Chuang Shaw Peng
Singapore
“Since the problem is most likely due to design, can the Senior Parliamentary Secretary tell the House whether the person responsible has carried enough insurance policy to cover the losses and damages? If not, would the Ministry ensure in future that all consultants should carry the appropriate insurance policy? Assoc. Prof.”
“I understand from the industry that a good number of professionals do not carry insurance at all. If such an accident occurs again when one of the houses, condominiums or schools collapses and the contractor is not insured, the residents will get nothing out of it because the person can just declare himself to be a bankrupt.”
“We must have self-cultivation, family cohesion, service to society and loyalty to nation. We must continue to enhance our multi-racial harmony and social cohesion. It is only then that we are able to lay down a very strong foundation for our society and country.”
“We could also emphasise the significant deterrent effects of death penalty on drug trafficking, and that more and more countries are beginning to emulate us in this aspect. We can put all these on the Internet.”
“Yes, Sir. I hope the Minister can see that there is a need to change our mindset and again I want to ask, in line with the call by Mr Lim Swee Say, that we change the mindset of our people. Dr Tan Cheng Bock has called on the Government to care for the people, in the light of our foreign talent policy.”
“It is very common for a team to put up a lot of money in preparing a tender, and if a tender is called after the tender prices are published and all the designs are made public, then the party calling the tender is effectively encouraging the parties to breach intellectual copyrights.”
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“Sir, last year, I spoke on the need to promote high-tech industry to bring our economy up the value ladder. I also asked the Government to consider providing more incentives for the private equity funds, including those for boutique funds. I am truly glad that the Government has acted swiftly and put this in place. Today, I have one more item on my wish list, which is the same as what Mr Inderjit Singh has asked for and that is, Singapore should have a stock exchange for high-tech industry. Let me explain why I wish there was one. In the midst of promoting technopreneurship, Singapore set up the basic physical infrastructure such as a high-tech park near NUS, it pumps money into R&D, the use of network with world renowned universities. But for those who are familiar and who could embrace technology, all these are wonderful things. But our society has not been oriented this way. Many of us still do not know or simply fear technology. Quite many of us cannot even define a knowledge-based economy. Therefore, there is a need to systematically educate our people. I know the schools are teaching the kids to be computer-literate. Our younger workforce also learns about IT in schools or on the job. But there is a large pool of people out there who may not be comfortable with technology and many of them do not even know how to log on to a user-friendly computer, let alone convincing them to learn about cyber transactions, gene splicing and growing artificial human organs. This group of people in our society, however, represents the wealthy. Many of them belong to the baby boom generation or even earlier generations. They have made and accumulated substantial wealth during the good years in our nation building. In Taiwan, 40% of the economy is high-tech.”
“I would like to ask DPM whether, in the process of opening up the financial sector, he would require the local institutions to meet the same reporting standards as the big international firms that we would like them to operate in Singapore. BG Lee Hsien Loong: We are doing that already, and a Committee chaired by Mrs Elizabeth Sam last year made recommendations which have been accepted, and which will bring our banks' reporting standards up to the norm in developed countries. They are not quite the very best practices, but the norm in developed countries. The banks have already done that. They have published their hidden reserves which have never been done before. These were treated as top secrets. I see OCBC has announced that they will give details about their land bank which is another old top secret. We are changing.”
“BCD has certain restrictions but the Ministry of the Environment would usually like the land to be filled up. These are contradictory rules. If no one can prevail, the process of sorting out can take a long time and can be very costly. Mr Deputy Speaker, Sir, now that BCA is about to be formed, I wish the Minister could get BCA to standardise all submission requirements and procedures for everybody in the country. At present, for example, some parties are still allowed to carry out work without obtaining a permit to commence work. For a small nation like ours, we should be in a better position to standardise all procedures to avoid confusion. Lastly, I would like to suggest to the Minister that for optimum running of this authority, the appointed Chairman should not be currently involved in a statutory board or organisation whose major interest is in the area of property development or construction. Yet, he should have a good knowledge and understanding of the industry. The Board of Directors, which can have up to 12 members, should not just comprise those practising professionals and contractors. It should include other disciplines such as sociologists, manufacturers, bankers, representatives from consumers, to get a broad and balanced representation for such a complex industry. It would definitely be in the best interest of all people in this country to see a progressive, vibrant and efficient construction industry. Mr Deputy Speaker, Sir, I support the Bill.”
“Therefore, it is very easy for them to practise marginal pricing or dumping to gain a market share and to deprive local firms from getting the necessary track records which are essential for players in the construction industry to continue bidding and expanding. Some foreign firms are even registered as subsidiaries with limited liability and they sublet the whole work so as to pass down the losses to the local subcontractors and suppliers. On the surface, the developers, be they the Government or private, get a better price for their product. But the parties they subsidise are not necessarily the foreign party but also the numerous local suppliers and subcontractors. In view of this, I urge the new authority, while trying to raise the capability of firms and to promote good procurement methods for the Government, to explore beyond the current procurement policies to curb the malpractices. If not, things that had happened in the last 15 years would continue to happen, and some of these functions of the new authority would not be substantially fulfilled. The last area I wish to comment on is to ask the Minister whether he would empower the BCA to be the final authority on matters relating to the construction industry. In the past one week, we read a lot in the newspapers about the dispute over the definition of "built-up" and "built-in" area. Should we leave it to the Court or the industry to sort it out? Or should BCA come up with a definition once and for all? I am sure that the developers and consumers alike would be keen to know the outcome. There are also occasions whereby there are discrepancies between BCD and some other authorities. For example, the issue of landfill.”
“The current form of contract tends to be one-sided, biased towards protecting the developers and consultants excessively. One example of their catch-all clauses is "unless otherwise expressly provided, the contract sum and contractor's rates and processing in the rates shall be inclusive of all ancillary and other works and expenditure, whether separately or specifically mentioned or described in the contract or not, which are indispensably necessary to carry out and bring to completion the works described in the contract or may contingently become necessary to overcome difficulties before completion." Another example is that the information given is only a guide. The party providing the information holds no responsibility for the accuracy of the information. These examples illustrate that the contract itself protects some parties excessively, so much so that they need not be professional in their conduct. So, in the promotion of professionalism, I believe BCA should ensure that all contracting parties have equitably distributed responsibilities and liabilities. The third comment I have is related to the promotion of capability of firms in construction and I am glad that the new authority recognises the need to do so. I believe that this cannot be achieved without looking at the wider and higher Government policy on whether we would accept unfair trading practices of dumping in our country. I have touched on this topic in the debate on the Report of the Committee on Singapore's Competitiveness last November. Our construction industry is a fairly small one. Some of the largest firms in the world individually have an annual turnover in dollar terms more than our entire industry.”
“Just recently, Ford Motors launched three distinctly different models, namely, the sports car, Firebird, the American saloon, the Lincoln, and the luxurious Jaguar S. All of them have the same chassis and all these three models are aesthetically appealing, even though they share a lot of common parts. This leads us to believe that, through concerted effort, both aesthetics and buildability can be achieved in the construction industry. BCA, with its regulatory power, should now be able to implement these measures. In this Bill, I note that the authority would have a new function, and that is, to raise the professionalism and capability of firms in the construction industry. On this point, I have several comments. First, it is easier said than done to raise professionalism in our industry. It is a known fact that in the construction industry, some clerks-of-works and resident engineers do not quite practise their professionalism. They would deliberately delay the progress of a project for their own benefit. CIDB has, not too long ago, conducted a survey and found some shocking results, ie, the delays caused by clerks-of-works and the resident engineers have resulted in 2-3% wastage in our annual turnover. If we take $20 billion as our national annual turnover, that means we have lost one centre for the performing arts each year. This lack of professionalism by the site supervisory staff has been highlighted time after time but the problem has never been eradicated and I hope the new authority, with its enhanced power, can find a way to resolve this perennial problem. One possibility would be the registration of clerks-of-works. The second comment I have is that the construction industry needs badly a fair and equitable contract.”
“Many public projects have attained high productivity with competitive cost. These departments have found relative ease in implementing this concept because they could control the entire process of construction, ie, from conceptualisation to final execution. But in the private sector, the scenario is quite different. I think this is why this Bill has to provide for legislation of buildability. In the private sector, possibly owing to unfamiliarity or fear of loss of creativity or fear of high cost, this concept of buildability has not been readily embraced, notwithstanding that it has been successful in the public sector. As a result, the labour productivity of private projects tends to be low and it pulls down the national average year after year. I personally do not believe high buildability is associated with monotonous and stereotype designs. On the contrary, many buildings, whether they are local or overseas, have attained a very high standard of aesthetics. In advanced countries such as USA or Australia, all doors and windows are mass produced in standard dimensions. Designers of buildings simply buy them from the shelf or from mail order, and nowadays from the Internet. In Singapore, there is no standardisation of windows and doors. All have to be tailor-made. And similarly, the room sizes in Singapore are dimensioned in such a way that there is always a lot of tile cutting at the edges. All these practices cause wastages and poor workmanship. In other industries, standardisation has proved to be a good way to make things buildable and the most notable examples are in the auto industry. Nowadays, most cars use interchangeable parts. Car manufacturers also try to build cars with as few platforms as possible.”
“Then the structural engineers are called in after the architects and developers have more or less finalised the concept plan and they are asked to come out, in the shortest possible time, with a structural design, again, without regard to buildability. So by the time the project is tendered out, the basic architectural, structural, mechanical, electrical designs are all firmed up. The contractor who wins the bid would have no input whatsoever to the entire design process. But the contractor is usually the best guy to know which method of construction is the best. So the process we have would not allow the contractor to exploit his expertise. And if we continue with this practice, our construction industry will continue to be burdened with labour intensive and inefficient construction processes. We are lucky that the CIDB has introduced the buildability concept a few years ago to address this problem. Let me elaborate a little bit on buildability. In layman's terms, it can be said to be the ease with which the construction product can be made and it is computed with a formula giving different weightages to various construction methods, materials usage and standardisation of dimensions. A high buildable score for a project indicates that the project is less labour-intensive and more efficient. To-date, some Government departments, such as HDB, Mindef, PWD, etc, have used the score to gauge if their projects have been designed for efficient construction. And two foreign countries, that is, Denmark and South Korea, have even legislated part of the buildability, ie, the standardisation part, to promote productivity and efficiency. Within the Singapore Government departments and statutory boards, the implementation has been quite successful.”
“There are currently more than 200,000 foreign construction workers. Our indigenous pool of workers in the industry is very small. It is around 30,000. The foreign workers, whether they are skilled or not, have come and gone. While they are here, we train them from unskilled to semi-skilled, to skilled and to be trade-certified, and all these cost a lot of money. At the same time, the quality of our construction also suffers. Sir, at first glance, we seem to have an advantage by having cheap labour. But if we add up all the costs, like training cost, defect cost, time cost and social cost, I think the total cost is probably higher. This helps to explain partially why we have a higher construction cost and yet our quality is not commensurate with the cost. Mr Deputy Speaker, Sir, at this point, I would like to commend the Minister for boldly introducing the new functions of the authority that would give the industry a quantum leap in the overall efficiency. The new Bill places a lot of emphasis on the promotion and development of advanced methods of construction. In particular, as part of the consequential amendments to the Building Control Act, the Bill states that it will introduce measures to improve the efficiency and standardisation in the construction industry relating to design processes, construction techniques, products and materials. As Members of this House would know, Singapore inherited the construction system from the British. All along, we have practised what the British did 20 or 30 years ago. Typically, for a development project, the property developer's main concern was maximisation or short-term gain by asking the architect to deliver the maximum saleable or lettable area in the shortest possible time without regard for ease of construction.”
“Mr Deputy Speaker, Sir, I rise to speak in support of the Bill. The establishment of the new Building and Construction Authority comprising the current CIDB and BCD of PWD should be welcomed as good news to the construction industry. As mentioned by the Minister, up to now, CIDB and BCD perform their roles quite independently. CIDB will deal with all the promotional and developmental aspects of construction industry at the downstream of the value chain. They handle the registration of contractors, training and certification of workers, promote new materials and processes. BCD, on the other hand, regulates and controls the building works at the upstream and they deal with the developers, architects and planners. Today, the coordination between these two entities can be said to be minimal. Often, if one entity wanted to do, it may not achieve the cooperation of the other. This has resulted, as the Minister mentioned earlier, in a delay in implementing measures to help promote the overall well-being of the industry. Now, with the merger to form one single entity under one Chairman and one Board of Directors, I can envisage that the merged entity would be a more effective one. On one hand, CIDB would be able, with the regulatory power of BCD, to move upstream to enforce the promotional measures that it previously found powerless to impose. On the other hand, BCD now would be able to better exercise the building control and approval of plans with a good knowledge of the latest construction methods, equipment and availability of skilled workers. This integrated approach will help to accelerate the process of skills upgrading and reduction on its dependence on foreign workers. May I digress now to speak on the status of the construction industry today.”
“Therefore, the policy actually opens the door wide open to the Chinese construction firms who now outbid everybody because of the low levies. In other words, the policy creates an uneven playing field. If the policy is not remedied through the diversification of sources of workers, the construction industry will hollow out. There will be no other but Chinese construction companies. Then, how will local firms compete and generate revenue to keep the workers, engineers, architects and foremen employed? How are we going to build capability? Mr Speaker, Sir, to sum up, the CSC Report provides a great vision. It is, in fact, a dream for most nations. But can we get there in 10 years? You need a lot of change in mindset, politically and socially, to change from the current status to that vision in 10 years. Many of our people, our industries, our entrepreneurs, our civil servants are perhaps not ready for the goals envisaged by the CSC whose members constitute the most successful, forward-looking, dynamic individuals. The job now for the Government is to convert the wonderful ideas of CSC into reality. This is not an easy task. But if our Government is able to persuade our people to take pay cuts, I do not see why it cannot realise the vision. Mr Speaker, Sir, I support the motion.”
“But, quite often, the system itself does not work out this way. I want to give an example, again, in the construction industry. When a project is delayed due to changes in design or client's requirement, the supervising officer may impose liquidated damages on the contractor to establish a bargaining power to negotiate for waiver of claim from the contractor. Clearly, this is a conflict of interest. The very person who causes the delay is given the discretionary power to mete out the penalty. So in order not to jeopardise his career, the tendency will be to take the easy way out. Outside the construction industry, I believe, similar examples exist. I hence suggest that in addition to the CSC's recommendations in the chapter on Government as business facilitator, closer attention should be paid to modify and improve the civil service structure so that their efficiency will be in line with the private sector and no wastages and losses will be passed on to the private sector unnecessarily. May I now quote another example about conflict of interest. The Government and the construction industry have been trying to promote the upgrading of skills and engagement of skilled workers. So the levy differential policy was perceived and implemented. However, in the early stages of implementation, the industry has fed to the Government that the policy, which has stark results in promoting skills upgrading, also has side effects, such as giving a particular country, such as China, an unfair advantage on the cost. Most of the skilled workers who enjoy a low levy of $100 today come from China. But it is a known fact that Chinese workers are very difficult to control and only Chinese companies can control them through their home connections.”
“The CSC Report touches on the introduction of more incentives such as employees' stock option plan, tax reduction for foreigners who work in Singapore, etc. Yes, I support this market oriented approach in management. After all, one of the key measures of success is the amount of money one makes. ESOP, the employees' stock option plan, makes a lot of sense. But, Mr Speaker, Sir, I beg the Government to look beyond implementing just those few suggested measures. Singapore has always been quoted as a "fine" country. And that is to say, we have used more sticks than carrots. In the earlier development of our nation, perhaps it took more sticks than carrots to accelerate the climbing of the value-added ladder. Some of the sticks are increased rents; increased wages; and imposition of quotas and levies. But the world is quite different now, especially in the aftermath of Asia's economic crisis. The carrot method, such as ESOP, will perhaps work better. So far, similar policies, such as levy differential, construction quality score, PSB's grant for R&D, have worked out very well. They have achieved good results. Hence, I urge the Government to deploy more carrot methods to stimulate the growth of the economy. And I believe such incentive methods will let the Government get back more, in the form of taxes and other benefits, than what they give away as incentives. Another area where the CSC Report is not clear is that as the business facilitator, how would Government act as the regulator and promoter at the same time? There is bound to be some conflict of interest. The CSC Report mentioned the receipt of feedback that the approval process remained opaque and hence suggested greater transparency and accountability within the civil service. Yes, this is very good.”
“The financial clout of GLCs should be exploited to do those businesses such as launching satellites, telecommunications, airlines, large-scale engineering, etc, but not businesses such as restaurants, golf courses and real estate. Temasek Holdings, as the overall guardian, should examine and evaluate the business plan of GLCs carefully to ensure that they will not pose unfair competitive advantage over local firms. Let us be mindful that it is the world trend to stay away from being too diversified. There are many case studies on this. IT&T, the Korean chaebols, are vivid examples of what we should avoid in building our world class companies. On the other hand, Nokia, Ericsson are the good positive examples cited by CSC on how they succeed by finding a niche market in technology. In my conversation with friends, colleagues and foreigners, one question that often pops out is the accountability of the management of GLCs. Will they be subject to the same level of scrutiny by the public and the investors as any other public company? I think if GLCs are to grow into world class companies, the management must be held accountable for the performance of the company. If they are good, they should be handsomely rewarded. If not, appropriate accountability should ensue. The second aspect of building GLCs into world class companies, as recommended by the Report, is that it gives the reader the impression that GLCs are the only likely candidates. I beg to argue that GLCs should stick to their core business and let other SMEs be nurtured and built into world class companies in areas that GLCs have no obvious competence. There is no guarantee that GLCs would succeed. By letting some SMEs to grow is a logical way to diversify our economy to have more breadth and depth.”
“If we import every player, including the captain from overseas, we do not really have a national team. This team can easily go away and we end up with no players at all. In other words, in economic terms, our economy has hollowed out. But if we have foreign talent to be part of our team, to be our sparring partners, then our players will eventually emerge to be as good as any foreign player. I think CSC should find a way to ensure that the playing field is level for everyone, and our supporters will cheer for our home team. The present situation whereby our own crowd cheers the foreign teams and boo the local team does not have the right spirit to build our competitiveness to become world class companies. I have so far cited examples in construction which I know very intimately, but the general public sentiment is that the same applies to other sectors. How are we going to build world class companies if we have no confidence in our own people? May I quote a famous Chinese proverb from the "Tactics of War: (Sun Zi Ping Fa) - Yi ren bu yong, yong ren bu yi [ ]. It means that we should not suspect the person we wish to engage and we do not engage those we suspect. That leads me to the next recommendation on the building of world class companies. It is a natural and good thing to have GLCs to kick start the development of world class companies. This is partly because the Government knows the GLCs' capability and has trust in them. But such trust should not be extended in such a way that the GLC grows in an indiscriminate manner and becomes a monster. In the world of business, people talk about core competence to excel. The GLCs should stick to their core business and try not to encroach on areas which the local companies can do equally well.”
“To draw a pictorial description of our tender system, I would like to describe our Government procurement system as a convex, tinted, one-way mirror. A local firm standing in front of the mirror will find itself smaller, darker than the real one. A foreign firm standing behind can see through the system to gauge the size of our companies and take full advantage of such transparency. Mr Speaker, Sir, for years, foreign firms, particularly in construction, have been dumping their products and services here. They have been practising marginal pricing, transferring costs to generate revenue to stimulate their own economy and reducing their fixed overheads. The local firms are just like a lightweight boxer challenging a heavyweight boxer. They probably do not appear as solid and impressive as the heavyweight. But if the job requires only a lightweighter, why must we choose a heavyweighter? Or, can we hire a foreign trainer, I emphasise foreign, under our wing and build our fighters into a world-class heavyweight? There have been many examples where our tender system itself excludes our own firms. Some of the conditions ask for track records which could not be found previously in our republic. In the world of construction, many countries try hard to use their procurement power to build their own capability. But it did not seem so here. Mr Speaker, Sir, I am not advocating protectionism. I am suggesting that the competition should be fair. Dumping should be strongly discouraged. Otherwise, the local firms will always face an uphill battle to acquire knowledge and to build capability. Without the projects, the local firms cannot have the chance to hire foreign talents to build up their knowledge and experience base. This is similar to building a national soccer team.”
“Like private companeis that have to make provision for losses due to a drop in land values, entities such as Singapore Power should be allowed to write down its land value so that even after it cuts its utilities rates, the return on investment would not be substantially affected. This is a logical step for our utilities company to benchmark against those in the region whose competitiveness has been enhanced by the drop in currency and land values. For the time being, to the employers, the 15% cut in business cost as suggested by the CSC come as a great relief. Before this, many were wondering how their firms will survive with our high cost structure. This matter has been brought up in this Chamber by many Members of this House throughout the year. Many firms depend on domestic demand, which is one-third of our total demand. Many of those who export also depend to some extent on domestic demand as a base business. If the CSC's recommendations result in a reduction in domestic demand or diminishing capabilities of the local firms, I can say that the net result may not be desirable. The NTUC, after convincing the workers to be prepared for the CPF and wage cut, has called on employers to increase revenue. But, with the economies in the region in a slump, this is not an easy task for most employers. At this juncture, we should perhaps re-examine our Government procurement system to see whether the local companies are given fair opportunities to conduct business. Particularly, in the area of construction, which is one of the few areas that Government can pump-prime, the rules do not necessarily create a level playing field for the local and foreign firms to participate. Mr Speaker, Sir, I hereby declare my interest in a construction company.”
“If there is no immediate positive stimulus in the pipeline, the market perception is still that in the short term businesses may not pick up much. I urge the Government to stimulate the economy more, even though some may have leakages and the effect of stimulation cannot be 100%, but as Members have pointed out earlier, the Government has plenty of reserves which I was made to understand are getting good return. My guess is that we should have an additional $3-$5 billion a year from the return on investment of reserves, if we can convince ourselves that for one or two years, our return on reserves can be lower, or even zero. Is there anything wrong with that? Any investment, be it private, mutual fund, hedge fund, can have some bad years. I suggest that we can use some of the profits on the investment to stimulate the economy and keep the principal untouched. Next, let me go back to the non-wage cuts. The cuts in these areas will not make the Government the only loser because the cuts in CPF and bonus of the civil servants plus the much reduced tender prices of Government projects will have resulted in a lot of savings for the Government in the first place. I hereby urge the Government to be more aggressive in cutting utilities rates, MRT rates, rentals, etc. After all, the corresponding rates of return from Singapore Power, MRTC, JTC and HDB factories depend very much on how much the fixed assets were valued. Just to give an example. Singapore Power could have inherited high land cost because its incorporation took place at the height of the property boom.”
“What is more important is for the employers, workers and investors to recognise that our Government has the political will to exert its leadership and has once again performed the impossible to rally its people around them to make the economy competitive again. In other countries, the 15% CPF wage cut would have led to massive strikes and protests. Our Government has put forward a very convincing reason why cost cutting is very necessary for our economy to chug along, to save jobs and to prosper in the future. However, what is not clear in the Report is, and I share the same sentiments with many who spoke before me, how much of the $10 billion is borne by the Government. Mr Leong Horn Kee has mentioned earlier that with the 10% cut in CPF and 5% cut in wages, that would amount to $7 billion. It is expected that the money supply to the economy would dwindle substantially. Though the banks may help in increasing the money supply through extending more credit to the home buyers, the net effect can still be contractionary. Hence, I wonder if the Government's economists have worked out the appropriate amount to cut from the non-wage parts such as utilities rate, JTC/HDB rentals, etc. to offset the reduction in consumption power and avoid a further slump in domestic demand. If it is not sufficient, the Government should introduce more expansionary policies to avoid a deflation. The September figures already showed large drops in retail and food consumption. This shows that the consumers could have started slowing down their consumption before the wage and CPF cut. This must have contributed to part of our negative growth in the last quarter.”
“Mr Speaker, Sir, at first glance, the CSC Report in the form of a press release appears to repeat what has been reported in the mass media in the past few months. One tends to be disappointed and believes that nothing substantial was forthcoming to save a recessionary economy and the jobs. However, I must confess, after going through 186 pages of the Report, I was quite impressed by the work of the Committee. The CSC Report is comprehensive, bold, in-depth and professionally written. It has addressed most of the key issues concerning our economy at present and how competitiveness can be enhanced in the future. Its completeness leaves me with only a few areas to criticise, particularly many of the requests made by myself and numerous Members of this House have already appeared in this Report. To name a few, many Members have asked for cuts in wages, rents, petrol tax, promotion of venture capital, investment in human capital, more training for workers, etc. In general, I find it hard to fault the contents, except for the following comments. First, the CSC Report should have been split into two parts. Part I on cost cutting could have been completed and announced earlier. I concur with several hon. Members of this House that the cost cutting should have been part of the off-Budget measures implemented in June this year. Like a morphine jab for a patient in great pain, earlier cost cutting would have helped the affected companies gain their competitiveness earlier and confidence in our economy would have been regained earlier. However, Mr Speaker, Sir, I am not here to cry over spilled milk.”
“Yes. I would like to ask the Prime Minister whether our help to Malaysia would jeopardise our relationship with USA, especially when they are not in favour of helping Malaysia.”
“From the reports, it was quite clear that the US is not very happy with Malaysia. It was also reported that the US is probably trying to block some loans to Malaysia because they said the loans would only be given to those IMF-backed countries. Mr Speaker: Mr Chuang, could you ask your question?”
“Sir, I would like to ask a question related to the consequences of a CPF cut. Would the Government encourage or allow the banks to reschedule loans for private properties if there is a CPF cut, because this will be the main concern when the CPF is cut, especially now that the HDB has announced that it will help those who have bought HDB flats? But in the private sector, there does not seem to be any clear direction on this.”
“I think the Government should immediately accelerate the creation of new wealth in knowledge-based economy, as Mr Singh has pointed out, by diverting more of our resources to human capital and to the promotion of new industries. In the long run, we should reduce our overall exposure to properties and increase high-tech services or, as Mr Lim described, the capability competitive sector, significantly. And in the short term, to alleviate the unemployment problem, the Government should come out and stress the need for workers to work harder and smarter, so as to increase productivity which is in a way translated into better chance of keeping jobs. The employers, of course, should also adopt a more positive attitude rather than the kind of pessimism they seem to convey in the press. They should improve themselves by emphasising on more skill training for their workers and also get involved in more value added activities. And, of course, the Government can take this opportunity to show their concern, to establish rapport with the businesses by helping them to search for new strategies, new directions or new markets beyond the region. In summary, Sir, I support the motion by sharing Mr Lim's call on the Government to blur the invisible line drawn between me, Government, and you, the private sector, and work together as a united force to brave the storms ahead.”
“Because of this practice, as a very prominent foreign banker pointed out, the banks in Singapore probably have not perfected their skill in making loans in any other way but getting a piece of property as a collateral. So in boom years, because of this lending policy and because the way land is being valued, the property sector grew disproportionately to the whole economy. The banks' performance also exceeded that of the GDP, year after year. Now, with the economic crisis prevailing in the region, this issue is here to haunt us. It is beginning to appear, from what I read in the papers, that the country seems to be held to ransom by the property developers and the banks, because everybody worries that the bankruptcy of these companies would have far-reaching repercussions. So we have to address this issue. The importance of addressing this issue cannot be over emphasised. As an individual, the problem closest to my chest is the fear of not being able to maintain payments of a mortgage loan at a time of unemployment. As a nation, our economic competitiveness is also dragged down by the over investment in low value added properties. So I beg to urge the Government to confront this issue head on and do some clear thinking about it. I am not here to speak against the developers and bankers. I am not here to beg the Government to subsidise the property sector. But I think the more sensible way to solve this problem now is to moderate the decline in property prices in a very gradual way so that there will be a soft landing. What should the Government do now?”
“Based on the Straits Times report last week, correct me if I am wrong, the people and the institutions in Singapore committed $140 billion to the property sector. Last Saturday, in a Chinese paper, there was a report on the Accountant-General's Report on the Government's net worth. It shows net assets of $251 billion. Hence, even a primary school student can find out that the total commitment to property is equivalent to 60% of the total assets of the Government. Next, concerning the same matter, I understand that the valuation of land by the Government is based on the moving average of recent land tenders. Now I am going to give Members some examples. Supposing the price of the last $10 billion worth of land is bidded up by 10%, that means somebody pays $1 billion extra for the $10 billion. Then the remaining $130 billion would correspondingly rise by 10% too. That is the way we value our land, and that is a $13 billion increase. So, all the property owners are euphoric over this and the banks, of course, feel very secure and they probably encourage more borrowing. With more loans available, what happens? The borrowers would buy more properties and so they chase property prices up. Our financial institutions, whose traditional preferred lending policy is to have property as collateral, actually encourage the property sector to grow in this unhealthy manner. You can imagine if you are an owner of a firm, you invest money into training your workers. Would the bank lend you the money? But I am sure if you use the money to pay for a piece of property and mortgage it to the bank, the bank will be very happy. So where is the line drawn? Are we encouraging people to buy property or are we encouraging people to put more money into something less tangible?”
“The recent economic forecast conducted by various agencies shows that most likely Singapore is going to have negative growth for the third and fourth quarters. Barring some exceptional turnaround, we are definitely heading for a recession. Hence, I think the Government should not hesitate now to assert its leadership by declaring a very comprehensive national action plan that will help to mobilise and unite the people as a cohesive force to resolve the economic problems. The citizens of Singapore can lend better support to the Government if they are convinced. The efforts are genuine, workable, comprehensive, not just piecemeal, haphazard or sectoral. When a person is feeling down, he needs comforting words. In this trying moment, it is particularly necessary for the Government to be more sensitive to the nagging complaints of its people. To cite just a few examples, the typical complaints are, as Mr Inderjit Singh has pointed out many times before, the encroachment into private business domain by the GLCs and the resistance to changes by Government departments. For example, Mr Lim Swee Say mentioned about the concept of price-minus and cost-plus, and also the lack of sensitivity or understanding by Government administrators about the problems in the private sector. Another example would be - of course, everybody knows about this - the ever rising business costs and, last, the boom and bust of the property sector and its related banking problems. The first few problems have been very well covered by all the Members here earlier and I am not going to elaborate any further. The last one has been touched on by Mr Inderjit Singh and Mr Rai, but I think I want to elaborate more. As it is, I think the property sector makes up too big a chunk in our whole economy.”
“But we should not be complacent either. Rather, we should see what our huge reserves and our people, that is the only other reserve we have, can serve to procure us a better future. Here, I would like to draw an analogy to a situation faced by a large and cash-rich corporation like IBM a few years ago, even Microsoft, two or three years ago, when they faced an attack on the Internet issue, and how these companies with bloating cost, with possibly unwise investment or wrong product lines, had eroded their competitiveness in the global marketplace. So what would the CEO do? The immediate task of the turnaround CEO would be to troubleshoot quickly by examining their strengths and weaknesses internally and externally, benchmark its own company against the best in the world, and formulate a clear strategy to rally its employees from the bottom to the top to work towards a new corporate goal. I strongly believe that, for a nation like Singapore, we should do exactly the same but on an even larger and wider scale, covering not only the economic issues but social and political as well. Before we can rally the people round, the Government should face the economic crisis and take advantage of it for future opportunities. We should carry out a diagnosis to find out the symptoms and put forward a very clear plan stating the directions, the resources required, the timeframe and possible belt-tightening measures that our people and businesses have to bear to cope with the economic slowdown and be prepared for a brighter future. Without the plan, I do not think people can see the light at the end of the tunnel. That is what they are feeling now.”
“Sir, on many occasions in recent years, I have heard many top executives, top businessmen, educationists and even politicians, complaining that the long boom years have led to escalating costs, demanding workers and lower productivity. We should all somewhat have a recession to moderate the untenable cost. We have a tremendous economic slowdown or even a recession coming. Some people from the very same group complain and they cry foul and ask for help. So are we really hypocrites? Although this crash in East Asia has come too fast and too great for most people to anticipate and be prepared, why are there so many people out there who are affected by the crash? Perhaps, we should re-examine ourselves and see whether we are all part of the reason why the economy has turned sour. Did we not try to get more gains out of the stock market or property market? Did we not try to get more pay to buy a second home or have more overseas holidays, without regard whether we are adding more value to our jobs? Collectively, yes. Greed in people drives the market economy. But that very market economy is sustainable only if the collective decisions or the expectations of the players are rational. When the decisions become irrational, that is, when the speculative effect overwhelms the investment effect or the cost overwhelms productivity, the market has to correct itself to a truthful equilibrium position. We should not cry now. Instead, as a nation, as a people, we should take stock. We should honestly and boldly be self-critical. We should examine our systems for possible weaknesses, reflect on our mistakes and then tap on the internal and external resources to formulate new strategies to move on. With $100 billion in reserves, our economic situation is not in a state of panic.”
“I came to understand that some subsidiary proprietors object to en-bloc sale because of their desire to send their children to a school within 1-2 km or their need to look after their elderly or sick parents nearby or they have just recently completed extensive renovations to their premises. I see a need for the Board, as defined in the Bill, to be empowered to consider these intangible factors in their mediation or arbitration between the disputing parties and possibly make adjustment to the share values to achieve an equitable distribution of the values. It will not be wise to pass this Bill to facilitate the development of land and ignore its possible detrimental effects on the other ongoing good policies which are meant to encourage stronger family ties and equitable treatment of our people. As pointed out by Prof. Chin, the Bill is not clear on this. I would call for more details on these issues to be addressed in the Select Committee. Sir, in principle, I support the Bill.”
“This situation is similar to an en-bloc sale which has resulted in this Amendment Bill in the first place. The only recourse for such a subsidiary proprietor would be to sell to a purchaser. Of course, one can argue that he can always set up a company to be the purchaser, but the procedure would attract more stamp duties, more legal cost, etc. And I feel that the spirit of this Bill should be to facilitate the en-bloc sale and not to collect more revenue for the Government if the situation does not require it. Situation 2, and this is a more complicated one. Currently, there are some land developments on sizable plots of land in Singapore where the DGP allows for more intensified use than its current use. But the intensification is not to the extent that it warrants the demolition of the existing buildings on the land, particularly if they are still quite new. And in some cases, due to the layout of the existing development, there is no need to demolish any building and an additional building can actually be erected on the site. But it means that the consent of 100% of the subsidiary proprietors of the lots in the development have to be obtained, and some objections would definitely be raised. I would like to ask the Minister whether in such a situation the same approach as taken by the Bill for en-bloc sale can be adopted, ie, if the subsidiary proprietors of the lots in the development holding not less than 80% of the share value consent to such a proposal, an application can be made to the Board for an order to allow the proposal. Mr Speaker, Sir, so far I have spoken about the benefit of the majority of the subsidiary proprietors of the lots. The interests of the minority, of course, cannot be ignored.”
“Mr Speaker, Sir, as everybody is aware, the emergence of en-bloc sales in Singapore is mainly due to the present Development Guide Plan (GDP), where the usage of land is capable of being intensified from that which is currently being used. This Land Titles (Strata) (Amendment) Bill is meant to facilitate the redevelopment of land for more intensified use, and I think it covers most of the possible situations. However, in my opinion, there are two situations which have been missed out and should be considered. Situation 1. The Bill deals with a case where the subsidiary proprietors of the lots holding not less than 80% or 90% of the share values wish to sell to the purchaser. But it does not, however, appear to deal with a situation where one subsidiary proprietor of the lots already owns 80% or 90% of the share values and wishes to purchase the remaining 10% or 20%. If the said subsidiary proprietor wishes to sell to the purchaser, it would be possible under the Bill to apply to the Board for an order. There is, however, no provision to allow this subsidiary proprietor to apply to the Board for an order to purchase the remaining 10% or 20%. I feel that the Board, in the spirit of the Bill, should assist such a subsidiary proprietor. Of course, some safeguards must be built in for such a situation, for example, the appointment of two independent valuers or the said subsidiary proprietor must acquire the remaining 10% or 20% only for the purpose of redevelopment. If this situation was not covered, the said subsidiary proprietor who meets with objection from the remaining subsidiary proprietors of the building would then not be able to redevelop the land to its fullest potential.”
“Sir, I do not understand why Malaysia claims that they have a right to stay in Tanjong Pagar as the piece of land belongs to them. If their argument is correct, it means that if Singapore Government owns a piece of land in Johor Bahru, we can move our CIQ to Johor Bahru too.”
“Now with these enhanced penalties and, of course, more pervasive use of computer networks these days, it is imperative that public awareness must be raised for the new Bill to be effective. Many computer owners are not computer literate enough to protect their computers. I once heard that somebody hacked into a banking network system although no harm was caused. Individual users also do not know that their usual behaviour, such as revealing passwords, loading illegal software to play games or to do their own work, to delete the database or even leaving the computer logged on but unattended during lunch time, can lead to serious consequences. Like all crimes, prevention is the best way to avoid it. It is quite late to alert the public about this law by putting somebody behind bars for 20 years after a major havoc has been caused by his hacking into protected computers and causing huge damage. Hence, I urge the Government and the public institutions to enhance their efforts to protect their computer networks. At the same time, a major effort must be put in to find ways to communicate in plain language to the public about the effects of the law, just like the one we had on speeding 60 km above the speed limit. The potential penalties must be firmly registered in everybody's mind. Hence, I suggest that seminars and public lectures be conducted at community centres, educational institutions and trade associations to prepare our people for law and order in the real world as well as in the virtual world. Other than those points which I have sought clarification, Sir, I support the Bill.”
“While the 20 years' imprisonment term seems like a just punishment, the $100,000 maximum fine appears low for actions that can cause millions of dollars in damage to the public and is definitely mild compared to the $50,000 maximum fine for a repeat offence in breeding mosquitoes or $200,000 fine for damaging an underground cable. The Bill has also introduced a new definition on the word "damage" in clause 2. Clause 2 mentions a loss aggregating at least $10,000 in value, but it does not explain how the loss is assessed. The reason why I think the calculation of the damage should be spelt out in the Bill is that the section differentiates between offences where the damage is $10,000 and above, and those which are below $10,000, with the effect that in the former case, the penalties are greatly enhanced. An accused will have no way of knowing whether he will receive a lower or higher charge because the law does not state how the damage is assessed. Under the same clause 2(b), paragraphs (c) and (d) are probably too wide because it raises the question whether a perceived threat to public health or safety or death or physical injury is subjective or objective. Can the Minister describe the circumstances under which the controlling authority or the court has the subjective power to decide on the damages? Sir, since this Bill touches on everybody's life, like the Electronic Transactions Bill, there should be more public education on the Bill. I have conducted some personal surveys with companies and individuals, professionals such as lawyers, engineers and architects, and to my surprise most people are quite ignorant of the existence of the 1994 Computer Misuse Act.”
“Mr Speaker, Sir, as the Minister has pointed out, the rapid development of computer technology and fast falling prices of hardware and software have led to the extensive use of computers for all purposes. From the largest corporations, Government ministries to schools to households, we can always see the computer at work. Increasingly, we are enjoying the convenience and improvement in productivity through the use of computer networks. However, the lightning speed of changes in computer technology and its indispensability are imposing strains on all social and legal systems. As Prof. Chin has just pointed out and given examples, laws may not be enacted fast enough or realistic enough to regulate without complication the activities carried out in the virtual world or, in-between, from the real to the virtual world. A recent CIA report says that nowadays the scientists' ability to network the computers is faster than the ability to protect them, and given the kind of money they have spent on the security of the computer systems, they still say that the national security of the United States of America can still be at risk if there is an electronic warfare whereby the attack is targeted to cripple the vast network of computers that is used to control its power plants, transportation, financial institutions, defence systems, etc, as the Minister has pointed out. Having said this, Sir, I support this Computer Misuse (Amendment) Bill, which will impose enhanced penalties on all categories of offences related to the misuse of computers, particularly the important part is on protected computers in new section 6C. This section carries a maximum penalty of $100,000 or imprisonment of a term not exceeding 20 years or to both.”
“The Minister has used a medical example of somebody getting flu, and a person with flu can get very sick. So does it imply that it is Government's policy to allow a recession to occur?”
“The need to diversify our traditional business is a must, as highlighted by BG Yeo, the Second Minister for Trade and Industry, not too long ago. And there is no dispute that NCB has done a superb job in promoting and developing world-class applications. But this is not enough. With NCB amending its charter, it can help to set priority by having a coordinating one-stop body to focus on the task of developing IT industry through working closely with the venture community, research laboratories, industries and various Ministries and to identify what is lacking and take aggressive steps to help develop the IT industry. Although we are a good deal away from having the critical mass, we can emulate Israel which has achieved amazing results in just a few years. In summary, NCB, with its new charter, should take up the challenge to create an environment for our IT industry to grow and prosper. Sir, I support the Bill.”
“Mr Speaker, Sir, the proposed Amendment Bill on NCB's charter, at first glance, looks innocently simple and, that is, NCB is now to promote, with the amendment, Information Technology instead of computer science. As the Minister has rightly pointed out, the definition of Information Technology now is very wide. As such, the amendment would open up tremendously the scope of NCB's mission. The term "Information Technology" nowadays encompasses a whole lot of technologies. It can be telecommunications, computer software, mass media, Internet-related innovations, e-commerce, etc. Such convergence of technologies makes the term "Information Technology" very much generic in nature. Hence, I would like to question whether NCB is embarking on such a challenging task of covering the wide range of technologies, especially in this amendment, it is stated that it is doing it without budget implication. I notice that, currently, the National Science and Technology Board (NSTB) and Economic Development Board (EDB) are all involved in the promotion of IT industry. To many people, it appears that there is much overlapping between these three agencies. Any interested investor or entrepreneur in IT may be confused about whom to approach. With this amendment, the presumption would be NCB would be playing the key role in IT promotion and development, while NSTB would be focusing on other non-IT R&D, and EDB would be concentrating on the manufacturing aspect of the IT industry. I hope the Minister can clarify this point. Mr Speaker, Sir, I think Singapore, on many counts, should have a vibrant IT industry. Some countries, including the small ones, like Taiwan and Israel, are experiencing strong economic growth partly because they have built up their IT industry earlier than we did.”
“At the present moment, the Government's policy is to encourage housewives to rejoin the workforce. The Ministry of Labour has specially formulated a "back-to-work" scheme, with the hope that more housewives would receive some training on the latest skills and some psychological preparation before they rejoin the workforce. I fully agree with this policy. However, with effect from 1st April, the levy on foreign domestic maids will be increased once again. Does this not run contradictory to the above policy? At the moment, with the economic slowdown, wages are not increased but the expenses will surely go up with the upward adjustment of loan interests and charges from the various departments. For example, instalment payments for housing and vehicle loans, and utilities charges have gone up. Although the additional $15 on the foreign maid levy can be offset by cutting down on sundry consumption expenses, this will affect the entire retail industry, causing the market to be even more depressed. Moreover, the Government has announced the extension of retirement age, and now it is going to increase the foreign maid levy. The Government intends to improve the quality of childcare centres. This will not only be ineffective, but may even end up with a blunder, causing the psychological burden of the people to be heavier at this time when everyone is on tenterhooks. I hope that the Minister can be circumspect and farsighted, and not to further increase the unskilled foreign workers levy and the foreign maid levy after 1st April.”
“In any event, so long as the Government's income is increased, then the wool must still come from the back of the sheep - the cost in the property sector will surely go up. At this present economic turmoil where business is bad, all the trades and industries are asking for reduction in taxes and rents, and the construction industry is also hoping for some concessions. All these years, the Government has been collecting more than $100 million a year from the foreign workers levy. However, there are more and more foreign workers coming to Singapore. This merely indicates an increase in the Government's revenue from the foreign worker levy, and not the best plan to improve productivity. I hope that the Government would respond to the public's request not to increase the foreign worker levy. Over the past few years, the Government and the construction companies are actively advocating the concept of "builderbility". In the past two to three years, this concept has been extensively affirmed. The concept of "builderbility" is mainly to encourage the top-level people in the construction industry, such as the developers and the architects, to actively consider, during the project design concept stage, the various problems of "builderbility" at the construction stage in order that the contractors may effectively make use of more machines and less workers to complete the project. If the Government speeds up the legislation process to promote this concept of "builderbility", coupled with the slight revision to the foreign workers levy, I believe productivity in the construction industry can be significantly improved in the near future. Sir, my second topic is on foreign domestic maids.”
“However, after years of implementation of this policy, and the levy being raised year after year, the number of local workers entering the construction industry has not increased, but has actually reduced. Even the supervisory-level work, which was formerly dominated by Singaporeans, is now gradually taken over by engineers employed from foreign countries. Apparently, construction work has not much attraction for Singaporeans. Unless the Government thoroughly changes its policy, like last year's large-scale incentives for the employers to employ skilled workers, it will not be easy to change the local workers' present attitude of fighting shy of the construction industry. At the same time, the levy for unskilled workers will be raised to $470 with effect from 1st April. Other than increasing the construction cost, it will not have much encouraging effect. I believe that when the Government was formulating this policy it was considering the need to attain budget neutrality. However, from 1st April onwards, when the new rates take effect, so long as the number of skilled workers is lower than 15% of the total number of construction workers, the Government's income in foreign worker levy will be increased, and not neutral. According to the statistics of the Construction Industry Development Board (CIDB), at the moment, skilled foreign workers who are paying the foreign worker levy account for approximately 10% of the total number of foreign construction workers in Singapore. Since the new policy on foreign worker levy was announced at the end of last year, and although the Singapore Construction Industry Training School has increased the number of its courses, it will be impossible to rapidly raise the percentage within a short period of time.”
“First, I would like to declare my interest as a Director of a construction company. However, I have no pecuniary interest in the subject matter that I will be speaking on. In Singapore, more than 90% of the workers in the construction industry are foreign workers. At present, an employer has to pay foreign worker levy to the Government at $200 for each skilled worker and $440 for each unskilled worker. The difference of $240 is to encourage the employers to engage more skilled workers in order to improve productivity in the construction industry. This policy is correct and encouraging. The construction industry is a very competitive industry. Since the Government's announcement of the adjustment to the foreign worker levy at the end of last year, many construction companies have been trying very hard to secure more skilled workers to replace the unskilled workers, in order to cut cost. At the present moment, the Singapore Government's Construction Industry Training School has been flooded with applications from many construction companies for their workers to be trained and to sit for the skills certification examination. The response was so overwhelming that the school is finding it difficult to cope. Obviously, this strategy to actively encourage the workers to increase their skill level is like "sending burning charcoal in a snowing weather". It is a timely help to the industry, and is significantly effective. Furthermore, the original purpose of the foreign workers levy is to increase the cost of employing foreign workers so as to prevent the employers from employing cheap foreign workers to replace the more expensive local workers.”
“Therefore, I urge the Minister to ask for more off-Budget allocations to do more for the upgrading of the national workforce.”
“It is understandable that the employers, especially the SMEs, are afraid of losing their employees after training them. But if all employers can change their mindset and capitalise on this window period of slower economic activities to train their workers, there would be a better chance of success because workers are less likely to job hop. We applaud the NTUC and MOL for their effort in setting up the programme but I would like to urge the Government to upgrade this retraining programme to a nation-wide programme. To achieve this, I hope the proposed budget that allows for the upgrading of skills of 9,000 workers only in the fiscal year 98/99 will be increased substantially. At this point, I would like to cite one example of what other governments have similarly done for their workers in terms of training. The Construction Industry Training Authority of Hong Kong provides basic courses such as bricklaying, plastering, carpentry work, plumbing, etc. Similar to our SRP programme, their trainees for these courses receive training allowances as well as free-of-charge training in their basic craftsmanship and construction supervisory courses. In addition, there is also a subsidy scheme for the employers where the employers are subsidised HK$2,000 per month for two to three years for every single basic craft graduate they employ. This encourages the employers to employ such properly trained persons in their construction work. The Singapore Contractors Association and the Building Construction and Timber Industry Employees' Union (BATU) are currently discussing to work out a programme to intensify skills training in the construction industry. We hope the Government will support the effort. Sir, the retraining of workers should be regarded as an urgent national issue.”
“Sir, in this fiscal year there is a big budget allocation for the Ministry of Education. For the preparation of our young ones, this is understandable and I fully support it. As our economy matures, there must also be a budget for retraining of those in the workforce. I commend the Finance Minister for his quick response to support the call from Mrs Yu-Foo Yee Shoon for more retraining and upgrading of workers. We need to recognise the past contribution of our workers and stand by them during hard times. Is it not our moral obligation to retrain and upgrade these workers to enhance their future employability? I would like to call on the Government and the employers to recognise this. Without retraining, our workers' productivity will remain stagnant. Any retraining will enable them to get a higher value job which will imply a higher income for them, as Mr Lim has just pointed out. This would also generate more profit for the employers. Since we have quite a large pool of workers below Secondary Two education, there should be a large scale training programme, including providing a basic education such as primary and secondary education, IT training and specific skills training, etc. Some of these forms of training are already being carried out by NTUC and MOL. The NTUC has the BEST and WISE programmes. They also have the Skills Redevelopment Programme (SRP) for which 80% of the training cost is paid by SDF and 20% is paid by the employer. At the same time, EDB pays 70% of their salary during training with the balance of 30% paid by the company. These programmes have received overwhelming response. So it is necessary to reach out and convince all employers and workers to participate in programmes of this kind.”
“Sir, in this year's Budget, the financial sector seems to get the giant share of the incentives. In a time of tight credit and falling business volume, it is only fair that some of those tax incentives given to the banks will also be given to the non-bank taxpayers. For example, an administrative incentive has been given to the banks to effectively allow tax deductions for unrealised foreign exchange losses and tax unrealised foreign exchange gains. In my opinion, a similar concession can also be given to the non-bank taxpayers such as manufacturers. Also, the Thai and Indonesian governments had recently announced changes to their tax law to even allow a five-year amortisation of exchange losses. Therefore, in this regard, Sir, I hope the Minister for Finance can look into such incentives to help Singapore companies. The second area I wish to bring up is similar to what Mr Leong has just pointed out, and that is, on the group loss relief. At this point, I would like to add that not only UK has this provision, USA and Australia also have this provision for group loss relief, and it is commercially sound for a group of companies to be set up for whatever reasons, usually for commercial and strategic reasons so that they can position themselves in the best position to do business. But with this currency crisis, some companies would be in a loss position and other companies would be in a tax-paying position. With this group loss relief, it removes the unnecessary tax burden on the other members of the group. And I hope the Minister for Finance would seriously look into the possibility of offering such relief to the companies. 6.30 pm”
“Through off-Budget measures, the Government can take the driver's seat in introducing more infrastructure projects, more manpower training, encouraging more private equity funds, working more closely with SMEs, so that we can get the buzz into our economy, as what our Senior Minister has judiciously called for. Perhaps then, the people may be better helped in getting prepared to weather this crisis.”
“The last area I would like to touch is that I notice from this proposed Budget that no major amount is allotted for manpower training. And this is strange because many, many Members of this House have repeatedly emphasised the importance of retraining policy, and there was even talk about tripartite cooperation on training. Here, I call on the relevant Ministries to focus more on the specific plans to carry out training to avoid structural unemployment as seen in many developed countries. With the setting up of the Ministry of Manpower, I believe the policy of manpower training will be more comprehensive and effective. Accordingly, more funding should be provided as an off-Budget measure. Mr Speaker, Sir, it was reported in this House not too long ago that there are 700,000 workers in Singapore who have had only up to secondary two education. If we were to train 5% of them per year, namely, 35,000 workers, and it costs $2,000 per worker, we will need $75 million in total per year. And that is a very slow retraining process, because at 5% per year, it will take us 20 years to retrain all our workers and many of whom would have retired by then. So I suggest that budget for training should be in the region of $100 million to $200 million so that we can cover 10-15% of the workforce per year. And I believe this will be more beneficial to the economy than the $130 million rebate in property tax given to a handful of developers, as rightly pointed out by Dr Lee Tsao Yuan yesterday. In summary, I believe that the Government should have their operation orders ready to avert a developing crisis, rather than wait for an emergency before thinking of remedial action.”
“It is clear that this is an opportune time for Singapore to encourage more private equity funds, big or small, foreign or local, to have their headquarters in Singapore, so that there is rapid matching between private companies in need of funds and those who are willing to invest in them. Note that private equity funds not only have the advantage of not being able to make massive, rapid pull-out, compared to those involving marketable securities, it also fuels growth for many start-ups, as everybody has witnessed in Silicon Valley in the USA. This will be a big boost to entrepreneurship and is also consistent with Singapore's on-going strategy for regionalisation. So far, it may sound as if I am supporting the financial sector only. But actually a vibrant dynamic private equity industry would benefit our SMEs more than just the financial market. And this brings me to the next point. There is constant complaint among our SMEs that the Government's policies, though pro-business, have always been pro-MNC and pro-GLC only. EDB is the main Government body in charge of the promotion of SMEs and bringing our SMEs to the vision of Singapore 21. Yet there is no clear strategy outlined in this Budget regarding this. It may be an opportune time for the House to consider the reorganisation of EDB so that fresh ideas and new directions can be injected to promote SMEs to cater to the new possibilities in the fast-changing global economy. This rejuvenating effort can only be good for the nation. Yesterday, Mr Inderjit Singh said that Taiwan has weathered this crisis better than others because they have a strong SME economy. And I hope the Government will take a serious look at this.”