, the biases, the prejudices sometimes behind many of our ideas. The great economist Keynes once said, "We are often the slaves to the ideas of some defunct economists." Great discoveries are often made by challenging assumptions, and the assumptions lie embedded like fossils in the old stone. Unless we know the history of the subject or the history of the theory, we may well be heading the wrong path, or not aware of why we think the way we are thinking. I am concerned about this as I see limitations in our current curriculum development. To properly cater to the diversity of strength and interest of our students, we must give them the space to learn and share. It means more time to cover and dwell on the subject, more time to explore and discuss, to think around the topic. As long as the system tries to jam too many things, the time and space available will be constrained, and defeats the whole purpose of what it may be hoping to achieve.”
“It has to do with perception as much as conception. It has to do with what the mind can see than what the mind can think. Learning about facts alone will not necessarily prepare our kids for the future. It is the way we relate the facts and the content that will determine whether these facts are going to be meaningful to the students learning about them. Creative thinking is important. New ways of looking at things or even inducing facts from observation, hypothesising anew and challenging sacred cows require a new frame of mind. It is important to teach our children to be creative, to give them room for creative thinking and imagination. Project work can be a basis for allowing creative imagination, but it depends on how we conduct the project. Time must be given to explore and challenge the usual frame of reference of our current thoughts. To do this requires a new frame of mind. The school children should be given not the syllabus as important as the environment. At the end of the day, it is not by saying that we allow for wider and deeper subject learning that the creative impulse will come. There must be time and space allowed for the students' imagination to fallow, incubate and envision. It depends on the way we teach or communicate the wonderment of the subject. It depends on how we test or evaluate them. We must give them time to explore and express. Perhaps the way we evaluate their competence ought to be varied. It is not the new facts or content we learn or know that will determine whether they are of any use. It is the way we interpret or relate these facts that will lead to a new discovery, new process, new product or a new solution to an age-old problem. Hence, the new programme structure, while commendable, is only half the story.”
“A famous philosopher - I think it was Wittgenstein - once said: "Whereof one cannot speak, thereof one does not know." I wonder whether the fact that our students are found to be poor in expressing their thoughts is really due to their language difficulties, ie, the complexity of learning languages in Singapore, as mentioned in the Report, or is it because they have not quite really learnt the subject properly. Is it because the way our subjects are currently being taught and the way we assess them that do not give them much chance for discussion and expression in order for them to clarify their thoughts? In ancient Greek culture, the learning process centres on dialogue. One has to refer to Socrates and Plato. I suspect teaching in Singapore is more monologue than anything. This new system proposes to make changes to the current system to give more skills at learning or on knowledge acquisition. I welcome the proposal, but I hope we will do it right. It is quite a change. We can cram our students with content, but what are they going to do with these contents? Have they understood the facts and how the facts stand in relation, in order to adequately express what they think about those facts and the contents they learn? Do they know what they are talking about? And if they do not talk, maybe they do not know. When will the magic moment strike in thinking when the facts are resolved into a recognition of pattern that can be expressed to be something meaningful to the persons listening to you? Learning more about content, while good, cannot lead to the act of creation in engendering a new way of looking at the causal relationship or the pattern of occurrence of events. This capacity for creative imagination springs not just from the analytical process of the human mind.”
“Thank you, Mr Speaker, Sir, for giving me this opportunity to speak on this motion. I wish to speak in support of this motion standing in the name of the Minister for Education. I have no quarrel with the intention of the Report to develop thinking and communication skills for our students in upper secondary and junior colleges, as well as to provide a wider range of subjects and areas of learning for our students. The diversity we require in knowledge and thinking processes cannot be doubted. The mark of our Ministry of Education's mandate as well as the slogan of "Thinking Schools and Learning Nation", as first articulated in 1997, can be said to be milestones in the development of our education system. The Report essentially proposes a wider gradation of the education system to give depth and width to a larger group of our students. There will be new subjects at H3 level, and new subjects of learning for the new system of examinations. This is good. After all, any old system of examination developed decades ago, having served us well, should give way to newer ones, more suitable, more relevant to the time. The world after all is not quite the same, and knowledge has exploded in this period. Going through the Report, we are introduced to new areas of enquiry, communication skills, language and knowledge skills, humanities and the Arts, mathematics and science. An Integrated Programme Structure of six years through to complete pre-university will replace the present 4-2 system. How can we quarrel with learning more things, learning deeper about things, talking and discussing about them in an intelligent way? How can we dispute about the importance of greater diversity in learning for our students?”
“Sir, I hope the Minister will consider this point.”
“While I agree that rules and regulations should be tightened to ensure efficiency to service public needs, the LTA should also determine what are the performance yardsticks for monitoring and making these yardsticks known publicly. They can be the number of delays in operations per year, the number of failures to observe safety regulations, revenue and load factors, etc, so that the public will be able to know how the public facility operator is doing. These red marks must be the basis to impose fines and penalties on these operators. Presently, this proposed amendment only provides for the penalty of $1 million on operators for failure to comply with the provisions or directions of the Authority. It makes no mention of failure to comply for performances. I believe operators who fail to deliver services up to standard should be given fines and penalties. This does not seem to be provided at all in this Bill. Although there is a provision in this Bill for the Authority to suspend or cancel the licence of the licensee, it is hard to envisage what alternatives the Authority has in cancelling the licence. After all, the trains have to run. Hence, I feel that putting in a scheme of fines and penalties for non-performance or failure is necessary. This will awake the management of the company. Public infrastructure operators fear penalties and fines more than public outcries. And by these fines, I do not mean a fine of $10,000 for the stoppage of trains for four days. The fine should be meaningful enough and of sizable amount so as to make it a deterrent for the companies. The reason for this is simple. For fines, such public infrastructural companies will have to measure the yardstick. And for public outcries, it is very hard sometimes to determine the impact.”
“Mr Speaker, Sir, this amendment Bill on the rapid transit systems is timely and necessary. As our MRT lines have expanded and another new operator of the North East Line is coming on stream, it is also important to lay out and further improve the ground for competition and performance requirements of our operators. Performance related indicators and codes of practice must also comply in order for our MRT to operate efficiently. By nature, this area of public transport, whether it is for buses or trains, usually falls into some area of natural monopoly. It is necessary to run it both efficiently and yet meet public expectations of service. Sir, rule-based competition is important to evaluate the performance of the operators. The amendment Bill focuses on three main areas - on the corporate changes in shareholding, on restrictions to lines of business, and standards of performance. While I applaud that such conditions and restrictions spelt out clearly for operators are good, sometimes it is difficult to see how it is applied in practice. Have we not, for example, seen the original SBS gone into property development? On the other hand, if an operator maximises the employment of its assets by properly going into interesting businesses, should it be discouraged in an entrepreneurial and efficient economy? We must appreciate that the MRT commands a sizable amount of assets and should be a dynamic sector in creating value in the economy. Infrastructural companies operating on public charter should run their business efficiently with the aim also of serving the public. Their aim must be to make a reasonable return by industrial comparison and ensure that the services are efficient, satisfying public demand and reinvestment.”
“So, when the public transport companies go to the PTC to justify for the increase in X, is there some anomaly in the CPI + X formula that we have to look at? Otherwise, productivity increase has no incentive to gain from CPI + X, because it suppresses X, whereas other cost increases in putting up equipment, fanciful features, frills that Mr Tan Soo Khoon talked about add to the X factor, and justification for fare adjustment. Sir, I am not arguing that public transport companies should not be allowed to raise fares, as allowed by the PTC. The question is whether this is the right time. I can understand that there is never a right time for raising fares, but in times like this, when the economy is suffering from a recession, when there are difficulties faced by our people, I think there has to be some cause for concern for the public transport companies to raise fares at this stage. Times are bad. We are told there is no sacred cows that will be left unexamined. The GST is going up next year. While we ask our people to tighten their belts, I think we should also be sensitive to the threshold of pain they can bear in these uncertain times. I understand that the Government will not allow public transport companies to raise fares next year when the GST goes up. Would it not have been better had the PTC delayed the fare hikes till January next year, together with the GST implementation, so that it is manifestly evident to the public that such an increase at that time, as opposed to now, would include the GST increases, which will be absorbed in this current fare adjustment? Finally, I would like to urge the Government to bear in mind the views expressed by Members and to consider this in reviewing the work done by the PTC.”
“6%; its return on equity is 8.3%; net earnings, $56.8 million, which is about 11% of sales. Of course, the ROE, in the case of the SMRT, cannot be so high because it has such a big infrastructural asset to maintain. I would say that perhaps in considering the financial figures for these two companies, it is of some merit to the Minister to explain to us how the PTC came to the conclusion that the two companies' viability are at stake. Of course, we understand that SBS Transit is taking over the North-East line. And for this current year, there may be some start-up operational expenses for the first 10-11 months before the North-East line starts running by the end of this year. So there could be expenses that it has to incur in this instance. But this is really start-up cost of operation. The other group of factors that we have to look at is the justification given by the PCT on the CPI + X formula. I believe there are many ways to interpret this CPI + X formula, and it is not exactly quite clear which is a plus and which is a minus. What do I mean? X can be a dummy for cost increases or productivity increases. Of course, management would have to manage this part of it. But as presently constituted in the formula, that formula is a justification for the PCT to arrive at 2.2% increase. I think we have to differentiate between productivity increase in the X and operational cost increases in the X. What do I mean? If productivity increases in the transport companies, naturally, this increase suppresses X, that means X would have a lower value to rise. Operational costs, in terms of equipment, TV monitors on the buses, fanciful bus-stops, air-conditioned halls, these could add to increases in the X.”
“On the first reason that the viability of public transport companies is at stake, I think this is only one part of the issue. Companies which exist by public charter must perform certain social roles and undertake some measure of social responsibility. Of course, they must run their business efficiently for shareholder value. Because they exist on public charter, they have to fulfill certain public objectives. And in times like this, I think there can be merit for considering some factors in delaying the decision or in modifying the rates of increase. I think it is not something so contradictory that it cannot be managed. Running such a business, of course, is not so easy, but balancing this role is necessary. That is why we have to hire the best management for the job. Otherwise, we will be having a family of clerks to do it. Is the rationale on the viability of the bus transport companies valid? Some figures have been given just now. I believe that the public transport companies concerned here are not about to go under. What has their performance been up to now? If we look at the financial figures, and some have been given just now, I do not think the figures justify the decision. If we look at the return on assets for SBS Transit for the financial year ending 31st December 2001, it is 13.5%; return on equity for the same period, 17.8%; the gearing of the company, that of debt to equity, nil; net earnings, 7.3%. If we look at these figures, one would generally come to the conclusion that SBS is reasonably sound and quite profitable. Perhaps the Minister can use this opportunity to explain how the PTC came to the conclusion that viability of the public transport companies was at stake. If we look at the SMRT, again the return on asset (ROA) is slightly smaller, 4.”
“Mr Speaker, Sir, I would like to speak on this motion in the name of Mr Tan Soo Khoon on the public transport fare hikes. I want to thank him for this opportunity to ventilate my views. So far, the discussion on the latest PTC's decisions on public transport fare hikes have been rather emotional. I can understand the sentiment, given the state of the economy, unemployment, difficulties that people are facing and the likely statutory charges that would come up in the months to come. If I were to look at the rationale given by the PTC on its decision, I would classify them into four main groups. The reasons given are, firstly, on the viability of public transport companies if the fares are not increased; secondly, the CPI + X formula, giving justification for small increases versus big increases; thirdly, the issue of wages and operation costs; and, lastly, the issue of productivity and quality of service and equipment necessary to sustain the quality in our public transport service. I have no reasons to doubt the statement of the PTC in saying that it has improved "the process of scrutinising operators' bus and train accounts and its financial performance. Operators have been prudent in containing cost and not been profiteering at the expense of the commuters." However, the public would like to ask questions on how the decisions on this latest fare hikes are arrived at. Hence, I believe transparency in its decision-making process is vitally important, and perhaps is lacking in this respect. In this instance, I think this opportunity is given to the Minister to explain and to justify the PTC's decision with respect to this monitoring of key performance indicators.”