Goh Chee Wee
Singapore
“Sir, I would like to thank HDB and the Government for the upgrading programmes. We saw 4,900 units of flats in my constituency, Boon Lay, benefiting or about to benefit from the Interim and Main Upgrading Programmes. For older constituencies like Boon Lay, most if not all of the flats are eligible for main upgrading.”
“There will be no need to panic and rush to secure COEs at all costs and this will address the kiasu syndrome expressed by Mr Chew Heng Ching earlier on. 1.15 pm In short, the authority must lay out clear rules and regulations and devise a fair and workable system.”
“The actual cost savings to the taxi operators would, therefore, come only from the existing fleet of taxis which were subject to the old tax regime. Nevertheless, there are sizable savings which could be passed on to the taxi drivers.”
“We already have Mercedes and London cabs on our roads to cater for those who are prepared to pay more to travel in style and comfort. One day we might have Kancil and Daihatsu taxis to cater to the budget-conscious commuters, provided the vehicles meet LTA's conditions.”
“Until such time when the taxi industry is completely deregulated, I propose that the Government fix the price of COEs for taxis in the same way that the taxi fares are regulated. We do not expect the taxi fares to fluctuate monthly, neither should the COE price for taxis.”
“Sir, there is currently no plan to extend the MRT line to the cargo and engineering complexes. Any extension will have to be justified in terms of cost and ridership. We should also consider the fact that the cargo and engineering complexes in Changi are housed in a sprawling area and I believe they cover 70 hectares.”
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“As I have explained, there is the Phone Lock service provided by Singapore Telecom. There is a cost incurred in providing this service and the user for this service should pay for it. IMMIGRANTS (Conditions for long-term residence) 8. Dr Kanwaljit Soin asked the Minister for Home Affairs (a) how an allegedly bankrupt Taiwanese divorcee was allowed to come and reside in Singapore for 3 years and (b) under what conditions immigrants can come into Singapore and reside on a long-term basis. Assoc. Prof. Ho Peng Kee (for the Minister for Home Affairs): Sir, the Member's question has two parts. On part (a), I am unable to comment without having more details of the person Dr Soin is referring to. On part (b), generally, any foreigner who wants to come and stay in Singapore for a long duration can apply for the relevant immigration pass to remain here depending on the purpose of her stay. For example, foreigners who wish to work in Singapore may apply for employment pass, dependents of employment pass holders may apply for dependents' pass and immigrants who want to make Singapore their home can apply for permanent resident's status under the Economic or Family Ties Schemes. The Economic Scheme refers generally to persons who apply for permanent residence on their own merit whereas Family Ties Scheme would refer to those with Singaporean spouses.”
“Sir, I beg to move, In page 4, line 23, to leave out "12" and insert "16". The SPSB Bill originally provides for the Board to have between 6 and 12 members, excluding the Chairman and the Chief Executive. This is the same number as that allowed in the National Productivity Board Act. In view of the wide-ranging functions of SPSB, it is proposed that the size of the Board be expanded to have a maximum of 16 Board members, excluding the Chairman and the Chief Executive. Increasing the size of SPSB Board will allow it to have adequate representation from the various bodies who have an interest in and who can contribute to the work of SPSB. This would include the Government, unions, professionals, training institutions, local enterprises and foreign multi-national companies. Maintaining a good network and receiving multi-angle inputs from members of different background will benefit the work of SPSB. Amendment agreed to. Clause 5, as amended, ordered to stand part of the Bill. Clauses 6 to 44 inclusive ordered to stand part of the Bill. First to Third Schedules ordered to stand part of the Bill. Bill reported with an amendment; read a Third time and passed. ADVANCE MEDICAL DIRECTIVE BILL Order for Second Reading read. 2.00 pm”
“I must explain that although only one of the 10 functions listed in the Bill is expressly to develop SMEs, other functions listed in the Bill, like manpower development and technology application, will also benefit SMEs. Dr Lee also spoke of the need for SPSB to maintain good working relationships with other agencies. I fully agree with her. Without close coordination and cooperation with other agencies which have the required expertise, SPSB will not be able to perform its functions effectively. Dr Lee also touched on the subject of TFP and suggested that TFP growth figures should not be used as an annual target but as a medium term one. I would like to clarify that the TFP growth target of 2% mentioned in my speech is meant to be a longer term target and not an annual one. We recognise that the measurements of TFP growth are sensitive to the business cycle, as rightly pointed out by the Member. SPSB's focus on TFP, including the publication of the estimates, will bring attention to the factors that determine TFP and set our efforts in the right direction. Sir, I believe I have answered all the questions raised by Members. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Mr Goh Chee Wee]. Bill considered in Committee. [Mr Speaker in the Chair] Clauses 1 to 4 inclusive ordered to stand part of the Bill. Clause 5 -”
“But I can assure the Member that SPSB will maintain close links with NSTB and other technology providers to secure access of the appropriate technology to the industries. Dr Ow expressed concern that SPSB may not be able to pay sufficient attention to the development of SMEs and asked if a separate agency responsible for local enterprises could be set up. Sir, I can assure the Member that upgrading the local enterprises will be a key function of SPSB and it is for this reason that we are setting up a Local Enterprise Upgrading Centre within SPSB. It will serve as the first-stop centre for SMEs. The Centre will tap on the resources of not only SPSB itself but also those of the other competent agencies. Finally, Dr Ow asked why the Task Force Report was not given to members of the GPC earlier. Sir, the Task Force Report was released to the public during the press conference and the public can actually ask for a copy of the Report from the Ministry. This Report was subsequently given to Members of the GPC. But I think the point made by Dr Ow is why was the Report not given to members of the GPC at the time of the press conference. This point is noted. Let me now turn to the questions raised by Dr Lee Tsao Yuan. Dr Lee has also expressed concern whether SMEs would be given sufficient attention in the new organisation in view of the multiplicity of functions of the Board. I have already given the assurance that the development of SMEs will be one of the key functions of SPSB and the needs of SME will not be neglected. The Board will not devote only one-tenth of its resources to SME development, as Dr Lee feels that that could be the case.”
“Mr Speaker, Sir, I would like to thank the GPC Chairman, Dr Ow Chin Hock, and NMP Dr Lee Tsao Yuan who spoke in support of the Bill. Both Members have asked a number of questions and I will try to respond to the questions raised. Dr Ow asked what is the compelling reason for the merging of NPB and SISIR now and in what way will the merger contribute to a faster TFP growth. Sir, I have already explained in my speech the rationale for the creation of a new agency, SPSB. There is a need to make strategic reorganisation of our productivity and quality improvement efforts to meet global competition. We have to improve our TFP growth and we are attempting to achieve this by integrating the functions of NPB, SISIR and SME development function of EDB. In this way, we can take a holistic approach in promoting TFP. Let me give you an example of how the synergy between SISIR and NPB could be developed by having a single institution. A primary role of SISIR is to promote the application of technology in industry, and the NPB's role is to provide and promote workers' training. The new Board, SPSB, will coordinate the two functions to ensure that the level of technology promoted to industry could be supported by the skills level of the workforce. So this is just one example. Dr Ow also asked whether the functions of SISIR should be merged with NSTB instead of NPB. My answer is that merging SISIR and NSTB will not address the primary need of creating a single institution or agency to promote TFP. It is only by merging SISIR and NPB that we can bring the key components of TFP which are manpower development, economic restructuring and technical progress under the purview of a single institution.”
“It will have powers to form and participate in any joint ventures and form companies. Clause 7(1)(r) allows SPSB to take over the administration of the Local Enterprise Financing Scheme (LEFS) from the EDB. SPSB is also allowed to invest its funds. Clause 19 of the Bill provides for this power. SPSB's operations and programmes will be funded by the Government and revenues from SPSB's activities. Clause 21 enables Government grants to be made to SPSB while clause 22 allows for SPSB to raise loans from the Government or, with the approval of the Minister, from banks and other financial institutions, if such a need arises. Provisions have been made in clauses 24 to 29 of the Bill for assets, interests, rights, privileges, liabilities and obligations of NPB and SISIR to be transferred to SPSB. Staff in the two organisations will also be transferred to SPSB. The formation of SPSB is a significant milestone in the Government's efforts to promote productivity growth. The adoption of a holistic approach to the management of TFP will bring about more efficient use of our labour and capital resources which, in turn, will contribute towards sustained productivity growth, competitiveness and economic progress. The Bill before the House sets out the legislative framework to enable SPSB to carry out its mission. Total Factor Productivity growth is an imperative for Singapore's future economic development. The establishment of SPSB will put us in a favourable position to meet global competition, through an integrated approach of improving the quality of our workforce and capability of our industries. Sir, I beg to move. Question proposed.”
“However, the restriction on the number of members that can represent Government, employers, trade unions, and professionals and academia are removed for added flexibility. The number of Board members has also been increased for greater flexibility too. The Minister will appoint the Chairman and members of the Board. As for the appointment of the Chief Executive, clause 12 requires that Minister's approval be sought by the Board. Clause 6 sets out the functions of the Board. The key function of SPSB is to raise productivity and improve competitiveness through manpower development, economic restructuring and technical progress. In the area of manpower development, SPSB will promote, facilitate, and assist in the development and upgrading of skills and expertise of persons preparing to join the workforce, persons in the workforce and persons rejoining the workforce. It will also take over the administration of the Skills Development Fund from the NPB. These functions are set out in clause 6(1)(b) and (c). On industry development, its efforts will be in the development and upgrading of industry and enterprises and the support of the growth of small and medium enterprises. Clause 6(1)(d) of the Bill sets out this function. In the area of technical progress, clause 6(1)(e) provides that SPSB will take over SISIR's role as the national standards body and serve to promote and facilitate the national standardisation programme and the participation of Singapore in international standardisation activities. It will also encourage the development, application and diffusion of technology in industry. SPSB is empowered, inter alia, via clause 7 of the Bill, to establish and operate schemes considered necessary for furthering its functions.”
“The Bill before the House today is to establish the legislative framework for this new Board which will be called the Singapore Productivity and Standards Board (SPSB). We are targeting to establish the SPSB on 1st April 1996. The SPSB will absorb the functions of NPB and SISIR and integrate EDB's small and medium-sized enterprise (SME) development function. Its primary mission is to promote TFP growth and, through it, help to enhance our economic competitiveness. SPSB will adopt a holistic management of the main factors that have direct bearings on TFP growth. The three factors have been identified to be manpower development, economic restructuring and technical progress. These factors are very much inter-related and their overall impact on TFP growth depends very much on how well they are integrated and managed. Being the executive body responsible for TFP, SPSB will develop an overall plan, formulate policies and strategies, develop programmes, and manage incentive schemes related to manpower development, economic restructuring and technical progress. To constitute SPSB, we need to enact the Singapore Productivity and Standards Board Bill and repeal the National Productivity Board Act and the Singapore Institute of Standards and Industrial Research Act. I now move on to the key aspects of the Bill. Clause 5 of the Bill provides for the constitution of the SPSB's Board. An amendment to the Bill will be moved so that the Board of Directors will have between 8 and 18 members, including the Chairman and the Chief Executive. The constitution of the Board is tripartite, which is a feature retained from the existing constitution of NPB's Board.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." During the Committee of Supply debate in March this year, the Minister for Trade and Industry explained to this House that, as our economy develops, it is critical for Singapore to seek greater qualitative improvements as opposed to sheer expansion in inputs. Singapore can no longer rely on growth achieved through increases in labour and capital resources. As Singapore moves towards the status of a developed country, a key challenge is to generate growth through more efficient and effective use of labour and capital. The qualitative improvements in the use of resources are known as Total Factor Productivity (TFP). In most developed countries at the same stage of development as Singapore is in now, TFP growth averaged 2% to 4% a year. However, for the period from 1980 to 1992, annual TFP growth in Singapore only averaged 0.4%. There is scope for our economy to be strengthened through improved TFP performance. Singapore should therefore aim to achieve annual TFP growth similar to that of the developed countries of at least 2%. This will help to sustain a productivity growth of 4% and GDP growth of 7%. During the debate, the Minister also announced that a multi-agency task force had been set up to look into the strategic reorganisation of productivity and quality efforts currently undertaken by NPB, SISIR and EDB. The task force had completed its deliberations. The task force noted that while there are different agencies addressing the various determinants of TFP separately, there is at the moment no single agency that is primarily responsible for TFP. The key recommendation that arose from the task force's deliberations was the setting up of a statutory board to be responsible for promoting TFP.”
“Registration confers nationality which a pleasure craft needs when sailing into international waters or calling at other ports. The Bill therefore provides for regulations for the registration of pleasure crafts. Other new provisions include imposing a duty on the master of a ship involved in a collision to assist the other ship, requiring the registration of births and deaths on Singapore ships and enabling the crew of a Singapore ship to claim to be discharged if the ship ceases to be registered in Singapore. Sir, I beg to move. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Mr Goh Chee Wee]. Bill considered in Committee; reported without amendment; read a Third time and passed. BUILDING CONTROL (AMENDMENT) BILL Order for Second Reading read.”
“This is to enable our Registry of Ships to respond quickly to competition, as we need to keep the registration fee attractive to international shipping. This will help build up our status as an international maritime centre. Register books are where records of Singapore ships are kept. They serve as registers of titles to the ships, and hence new provisions concerning register books are introduced. In keeping with its importance, provisions relating to entries, amendments, rectification of clerical errors, and substantive law on ownership are introduced to regulate and facilitate the maintenance of these record books. The Bill also contains a provision to empower the Minister to make regulations for the registration of bareboat chartered ships and to allow Singapore ships to be bareboat chartered out and registered in other countries. Our law currently allows the registration of a ship under the name of its legal owner only. Bareboat registration allows the registration to be done under the name of the charterer. The advantage of bareboat registration is that it allows the charterers the flexibility to charter the ship and register it with our Registry without having to buy over the vessel. At the same time, charterers enjoy the privileges accorded to the flag, eg, under bilateral shipping agreements. It also allows owners to structure their set-up for maximum advantage. An increasing number of countries, including the UK, are allowing bareboat registration. Hence, if Singapore is to retain its competitive edge, we will need to offer at least the same facilities. The demand for the registration of pleasure crafts is increasing, especially with Singapore's growing affluence.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The existing Merchant Shipping Act (1985 edition) was inherited from the British and contained many provisions governing various aspects of the functions of the Marine Department. As part of its regular review of legislation to bring it in line with current international practices and our needs, the Marine Department had done a complete review of the Act. In the course of the review, the Marine Department had consulted various public and private sector organisations involved such as shipowners through the Singapore National Shipping Association, seafarers through their unions, shipping employers through the Singapore Maritime Employers' Federation, TDB, Immigration Department and PSA. The result is a completely new Merchant Shipping Bill 1995 which seeks to repeal and re-enact with amendments the existing Merchant Shipping Act. Besides the removal of obsolete provisions and the updating of certain provisions, the new Act will contain the essential provisions while most of the detailed administrative and procedural provisions will be moved to subsidiary legislation. In this way, the new Act will be flexible enough to adapt quickly to continuing changes in the shipping industry. The provisions which are removed and incorporated in the new regulations relate mainly to matters concerning the crew on board Singapore ships like crew agreements, the engagement and discharge of seamen, payment of wages and account of wages, and the keeping of official log books. We have added a provision to empower the Minister to reduce or vary the fee for registration of ships as circumstances warrant.”
“So the growth in shipping and container traffic at both ports is therefore closely linked to the economy and trade of their respective countries and that of the countries around them. Mr Charles Chong asked about the problem of piracy. Sir, sea robberies are not new to this region. We have been cooperating closely with neighbouring authorities to eliminate this problem. Their efforts and ours, such as increased naval and marine police patrols, and arrest of suspects of sea robbers, have reduced the problem considerably. Since mid-1992, sea robbery reports have declined sharply. There was only one report in September 1993 and eight in January 1994. These incidents occurred outside our waters. There has been no reported incident in the Singapore Straits since early 1994. We will continue to monitor the situation and work with neighbouring authorities to control the sea robbery situation.”
“Sir, Encik Harun asked about the development of the Pasir Panjang Container Terminal. Sir, PSA's container traffic has been growing at an average rate of 20% per annum. Last year, PSA handled 10.4 million TEUs (20-foot equivalent units) of containers. [Mr Deputy Speaker in the Chair] 4.03 pm The forecast indicates continued strong growth. The completion of Brani Terminal and upgrading of Tanjong Pagar and Keppel Terminal will raise PSA's combined handling capacity from 13 million to 16 million TEUs. But the capacity of these terminals will be fully utilised by the year 1997. PSA therefore has to develop a new container terminal at Pasir Panjang to meet the port's future requirement. The first five berths at the new container terminal will be operational in 1998. The completion of Phases I and II of the new terminal will double PSA's total container handling capacity to about 34 million TEUs in the year 2010. The total cost for Phases I and II of the new container terminal is estimated at $7.2 million. Encik Harun also asked whether Singapore can become the world's number one container port. Singapore was the world's number one container port in 1990 and 1991 while Hong Kong was a close second. However, from 1992 to 1994, Hong Kong became the world's top container port based on the number of containers handled. Singapore and Hong Kong serve different hinterlands. While Singapore is the cargo hub for ASEAN, South-Asia and Australia, Hong Kong is the gateway to South China. Both ports are in an international shipping network. Singapore handles mainly transhipment containers worldwide while Hong Kong handles mainly containers imported and exported into mainland China.”
“Sir, we do have various assistance schemes for local industries. I refer to the brochure which we have distributed. In the brochure, for instance, we have listed the Local Industries Upgrading Programmes and others. We can consider expanding the scope of the schemes to see how we can help these local companies along the line that the Member has mentioned. We can think of expanding the scope of the existing schemes so that we can achieve our objective of upgrading, and not only upgrading but of course the training of the workers as well.”
“We will try to deal with the funding of the SDF specifically. As I have answered the Member previously, we still have funds in the SDF to support the company's training programme. As to whether there should be other incentives to encourage the company to embark on training programmes, I think we are open to suggestions. We can always explore all avenues of encouraging the company to invest in training. Tax incentive is one of them, but I think we should explore other possibilities. Dr John Chen Seow Phun: Sir, there are two questions that the Minister of State has not answered. The first question is about helping local companies to upgrade. I know that the Government is trying to promote the industry cluster development and I thought it is a good idea. I am asking whether small companies would be included to help them upgrade and strengthen their core competency. I see this as one way where you can help them to upgrade so as to provide higher value-added jobs. The other question is: does the Ministry know that there is a shortage of particular skills at the moment and whether they will look into setting up training programmes for such skills and allow individual Singaporeans who can meet certain prerequisites to enrol in this programme and be helped by the Government?”
“The other issue which has been raised by many Members concerns the SDF contribution rate. Mrs Yu-Foo and other Members have also touched on this and said that we have to review or revise the SDF contribution rate periodically or yearly. Although currently the amount of money collected by SDF is less than what it disburses, that means, you pay out more than you collect, the training effort supported by SDF is not, I repeat, is not constrained by the amount of funds available in the SDF, which means the SDF will support all worthwhile projects. Of course, then we have to draw down from the balance of the SDF. With effect from 1st April 1995, the salary ceiling for the Skills Development Levy will be raised from $750 to $1,000. The SDF plays a key role in upgrading the skills of our workforce which must be adequately funded. My Ministry will continue to review the levy collection and funding requirements periodically and make further revision when necessary. So these are my responses to some of the key points raised by Members. 2.30 pm”
“So there is a company-wide training plan and the plan covers all employees -management, supervisory and the rank-and-file workers. The Management Development Grant Scheme, for instance, is targeted primarily at managers and supervisors of local companies, in particular the SMEs. In fact, one of the most difficult tasks of NPB is to convince the management of the SMEs the benefits of workers training. So NPB and SDF have to take a total approach in helping to upgrade the skills of both management and workers of these companies. But I will assure Members that the focus of SDF has been, and will continue to be, on upgrading the skills of the workers. Mr Stephen Lee talked about the problems of lowly-educated workers. He also mentioned about the problem of older workers and of course he supports the OJT programme. I think I have responded to most of the points mentioned by him. Yes, we support the OJT programme. I will look into the certification of the skills acquired through OJT. Mr John De Payva mentioned a few points, including a suggestion that the Government considers helping workers who attend courses after working hours because many of them have got to earn extra income and they had to work overtime. I can understand the plight of workers who need to work overtime to earn extra income. I think it would be difficult to justify a scheme which requires the Government to pay the workers to attend courses. So we try to find other solutions and one of the ways which we are trying to do is really to encourage companies to participate in this training leave scheme and to embark on this training leave scheme where training is conducted during working hours. This is supported by SDF and we want to encourage more companies to participate in this scheme.”
“To overcome the problem often faced by the SMEs in releasing workers for training due to their small staff strength, again this is a common complaint. The small companies claim that they have a small staff strength and they cannot release their workers for training. So to overcome this problem, we have placed particular emphasis on the On-the-Job Training (OJT) programme which many Members have spoken about. The On-the-Job Training scheme was introduced in July 1994 with the aim of helping the SMEs to implement cost-effective OJT in-house, and we will continue to promote this OJT programme. Let me also answer some specific questions raised by Members. Mr Koo Tsai Kee mentioned the question of retrenched workers not being able to join the START programme and he said that without SDF funding, they would not be able to participate in the START programme. I would say that for those retrenched workers who are not eligible for SDF funding, the NPB is prepared to support such training programmes. The START programme is formulated to help retrenched workers. So either SDF or NPB will support such programmes. Mrs Yu-Foo made a couple of points about the use of SDF and she also commented on the use of SDF fund for training of managers. The SDF was set up in 1979 to encourage and provide financial support for companies to train their employees. Owing to the need to upgrade the skills of our workers as our industries restructure, the focus of the SDF has been primarily on skills training of workers. However, the SDF does support to a limited extent management and supervisory-related training. Very often these are integrated into company-wide training plans which cover all levels of employees.”
“I would like to inform Members that the Government has taken a number of measures to encourage the development of such core skills, and these include the launching of a Core Skills Training Scheme in July 1994, some 200 courses covering six broad areas, and these include advanced manufacturing technology, system design and development, and so on. All these come within the scheme. Many employers are expected to re-train their workers in these skills courses to ensure that their workers are equipped with skills to match the advances in technology and new work processes. The Workers' Training Plan Scheme is another scheme where the SDF provides grants to companies to encourage them to plan in advance their future skills requirement and embark on systematic skills upgrading of their workers. The SDF is now exploring the possibility of a scheme with the polytechnics to encourage workers with technical qualifications to further upgrade their skills to meet the higher demands of industry. So we take a long-term perspective on training and we will continue to review and improve our efforts in this area. Dr John Chen commented that the small companies are not paying attention to training and he asked whether we are taking measures to help the small companies to upgrade and to train their employees. Several schemes are already in place to help the SMEs implement the workers' training programme with the support of SDF. With the increased efforts made by SDF, 76% of the more than 35,000 SMEs have now benefited from SDF funds. In financial year 1993, out of a total SDF grant commitment of about $89 million for the support of 506,000 training places, SMEs accounted for about 18% of the total grant commitment and 10% of the training places.”
“Sir, many Members of the House have raised concern about the training of workers, in particular older workers. I shall address their queries together. We do appreciate the special needs and the problems of the older workers, and some of these problems have been highlighted by Members who spoke on this subject. I would like to inform Members that SDF has in fact taken these into consideration in formulating the various programmes to train the mature workers. I will give some examples. We have a training leave scheme which encourages employers to release mature workers for training during working hours. Another example is the development of training programmes that are tailored to the learning needs and the profile of mature workers. For instance, we have this Fast Forward programme. We also broaden the training framework by the development of alliances with training providers to offer training programmes specially targeted at older workers. So through all these efforts, the number of training places for older workers supported by SDF has increased from 28,000 in FY92 to 64,000 in FY93. This represented 13% of all the training places, up from 8% in FY92. The various schemes can only help to overcome the obstacle to training like the lack of time and the lack of opportunities. But these schemes will do little to increase training amongst those who are reluctant or do not see the need to undergo training. So there is a limit to what the Government can do here and we do hope that with the help of the employers and unions and greater awareness, the reluctance of such workers can be overcome. Mr Chay Wai Chuen urged the Government to work out re-training programmes to enable our workers to acquire new core skills.”
“Sir, I believe this issue has been debated quite extensively. I think people know the pros and cons of a strong Singapore dollar. The Minister for Finance has put up a very convincing argument. I do not see the need to make a special study on this subject again.”
“Mr Lee also asked if Government would give grants to employer organisations with special assistance schemes for members who are local SMEs. I do not believe there is any need for such an arrangement, because our existing schemes are not only broad based but they are actually open to all local SMEs. Again, if the Member has any specific proposal, I will be very glad to study it. Dr Wong Kwei Cheong expressed his concern about the impact of the strengthening Singapore dollar on our MNCs and SMEs. The Minister for Finance has spoken extensively on this issue in this House earlier, and I do not propose to go into this further.”
“Sir, in answer to the question by Mr Stephen Lee, we have a wide spectrum of programmes to help our local SMEs. These programmes are administered by the various agencies like the EDB, TDB, NSTB, SISIR and NPB. These programmes benefit local enterprises at different stages of development, from start-up to the growth and expansion stages, and to going regional. It includes low-cost financing, tax incentives, business development, technology upgrading, formation of economic grouping, standards upgrading and overseas expansion programmes. In 1994, 1,453 loans amounting to $451 million were approved. Another $110 million in grants were given out to more than 72,000 projects. The amount of loans and grants approved in 1994 represented an increase of 17% and 12% respectively over the amounts approved in 1993. The details of these schemes can be found in the brochure which has been circulated to Members of the House. Some specific details which Mr Stephen Lee asked for can actually be found in the brochure. Mr Stephen Lee asked whether there are new types of schemes to be offered. I would say that the range of assistance schemes which are available today is already comprehensive. I would like to assure him that our assistance schemes are constantly reviewed and updated to keep them relevant. For example, the Product Development Assistance Scheme is aimed at encouraging local companies to undertake product design and development activities. Last year, this was extended to include process development. So if Mr Lee has any suggestions with regard to the existing or new schemes to help SMEs, I will be glad to ask the relevant agency to study it.”
“He asked whether retrenched workers could be considered for the START scheme for up to a month after they have been retrenched. Sir, the START programme was introduced in July 1994 to help retrenched workers adjust and find new jobs. It is fully funded by SDF. Within the programme, apart from undergoing training skills and confidence building, the retrenched workers are also job-matched to potential employers. Contrary to what Mr Koo believes, the START programme is actually open to all retrenched workers regardless of when they are retrenched. There is, therefore, no time limit on the eligibility, neither is there any requirement that they must still be in employment to qualify for participation. As to his other suggestion that we expand the pool of companies in the scheme, I would like to inform the Member that the 11 companies which are participating in the programme were chosen as they already have in-house skills training programmes from which the START participants can benefit. Other companies are also welcomed to participate in the programme as long as these companies have suitable training programmes for their workers. This is to ensure that the workers are job-matched to responsible companies that are committed to providing training for their workers.”
“The Ministry of Labour keeps track of statistics on retrenched workers according to sectors and occupational groups and also on unemployed workers who cited retrenchment as their reason for unemployment. Based on the Ministry of Labour's survey, 74% of the retrenched workers were from the manufacturing sector and 69% were production, transport and other related employees. The labour force survey also shows that 51% of the unemployed retrenched workers were above 40 years old and 49% have less than secondary qualification. In 1994, there was a net creation of 71,200 jobs. All key sectors recorded increases in employment. The major sectors were manufacturing, 11,500 new jobs; construction, 12,700; commerce, 11,800; financial and business service, 15,800. However, we do not have the details with regard to the age and educational qualification requirements for these new jobs. Mr Sinnakaruppan talked about the need for an accreditation or certification scheme for workers who have undergone On-the-Job Training (OJT) programme. Sir, certification of OJT-trained workers helps to motivate the workers to upgrade themselves and also ensure that skills acquired would be useful to and recognised by future employers. At the same time, a certification system would enable employers to plan their skills training and upgrading more effectively and help to reduce wastage that results from duplicating training efforts. In view of the benefits, the NPB, together with other agencies and organisations, like NTUC, EDB, ITE, will study into the possibility of certifying skills acquired by workers through OJT. Mr Koo Tsai Kee made a number of comments on the Skills Training and Retraining (START) programme.”
“There is an efficient and cost effective system of administering Government assistance schemes to local enterprises in a practical and timely manner. We welcome suggestions and will continually look at more ways to reach more local enterprises without straining the resources of our agencies. Mr Chay also commented on the Government assistance schemes like Local Enterprise Finance Scheme (LEFS) and the Capital Assistance Scheme. The Local Enterprise Finance Scheme is intended to provide low cost fixed rate loans to SMEs. The Capital Assistance Scheme provides long-term financing to skill-intensive and technologically desirable projects. The preferential rates given under these two schemes are based on the prime rates of the major local banks and are revised from time to time. Mr Chay has referred to the figure of $855 million in the EDB's Annual Report. I must explain that this figure only reflects the amount of loans outstanding. It does not include those loans which have been paid. As I had mentioned earlier, in the last four years alone, we have given out loans totalling $1.6 billion to SMEs. Unlike the LEFS, which is positioned to allow easy access to all SMEs, loans under the Capital Assistance Scheme are for larger projects. In the last 10 years, there were only 12 applications approved. As the number of applications received for this Capital Assistance Scheme is significantly smaller, it is more practical for EDB to administer each loan directly instead of operating through other agencies, as suggested by Mr Chay. 1.30 pm Dr Ow Chin Hock asked about the profile of the retrenched workers and the new jobs created. In 1994, 9,444 workers were retrenched.”
“Sir, Mr Chay Wai Chuen spoke about the small and medium enterprises and asked whether we are running down the programmes for local enterprises. The answer to this question is a definitive no. Let me explain. The Economic Development Assistance Scheme (EDAS) is the umbrella scheme comprising all financial assistance schemes administered by EDB. Funds are made available by the Government to EDAS on a five-year basis. The sums referred to by Mr Chay represent a drawdown on approved loans or grants made previously. These sums are not indicative of the total assistance expended to SMEs by the Government. Mr Chay may be reassured to hear that over the period 1991 to 1994, the total number of loans approved for SMEs was 6,403 amounting to nearly $1.6 billion. In 1994, the value of these loans increased by some 16% over 1993. As for more user-friendly ways to reach the users, the point made by Mr Chay, the Government is already working directly with the private sector to tap on the manpower and expertise that are available there. Let me give some examples. The Enterprise Promotion Centre (EPC) was set up in 1990 by seven Chambers of Commerce and Industry associations with the support of EDB. It specialises in promoting Government assistance schemes and providing business guidance and consultancy advice to local SMEs. The Retail Promotion Centre (RPC) was set up by EDB and NPB together with the Singapore Retailers Association and the Federation of Merchants Association. RPC helps retailers upgrade and increase productivity by providing business guidance, retail consultancy and promoting the use of Government assistance. Furthermore, schemes such as the Local Enterprise Finance Scheme are administered through all branches of some 30 participating financial institutions.”
“We do not specify the minimum turnover for companies to enjoy the benefits and we have actually a whole range of incentive schemes. It does not mean that every company that comes to Singapore will be given pioneer status. Depending on the type of investment, we will evaluate them and decide on which type of incentive tof be accorded to them.”
“Pioneer status incentive applies to all sectors. That means all industries or investments can apply for the incentive. Of course, they must meet certain conditions. We do not say that this incentive only applies to, say, electronics or petroleum companies. It applies to all industries. But in evaluating whether we should give them incentives, whether it is pioneer incentive or other incentives, we consider the value to Singapore. We consider their investment. We consider what sort of employment they are providing to Singaporeans. All these are taken into consideration.”
“In the initial years, we focused on attracting labour-intensive industries which could provide jobs. Later on, we upgraded and tried to attract high-value added operations and more capital-intensive type of operations to Singapore. And that has been our policy in recent years. High-value added industries can cover quite a whole range of industries in the industrial sector. Of course, we have been attracting electronic and petroleum companies. But any industry or company which can add value to Singapore and which can provide good jobs to Singaporeans will be welcomed.”
“Sir, we have a number of incentives to encourage foreign investments. This particular Bill actually deals with only four incentives: the Expansion of Established Enterprises, the Expanding Service Company, the Export of Services, and the Warehousing and Servicing Companies. These are four specific incentives and they apply to both foreign companies as well as local companies. I think it is wrong for Mr Chiam to become complacent, thinking that since everything is good in Singapore, we have full employment, there is no need for us to offer incentives in order to attract foreign investments. We are in a highly competitive world. Many countries are still continuing to compete for foreign investments. I think we must continue to make our incentives attractive enough to attract foreign investments.”
“Such adjustment is similar to that provided for in the Income Tax Act vis-a-vis unabsorbed losses arising from activities which enjoy a concessionary tax rate. To give an illustration, an absorbed concessionary IA of $100,000 for an activity taxed at 10% rate will be reduced by a factor of 27/10 when it is used to set off against normal chargeable income. Consequential amendments Finally, there are two amendments found in clauses 2 and 14 of the EEI Bill which are consequential to the Income Tax (Amendment) Act 1994. These are to provide that the Comptroller may raise additional tax assessments to recover tax only within the time limit allowed under the Income Tax Act, which is six years. Mr Speaker, Sir, the proposed amendments to the EEI Act will improve and update existing tax incentives for the inflow of foreign investments into Singapore, and encourage local companies to expand and upgrade. Sir, I beg to move. Question proposed.”
“Investment Allowance The third set of technical amendments pertains to the way an Investment Allowance, or IA in short, may be used. IA is given for fixed asset investment, and may be used to set off chargeable income. However, the EEI Act has not specified how an IA may be used where a company has various incomes which are taxed at different rates. There is a need to clarify how IA can be used. The amendments in clauses 9 to 12 are to provide that under normal circumstances, an IA given for an activity where the income is taxed at the normal rate (or normal IA) may only be set-off against income taxed at the normal rate (or normal chargeable income), and an IA given for an activity where the income is taxed at a concessionary rate (or concessionary IA) may only be set-off against income taxed at the concessionary rate (or concessionary chargeable income). Normal IA that cannot be fully absorbed within one year of assessment may be carried forward to be set-off against future normal chargeable income. Similarly, companies may carry forward unabsorbed concessionary IA to set off against future concessionary chargeable income. Unabsorbed normal IA may also be used against concessionary chargeable income, on a dollar for dollar basis, if a company chooses to do so instead of carrying forward the unabsorbed normal IA to be used against its normal chargeable income in subsequent years. However, concessionary IA will not be allowed to be used to set off normal chargeable income. This will only be allowed under one situation, which is when the company has ceased to derive concessionary income permanently. And the concessionary IA will be adjusted using a conversion factor in the ratio of the two tax rates.”
“In this incentive, the interest on an approved foreign loan will be fully exempt from tax, but only if the Comptroller is satisfied that the exemption will not increase the foreign lender's tax liability in his home country. It is a statutory condition. The intention is to ensure that the foreign lender has sufficient foreign tax credit to benefit from the exemption so that the exemption will not result in the mere transfer of tax revenue to the foreign treasury. In practice, companies which have been given the Approved Foreign Loan incentive have found the statutory condition administratively onerous to comply with. Clause 6 of the Bill will therefore remove that statutory condition. But while we will remove the statutory condition, it is important to continue to have some safeguards to minimise the likelihood of the revenue forgone by Singapore going to a foreign treasury. To achieve this, an assessment of whether the foreign lender will have sufficient foreign tax credit to benefit from the exemption will still be made at the point of the application for the incentive. In addition, the amendment will give the Minister an option to grant a concessionary withholding tax rate of, say, 10% or 15%, instead of a full exemption only, on the interest payable on approved foreign loans. The Approved Royalties Incentive The Approved Royalties incentive has a similar statutory condition - the Comptroller may exempt approved royalties from tax only if he is satisfied that the home-country tax liability of the non-resident recipient will not increase as a result of the exemption. Clauses 7 and 8 of the Bill will make similar changes to the Approved Royalties incentive, for the same reasons which I have given above.”
“The Warehousing and Servicing Companies incentive, as the name suggests, is applicable to companies which operate warehousing facilities or those which provide technical or engineering services. It exempts from tax one-half of the incentive company's qualifying income. The problem with these four incentives now is that they are not attractive enough to companies. Firstly, the maximum length of the initial tax relief period is only five years which is too short to give companies enough certainty for planning purposes. Secondly, the two expansion incentives, that is, the Expansion of Established Enterprise and the Expanding Service Company incentives, cannot be extended beyond the initial tax relief period. That these incentives are unattractive is reflected in the low number of companies which have received these incentives since the incentives were introduced. For example, only four companies have obtained the Expansion of Established Enterprise incentive since 1967, while no company has been given the Expanding Service Company incentive since its inception in 1984. Clauses 3, 4, 5 and 13 of the Bill relate to the amendments to address the weaknesses of these incentives. Firstly, they will increase the maximum length of the initial tax relief period of these incentives to 10 years, instead of the current five years. Secondly, they will allow these four incentives to be extended beyond the initial period by further periods of not more than five years each time, subject to a maximum total tax relief period of 20 years. Technical amendments I now move on to the technical amendments which are intended to facilitate the administration of three tax incentives. The Approved Foreign Loan Incentive The first of the technical amendments is to the Approved Foreign Loan incentive.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Bill will amend the Economic Expansion Incentives (Relief from Income Tax) Act, which I will refer to as the EEI Act in short. The Bill is to put into effect several tax changes which were announced in the 1994 Budget Statement. It will also make a few technical changes to the EEI Act to facilitate the administration of the incentives, and two consequential amendments to bring the EEI Act in line with the Income Tax (Amendment) Act 1994. I will now describe each of the proposed amendments in turn. Tax changes of the 1994 Budget The first set of amendments are those pertaining to the tax changes announced in the Budget Statement. The changes are in the tax relief period of four existing incentives to make them more attractive. The four incentives are the Expansion of Established Enterprise incentive, the Expanding Service Company incentive, the Export of Services incentive and the Warehousing and Servicing Companies incentive. The Expansion of Established Enterprise incentive and the Expanding Service Company incentive seek to encourage companies which are in businesses of very substantial economic benefit to Singapore to expand their operations. Both incentives exempt from tax the incremental profits of the incentive company which are in excess of the agreed pre-expansion level. The Export of Services incentive is granted to companies which export their services in qualifying activities spelt out in the EEI Act to other countries. The incentive company will be exempt from tax on 90% of its qualifying income.”
“In as far as the collection of data for determining the CPI is concerned, a main objective of the Household Expenditure Survey is to update the basis for computing the CPI for the subsequent years, in fact, for the next five years until the next Household Expenditure Survey. In as far as inflation is concerned, the Member would note that last year the Department of Statistics was actually very heavily involved in monitoring the price increases of consumer goods and hawker food, for instance, consequent on the implementation of GST. So such information was available. 3.00 pm”
“The data collection was completed in September 1993.”
“The survey was conducted over the period October 1992 to September 1993.”
“Mr Speaker, Sir, the latest Household Expenditure Survey has been completed. The Department of Statistics is now in the process of revising the items and the weighting pattern in the CPI basket to incorporate the survey results. The new CPI for the overall population will be released in March this year. Separate CPIs for the lowest 20%, middle 60% and highest 20% of the population, based on household income, will be released in July.”
“As I said, the figures I quoted have been worked out by the PUB and it is part of the total cost of laying the pipes. If the Member feels that the PUB should contribute more, we would be pleased to hear suggestions from the Member. GENERAL ELECTION 3. Mr Chiam See Tong asked the Prime Minister when the next general election shall be held.”
“If the Member wishes to put up a proposal as to the percentage of cost that the residents are prepared to bear, I think we are prepared to consider.”
“As I mentioned, it depends on the estate. In this case, I also want to mention that the residents have an alternative. They can always switch to LPG gas which is available at more or less the same price as PUB gas.”
“Even if the residents pay the cost which I have mentioned, they only bear part of the cost of laying the pipes. Mr Goh Choon Kang: Compared to the total cost, what is the percentage?”
“I have already explained the rationale why, from PUB's analysis, it is not economically viable to re-lay the pipes. But if the residents insist that they want the PUB gas supply and they are prepared to bear part of the cost, PUB will oblige.”
“It depends on the housing estate concerned. The figures I quoted, ie, between $2,000 and $17,000, are the contribution to be made by the households. The cost actually depends on the estate concerned, ie, the condition of the pipes, the pipelines, the layout, etc.”
“The average cost is $4,000 per household. To-date, PUB has served notice to seven estates but has yet to terminate supply to any. The Members of Parliament of these seven estates have been informed of the intention and the rationale behind this exercise. Some households have already applied to cut off gas supply following the notification. I would like to assure Members that PUB will continue to render all possible assistance to affected households and will carry out the exercise in a manner which will cause least inconvenience to them.”
“Mr Speaker, Sir, the Public Utilities Board (PUB) will be terminating piped gas supply to 40 low-rise estates affecting 15,970 households over the next two to three years. Gas pipes in these estates were laid between 22 and 40 years ago. Over the years, house owners have built extensions in their backyards over the run of these gas pipes, thereby rendering maintenance of gas pipes difficult, if not impossible. These gas pipes could be corroded and the risk of gas leak would increase as the pipes get older. The leakage of gas could accumulate in the voids beneath the house extension and accumulate into an explosive mixture. Hence, for safety reasons, these pipes have to be replaced. However, the cost of re-laying new pipes is very high and is not economically viable in view of the small number of households which use PUB piped gas in these estates. Although all housing units in the 40 affected estates are served by the PUB gas network, only 46% of them use PUB gas. It would not be justifiable for PUB to expend large sums of public fund when the majority of residents are not using PUB gas but bottled LPG. Those households using PUB gas now would not be unduly inconvenienced as they can switch to LPG which is readily available and competitively priced. However, if the affected households wish to continue with PUB gas supply, they could collectively, within each estate, make a capital contribution towards part of the cost of laying the new gas pipes in order to make the gas mains renewal project financially viable. Additionally, each household would have to bear the cost of laying a new gas service pipe within his premises. It is estimated that each household would have to pay between $2,000 and $17,000 depending on the location and number of households in the estate.”
“There is no such so-called standard. But I think in a competit2ive environment, companies will have to be efficient and those which can utilise their labour efficiently will be the ones which will succeed. HOUSING AND DEVELOPMENT BOARD (Privatisation) 13. Dr Kanwaljit Soin asked the Acting Minister for National Development whether he will consider the privatisation of the Housing and Development Board in line with the nation's long-term economic plans.”