Inderjit Singh
Singapore
“You do not want our monetary policy easing to offset some of these as it will result in an inefficient allocation of resources. I think our SMEs will also be similarly affected by higher import costs.”
“Thus, SPRING can become something like a Municipal Service Office (MSO) for SMEs. SPRING has already set up an outreach mechanism through the SME Centres. This structure should stay to be the outreach arm.”
“I want to thank the Minister of State for agreeing to the suggestion of the first- and one-stop agency. We have higher expectations, so, I hope we can make it work. But my question on REITs was not answered.”
“She worried about the eroded sense of belonging that she and her friends felt and their view that Page: 24 the Government was more interested in luring foreigners than bringing Singaporeans home. She said that friends and relatives asked if she planned to stay in Australia after her graduation. In 2013, she was unsure of her answer.”
“I recently read that, in Malaysia, the EPF holders are paid 6% for their savings for a number of years, and this is much higher than the return we are paying to our CPF holders.”
“I believe Minister of State Mr Teo Ser Luck mentioned just now the company formation rate of about 14,000. I would like to ask are we monitoring the rate of companies folding up. I have heard recently that the rate has also increased, especially in some sectors that are very dependent on rental.”
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“You do not want our monetary policy easing to offset some of these as it will result in an inefficient allocation of resources. I think our SMEs will also be similarly affected by higher import costs. Although I agree that a portion of them may inadvertently benefit from a lower Singapore dollar, which may make their goods more competitive in the international markets and, thus, also boost our exports, this is not a given for all. Not all our SMEs produce goods for export. There is a significant proportion that also produces for the domestic market and not to mention service businesses, which cater to local customers only. For such companies, they may not benefit from a lower Singapore dollar but, in fact, would suffer from higher cost of imports. I would like to urge the Government to reconsider the easing of monetary policy as the main tool to boost growth and help spur the economy. Its trade-offs could be more than what we bargain for. Individual Indebtedness”
“I would like to make two points on Singapore's monetary policy. Recently, the MAS made a surprise and unexpected move on 28 January, when it announced the easing of monetary policy by reducing the slope of its policy band in an unscheduled meeting. News reports last week have quoted economists as saying that they expect the MAS to further ease monetary policy in April. While I understand that the easing was done to arrest a slowing economy and low inflation numbers, however, I am concerned by this approach, if the MAS is going to continue on a continued easing policy. For one, the impact on Singaporeans and households could be strong. Even though we are far from inflation, but the prices of certain items that Singaporeans consume would increase in tandem with the easing because of higher import costs. This is especially true for food prices because you can expect the cost of food, vegetables and meat to increase as they are all imported. Already, last week, I went to the hawker centre for lunch and the tea that I normally pay $1 for has now gone up to $1.10. Page: 84 I think we can expect price increases across-the-board as import costs of raw materials will increase in tandem with a weaker Singapore dollar. I, therefore, worry that prices of other goods and services will now rise faster as we are impacted by more imported inflation. At the end of the day, I am most worried about the lower-income households in such import-led price increases. Our local statistics have shown that price rises affect the bottom 20% of households more than any other income brackets, especially for items such as food and clothing. The Government already utilises precious resources to help Singaporeans in this group, as can be seen in this year's Budget as well.”
“Page: 57 Since returning to Singapore, Calvin has been actively involved in building a creative culture among our youth and worked on various projects, including Time Traveller, an app that allows users to share their stories about various landmarks and places in Singapore. Recently, he was invited by a local University to speak to students. He was then asked to submit his CV. Upon realising that his highest qualification was an "O" level certificate, the invitation was rescinded. Calvin also shared with me that there are many Singaporean creative directors across Asia, particularly in China, because of the over emphasis on academic qualifications, their collective knowledge and talent are not readily recognised yet in Singapore. I hope that with the changes brought about by the creation of ASPIRE, the stories I shared will not be repeated. As we encourage companies to employ and reward those with specific skills, the state is the largest employer, through the Civil Service and uniformed services, I hope that the Government will lead the way. As the Deputy Prime Minister mentioned during his Budget speech, we must endeavour to make Singapore a meritocracy of skills and not a hierarchy of grades earned at a young age. The Civil Service can certainly do more to promote the employment and career progression of non-graduates. Look at UniSIM graduates. I hear that not many of them get employed by the Civil Service, which means that its qualifications are not much recognised in the Civil Service. Perhaps, the Government could elaborate on how many UniSIM graduates it hires, to show us that they are, indeed, recognised. Low-wage Officers in Civil Service”
“Madam, it is encouraging that the Government is willing to expand the old model of using academic excellence as hiring benchmarks in the Civil Service and adopt unique and non-academic skills as well. I would like to share the stories of two young men who have faced many challenges because of the previous policies of over-emphasising on academic qualifications. Earlier this year, a young Singaporean, with an ITE higher Nitec, contacted me. He served his National Service with great dignity and honour, performed very well and grew to love the uniformed services and aspired to build a career in it. After completing his National Service at great expense to his family, he went for further studies in Australia to obtain a degree. Upon his return, he applied to serve as a regular officer, first in the SAF, and, when he was not successful, as part of the Home Team. His applications were rejected by MINDEF and MHA, citing his unrecognised academic qualifications. He became disillusioned with the system. He was enthusiastic about the National Day Rally speech that the Prime Minister gave, outlining his vision of better recognising and rewarding those who have pursued a non-traditional education route. He hoped that it would be an opportunity for him to finally realise his dream of being a regular officer in the uniformed services. You can imagine his disappointment after the multiple rejections. Mr Calvin Soh rose to be the Vice Chairman and Regional Chief Creative Officer of Publicis Asia, a top advertising and public relations company, and was the first Singaporean creative director of a top advertising firm in New York, with only four "O" level results.”
“I want to thank the Minister of State for agreeing to the suggestion of the first- and one-stop agency. We have higher expectations, so, I hope we can make it work. But my question on REITs was not answered. There are companies that have yet to get direct allocation of land and, so, they got preferential treatment and perhaps, preferential prices. Later on, they turn this back into REITs which, I think, is not the right thing to do because they got preferential treatment. Are we having this practice and, if we do, are we going to stop this?”
“Thus, SPRING can become something like a Municipal Service Office (MSO) for SMEs. SPRING has already set up an outreach mechanism through the SME Centres. This structure should stay to be the outreach arm. I believe if the Government can help SMEs on these three fronts: by addressing the cost of doing business, reducing their land and rental costs, and streamlining the assistance to them through a stronger and more focused SPRING looking like a MSO, the Government would have greatly helped SMEs, which play a critical role in our economy that provide jobs for seven out of 10 Singaporeans here in Singapore. Helping SMEs Sustain and Compete”
“There must be a reason why so many of us involved in the SME community feel the need for such a single SME agency, so I urge the Government to not write this off. In fact, Page: 12 SBF is very closely linked to the Government. SBF also made this call this year. Many other agencies made the call many years before. So, there must be something wrong and we need to do something about it. During the Deputy Prime Minister and Minister for Finance's closing speech last week, I was shocked to learn that the net new company creation in the last five years was 100,000 companies. This is a huge increase in only five years. Does this mean that SPRING has also an additional 100,000 companies to support? Can I ask the Minister if SPRING's manpower has increased in proportion? If not, we can understand why SMEs feel that not sufficient support is going to them. While MTI tries to figure out the right time for this single agency to be set up – which I think will happen one day – may I suggest an interim solution of a "First and One Stop SME Agency" approach where companies only need to approach one agency for all their needs and that agency will help SMEs identify the kind of help needed, coordinate with the different economic agencies and then bring the right assistance to the companies. Obviously, SPRING is well positioned to do this by extending its scope of work beyond the schemes it currently administers. And SPRING will also need a lot of manpower and resources and I hope that the Government and the Deputy Prime Minister will allocate more for them. 11.45 am For companies, they will just see one agency and we present just one face of the Government. In the background, the Ministry can allow the various economic agencies to continue to work the way they are currently working.”
“JTC needs to become a bigger player in the local industrial land space if we want to moderate rentals. The Minister should also have rolled back more of the REIT incentives so that we do not have too many focusing on financial engineering without adding real value to our economy. The Government should also never have allowed some companies, which had preferential land allocation or preferential prices for land, to subsequently sell them into industrial REITs. REITs should only be restricted to properties originally purchased from the open market. Otherwise, it helps create a dual economy, and regular SMEs are disadvantaged as they do not get the land allocated to them. Third, a first and one stop SME agency. The current Government approach of many agencies supporting SMEs at different stages of their growth and for different needs has run its full course. It is time we relook our approach of managing SMEs. Many say that they are confused by the number of assistance schemes and the various agencies that they have to visit for each of these schemes. They are unhappy that they have to be passed from one agency to another for different needs and sometimes fall through the cracks without help. We must realise that they have businesses to run and cannot be figuring this out or going door-to-door to deal with onerous administrative requirements, as they are very small. Recently, the Singapore Business Federation (SBF) and its SME Committee, too, urged the Government to establish a single agency as opposed to a multi-agency approach. It said that under the multi-agency approach, each agency tended to rely on its own mandate and KPIs, and I agree with this. Moreover, the current multi-agency approach adds to red tape and delays response time for many of these companies.”
“Thank you, Mdm Chair. I have three points to raise. First, on the high cost of business In his round-up speech, the Deputy Prime Minister and Minister for Finance stated that the Government had taken the middle path in restructuring the economy. I am afraid the middle path that the Government thinks is right is not middle enough for most SMEs. Can I ask the Deputy Prime Minister if he has looked at whether we have a dual economy growing where SMEs face one cost structure and larger MNCs and GLCs have another because of better support from the Government? Perhaps, this is why an average middle path from the Page: 11 Government's perspective looks good enough because it is an average of unequals. Just look at some of the indicators. Among the top 1,000 SMEs in Singapore, data compiled shows that the hospitality and F&B sector is the only one that has contracted by as much as 7.7% in each of the last five years. There were also more loss-making SMEs among the top 1,000, rising to 130 from the previous year. Among the top 1,000, 13% of them are already loss-making! I cannot imagine how many more of the 200,000 or so of our SMEs are loss-making, reflecting that costs are spiralling out of control. Next, on industrial and commercial land. I want to repeat my call and many from the SME sector for the Government to take a serious look at the industrial and commercial rental markets, as rents are killing companies' cost competitiveness in almost every sector of our economy, not just one. We need to implement ideas, such as rent control – which I believe the trade associations and chambers (TACs) had suggested – and restricting industrial land for owner occupation instead of allowing such properties to be used as investment properties.”
“It could also allow parents to be less fixated with the cut-off points of the schools since all schools will have a spread of academically stronger students and academically weaker students. Educationally, this also means that the school will have to be able to cater to students from across a different range of academic performances. The other advantage is that all our children learn about the diversity in society and this interaction of students of different talents and abilities will build a stronger society in the long term. Today, many of the same mould are put together in the same schools. This approach I am suggesting will also allow parents to finally see beyond the cut-off points to take note of the many distinctive programmes that our secondary schools are rolling out, particularly aimed at catering better to the different strengths and interests of our children, across a wide range of domains – programmes that could spur the interest of their children to want to learn, see relevance in learning and make them more engaged and self-directed in learning. Ultimately, our hope must be for each child to develop holistically, discover their interests, build on their strengths and stoke the flame for learning that will last a lifetime and benefit from interacting with people of diverse backgrounds that will later build a stronger society and a stronger Singapore. I, therefore, would like to ask the Minister if he feels that he is succeeding in changing the mindsets of Singaporeans that every school is, indeed, a good school. Page: 52 Integrated Schools”
“Madam, today many parents think that their children must get into the so-called "top" schools, based on academic results, in order to be successful in life. By allowing academically top students to congregate over time in some popular schools, we fuel the perception that these schools are better than others. It also results in a self-fulfilling prophecy, as students who attend these schools, because of their strong academic performance to begin with, indeed do well subsequently and as they progress higher in their education. This creates a scarcity mentality that makes parents Page: 51 want their children to do well academically in order to qualify for these "top schools". As more of the academically stronger students gravitate to these "top schools", it raises the cut-off point of these schools, as Ms Denise Phua had mentioned earlier, making them look even more like "top schools", because parents do not know how else to measure the quality of a school. This causes parents to spend a considerable amount of money on tuition for their children in order to help them to score better academically, so that they can still make it to these "top schools". This mentality has created a "tuition" race, fearing that if they do not provide their children with tuition, they will lose out to those children who are already getting tuition. Therefore, this is a disadvantage for lower-income Singaporeans. MOE has set a goal for our children to learn independently on their own and to be self-directed in learning. The tuition mentality defeats this goal. Could the setting of a quota in each school for academically stronger students help spread these students across more schools and avoid a situation where such a vicious cycle forms?”
“She worried about the eroded sense of belonging that she and her friends felt and their view that Page: 24 the Government was more interested in luring foreigners than bringing Singaporeans home. She said that friends and relatives asked if she planned to stay in Australia after her graduation. In 2013, she was unsure of her answer. I hope that today, in 2015, having seen all the policy changes implemented by this Government, she is encouraged and can say with conviction that she is going to return to her home, to Singapore. I call on this young lady and all young Singaporeans studying overseas, "Come back to your home, be part of our nation building for the next 50 years and more. This is your home! This is our home!" Thank you, Mdm Speaker. I support the Budget. 12.43 pm”
“National identity results in a greater sense of ownership and responsibility towards nation-building and we need to energise our young to feel the sense of ownership and responsibility. I am very sure that if we continue to focus on the inclusive growth approach and put in place measures that make each Singaporean feel that this is their home and not a hotel and that citizenship is a matter of pride to want to continue to build a better future for subsequent generations of Singaporeans, we would have succeeded in building a stronger national identity. I urge the Government to spend more in future Budgets focusing on this exercise of building the Singapore national identity. In conclusion, at the end of the day, if every Singaporean can feel that their life today has become better than it was yesterday, then this Government would have done its job well. I am confident that we are heading in the right direction. Let me conclude by speaking about a letter I received from a young Singaporean. After delivering my speech at the White Paper debate in 2013, I received an email from a young Singaporean lady who was leaving Singapore for university in Australia. She highlighted her various concerns and worries and her sense of disassociation with Singapore. She had four main areas of concern. As a far-sighted lady, she worried about her employment prospects as she grew older. She was worried that she would be replaced by younger, faster, cheaper foreigners. She was also concerned that with the ever rising number of foreigners coming to work in Singapore, our infrastructure would be unduly stressed.”
“As we can see from what the Government has done since GE2011, this Government did momentarily get distracted by the "growth at all cost" policy, but it did not lose the plot. Today, the Government has addressed many of the concerns that Singaporeans had. At least for me, I am seeing that the Government is now addressing many of those concerns and, in a few years' time, we will see the full impact and feel the difference of living more comfortably here in Singapore. While I am happy that we are heading in the right direction and have made good progress, there are some areas that we can still work on. No one is perfect. One area, I think, Page: 23 that we should continue to focus on is affordable housing. This will also help us build, among Singaporeans, a strong sense of stakeholdership in the country. Would this Government consider removing the salary ceiling and providing first-time Singaporean home buyers a substantial housing grant, say, $50,000? This grant should be over and above the existing grants, but would come with one clause. First-time home buyers who utilise this grant will only be able to sell their properties back to the HDB. The HDB would buy back these homes at inflation adjusted prices, less the straight line depreciation for the years of occupancy. Every Singaporean should be allowed to buy at least one HDB flat, no matter what size of the flat, at a very affordable price. National identity. Last year, I wrote about the erosion of our national identity and the urgent need for the Government to refocus on rebuilding it. I feel that as long as the Government focuses on "Inclusiveness" and on "Singaporeans First", we will have a chance of building a stronger national identity for our future Singaporeans.”
“Starting with the Pioneers aged 65 and above last year, who were given the Pioneer Generation Package (PGP) for healthcare needs, they now worry less about falling ill and being able to afford medical treatment. This is also a relief for family members who have to worry less about supporting their pioneer parents and grandparents, who mostly earned much lower wages and have much less savings compared to those who are working today. The many changes to the CPF scheme, the regular CPF top-ups for older Singaporeans and the Government paying 6% interest for the first $30,000 of savings in the Retirement Savings account, announced this year, are all useful to help us build sufficient retirement savings. The Silver Support Scheme, soon to be implemented, will help all lower income Singaporeans today have an assurance that they will get some help from the Government when they retire so that they do not feel disadvantaged by the huge income gap that we see today here in Singapore. The long-term sense of well-being is a very important thing for us to build a sense of national identity. As long as we keep adopting this "Inclusive Growth" strategy that we started in 2012, I am sure we will do the right things to improve the lives of Singaporeans. We need to keep focusing on building infrastructure ahead of time, keep housing and public transport affordable in the long term, valuing all skills – not just academic excellence – and be willing to pay better for these skills so that not only those with good academic grades get paid better. Over the past 10 years, some people have thought that the PAP Government has lost the plot in governing Singapore.”
“The Progressive Wage Model (PWM) policy to mandate a minimum wage for some categories of workers is a good start for a long-term minimum wage system that will assure Singaporeans that they will always earn enough to support their families as cost continues to rise here in Singapore. We should expand this to cover all low-wage Singaporeans. Many prominent members of society have called on the Government to implement a national minimum wage. The business community has, in general, been reluctant in allowing wages to increase across the board, citing increases in business costs. This is a fair argument. Increasing wages would certainly lower margins of businesses. Despite these arguments, the Government has courageously begun the implementation of sector-specific minimum wages, through the Progressive Wage Model. The Progressive Wage Model, however, does not provide a comprehensive longer term solution that we need. Some companies have gotten around this model by reclassifying their jobs in the two sectors affected, while employers in sectors not covered by the Progressive Wage Model have little incentive to redesign their jobs. A Singaporean earning very low wages – who has a family to support – cannot cope with unrealistically low salaries, no matter which sector they work in. Having considered that, I think that we should formalise a national wage system so that Singaporeans are more self- Page: 22 sufficient and do not have to rely on regular Government interventions for them to cope. Retirement and older Singaporeans. Without doubt, taking care of older Singaporeans has been one area where we can say the Government has done an excellent job in.”
“The other short-term and medium-term policies that have been put in place include CHAS for medical care, Workfare Income Supplement (WIS), which is now a permanent feature, regular CPF top-ups and utility rebates are also forms of transitional Government help to help the short-term issues. Budget 2015 also addresses the plight of middle-income Singaporeans, who have been called the "sandwiched class". In addition to childcare and kindergarten subsidies, this Budget has also introduced a one-time tax rebate, which I hope can become a permanent Page: 21 feature in future Budgets, and also the reduction in the levy for foreign domestic helpers to help middle-income Singaporeans. What about the longer term solutions put in place by the Government? For the long term, the key focus of the Government is to create well-paying jobs by building a good environment to attract quality investments. SkillsFuture is an initiative introduced this year that gives every Singaporean a chance to upskill, while the focus on ASPIRE will help us create an environment where everyone is valued for his or her skill and given a well-deserved compensation that affords them a comfortable life here in Singapore. This, together with the policy introduced in Budget 2014, called the Fair Consideration Framework (FCF), will ensure that Singaporeans will not be unfairly treated by employers who may try to hire younger and lower paid foreign workers. MediSheld Life, to be implemented later this year, is a relief for all Singaporeans that they will always have good and affordable healthcare. This, coupled with the huge increase in the number of hospital beds and new hospitals coming on board, should assure all Singaporeans that their healthcare will be taken care of as they grow older.”
“5 billion in 2015 and the projected goal of spending close to 19.5% of the GDP on development expenditure will, hopefully, solve all the infrastructure problems facing our hospitals and transport system. I am confident that in four to five years, infrastructure issues, including housing, will not be a major bugbear for Singaporeans. Because the Government is forward-looking, there has also been greater focus on creating opportunities for future generations, so that our young see a sense of "Hope and Opportunity" in their own country. And what are the changes that have happened? Because of the rapid rise of cost in the last 20 years, lagging wage increases, we saw a cross-section of Singaporeans become structurally unemployed or under-employed. They just could not be reskilled to match the jobs that were created. This resulted in short-term, transitional issues that needed to be addressed by policy changes which resemble those of a welfare state – where the Government has moved in to plug the gaps created in the area of depressed wages, healthcare affordability and to generally help low- and middle-income Singaporeans cope with the cost of living. How has the Government achieved this? By redistributing Government earnings to help those facing difficulties in coping with the higher cost of living. For all Singaporeans, the Government has focused on helping families cope with the cost of education through subsidies for childcare, kindergarten, as well as top-ups to children's individual accounts to help them pay for some of the enrichment programmes which will otherwise be less affordable to them.”
“A number became structurally unemployed, causing them great stress; many took part-time jobs that low-skill foreign workers typically did and, in return, for very low wages, not enough for them to cope with the daily needs of their families here in Singapore. Looking at all these issues, some of our young raised questions about their future in their own home – Singapore. Can they afford a house or have jobs as they get older? It was vital that we could show the young a sense of "Hope and Opportunity" in Singapore for the future. They must be confident of Singapore, in Singapore. So, what has the Government done since GE2011? Have they addressed these issues? This is my perspective. Has life become better for Singaporeans? I think, yes. First, the change of economic growth policy. Some commentators have labelled this Budget as the most egalitarian Budget in the last couple of decades. Although the headline figures would certainly support this view, I believe that this Budget is simply another step in the process of building a more inclusive society, which began after GE2011. Page: 20 In 2008, during the Budget debate, I called upon the Government to abandon the "growth at all cost" economic policy and I am glad that in February 2012, the first Budget after GE 2011, the Minister for Finance heeded this call and started talking about an "Inclusive Growth" strategy – which is economic growth that will benefit more Singaporeans – and it has adopted this approach since then in all the four Budgets. It has been four years since this change of mindset has taken place, resulting in many positive impact on many Singaporeans. The tremendous increase in infrastructure and development spending from about $10 billion in 2009 to $19.”
“I would like to refer to the speech I made in Page: 19 this House on the Population White Paper in 2013 and also my response to the President's Address in 2014, where I raised various issues facing my fellow Singaporeans. I explained that the biggest issue which resulted in the state of affairs in Singapore was the pursuit of a "growth at all cost" economic policy that focused on growing the GDP pie bigger without keeping a close eye on how such an economic policy would impact the lives of Singaporeans. I expressed that while the past policies were focused on economic growth and the pursuit of higher standards of living, the Government did not adequately focus on improving the quality of lives of Singaporeans as GDP grew. While data pointed to higher wages for most Singaporeans, the cost of living increased at a faster pace, resulting in lesser savings, including retirement savings, as people forked out more to pay for everything, including higher prices for their HDB flats. The "growth at all cost" and liberal immigration policies caused great difficulties for many Singaporeans. We saw infrastructure being stressed and Singaporeans facing tremendous difficulties with availability and pricing of housing, including HDB flats, a clogged up public transport system, overflowing hospitals and roads. For some, the rapid development of Singapore caused serious displacements and dislocation as they could not benefit from the new jobs created simply because they could not keep up with the skills needed, no matter how much the Government tried to retrain them.”
“We must stop this exodus we are seeing today. Because once companies relocate, they are unlikely to come back. Managing business costs. SMEs think about productivity or venturing overseas when they are able to. Currently, they are pre-occupied with their day-to-day concerns of managing costs and staying alive. In Budget 2015 and the previous two Budgets, at best, businesses have been given a chance to breathe a small sigh of relief of not incurring additional cost pressures. We need longer term cost reduction measures if we are serious about nurturing a conducive SME business environment. I urge the Government not to take the cost issue lightly and find a permanent solution rather than allocating large amounts from every year's Budget to help companies offset the high cost of doing business – Wage Credit is an example. This approach cannot be a permanent solution. For the longer term, we need to identify and resolve some deeper structural factors in the economy, which have led to high business costs in Singapore. This needs a focused, experienced and diverse team to study the factors for a concerted period of time. I would like to urge the Government to focus on this and set up a Cost Competitiveness Committee like what we did 30 years ago to address the same type of problems that we saw in 1985. We have nothing to lose by forming such a Committee: at worst, we will confirm our cost structures are not wrong but, at best, we would be able to solve some of these problems. Next, Madam, I want to shift the focus on inclusiveness for Singaporeans. As we debate Budget 2015, I would like to take a step back and look at how the Government has progressed since GE2011, how the four Budgets since have addressed the issues Singaporeans faced as a result of past policies.”
“Besides giving incentives, exposure of our SMEs to new business concepts here and overseas, equipping them with the right mentors and facilitating collaboration would greatly help. Regarding the foreign worker levy, the key idea for productivity improvement should be to incentivise, and not penalise, companies in making full use of their foreign manpower. Instead of having a blanket levy for all companies, why not we give a foreign levy rebate to companies that have a less than average number of foreign workers compared to their sub-sector average, while we continue to charge those that exceed the average number the normal or higher rates? This will give companies a tremendous incentive to push down their foreign worker dependencies and actually accelerate the restructuring process. Higher business costs. Another concern for companies here is high business costs, which have become the bane of their existence. In my interaction with SMEs, I have come across many in the last year or so that have shifted part or all of their operations to lower cost Page: 18 countries. Just recently, I met the owner of a well-known large food product manufacturer at a grassroots event and he told me that he has already moved his entire manufacturing operations to Malaysia and Vietnam because he could not cope with the costs of operating here. I have highlighted several times in the last couple of years in Parliament that we need to keep an eye on our business costs and that if it is not managed carefully, we would see an exodus of companies from Singapore. I believe that this exodus has started and is going to accelerate further unless we do something about rising cost. Venturing overseas is positive and healthy for the economy and our companies, but relocating may not be.”
“Mdm Speaker, thank you for allowing me to join the Budget debate. I would like to break my speech into two parts: first, on the plight of SMEs Page: 17 and, second, on inclusiveness for Singaporeans. On the plight of SMEs, as Members know, SMEs contribute significantly to the economy, accounting for 70% of jobs and deserve better attention. The general feel is that things have become worse for SMEs in the last few years and business owners wonder if the Government is listening enough to their problems. Are we doing enough to help them? Or are we prepared to allow a substantial proportion of them to exit, shut down or die a natural death? As many have mentioned before, only a small proportion of SMEs have benefited from the productivity push and I believe this is because of how we have defined and devised the incentives. We should broaden the definition of productivity so that it does not only pay attention to improving companies' bottom lines. If we want our businesses to flourish, then they also need to grow their revenues. Our economic restructuring process should, therefore, focus not only on reducing cost but also on creating demand. This would help to bring about higher productivity, growth and incomes. The focus on innovation and internationalisation in this year's Budget is, therefore, timely. We can also broaden the definition of innovation from its current form to include business model innovation. According to the latest SME Development Survey released in October, SMEs have embraced the need to restructure but 51% say that their main business strategy is to rethink their business model. Many of our SMEs need to restructure their business models to survive and they need help in this area.”
“We could ensure that there is a rotation of teachers and principals within the cluster, so that all schools benefit from high calibre staff instead of the current practice of only a few well regarded or so-called elite schools being given the best resources to make them better. For such clusters, CCAs can be jointly conducted and interaction during these non-academic sessions will help us create better understanding among children of different academic abilities and backgrounds. Implemented in this way, we will see greater support of teachers and staff among one another which I think will benefit all, including the so-called elite schools. The schools can also be vertically integrated, putting Primary and Secondary schools together, as this will help them pool together resources. It will also remove more competition from the system as you will encourage students to continue in the high schools out of convenience rather than to choose schools based on grades alone. This, I feel, ties with the aim of removing some of the pressure from our PSLE system. If we can adopt some of these measures that I have proposed, I am confident that most of our schools will be regarded as good schools in line with MOE's objective of Every School a Good School. Every School a Good School and Multiple Peaks of Excellence”
“In Primary schools, students are already being streamed based on their academic standing since Primary 2. As different students bloom at different pace, I think this may not be the right thing to do as it unnecessarily stigmatises the students at such a young age. Moreover, with such high level of competition built into the education system at such an early age, parents and students both face the pressure to outdo one another, and it is very common to see some parents spend large sums of money on private tuition for their children. This may turn into a vicious circle, as the parents from the lower-income families may struggle to keep up with such spending, so they could lose out in this race. In this way, education will fail in its objective to be a social leveller and may, in fact, help widen the gap. We already have Special Assistance Plan (SAP) schools and recently MOE announced the setting up of Normal (Technical) schools. I do not think that such segregation would be useful as it will not allow us to achieve our goals of fully integrating our society at an age we should be doing so. One possible solution is to start the clustering of schools. I believe that students can benefit greatly by interacting with pupils of different abilities and backgrounds. In future, in my opinion, diversity will be more useful than uniformity. I would like to suggest, therefore, that we work on clustering of schools where two or three schools within the same locality be clustered into one mega school system, where we can have a mixture of our top schools with Page: 119 what people label as neighbourhood schools as one cluster.”
“Another issue which I believe creates the impression of elitism is the existence of the Gifted Education Programme (GEP) in certain schools. I believe that the GEP has run its useful course and we should do away with this programme where we gather students who pass an entrance exam together in just a few schools. Instead, we could have some part of the curriculum of the GEP as an enrichment programme to support the core syllabus, for some students in all schools where for most part of their school time, the students spend time with students of different abilities doing the standard subjects and those capable of a higher level of challenge be allowed to do a special enrichment programme. Page: 118 Also, the "Gifted" labelling does great disservice to students who may not be academically talented but who are also talented in sports, music, the arts or in other areas. Are we saying that they are not gifted? The Gifted Programme is obsolete and the enrichment model, which builds on students' respective strengths around a core group of subjects, is more suitable in my opinion. This is better than segregation, which brings me to my next topic, which is streaming and segregation in schools. Since I entered Parliament, I have been speaking against streaming in schools. I was glad, therefore, that after many years of debates in this House, like many other Members too, some years ago, MOE eliminated the official streaming of EM1 to EM3 after the Primary 4 level. Most of us would agree that education is a great leveller and helps improve the mobility within society. Unfortunately, in Singapore, the segregation, which is still existent in our education system, may be counter-productive in this regard.”
“Madam, I want to share with the House my views on how we can achieve the goal of "Every School a Good School". First, elitism in education. In recent years, the Ministry has put in a lot of effort to promote every school as a good school, and it is the right thing for our education system. For example, MOE has stopped announcing the PSLE top scorers in an effort to curb elitism perception of schools. I was, however, disturbed to hear about the resourcing plans by the Ministry some weeks ago where The Straits Times reported funding cuts for some top Secondary schools. Unfortunately, the report seemed to indicate that, all along, the Ministry gives preferential treatment to what we called "elite schools" and this is particularly damaging to the Ministry's earlier slogan that "Every School a Good School". It generated and reinforced the impression that elite schools are better than others, in that elite schools received more funding, support and recognition from MOE itself; and, second, elite schools had more funding, better facilities, better teacher-to-student ratio, better study environment and the students are likely to do better and succeed in life. One would have thought that we should have put in more resources and funding to non-elite schools to help level up the playing field but the impression we now have is that we are giving more to the schools that do not really need more, and not giving enough to the schools that actually need the additional support and resources, even though I note that students in our elite independent schools pay much higher fees than other schools. Even so, one can expect even more stress in our education system where parents will try to get their kids into a perceived elite school.”
“I recently read that, in Malaysia, the EPF holders are paid 6% for their savings for a number of years, and this is much higher than the return we are paying to our CPF holders. If we can pay a higher return to the CPF holders, this may be a better approach than having to resort to Government transfers which may be unsustainable in the long term, and also disincentivise Singaporeans from working hard. Perhaps, to help us better understand why our returns on the reserves are much lower than Malaysia's, can the Minister shed some light on what the returns of GIC, Temasek and MAS have been in the last five years, compared to that of Malaysia's?”
“I would like to raise some points on our reserves, specifically on its use and also the rate of return. Before 2009, the Government was allowed to spend only up to 50% of the Net Investment Income (NII) from our reserves for the Budget. The NII came from the assets managed by Temasek Holdings. Since then, this amount has been expanded to the Net Investment Return Contribution (NIRC) which comprises up to 50% of NII and up to 50% of return on assets managed by GIC and MAS. Even though we have increased the principal source of these funds that can be used for the Budget, we have not reduced the proportion that we are withdrawing but are actually using more in absolute terms. I am concerned that we are digging too much into our reserves to fund big ticket Budget items like the Pioneer Generation Package. While I really want that to be funded, I am thinking about the long-term impact. In fact, this year, of the $11 billion transfers that the Government budgeted, $8 billion came from the NIRC. If we continue with this, I am worried that we may be eroding the buffer for the future that we have been building for a long time. On the rate of return – and this also leads to my next point – as the need for spending our reserves increases, would we then rely on better rate of return from the likes of Temasek, GIC and MAS so that our reserves would not decline so rapidly? What are the factors that will help to determine this? Page: 173 I would also like to take the opportunity to raise the point on whether our 2.5% interest rate paid out to the CPF Ordinary Account is a fair compensation for Singaporeans who have left their savings locked up for so long.”
“I believe Minister of State Mr Teo Ser Luck mentioned just now the company formation rate of about 14,000. I would like to ask are we monitoring the rate of companies folding up. I have heard recently that the rate has also increased, especially in some sectors that are very dependent on rental. Entrepreneurs are such that they see opportunities but many of them come in and may not last long, particularly in the F&B and the retail sector. Many of our entrepreneurs try in that area. So, I am a bit concerned about the rate of failure and bankruptcy. In addition to formation, are we monitoring closures also?”
“Mr Chairman, I understand what Minister Lim Hng Kiang just mentioned about the pace. It is a matter of judgement. I would just Page: 162 urge the Government to get the pulse of the ground right. While I agree that we need to take the middle path for the reasons that the Minister mentioned, what we feel is that the middle path may not be what the ground is feeling from the feedback that we have received. The feedback that I got may be wrong but maybe it is good to have some dialogue with some of the players – both big and small companies – to understand whether we are doing it at the right pace. I also mentioned that there are a few things happening at one time: restructuring, productivity drive, labour reduction and cost increases. The confluence of all these issues is also making it feel a bit more painful. While restructuring at a certain pace is important, the other issues are creating a problem. It is a matter of judgement. I am not just saying the Government is wrong. I think it is best that we keep a close pulse to the ground, have more dialogues, so that we get it, finetune along the way and do not make some mistakes and cause more pain.”
“If we can add this as one of the initiatives that companies take to be eligible for grants, I think that will help many companies. In fact, many of the small companies that Mr Teo talked about need business process re-engineering for them to be able to survive in this environment. If we can tweak the system a bit, I hope that we can include this as one of the measures that companies are eligible for. SMEs”
“If we can address the cost issue, I think we would have worried less about the types of payment that we have to make in PIC and many other grants that we are making. In fact, if you look at the rate of productivity improvement that companies have made, it is not so impressive in the last three years, simply because any improvements that they made have been lost in the cost increases that came about in the last couple of years. Let us say, if we failed to address the issue of cost, the productivity drive that we are trying to achieve will be a lost cause. Many Members have also raised issues about JTC and the Government's land divestment policies. I urge the Minister, this time, to rethink about JTC's share drop of 18% to 3% of the rental market. It has been a big change and I think, at 18% to 20% share, we could have some influence on the rentals – I am not saying that you set low prices – we could maybe put in controls like having companies to graduate from a JTC rented factory that has a lower cost after a certain number of years. But if we do not even have an opportunity for companies to start in low-cost facilities, they will never get started. So, I hope that we can reverse the policy that we have already made in this area. I have one specific suggestion to make on the PIC. It is an excellent scheme. I think the companies which are tapping on it are benefiting. Many small companies, as we heard from Members, cannot access this; they have problems. In addition to the six areas, innovation is key. And I think innovation does not have to be innovation in a product or service. Innovation can come also in a business model or business process improvement.”
“Mr Chairman, instead of making a speech, I decided to refer the Minister for Trade and Industry to the speech that I made during the Budget Debate. It was specifically covering the issues businesses face in the restructuring efforts that we are putting in place. If we listened to the tone of debate in this House and the speeches that have been made, many of the Members of Parliament, whether elected or nominated, who come from the business world have one tone, which is quite different from some of the Members of Parliament who may not have the business experience. The tone is that the rate of restructuring that we desire is hurting many companies. So, I really hope that the Minister for Trade and Industry, together with the Finance Minister, can relook at the rate. There is no doubt that we need to make productivity improvements and future growth needs to be productivity-driven. But the rate at which we are doing is going to hurt many companies that could have made it in a bit of a longer term. They can be hurt so badly that they would not even cross the hurdle and end up folding. As I mentioned during my speech, we are going to end up in a situation where companies fold and jobs would be lost, and I think the situation could be very serious. During the debate, I had spoken about a few things. I want to, again, highlight "cost". Immediately after I made the speech about the cost of doing business and cost of living, the Economist Intelligence Unit (EIU) report came out and Singapore was ranked as the most expensive city in the world. If there is a measure of cost of doing business, I think we would also end up as one of Page: 132 the highest cost in the world right now. The situation is such that cost has gone too high.”
“Madam, during last year's debate on the Population White Paper, I asked the Government to pause its relentless population growth through immigration and instead focus on solving the many problems that we created as a result of the immigration boom of the past decade. I am glad the Government has responded to this call to pause and is doing a lot more to moderate the situation. Among the things adopted in the amended Motion to the White Paper passed in Parliament in January 2013 is that the Government agreed to plan, invest and implement infrastructure development ahead of demand and also to ensure the benefits of our population policies, such as better job opportunities and salaries, flow to Singaporeans first. And the questions I have for the Deputy Prime Minister are: can he please share with us the change of process in infrastructure planning that will bring infrastructure ahead of time, which means, what is changed that will prevent us from making the same mistake of the past? Has the Government decided on a Page: 63 steady state of inflow of foreigners, particularly PRs? What are the yearly numbers of PRs and citizenships granted and what measures are in place to ensure that we do not overrun the numbers that we have planned which I think we did in the past? What is the reduction in numbers of work permits, S Passes and Employment passes in the last one year? Can the Deputy Prime Minister share with the House what initiatives are planned to ensure that population policies mainly benefit Singaporeans as was passed in the amended Motion? And are we making progress in integrating the foreigners? It does not seem to show good results but perhaps, maybe, I am missing out on something. Availability of Childcare Centres and Lower Fees”
“In conclusion, while we have to pursue productivity as a growth strategy for the future, I have issues with the rate of change that we desire. Similarly, while we are focused on reducing dependency on foreign workers, the rate of reduction is too steep and is causing companies huge problems. The ambitious change that the Government desires is resulting in a confluence of too many factors at one time – high business cost, especially rentals; increasing labour cost as a result of policy changes like progressive wage; CPF increases and a tightening labour market, and also a steep reduction of foreign worker quotas. All these are happening together and too fast. An "Instant Tree" mentality of sorts once again. We must rethink and recalibrate the rate of change, if we do not want to create serious fractures to our future economy. We must focus on two things – the right cost structure for Singapore, and the right wage level for Singaporeans. If done successfully, this will mean that the Government has done an excellent job in managing the economy and Page: 21 country. Budget 2014 is one that will be remembered for a long time for the Pioneer Generation Package and the several things that are good for Singapore. Taken as a whole, the past few years' Budgets have been socially inclusive and helped many Singaporeans – not just the low-income and aged, but also many middle-income Singaporeans. While I am disappointed that the Government failed to address the cost competitiveness issues, the many initiatives in Budget 2014 make it an overall good Budget. Mdm Speaker, I support the Budget. 12.34 pm”
“Failing to convince employers to pay higher wages by persuasion through the progressive wage system, we now have a plan which legislates the need for a minimum $1,000 wage for cleaners and, later, also for security guards. This is really welcomed. The current approach will, however, add to the cost pressures for companies and, therefore, I feel the Government could have adopted my suggestion of a Government-assisted minimum wage scheme which I Page: 20 suggested at last year's Budget debate. Done in such a way, the progressive wage for cleaners could have kicked in without even hurting the SMEs through higher costs to them. I also feel that we are neglecting the fact that there are similar low-earning workers in many other sectors of the economy and a limited progressive wage approach will not achieve the objective of helping the low-income Singaporeans manage the high cost of living. We may only be helping just a fraction of Singaporeans. Furthermore, implementation of what the Government has announced is going to be difficult as we already saw with the caveats announced recently even before the progressive wage system could be implemented for the cleaning industry. As reported in The Straits Times on 24 January this year, certain categories of cleaners will not benefit from the so-called "Progressive Wage System", as swimming pool and home cleaners, firms such as those that remove construction debris from work sites, clean building facades on gondolas and animal pens in the zoo are all exempted from the Progressive Wage System. Unless we have a universal minimum wage scheme, we will not be able to fully address all the issues related to the cost of living and the exceptionally low salaries Singaporeans are getting for a decent job that they do.”
“This has led to the problem of Singaporeans unable to afford the high cost of living because the wages are not going up as far, and, therefore, having to have the Government step in year after year with transfers to help Singapore cope with the problem. Let me quote one employer who made this comment to me recently, "I would be much happier being generous in salaries to Singaporean staff than supporting the high rentals." I believe it was a mistaken policy some 10 years ago for JTC to divest its properties that benefited just a few companies, especially the large developers and investors, including the REITs, and I believe we have to reverse this policy even if it means the Government having to buy back some of these REITs. In any case, the biggest REIT players are Government-linked entities like Mapletree and CapitaLand. I would rather have a situation where many more productive companies benefiting from our land policies of the Government than a few non-productive large investors benefitting because it is an investment tool. In the long run, if we do not do anything to reverse the situation, we will be in deep trouble as we lose companies to other locations in Asia. In fact, the cost issue is so chronic that I believe it is timely that the Government focus on this and I would like to urge the Government to set up a Cost Competitiveness Review Committee, something that we did 30 years ago when we faced similar cost problems in 1985. It is useful that we take stock of our problems and causes, and try to find solutions that will help our people in the future. On minimum wage, I am glad that the Government has finally realised the need for some form of a legislated minimum wage scheme, something I have been asking for the last few years.”
“And I hope that future Budgets will focus more on permanent solutions for cost reduction that will not cost the Government so much in transfers as it is costing us as much today. The high cost of business is also affecting our ability to attract foreign multinationals to locate operations here in Singapore and also giving a rethink to many of those who are already here. I recently had lunch with a senior banker of a foreign bank, a very big bank, which has large operations here in Singapore, and he expressed his worry about Singapore losing its competitiveness and the bank having to relook at its future growth strategy here in Singapore both in terms of what it already has here and bringing future operations into Singapore. I would like to talk about Government land divestment policy – JTC and rental costs in particular. Part of the loss of competitiveness is due to the high rental costs for businesses, and that can be boiled down to one key reason, and, that is, the Government's land divestment policy. JTC was a landlord for about 18% of the industrial property some 10 years ago but, today, only manages about 3% of the market. This is a huge shift and the Government lost the ability to influence rental prices, resulting in developers and investors making the money – this is passive income and not productive income that only benefits the investors, including foreigners, who can afford to invest in industrial and commercial properties as an investment tool and not as a productive activity. Page: 19 In return, the smaller companies find that they cannot manage the high rental costs and look for other means to cut cost, which inevitably leads to the squeezing of salaries of workers.”
“Two weeks ago, a middle-aged SME owner came to the Prime Minister's Meet the People Session, and I was helping Prime Minister at that time. In addition to six Singaporeans, he has hired one foreign worker as a machinist who has been working there for seven years, while two other foreign workers' Work Permits were not renewed last year. He begged that the renewal of his Page: 18 specialist machinist's Work Permit be approved, since he has no one else left to operate the machine. Otherwise, his six Singaporean workers, their families, his three children and wife will have no means of income to support themselves. So, what do we tell this SME owner about the rapid rate of restructuring? Cost has also been a perpetual issue for the past five to six years, and every Budget has been allocating billions of dollars to help Singaporeans, and, in some cases, companies, offset the high cost of living and doing business here in Singapore. Here, I am talking about cost to every Singaporean in general, not just to SMEs. I think all these transfers and help that the Government is doing is not an efficient way to manage things, and the right thing to do is to go and tackle the root cause of the problem in the first place, and that is to address the real cost issues that we all are facing here in Singapore, individuals and companies. The Government, I believe, has neglected this cost problem for too long and we are facing problems and, therefore, it is costing the Government more by having to do special transfers like GST package, MediSave top-ups, utility top-ups and many others. While I welcome all of these measures because the Government is helping Singaporeans because of the high cost, I think we failed to address the cost issues in the past.”
“I would caution the Government against doing too much of cherry-picking of sectors and companies as we do not know which companies will remain rooted here in Singapore and which may become long-term winners. I recently spoke with the CEO of a Singapore-based company listed on the Stock Exchange which operates the fifth or sixth largest coffee processing plant in Iskandar and he mentioned that the lease he has to pay to JTC for one of his plants which he operates here in Singapore is too high. In Iskandar, his company owns a freehold property that is able to employ people, including foreign labour, a lot easier than he can do here in Singapore. It is a pity, because the factory is fully automated and it is the type that we would like to be based here in Singapore. I do not think we can ever convince such companies to come back and operate their operations here in Singapore. We, therefore, risk losing such companies forever, if we are not careful with our current policies. Cost competitiveness. The reality is that cost and cashflow are bigger problems in our business landscape than some of us might imagine it to be. We saw a few weeks ago in the media how a subcontractor working for Keppel Shipyard could not afford to pay wages to its workers. There are others out there who also face similar problems. So, we should have seen how we could have helped them improve their cashflow so that they can survive. We have already given them the opportunities and the deterrents in our many measures to ensure that they stay on the path of restructuring and productivity. But they can only do so if they even survive in the first place. We need to help them do that. We need to look closer at the immediate needs of SMEs and help them overcome their survival issues.”
“While MNCs are more mobile, SMEs have less choices and will have to try to stay and fight for their survival. But I urge the Government not to take this for granted as we have a huge threat just next door. Recently, I made a visit to a few industrial parks in Iskandar and I was shocked to see many factories already in operation and many more coming up. And companies operating in these Iskandar industrial parks are not just SMEs, but also some MNCs. If we are not careful and as more of our SMEs are forced to move to Iskandar, which seems to be the saviour for many of our Singaporean companies, some MNCs may follow them to be near their suppliers and subcontractors, which are mainly our SMEs. The exodus may be larger than we imagine and so we should not ignore the potential impact on our economy as job losses may become a serious national problem in the future. We also risk hollowing our economy in the future and I would like to sound an alarm that we are close to the tipping point of this Page: 17 happening. I have heard this argument from some Government agencies that they do not mind letting some of our SMEs shut down and relocate as this would free up workers for the sectors that the Government would like to focus on. I say that this is too simplistic an assumption because our SMEs hire two-thirds of the workforce and, moreover, many of our SMEs hire the older workers which multinational companies do not want to hire. A good number of these workers will face difficulties fitting into the sectors that the Government desires, for example, moving from a manufacturing sector to service sector.”
“Page: 16 The Government did the right thing by sticking to its productivity push as it is central to our broader economic restructuring efforts. I fully agree and support that, in the long term, our economy must be supported by productivity-driven growth and not one that relies on cheap input factors like cheap labour. There are two issues facing companies. One is the top-line growth of revenues and business, which I believe will be best tackled by the productivity and innovation initiatives, like the PIC and PIC+, and the other good schemes announced in Budget 2014. The second and immediate issue is one of cost of doing business in Singapore. We are at a critical stage, and I feel that the Government has underestimated the impact of high business costs on our future economy. In fact, this year, companies are facing a triple whammy when it comes to doing business in Singapore. First, business costs have gone up, especially rentals and utilities, and some others – transportation cost, for example. Second, cost of labour is going up because of the tightening labour market but also including new measures like the additional CPF that they have to bear. And, third, shortage of workers, as we close the tap on allowing in foreign workers, even if employers are willing to pay more to hire them. We are just trying to do too many things too fast and this is hurting many companies. The key issue of cost is not just a concern for SMEs, it is also a big concern for larger companies. I have met with some top management of some large MNCs here in Singapore and they have expressed their serious concerns about the unrelenting increase in the cost of doing business, coupled with the unavailability of workers. Some have warned me that relocation is something in their minds.”
“Mdm Speaker, thank you for allowing me to join the 2014 Budget debate. This year's Budget, like last year's, is socially inclusive and, taken together with the Budgets since the last General Elections, we now have many measures to help us address the widening income gap among Singaporeans. I am particularly glad that the Government is no longer pursuing a "growth at all cost" policy and, instead, focuses on sustainable and inclusive growth. As we approach the 50th Anniversary of Singapore next year, it gives us a good reason to recognise and reward Singaporeans before us who worked hard to build Singapore into what it is today. The Pioneer Generation Package is an unprecedented budgetary measure in so many ways. Firstly, it is catered for everyone aged 65 and above, and I am glad to note that the Government chose not to use means testing or any other economic criteria to define the parameters of this package. Everyone who is from the pioneer batch of Singaporeans will benefit from the $8 billion fund. That is a fair and equitable way of recognising the efforts of all those who have contributed to our nation's development in the early years. The Pioneer Generation Package does not just benefit older Singaporeans but also generations after. By subsidising healthcare costs, for instance, this helps reduce the dependency ratio for younger Singaporeans going forward and reduces the economic costs of an ageing society on them. While this Budget can be lauded for achieving its social aims, I feel that it completely ignored a very important issue facing Singaporeans and companies, not just SMEs. And that is the high cost of living and high cost of doing business in Singapore.”
“These are essential elements in support of our larger overall effort to raise productivity, attain quality growth and achieve economic transformation. We look forward to the support of all stakeholders in this important endeavour.”
“Singaporeans today already enjoy a natural advantage in guiding given our deeper and more nuanced understanding of our heritage, history and tourism offerings. We want to enhance our capabilities in this important area, but I also want to stress that we want to be careful not to unnecessarily constrain the industry with onerous regulatory or certification-type requirements. We need to find a balance because there are also a lot of excitement and interest in the voluntary aspects, and we need to preserve that enthusiasm and vigour in this space. Other segments of the tourism sector are also keen to enhance productivity and move up the value chain, and we will support them in this journey. Hotels are evolving their business and operating models, using technology and new management methods. For example, Fullerton Hotel worked with STB to refine its multi-skilling initiative. The scheme prepared Mr Daanish Louis Chandrasegran, a security officer, to also help with F&B services. Daanish Louis has benefited from his expanded role and skills. The hotel has also benefited Page: 90 from the productivity gains. Beyond the hotel industry, travel agents are also raising their game. The National Association of Travel Agents Singapore (NATAS) has been working with WDA on an accreditation framework for the travel agent sector. This framework enhances the professional standards of travel management practices. I look forward to NATAS launching the framework later this week. Mdm Chair, if I can conclude, I have highlighted MTI's efforts in three areas – ensuring secure and competitively priced energy; leveraging on R&D to promote innovation and productivity, especially among our SMEs; and seeking high yield in the tourism sector through differentiated products and experiences.”
“For example, Mdm Geraldene Lowe-Ismail has been conducting heritage walking tours around Singapore. And Geraldene offers tourists a mix of historical tidbits, infused with her own personal memories. I think that is the kind of tour guides Page: 89 that Ms Faizah Jamal was talking about. As we push for quality, yield-driven growth, opportunities abound for our tourist guides to create unique itineraries for discerning travellers who are willing to spend more for customised or bespoke experiences. 2.45 pm This entails more targeted training, as Ms Faizah Jamal has alluded to. STB is fully committed to working with the industry on such capability development efforts, and I would encourage all stakeholders to highlight to STB any skills gaps that need redress. In the specific examples that Ms Faizah Jamal highlighted on NLB and NHB, for example, the tourist guides that are licensed today are, in general, providing a guiding service to the tourists who come to Singapore. If there are specific niche areas which are run by statutory boards, I think the most productive way to take the conversation forward is to see how those statutory boards can work with STB to allow these niche tourist guides to develop and provide the relevant service. STB's primary interest is to ensure that the guides are well trained, maintain a high quality, because they also receive compensation. I think if there are niche areas, then I think these are specific statutory board discussions that need to take place. We will study further Ms Faizah Jamal's specific suggestion of licensing and accreditation of niche tours according to tourist guides' residency areas or specific focal point.”
“To augment the impact of this event, STB worked closely with industry to catalyse and co-locate other visual arts events around Art Stage. The inaugural Art Week in January 2013 recorded high footfall, strong sales and good international media coverage. The success of Art Week demonstrates the potential of building a spectrum of lifestyle offerings around a marquee event. STB will continue to complement the industry's efforts to introduce other large-scale innovations. STB is also committed to fostering innovation and test-bedding of new ideas which might be smaller in scale. So, to this end, STB will establish a new Kickstart Fund with an initial funding of S$5 million to support start-up type lifestyle concepts with strong tourism potential and scalability. This includes pop-up entertainment, dining, retail or arts events, as some examples. The scheme will also provide entrepreneurs access to business advice from experienced mentors from the industry. Over time, this scheme can help catalyse the development of compelling lifestyle concepts here, and they can add to the software that will enhance our cityscape. STB will announce the details and call for applications soon. Even as we seek out and anchor higher value tourism products here, we will also help companies and workers move up the value chain and benefit from such growth opportunities. One example is our 2,000-strong tourist guiding industry. Today, the industry comprises mostly Singaporean guides from a diversity of backgrounds and with a variety of interests. Many like Ms Tare Lee Yong and Mr Sng Soon Huat, provide general guiding services in Singapore's vernacular languages. Other guides offer more niche services.”
“Through initiatives such as Sentosa's Train and Raise (STAR) programme, Singaporeans like 29-year-old Noorzabidah Bte Buang have been able to pick up new skills like budgeting and human resources management, and rise through the ranks to assume greater responsibilities that realise their potential. Our local companies are also well-poised to benefit from this transformation. Lighting company SMM Pte Ltd is a case in point. As part of the 2012 Singapore Grand Prix, SMM worked with STB and international lighting consultants to implement a lighting solution and develop a poster mesh that preserved the Old Supreme Court's iconic façade amidst construction works. This is a first for Singapore with interesting future application possibilities for the company. As we push for quality, yield-driven growth, we can expect more of such opportunities for our SMEs to partner world-class players and Page: 88 eventually come into their own. What we need now, Madam, in the tourism sector, is strong content, especially in business and leisure events. Such "software" is hard to replicate and will help differentiate Singapore from our competitors, who might be catching up in terms of hardware, infrastructure and even volume. Strong content also helps to maximise the value we can derive from our current infrastructure. In that regard, we will strengthen our "software" through new, large-scale lifestyle events. We will continue to work closely with the industry to facilitate content curation and delivery. Take Singapore's growing visual art landscape as an example. Today, the privately organised Art Stage Singapore is one of Singapore's highest profile contemporary art fairs.”
“These have strengthened our value proposition Page: 87 as a vibrant and attractive tourist destination – 14.4 million tourists visited us in 2012, accounting for a record level of tourism receipts of $23 billion. Over a five-year period since 2008, tourism receipts have grown at a compounded annual rate of 10.4%, and visitor arrivals at 9.2%. STB forecasts 2013 tourism receipts to be in the range of $23.5 billion to $24.5 billion, an increase of about 2.2% to 6.5% from 2012 depending on which point of the range you look at, and visitor arrivals of about 14.8 million to 15.5 million, an increase of 2.8% to 7.6%. Looking ahead, our visitor arrivals cannot continue to grow indefinitely and sustainably at the rates we have seen in recent years. Dr Lim Wee Kiak has pointed out that regional competition for the tourism pie is intensifying. Domestically, our land and manpower constraints mean we need to find new ways to do more with less. The next phase of tourism growth would thus have to come from increasing the yield through visitor spend, rather than just visitor numbers. This transformation and change is timely because, externally, the expected rise in Asian tourism over the coming years presents a window of opportunity for us to attract discerning travellers who seek out differentiated and value-added experiences. Internally, we have the essential building blocks in place to continue maintaining our edge as a premier tourist destination. Taking our workforce as an example, Mr Seah Kian Peng would be pleased to know that the STB, Sentosa Development Corporation (SDC) and WDA have been working jointly to raise the capabilities of Singaporeans so that they can take on the higher value jobs generated by our tourism developments over the years.”