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.”
The complete record
Every one of 977 lines we hold for Inderjit Singh, in date order, each linked to its source. Free to read, in full, without an account. Page 10 of 20.
“I feel that many students who do well in their later ages may be disadvantaged by the current system of getting students started at the integrated programmes at Secondary 1 and Secondary 3. Can the Minister assure us that students who do well will still have an equally good chance of getting into good junior colleges, as it was done in the past?”
“Sir, I have two issues to raise. The first is the one on admissions to Secondary 1. Currently, there is a huge advantage given to students of affiliated schools when being posted to secondary schools after their PSLE examinations. The issue is that many students may not get into such an affiliated primary school for various reasons, especially because of different priorities granted when admissions to Primary 1 are done. This disadvantage then remains for such children even if they do well during the PSLE examinations. It is best that such an advantage should end at the primary school level and not be carried forward to the secondary school level during the admission exercise. Such admissions at the secondary school level should be purely on merit, based on the PSLE results. Currently, affiliated secondary schools are giving too much of an advantage on the cut-off aggregate score for students from an affiliated primary school, and this is unfair for the many students coming from our neighbourhood schools who do well in their PSLE examinations. I suggest that the Ministry relook at this advantage and put a cap as to the level of the advantage students from affiliated schools get. The second is the issue of the integrated programme. Many junior colleges have now started offering the integrated programme, taking students either at the Secondary 1 or the Secondary 3 levels. I worry that when we do this, we would be limiting the number of spaces available in the good junior colleges for students who do well at their 'O' level examinations. Again, most of them will be coming from our neighbourhood schools. How does the Ministry plan to address this issue?”
“I hope that the Minister will consider modifying or totally eliminating the streaming system to achieve the same objectives as we are trying to achieve for each student.”
“I truly feel that we can achieve the same objective of letting each child progress at his or her ability and to learn by not segregating the students into clear streams but by perhaps creating a hybrid system, which I brought up before. I also recognise that each child has different learning abilities at different stages of their lives, and we should therefore find other ways of maximising each child's talent and potential, rather than through the streaming systems. I would like to suggest an alternative to streaming children after Primary 4, where we have a system where students be kept in the same class for as long as possible. In fact, for EM1 and EM2, as has been stated earlier, the only difference is the mother tongue, whether they can be kept in the same class and only be separated when it comes to the learning of mother tongue. We could carry this one step further to separate students according to the ability in each of the subjects, ie, in Mathematics, Science, and so on. In fact, I would like to go one step further to suggest that, even for EM3 students, we could integrate them together with the EM1 and EM2 as they are today, and integrating them for Physical Education, like Music and other non-Mathematics or Science subject levels where they may have strengths, as good as the EM1 and EM2 students. My main objective is to allow students to learn from their diversities from each other and also for using peer influence for each child to improve herself or himself . If we can do what I suggest, I am sure it will go a long way in minimising the potential future social problems that we will see as a result of the class system that we are creating.”
“Sir many people have asked me why I was the only Member who did not talk about the procreation issue during this year's Budget debate. I think everyone else spoke about it except me. This cut is my contribution to the great baby debate. In my opinion, there are two things that worry and stress Singaporeans when it comes to having children. The first is the stress of the cost of living and the ability of their children to live comfortably in the future in Singapore. The second issue, which in my opinion, is more significant than the first is the stress of our education system. There are two levels of stresses. The first is the stress of a child going through a system which labels and streams them too early and too many times, and the second is the stress on the parents who inevitably worry about the academic success of their children. In fact, many a time, when a child goes through a major examination, it seems as if the parents are sitting for the examination for themselves. So, if we can bring back the joy of being a child, as I experienced when I was a child, and if we can bring back the joy of our education system for our children and parents, we will reduce the unnecessary stresses and make bringing up a family more fun. Sir, today, I would like to focus on the streaming issue, particularly streaming in our primary schools, which is one of the causes of the stress in our education system. As I mentioned before, while the rationale of allowing each child to progress at his or her own pace seems logical, I have issues in the implementation which has resulted in the wrong measure of success as well as labelling, branding and creating a social class system, including the emergence of some amount of elitism, as some Members have brought up.”
“Perhaps the Minister can help us facilitate this. And I hope that before the end of this year, we can see the emergence of a Private Equity Exchange in Singapore. Financing Schemes”
“For example, I would like to mention the Small Business Investment Company (SBIC) model in the USA where small funds were being set up for the purpose of a whole range of financing, not just equity, but debt and equity. Perhaps, if we could do this, instead of giving all the funds to agencies like EDB, A*STAR and Temasek for these purposes, I think we will enhance the vibrancy of financing in this area. Private Equity Exchange Sir, one of the recommendations of the Action Crucible for Financing made in this recommendation list was the setting up of a Private Equity Exchange. I have brought up this issue many times in this House about its implementation in Singapore. I thought we had a good response but things are not moving as fast as we desire. In the past few years, we have seen a track record of companies which the SGX is not willing to consider for listing on our local stock exchange, but these companies finally got listed in exchanges in other parts of the world. At the same time, we are seeing companies getting listed on the Singapore Stock Exchange raising very small amounts - $1 million-$2 million - and spending much money just to raise that amount of money, and then having the burden of high cost of maintaining a listing on the Stock Exchange. I think there is now a need for a Private Equity Exchange to be set up. With the encouragement of the Action Crucible for Financing, there are a number of private sector companies that are ready to run this Exchange. The Government's argument is that it is not viable. I would like to ask the Government to reconsider this. If the private sector players feel that it is a viable thing to do, let them take that risk. Because I know that a number of them are interested but things are moving just too slowly.”
“If we can make the interest rate chargeable flexible, maybe a minimum and a maximum, I think banks will be willing to lend to riskier companies and charge a higher interest rate, because of the nature of the risk that they will have to absorb, and still perhaps lend companies that they would not normally lend under the current scheme. Sir, the other area is that the LEFS has been very useful for manufacturing companies, but the traders in Singapore, unfortunately, do not have the support. I would like to ask the Minister to consider extending the LEFS to traders. The argument here by the agency that is administering this scheme is that trading is a non-value added activity. The impression is that the traders just sit next to the telephone and goods just cross over without reaching Singapore. I think this is wrong. Many traders do a lot of value-added activities in Singapore and LEFS could be very useful for them by way of financing. Sir, the next area is one of SEEDS. Currently, we have the SEEDS scheme which is administered by EDB and SPRING. It has been very successful but I would like the scheme to be enhanced to take into consideration the money that has been put in by the entrepreneurs themselves. Currently, the matching grant by EDB comes only as a result of third party financing. I would like to ask the Minister whether he will be willing to consider extending this scheme to recognise investments made by the founders and the entrepreneurs themselves. Finally, Sir, in deploying future funds like the $1 billion Technopreneurship Promotion Fund that we have, I think the funds went mainly to the right places, but I propose that some of these funds could be deployed a bit differently.”
“Sir, in the example mentioned earlier, I think if the foreign ownership had been 75%, they would probably have got the grant that she was talking about. Sir, I have been working on this issue of financing of SMEs and start-ups for the past two years. Many people have been involved in this process. And now as part of the ACE, the Action Crucible for Finance, we are working on implementing a number of initiatives in this booklet called Report on Financing for SMEs. There are a number of initiatives down here. And the reason I raise this issue here is that while the Government has been very proactive in helping us implement the detailed list of recommendations, there are a number of areas which I hope the Minister will help us facilitate the implementation. The first is in the area of loan or asset securitisation. I brought this up under MOF. I wanted to hedge my bet down here that there is enough attention. Therefore, I again raise this issue of help that we need from the Government. I think this will be a very exciting area, an alternative for fund raising for SMEs and small companies. And I foresee a number of areas that we will need Government's help particularly in the area of helping take some of the risks in subscribing to some of the tranches of the bonds that may be issued as a result. This is one area. The second area is in the area of Local Enterprise Financing Scheme. It is a very successful scheme. But we have left the interest rate requirement at a fixed rate for the banks to charge. The problem here is that because it is a fixed interest rate that the banks can charge the SMEs, the banks therefore select a narrow category of companies that they are willing to lend to.”
“I think an account manager who will hand-hold a cluster out to Singapore would be a way out for us.”
“I have many more examples, but in the interest of time, I will go straight to the request that I have. We really need a champion agency for SMEs, not a first stop agency, but a first and last stop agency. Perhaps we can think of the modus operandi of such an agency as an account manager, who can hand-hold the companies through their various stages of growth, including navigating through the many agencies which may provide different types of support and needs. So I am not suggesting that we move all the assistance schemes into one agency, but have an agency that can hand-hold SMEs through the various agencies. While SPRING can help, and they have played a good role in helping SMEs, but I think SPRING does not have the type of resources EDB or A*STAR has in terms of people and funding. I think maybe there is a need to relook into this area, if SPRING is to be the champion agency. Sir, secondly, mergers and acquisitions are going to be a significant thing and a way out for our local companies. We have a poor track record of this happening, and I think we need to look at either having incentives or buyout funds to be set up in Singapore and a change of legislation. In particular, I would like to highlight section 76 of the Companies Act which makes it very difficult for companies to merge. There is a clause that talks about financial assistance. I personally have seen this as a problem where companies run the risk of contravening this regulation in trying to do mergers. I hope that the Minister can look into this particular legislation. The other thing is in the area of clustering. That is a great way to go out, but, as the Minister mentioned, the culture is not there yet. We really need to do a lot more.”
“Sir, on SME support, many of us in this House and also many industry groups and people from the private sector have been asking for a clear champion agency to support companies at the start-up stage, growth and expansion stage, and the stage where they globalise, ie, companies that actually initiate out of Singapore. The voice is getting louder and the need is a real one. However, the Government's response is that all the support is already in place at different agencies. Their argument is that no one agency can play the role being requested of the champion agency. On the surface, this appears to be true, but, in reality, things are falling into cracks, as handover from one agency to another takes place when these agencies try to support the companies at the various stages of their growth. Sir, in a dialogue session I had with SMEs, both local and foreign SMEs were there. One owner of an American SME told me that he felt little pity for Singapore SMEs. His observation was that foreign SMEs are getting preferential treatment, while local SMEs are being given the run-around by the Government agencies. This was his own observation. He was referring to the EDB support that he got very easily. I have personally experienced a difference in treatment when I applied for a number of Government grants, when I was in a multi-national and when I tried to do it as a local company. I was not given the kind of help that the American multinational gets. I had lots of resources when I started United Test and Assembly Centre, which is a listed company today, but I gave it up although I could have proceeded because the incentives that I was going to get were not attractive enough as I could have got if I had applied as a multinational.”
“One of the problems we face is that we do not have the resources or the financial sources and time to do many of the details and planning. So I am asking whether the Minister could actually provide for an Enterprise Centre, kind of a secretariat and resource support, for organisations like these. Sir, in the area of introduction of new legislation, can I ask whether the Government can make it a requirement, and I have asked this before, where the civil servants make a study of the cost of compliance of new legislation before the laws are passed? Parliament should actually look at these things before we approve any Bill. In the area of unfair competition, we have seen many start-ups failing too early because they are being suppressed by bigger companies here in Singapore. In this respect, I would like to get an update from the Minister on whether the competition law that we are planning to enact will help smaller companies, at least, survive the initial stages before they get suppressed too early.”
“Sir, entrepreneurship has indeed become an important agenda for all of us and we need to address a few issues. At the policy level, I have very little to say because I am really pleased at the rate at which things have changed. One of the most significant things that happened for us was the creation of the position of the Minister-in-charge of Entrepreneurship. As a result of those changes, we have seen many things happening, both at the policy level and also in the details. This year, I would like to commend Mr Raymond Lim, Minister-in-charge of Entrepreneurship, as well as the Chairman of ACE, for the many initiatives that are making entrepreneurship now a buzzword in Singapore. For this year's cut on entrepreneurship, instead of talking about the philosophical level, I have reduced it to a number of details that I think need to be addressed. First of all, in the area of legislation and infrastructure changes, one of the issues that we see today is that banks are quick to react to cases where companies default in the loans, and banks actually would rather make the directors of the companies go bankrupt very quickly. I am asking whether we should look at a regime of changes in the bankruptcy laws where there are some protection and some scheme of arrangement that become compulsory before we allow any bankruptcy procedures to take place. Sir, there are also many volunteer groups that have come out in Singapore recently, eg, TiE, The Chinese Entrepreneurs, which I am heading, Monte Jade which is a Taiwanese-based group, and The Chinese Entrepreneurs, which is a grouping of entrepreneurs of Chinese origin. Many of them are volunteers, like I am.”
“Sir, I think we have done a great job in negotiating so many FTAs with a number of countries, but it does appear that the FTA is forcing us, particularly the one with USA, to do a few things that seem to go against the grain of the Government's desire. An example is the divestment of its stake in the Government-owned companies, which I think the USSFTA clearly stated. There are also a number of other requirements and changes that need to happen as a result of this FTA, eg, changes to the financial and legal sectors, as well as trivial things like the chewing gum import, which Mr Leong just brought up. While I generally agree that FTAs are good for Singapore in the long term, I would like to ask the Minister the following questions. When we sign a FTA with large countries, like the USA, are we giving away too much, particularly in the changes in the way we do things here? Secondly, our small companies have yet to see a clear role and advantage as a result of the FTAs that are already in place, particularly the USSFTA, other than the textile benefit that Mr Leong mentioned. Can the Minister elaborate the specific areas smaller companies can look forward to benefit from these FTAs? I also notice that the private sector seems to play quite a significant role to influence the USSFTA at the planning stages and also the Indian private sector in the planned FTA with India. Can the Minister assure us that the private sector in Singapore too will have a role to play in the very early stages, so that all future FTA discussions will involve them and also take the inputs of the private sector into consideration before we conclude any of these?”
“Sir, I will pass this cut but I hope you will give me more time on entrepreneurship and SMEs later on.”
“If they could keep their jobs while being trained with new skills, they can also help their industries become more competitive. Could the Government provide incentives for stretching the lives of certain traditional industries in Singapore? Finally, could the Minister address the business cost issues that I raised during the Budget debate?”
“Sir, I would like to ask the Minister whether he is happy with the rate of restructuring of the Singapore economy and whether there are areas that are moving too slowly. Also, what are the types of companies which are investing in Singapore? Although we are seeing big FDI numbers, the question is: are these investments creating a lot of value by way of spin-offs to, supporting industries and, more importantly, more jobs for Singaporeans? Instead of giving tremendous incentives for such companies, would it be more worthwhile to spend the money in supporting local companies? As we try to restructure, our neighbours are also doing exactly the same. In fact, some of them are just copying what Singapore is doing. I see Thailand trying to become the healthcare hub, the manufacturing hub, the airline hub of Asia, in fact, more recently, the energy market hub too. Malaysia is trying to be an IT hub and a biomedical hub and they are even more aggressive by providing our local start-ups, based in Singapore, funding if they relocate from Singapore to Malaysia. This makes it very attractive for these local companies because they are finding difficulty in raising funds in Singapore. The question is: what are the threats to Singapore's economic restructuring plans with the aggressiveness of our neighbours? Would the Government change its direction in phasing out some of the older industries? In many cases, while the Government concludes that some industries are no longer viable in Singapore, they in fact could still operate profitably here. If we could stretch some of these industries to remain in Singapore longer, we could lengthen the economic transition and therefore lessen the stresses our workers are facing.”
“Sir, thirdly, the Minister for Finance talked about the benefits or incentives for asset securitisation. I have been working on this project, and I would like to ask the Minister to help clear any legislative restrictions or any impediments that may arise, because I think this form of financing will actually create virtual banks for us here in Singapore, and they will open up many more opportunities for local companies to raise financing. Banking”
“Sir, I can understand the Government's move to compel the local banks to merge to allow them to compete with the more liberalised and globalised financial sector. It was the right move to create one or two local banks which can become global banks, headquartered in Singapore. However, the unintended effect, as my colleagues have mentioned, is the reduction of options for our companies operating out of Singapore. I am sure that having big local banks and having small banks in Singapore are not mutually exclusive outcomes. I, therefore, would like to ask the Minister to consider the following suggestions: First of all, make it easier for smaller banks to be set up in Singapore by making the licensing more liberal and by reducing the costs involved. I was told that in the Silicon Valley, banking licences are a dime a dozen, which means it is quite easy to get those licences, and it is up to the private companies to take the risk to decide whether they will be viable or not. Therefore, while we continue to promote big banks, why not allow smaller banks which feel that they can set up base in Singapore to do so? Secondly, perhaps MAS can give greater flexibility to some of our local finance companies to operate as limited banks. Many of these finance companies are already significant lenders, but there are still too many restrictions which make it difficult for such finance companies to service a wider group of companies. For example, can finance companies be allowed to operate checking accounts with the clients that they are already lending money to? The intent here is that the finance company will have the possibility of monitoring the finances of the company and, therefore, give them more confidence in lending to these companies.”
“And we identified that prompt payment by bigger companies is an issue for SMEs. In this respect, the Minister for Finance has done an excellent job in sending a directive to all Government agencies to pay promptly. I would like to see whether we could find a way to also encourage TLCs and Government-linked companies to become the leaders in prompt payment in the private sector. This will go a long way in helping the cash-flow issues that our SMEs are facing.”
“Sir, I hope that the Minister for Finance would bear with me for bringing this up repeatedly, but I think the issue is that it remains a source of concern not just for Singaporeans and Singapore companies, but also, as we saw it, when we were discussing or negotiating the FTA with the USA. This was a big source of concern for USA too in concluding the FTA. In fact, it was left as one of the last thing to be resolved. So, therefore, it does say that the perception out there is that we have not done a lot of work particularly in the area of divestment of the GLCs or TLCs and, therefore, I was quite glad to note that, if I am not wrong, DPM mentioned that there were about 90 companies like that identified for divestment. I would like to suggest that the Government provide a strong push to accelerate the overseeing of this divestment activities for the reasons that Mr Leong Horn Kee just mentioned. The approach that we have been taking right now is to leave it to the Government agencies and also leave it to Temasek. I think this is the area where I would ask for Government's more dominant role as opposed to lesser role in other areas. I also suggested last year that we create competition for Temasek. While recently we have heard Temasek revealing some of its results, the question is: how does it compare benchmark performances elsewhere? In this respect, perhaps an alternative to divestments could be creating more vehicles like Temasek - maybe not 100% Government-owned, but joint ventures with private funds that could provide some competition for Temasek. The third area is in the area of prompt payment. The Action Crucible for Financing, which I am chairing, which is part of ACE, has worked on this one item of trying to improve cash flow among SMES.”
“Sir, my cut is on the net income from investments (or NII), particularly the performance. I have noticed that the NII performance over the years has been quite erratic. Based on the information I could get from the Budget books in the last six years, I notice that the numbers have varied quite a lot, ranging from $3.1 billion in 1999, hitting the highest of $3.68 billion in 2002, and it is budgeted to go down to $2.29 billion this year. I would like to ask for more details as to how the NII is derived. What investments qualify for the NII which are included into the Government accounts? How did the investments perform compared to industry performance and other large funds managed around the world? Is the performance stated above considered good or bad? Particularly, since there was a big drop from 2002 to 2003, perhaps the Minister can let us know what caused this. Finally, is the $2.29 billion budgeted for 2004 a conservative estimate, given that the global economy seems to be headed for good growth and the fact that we did well in the year 2002? Tax on Dividend”
“Sir, ultimately, the ideal scenario is one where a couple can choose how they would want to care for their child and are not unduly limited by mindsets about stereotype roles for the mother, or by inflexible work arrangements, or unfriendly corporate policies, or limited and expensive infant care. It must also be one where the woman is not placed at a disadvantage when it comes to employment. In short, the overarching principle is one of no gender discrimination in employment on account of family formation. One final point, the procreation challenges require a multi-pronged approach because the considerations are varied and often emotive. Yet, it would appear that the Government committee charged with this heavy responsibility is under-represented by women. How would the many men know what women really want? With all due respect to the Minister and his committee, would we end up with stereotyped solutions that leave us scratching our heads, again? I propose that the Deputy Prime Minister review the composition of this committee and enlist the help of many more women, including the women MPs in this House, who will be more than willing to help address a national challenge. On that note Sir, I thank the DPM in anticipation of a holistic approach to addressing the procreation challenges.”
“Secondly, provide the necessary support systems: (a) Allow for longer maternity leave of up to six months on a voluntary basis, with Government picking up the tab beyond the existing, mandatory eight weeks (and not two months, if I may respectfully correct the Deputy Prime Minister). Every extra week is precious to a working mother who is on maternity leave. The Government may want to pay in full up to the end of the fourth month and support at half-pay for the remaining two months. (b) Facilitate the setting up of more affordable infant care services through subsidies. (c) Allow for a declining maid levy so that employers can retain good help over a longer period of time without having to bear higher employment costs. (d) Extend tax benefits to husbands so that women are not compelled to return to work just to 'enjoy' the benefit. (e) Ensure a minimum level of ante- and post-natal care, as well as of pediatric care so that childbearing and rearing can have a pleasant start. (f) Provide support for young couples who may need help to conceive. The third initiative revolves around Government setting an example. Being the largest employer, the Government should take the lead by walking-the-talk and implement family-friendly policies, such as longer maternity leave, introduction of paternity leave, in the hope that the private sector may do likewise eventually; provision of childcare facilities and developing more flexible work arrangements across more Ministries. These should include working from home and job-sharing, especially to facilitate the re-entry of mothers into the public sector.”
“Women do not set out not wanting to get married or to stay childless after having gotten married. Neither are women so career-minded that childbearing takes a permanent back seat. Many simply want to be responsible and good mothers. But they have to make real trade-offs, as they would like to remain economically engaged as well. So, if there are too many hindrances and very little moral support, not having a child becomes the default option. Thirdly, do not prescribe what is ideal. A pro-family message must necessarily be pro-children, regardless of the number of children. It used to be "Stop at 2" and then "Have 3 or more, if you can afford it". The decision on the number of children is a rather personal one and many couples are increasingly uncomfortable with the Government's prescriptive approach. Until recently, couples with three or more children unwittingly get stigmatised as they struggle to get leave following childbirth or have to explain to their own child why there is no Edusave balance. Even worse still are multiple births, where entitlements get reined in for subsequent children. If ever there was a reason to be liberal in interpretation, then surely celebrating multiple births amidst a declining replacement rate must be one. Instead, I would like to recommend that the Government undertake three broad initiatives: Firstly, change mindsets. Launch extensive public education on a long-term basis to highlight the value of children to a marriage, to glamourise motherhood; mothers should not be viewed as economic nuisances, just as men are not viewed unfavourably for their reservist obligations, and to emphasise shared responsibility between husbands and wives in childbearing and child rearing.”
“Towards this end, can the Deputy Prime Minister reassure the House that the burden of the budget cuts would not manifest itself as either sub-standard service or mindless efficiency that targets the more dispensable social programmes or an indirect outsourcing of not services but costs to the private sector? Will the Deputy Prime Minister also assure the House that each Ministry will not take the easy way out but will scrutinise its "must-have" programmes, as I believe the 2-plus-2% cut must really presume to be permanent. Will he also ensure that Ministries adopt a proactive attitude towards structural reforms in the way they do their business and towards cutting waste instead of leaving the Cut Waste Panel to handle suggestions or complaints in a reactive fashion? Ultimately, the budget cuts should be achieved without a deterioration in performance and service standards. Next, on procreation initiatives. Sir, before I dwell on the various aspects and make specific recommendations, I would like to place strong emphasis on the need for Government to be consistent in all its messaging and signalling. I recommend that the Government bear the following in mind when mapping the overall strategy: Firstly, do not just blame the women. The procreation challenge is not a women's issue or problem; the notion of shared responsibility for childbearing between the husband and wife must prevail. It is not helpful that many of the current liabilities revolve around women being expected to carry the burden, literally, economically and socially. By the same token, I look forward to active participation in this debate by my male parliamentary colleagues. Secondly, do not blame their career aspirations.”
“Secondly, I am also told that the amount of trimming effort needed varies directly with frequency. So, effectively, contractors will be squeezed if they have to make do with the old rates. The contracts handed out by most Government departments are usually so material that suppliers cannot afford to ignore them. Their bargaining position is poor. Hence, what is likely to happen is, effectively, the passing on of the cuts to the private sector. I would like to humbly suggest that a lot of cost savings could perhaps be realised through better coordination between Government departments. Let me recount a live example within my constituency. As part of a private estate upgrading programme (EUP), which my residents are extremely grateful for, the old drains were replaced and covered. A walkway is then built over the covered drains. In the very old area of Serangoon Gardens, some roads are extremely narrow. So, for years, residents have parked on grass verges. As such, after the drainage improvements, these narrower roads cannot have regular kerbs. My grassroots leaders had conveyed to the relevant departments their experience that regular kerbs would not work for other similar stretches for the rest of the estate. They were told that improvement works were not imminent. So, it came as a real surprise when not only were improvement works carried out on these stretches, but regular kerbs were also constructed. The residents, of course, cried foul as they could no longer park outside their homes on these stretches and, regrettably, the kerbs would now have to go! If there were better coordination, much time and money would not have been wasted.”
“If we start resting on our laurels and fail to address these issues I highlighted, the next time it may be too late for us. So I hope that the Deputy Prime Minister and Finance Minister would seriously look at the recommendations that I have made, particularly in the area of cost reduction. Sir, with that, I support the motion. Mrs Lim Hwee Hua (Marine Parade): Sir, let me begin by expressing my support for the strategic initiatives outlined by the Deputy Prime Minister in the Budget Statement. I would like to devote my speech to what I see as the challenges of translating two of these initiatives into concrete results, the first of which is the ramifications of the budget cut, virtually Government-wide, and secondly, the key considerations when drawing up the procreation initiatives. Firstly, the austerity drive. Sir, the move to cut the budgets of Government Ministries by 2% for each of the next two years is commendable and reflects a very responsive approach to changing circumstances. As elaborated by my colleague, Mr Leong, however, the key question is really how the Ministries would achieve these cuts. Would it arise from a careful review of recurrent practices, or of new projects and not from the scrapping of social programmes, or the passing on of its own expenditure to the private sector? Allow me, Sir, to illustrate with an anecdotal possibility. Supposing trees in the divider of an expressway are trimmed once every two weeks, to save cost, the tender is now modified for a trim once every four weeks, presumably at the same absolute charges. There are now two likely consequences. Firstly, I am told that trees do not stop growing from the third week of trimming. So overgrown trees can create unnecessary road hazards.”
“Sir, in conclusion, having said the above, I would nonetheless thank the Deputy Prime Minister and Minister for Finance for giving his support to the entrepreneurship drive in Singapore by announcing the few initiatives in this year's Budget. What is not so obvious is that the Government has been very receptive to a series of recommendations made by private sector groups, and I have been involved in some of them. We have recommended a number of initiatives which we hope would make Singapore a very vibrant place for entrepreneurship and for financing entrepreneurs and start-ups, and also for financing of local companies. The Government has agreed to many of the recommendations. And now, the action crucible for financing, which is subgrouped under ACE that I am heading, is working to implement as many of the recommendations as possible and I am glad to note that the Government is very receptive and I hope it continues to do so, because I believe if it can implement these things we will really have a change of landscape in Singapore. Sir, I had a wish-list which I presented during the 2002 Budget debate. I still stand by those items but I do not want to spend time talking about them down here. Most of those items were related to cost reductions and I hope that the Government could seriously get back on track and walk the talk in really addressing the cost issues in Singapore so that we could attract and retain long-term companies and investors into Singapore, thereby creating more jobs for our fellow Singaporeans. The economy is recovering and optimism is in the air, but we all need to realise that while we would see good times again, sooner or later, we would again face tough times as the economic cycles shorten.”
“Similarly, I feel that the Government continues to have a dominant role in financing companies. Currently, I feel that there is too much money in the hands of too few people, particularly held by the Government funds and Government economic agencies. We all know that money talks and, therefore, by giving money to a few people to manage, we created a lopsided outcome as to how and where the money gets invested. This is particularly so because of the type of people who are appointed to the agencies managing the money. They mainly come from the same background, being Government-appointed. I suggest that the Government change its approach by spreading the money around and by giving it to more agencies, both Government agencies as well as non-Government agencies. I have seen a number of Government agencies which were so limited in funds that they are not able to do what they really want to do effectively, whilst some other agencies have lots of money and, therefore, they continue to support one cross-section of industry that we should be supporting. We could learn from the USA model where the Government deploys some of its funds to organisations like the Small Business Investment Corporations (SBICs), or we could deploy some of our funds to be managed by some successful Singapore businessmen for investment in private companies, whether start-ups or established companies. I am sure that the overall return will be more interesting than what the Government has been able to derive from its current investment arms. This would then go a long way in resolving the financing problems of our local entreprenuers and companies.”
“While many of them are already listed companies, we continue to see a strong influence of the Government, including giving helping hands to some of these companies, hence creating an unlevel playing field in the perception of others and, I think, this is to the detriment of the private sector. Of course, it took the USA, through its FTA, to pressure the Government to back off from playing a dominant role in the Government-owned companies, I feel that the Government could have reacted earlier, but I guess we have to thank the US FTA for this, that the level playing field may be created very soon. Sir, two examples which stand as cases where the Government is being directly involved in the affairs of the Government-owned companies are SIA and PSA. In both cases, we see very senior Ministers getting directly involved, despite the fact that both of them supposedly have strong management teams and boards running them. This is not a good signal and is not in line with what the Government has been saying about its role in managing its Government-owned companies through its investment arms. Another example I can remember is the proposed merger of our transport companies. In that case, again, the Government, through a Minister, jumped the gun to go public with his suggestion that the companies should merge into one entity. Both companies are listed and it should have been their own decision. Of course, the Government could advise these companies, but this could have been done, not publicly, I believe. They could have a private discussion, rather than to come out in the open. Sir, my point is that the signals that we are giving are not good, not just to private companies in Singapore but also to other countries, about the dominant role that the Government is playing.”
“The one thing related to the issue of cost of Government is the issue of budget deficit which we have been talking about. First of all, the budget deficits of the past years were really a result of specific transfers which the Government made for various reasons. And, some of them were very good reasons. At the operating level, we have not really seen a budget deficit. The real deficit was really in the year 2003, where, before transfers, the deficit was about $1.16 billion. In fact, at the operating level in 2004, we would still not see a deficit budget. In fact, there is a surplus of $0.16 billion. In any case, my real point is that there are two ways to balance a budget. The first, of course, is to bring in more revenue, which is in a way not controllable. While we have fixed taxes, companies may not make profits, individuals may not make income to pay taxes. But, the second way is to reduce costs. So, if the Government can really work harder in reducing cost, I am sure we will have a surplus budget. I think this again needs to be addressed quite seriously. Sir, the third area is one of the Government's interference and dominant role in GLCs and TLCs. I feel that the Government should shed its "I know best" attitude when it comes to the management of these companies. Many a time, many Singaporeans have given feedback to the Government, the latest being the recommendations by the ERC, where the recommendations are for the Government not to interfere and be involved in business. While there was seemingly good reception by the Government, the outcome does not show it has, and will let go.”
“I have been involved in a number of companies and have been looking at what was happening around in the private sector. In the real world, particularly in the private sector, they have restructured themselves and many companies have to do drastic cost reduction just to survive. We have seen many companies in the private sector reducing cost by as much as 20-30% over the last two years. In contrast, we are seeing the cost of Government continuing to go up and, therefore, there is little wonder that we continue to see business cost not coming down. While we did well in wage reductions, who contributed to this? They were the people of Singapore. The companies have played their part too, and I feel it is now time for the Government to play its part seriously. I think there is an urgent need for the Government to put in place cost reduction targets for the sake of boosting our economy. Unless clear targets are set, like what the Senior Minister suggested, as a 20% cost reduction target for Singapore Airlines, that was what he said, I do not think any serious cost reduction would take place in the Government. The Cut Waste Panel would have limited success because it just looks at wastes. What the Government really needs to look at are real structural changes, which may not be obvious as wastes, but which can be structural changes and which can be re-engineered to achieve big improvements. In the area of cost, the Government needs to play its part too. It should learn how the private sector got more productive and more efficient. The companies which restructured their costs survive and they became stronger. We need, therefore, the Government to be also productive and efficient and to become stronger.”
“While I was encouraged by the Finance Minister's comments that the Cut Waste Panel has made progress, and about the efforts to limit the budgets of the various Ministries, I am not convinced enough has been done to reduce the cost of running the Government. This was the hunch that I had because I have yet to see the cost coming down in these areas. I went back to the past five years of the Budget books and I looked at the details. To my surprise, the data shows that the cost of running the Government had continuously increased since 1999. If we look at only the running cost items, not counting the development expenditures, which are capital and long-term investments in nature, the line items called "running cost" had continued to rise from $13.59 billion in 1999 to $17.05 billion in 2002. Then it is estimated to be at $17.35 billion in 2003 and planned to be $18.05 billion in 2004. Now, if we take out the military spending, which is strategic in nature, then the numbers under the operating expenditure section of the Budget book looks like this: all non-military expenditure in 1999 was $1.89 billion, and this continues to go up, with the $2.38 billion expected in 2004. And, if I look at the manpower cost part of the Budget book, in 1999 the cost was $2.87 billion and this continues to go up to a planned $3.47 billion in 2004. In fact, if my analysis is not wrong, then the 2004 cost of running the Government would be the highest in our recent history. These numbers surprised me, as I said, and therefore I think that we really need to get out of this fantasy world, because the whole world has changed around us in the last five years, particularly after the Asian financial crisis.”
“I think we should be benchmarking against the prices of properties in our competitor countries. On utilities, while the energy market is being relaxed and it is coming down, I think it is not the most competitive in the area of power supply and also in other utilities. So we need to address these as we move forward. There are many other costs like hidden taxes - as I have mentioned before, the many taxes that we have, higher port and aviation charges - in fact, have seen us losing our business from Singapore to our neighbouring ports because of this issue. The bottom-line is that the Government has yet to do a good job in addressing the cost competitiveness issues other than the good job it has done in the area of wage reduction, which is, of course, at the expense of harder times for Singaporeans if the rest of the cost issues are not addressed. The second area which is related to cost is one of cost of Government. This is an area that surprised me that we seem to be operating in a "Fantasyland" where it continues to operate as if the economy is growing at a 10% rate. We have seen, since 1997, that this can no longer remain the case. Why do I say "fantasy"? While I mentioned the part on the cost of business problem and in the area of high charges and rates which the Government charges to businesses, I understand the principle of cost recovery, which is good, since this principle assumes that the Government would not make a profit when charging the people and the companies, and with the hope to keep such costs low. But, if the cost of providing these services is high in the first place, then there is little hope for us in reducing costs to the users. In this respect, I feel that the Government has not done enough to reduce its own costs.”
“I have brought this up many times before about the Government's approach of temporary rebates and subsidies, which will result in the cost going up again once the Government decides that times are good again. We, therefore, seriously need to look at long-term cost reduction and assurances from the Government that costs will go down or will remain low. I would like to remind the Finance Minister about the seriousness of this issue and it was also raised by none other than the Senior Minister, Mr Lee Kuan Yew, who at one of his speeches published in the Business Times on 31st January 2004, headlined "Cost too high in Singapore". The report quoted the Senior Minister as saying, "While the economy may be bouncing back, Singapore still has a long-term problem of high cost structure to deal with." In his speech, he said, "Wages, rents, fees, taxes, have become too high compared to not only China and India, but also to our immediate neighbours. Singapore requires basic changes in cost structures and, unless this happens, many industries here will relocate to China and elsewhere." So, again, I ask the Government not to relax too soon at the first sign of the economy recovering. We need to seriously address these issues and to take this opportunity of good times to go about seriously addressing and reducing costs further. And what are the areas that we should look for? These have been brought up many times before and I would repeat them here. First of all, permanent rental reductions, as well as lowering industrial and commercial property prices, to be benchmarked not against the commercial value of, say, Raffles City property, as what we have heard Mr Ngiam Tong Dow recently talked about the benchmarking approach that we have taken.”
“As I mentioned, this was really missing this year. We have been hearing statements from the Government that the cost reduction efforts and the cost issues continue to plague the Singapore economy. The only one thing that has been addressed in this respect is the area of wage restructuring which is important to make Singapore companies competitive. But the question is what is the root cause of these high wages in the first place? Many of us have raised this many times, ie, the cost of living continues to be high, that every Singaporean here needs to have wages high enough to support even their basic lifestyle. What is more, Singaporeans at this stage should expect better than the basic lifestyle, but the costs are just too high. So, if we want to restructure wages, we must also restructure the cost of living in Singapore. For companies to remain competitive, there needs to be a restructuring of cost for businesses too. So, may I ask the Finance Minister: what has happened to the cost reduction effort? I was afraid that at the first sign of a recovering economy the Government will forget about the need to do more about restructuring and reducing costs. While there is a realisation by the Government, and my impression is that we have run out of ideas about what needs to be done, I think this could be quite detrimental to the economy. I know of my local companies which still suffer from cost competitiveness as compared to their competitors around the world, particularly from around the region, and they risk going out of business. Also, there are still a number of multinationals based here in Singapore who will not slow down their plans to relocate out of Singapore as they still do not see long-term cost reduction actions.”
“I would like to state here that I disagree with this observation as I have, over the years, seen significant improvements put in place as a result of the suggestions made by many of us in this House and by other advocates of changes from the private sector and from organisations like the Action Committee for Entrepreneurs (ACE). I am very happy to see the three initiatives supporting entrepreneurship I mentioned. These have been the recommendations that have been made by many of us and they are finally being implemented. Of course, they were not implemented the day we asked for them but, over time, they happen. I would like to say, like any entrepreneur, never give up. We will continuously bring up those issues. We will be spontaneous, as Mr Chiam wants us to be, and while we are obedient, we will still come up with suggestions for changes. This is one thing that really needs to happen, that is, a Government to listen a lot more because, as the results have shown, over time, what many of us said has turned out to be something that should have been done and, if the Government could implement this faster, we would have a more interesting economic development ahead of us. Sir, the one area that the Finance Minister glaringly missed out this year was in the area of helping local companies, not start-ups, but those SMEs who are already in business here. Instead of helping these companies, in fact, we added costs, with the increase in the ceiling for the SDF and the increase in the skilled workers' levy. The private sector, particularly the SMEs, felt left out this time - that we did not address cost reduction issues. These are the few things that I would like to bring up this year. First of all, the area of cost reduction and business costs.”
“Sir, thank you for allowing me to join in the debate. Sir, I support the motion. First of all, I would like to say that I had very low expectations of the types of initiatives the Finance Minister would be announcing in this Budget, given that the economy is at the recovery stage. Against these lower expectations, I am, in fact, pleased with the range of initiatives the Finance Minister announced this year, particularly in the area of entrepreneurship support. I now feel very comfortable that the Government is well on its way to making entrepreneurship an important agenda of our economic development. Of course, the first signal of its seriousness was the appointment of the Minister in charge of Entrepreneurship, Mr Raymond Lim, and with its support of the many initiatives recommended to promote entrepreneurship, it gives many of us, who have been advocates of an entrepreneurial economy, confidence that we finally have the 'ears' of the Government, which, up to recently, looked like a half-hearted support. Some of the initiatives which the Finance Minister announced, like the Entrepreneurship Investment Incentive, the tax changes to support asset securitisation and the tax benefits for start-ups were all moves in the right direction. Before I go on, Sir, I would like to say that recently, I was asked by a journalist as to what I will be bringing up during the Budget debate. I mentioned to him the issues that I would be raising and he told me that it was actually a waste of time and it was pointless, as the Government did not seem to listen.”
“Sir, I would like to ask the Minister whether the Ministry will be opening the position of the third operator to foreign players or is there a plan to set up another Government-linked company as we did in the past.”
“Examples of medical coverage requirements include the requirement for a medical officer to be physically present at the medical centre when physical proficiency and obstacle tests are carried out where soldiers are expected to exert maximally. Another example is the requirement for an automated oxygen resuscitator for water-based activities when there is possibility of drowning. The training safety regulations were extensively reviewed in 1999 and further updated in January this year with inputs from all the Army formations. In the light of the recent incidents, the Army would conduct a further thorough review of medical coverage requirements for all moderate and high-risk activities. The plan is to widen the requirements for some of the equipment and look at perhaps new kinds of equipment that might be provided, for example, portable defibrillators. Sir, the investigations of these three cases show that the medical attention and coverage on the ground - what the medics did to try to help the servicemen in distress - were correct and appropriate. In the case of Sergeant Hu, the medic did all he could with the equipment that he had. But because training was carried out in an unauthorised way, if he had other kinds of equipment, he might have done better. But that was not planned for because that type of training would not have called for that kind of equipment. The medics do well, they get realistic training. In the three cases, so far as we know, the inquiries have not shown up any lapses in the medical treatment given by the medics on the spot.”
“Sir, it is unfortunate that we lost three servicemen. But having gone through National Service myself, we know that accidents do happen and, in this case, there were two soldiers who collapsed due to physical activity and one due to negligence. The question I have for the Minister is: in training, accidents do happen, but in the cases that the Minister mentioned, did we react fast enough and appropriately? Did they get proper medical attention and is MINDEF in all its training procedures prepared to handle such unforeseen circumstances? RAdm Teo Chee Hean: Sir, medical cover requirements for training activities are one of the most important things which have to be provided for and are one of the things on the checklist which every conducting officer must plan for. And the requirements are clearly prescribed in the Training Safety Regulations. The Training Safety Regulations outline when a medical officer, eg, a doctor, is required to be present, and when a medic is adequate. It depends on the type of activity that is being conducted. Ambulance, safety vehicle and what particular types of medical equipment required are also stipulated. The requirements are based on the nature of the activity, in-camp or out-of-camp, and the number of soldiers involved. For example, a doctor would be present for all battalion size and above training. Examples of different categories of exercises which require different kinds of medical preparations are live firing, field training, water-based training, heli-borne training, strenuous physical activities and sports.”
“"We will drown," he lamented without much ado, and with a last despairing cry, he flung up his legs and said, "Goodbye." Quote the other frog with a steadfast grin: "I cannot get out but I would not give in. I will just swim around till my strength is spent, then I will die the more content." Bravely, he swam to work his scheme, and his struggles began to churn the cream. The more he swam, his legs a flutter, the more the cream turned into solid butter. On top of the butter at last he stopped, and out of the bowl he gaily hopped. The going will be tough and it is difficult to predict how long we would have to keep swimming. But, Singaporeans must have the same indomitable spirit as the second frog. Our fortitude and strength in adversity will see us through these trying times. We will not drown like the first frog. Some may need help to swim. The Government will provide the life jackets, but Singaporeans must continue to churn the cream. Despite our competitive lifestyle, Singapore is still held up as a compassionate society. In Singapore, no one will go homeless, no one will be denied healthcare, and no child goes without an education. If we press on with the CPF changes and productivity improvements, we will soon hop out.”
“To his surprise, the factory is fully automated with the latest technology comparable even to those in the developed world, like the United States. The factory produces a small number of good jobs but have avoided employing a large number of production line workers, even though labour is cheap and in abundance in China. The factory owners did not merely resort to cheap labour but have set their sights much further, for much bigger and more sustainable growth. The jobs created by this factory will pay well and will continue to be around for much longer than traditional labour intensive production lines. The productivity level is very high and the consistency of high quality DVDs assured through the application of modern technology. And this is happening even in China! We live in a harsh economic world made harsher through globalisation and as we speak, insurgents are drawing out plans to out-do the established players and unless companies in Singapore, including our leading companies, continue to innovate and up their productivity, more Singaporeans may lose their jobs. I call on employers to work with SPRING to improve the industry's productivity. And, if retrenchments are inevitable, the Government, as DPM Lee has assured, will re-double its efforts to help place retrenched workers in new jobs. Workers, on their part, must adjust their expectations and be prepared to help themselves. Some jobs will never return, so continuous lifelong learning is the only guarantee of continued employability. We have already heard a frog story from DPM Lee on Friday. I have another story about frogs which is adapted from a movie, "Catch me if you can". Two frogs fell into a deep cream bowl. One was an optimistic soul, but the other took the gloomy view.”
“SPRING also administers the LETAS (Local Enterprise Technical Assistance Scheme) and LEFS (Local Enterprise Finance Scheme) to help small and medium enterprises in Singapore improve their productivity. Since the programmes' inception in 1986 and 1976, respectively, SPRING has given out $481 million in LETAS grants and has helped local companies raise $8.6 billion of loans through LEFS. SPRING conducted a survey of Singapore SMEs recently on their views towards the announced changes in the CPF. An SME, Aceford (a vegetable oil manufacturer) indicated that they are prepared to channel the CPF savings back to employees. Many SMEs, like "The Lighting Centre", said that they were prepared to help their employees should they face financial difficulties as a result of the CPF changes. These companies see the need to continue to reward talent. They understood that successful companies pay attention to all stakeholders (shareholders, suppliers, managers, employees and the community at large) rather than narrowly focusing on short-term shareholder value. Many of the SMEs remarked that their staff should not be overly concerned with the CPF changes. In fact, they said that the impact of the CPF cut is minimal because they already have in place reward systems that are linked to performance. Thus, when the company performs well, contributing employees will end up with significantly higher income, despite the CPF cut. Such performance-linked reward systems are to be encouraged as they ensure that wage growth lags productivity growth. On the other hand, companies with seniority-based wages are at risk of becoming marginalised. A prominent Singapore businessman recently visited a DVD factory in China and recounted his observations. This factory produces 8% of the world's DVD output.”
“I can understand that Singaporeans will not take up such jobs as they do not pay enough even for meals and transport. Well, why not just pay the Singaporean more for the same job? If we do so, we will be paying more for exactly the same job content, which means that the productivity level has fallen. Someone has to pay for it; either in terms of higher prices by consumers or higher taxes by taxpayers. A better solution would be to redesign the jobs, possibly with the application of technology. If we can enlarge and value-add to the job, these jobs can then command higher wages and be attractive to Singaporeans. One good example is the cleaner's job at the upgraded Zion Riverside Food Centre. Our National Environment Agency (NEA) has redesigned these jobs. The cleaners there now draw between $1,000 and $1,400 a month (with overtime) which is much higher than the $800 that cleaners usually earn. These cleaners had been trained under the National Skills Recognition System. They wear smart uniforms, use specially designed trolleys and the plates and utensils are washed at a centralised location. We could also use dish washing machines to enhance the efficiency further. Although each stall now contributes $200 a month, instead of $150 a month, towards cleaning, the centre now serves about 500 customers a day compared to 150 customers previously. Stallholders appreciate the faster cleaning cycle and customers enjoy cleaner tables and plates. We believe that there is scope to redesign work in other domestic sectors, like food and beverage, retail, healthcare, domestic/commercial cleaning and construction. The Domestic Cluster Development Fund will be used to seek out such opportunities.”
“Firstly, companies can reduce input for a given output, which means consolidating to leverage on scale or improve operational performance. Secondly, companies can increase output with a given input; which is a less travelled path. This means selling higher-valued and more innovative goods or selling more goods to increase capacity utilisation. When manufacturing cost index is adjusted for productivity, Singapore companies fared rather well. Singapore compares very well with the competing economies. The World Competitiveness Yearbook 2003 puts Singapore (with index of 100) as more competitive than China (with a manufacturing cost index adjusted for productivity of 113), India (122) and Malaysia (156). However, Singapore still lags behind Thailand (which has an index of 70.4). Among the measures announced by DPM Lee, SPRING Singapore will administer the $45 million Domestic Cluster Development Fund. The primary objective of the fund is to raise the productivity of our domestic sector. The fund will provide assistance for the engaging of consultants for Business Process Re-engineering, training, the purchase of equipment and intellectual property rights costs. It will help innovation diffusion within cluster, thereby raising overall industry productivity. One of SPRING's current priorities is to see how we can create jobs for Singaporeans through work re-design, which Ms Braema Mathi talked about. As Minister Lim Boon Heng said, Singaporeans may need to take up some of the jobs currently performed by foreign workers. If we merely replace a foreign worker with a Singaporean, we are unlikely to succeed. The job content currently performed by the foreign worker is low and these jobs typically pay low wages.”
“Even if the productivity surplus were distributed to shareholders, such surplus will be invested in other sectors of the economy or end up as higher consumption. All these lead to higher employment overall. The economic development in the US bears this out. In the 1990s, productivity and total employment were both growing in tandem at high rates. For Singapore, productivity growth rates averaged 3.5% per annum throughout the 1990s. During this period, total employment increased from 1.54 million in 1990 to 2.09 million in 2000. Singapore companies have performed commendably in their productivity quest. Let me just cite two examples, one in the 70s and a more recent one. In 1975, SBS introduced computerisation of the ticketing system and did away with bus conductors. They went One-Man-Operation (OMO). Productivity doubled. You need only the driver. Then they went on to operate double-decked buses with twice the capacity but with the same one driver. Productivity doubled again. Trans-Island also operates the "bendy" - a stretched ultra-long bus with higher labour productivity. If not for their productivity efforts, the recent transport fare increases would be much heftier. The other example concerns our cinemas. In cinemas of the past, at least one usher was used for checking tickets at each entry point. All employees were single-tasked. One is either the cashier, or the usher, or the snack bar attendant. In new multiplex cinemas, the layout is designed for only one ticket checkpoint for all cinemas and it is located near the snack bar. So that the jobs of ticketing, ushering and snack bar tending can be combined into a single category. These changes have enabled Golden Village to save about 40% in labour cost. Productivity can be achieved in two basic ways.”
“In fact, our long-term objective should be to raise the real wage of Singaporeans and to keep the Singapore dollar strong. These are ultimately the drivers that would determine the quality of life in Singapore. But we cannot blindly push up wages unless it is supported by higher productivity relative to competing economies. Without which, Singapore cannot retain or attract enough investments to sustain our wage premium and to achieve full employment. Productivity improvement is the key to a nation's competitiveness. And it is a marathon without a finish line. Yet, we cannot let up. Some have suggested that we use our foreign reserves to prop up the economy and support our high living standard. But for how long? Our reserves are finite and can be depleted. The way I see it, productivity improvement is the only sustainable way for us to support a higher quality of life. In the face of recent retrenchments in Singapore, most notably SIA and PSA, many Singaporeans are understandably concerned about loss of jobs. There is widespread belief that productivity improvements and employment creation runs counter to each other. It is argued that higher productivity leads to job destruction. On the one hand, it is true that one of the direct effects of productivity improvements in an industry is that fewer workers are needed to produce the same amount of output. But this view is too simplistic. In reality, in a competitive environment, lower cost of production, as a result of higher productivity, will lead to lower prices for the products and will stimulate higher demand and therefore more products are sold. Soon, higher capacity is needed and more jobs are created.”