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 13 of 20.
“Sir, the Cost Competitiveness Committee, a few years ago, identified the development of SMEs as one of our key pillars to drive the Singapore economy. We, however, do not have concrete follow-up plans on how this can be done. The SME 21 plan has many excellent actions and initiatives, but what is lacking is a clear vision and direction, and there is no clear driver identified. We need a focused agency or statutory board, and we can call that Enterprise Singapore, if you like, which has clear goals, responsibility and accountability, just as EDB has clear goals and measures to track progress of foreign direct investments. Such an agency should be given similar goals. I suggest that we should carve out parts of SPRING Singapore, NSTB or A* STAR, EDB, IE Singapore and form a dedicated one-stop support centre to help identify, nurture and grow local companies. Currently, it is not clear which agency has the responsibility of supporting this important pillar of our economy. Over the years, there has been an explosion of a number of incentive schemes and grants administered by too many Government agencies. Application procedures are too complex for the smaller companies, while the bigger companies have no problem assessing these things. We should streamline and cut down on the number of schemes and identify just one or two Government agencies who would administer the scheme, so that the smaller companies will have no difficulty in applying for them. Another thing is that it is also about time that we redefined what we really mean by "SMEs". The current definition is just too broad and it is not good in helping identifying potential winners. I suggest we categorise companies into those with or without potential growth, and not just by their size.”
“Sir, this cut is on competition law, and I believe Mr Raymond Lim's EISC Committee, as part of the ERC, is looking at this too, and I would like to have the Minister's view on this. I feel that it is about time we seriously considered the implementation of laws which can address the issues of unfair competition, much like what exist in many developed countries. The law should help ensure a level playing field between large and small companies, so as not to stifle entrepreneurship. The competition law should be about anti-competitive business practices, such as abuse of market dominance and collusion, and not about anti-consumer business practices, which are being taken care of by CASE and also what Mr Yeo Guat Kwang is suggesting. Many examples of competition law exist today. So we should pick up the best practices from around the world and create our own laws which can work in the Singapore environment. In the context of what many Members have talked about, in terms of GLC practices, a competition law will address many of these things.”
“Sir, utility taxes and utility rates are an issue, especially for companies which consume a lot of energy, such as petrochemical companies, wafer fabs and also semi-conductor manufacturing companies. We need to address this too. I would like to suggest that JTC put in place a scheme to purchase factories from businesses and then lease back these spaces that they have acquired back to companies to conduct their businesses. Currently, too much of resources are tied up by businesses in owning properties. This scheme will do a few things. First of all, it will minimise the company's assets which are not productive; it will release cash for growing businesses without indebtedness for the company; and JTC should be able to lower its overall charges by averaging their cost of property, thus helping new and existing tenants. JTC can continue to build upon its pool of properties, which is their core business anyway, in the situation that they acquire these spaces from companies.”
“Sir, many Members have raised the issue of the cost of doing business in Singapore, and I would like to talk about this in the context of the competitiveness of the manufacturing sector. We really have to look into how we can lower costs to keep manufacturing companies invested in Singapore. While the tax measures are important, we need to address the many other cost issues, including the many hidden taxes which I have talked about. With our current approach of levying such taxes at source, companies are paying too much of the tax payable upfront, resulting in much lower margins, compared to equivalent companies in other countries. We need to rationalise and balance between paying tax upfront and that paid at the end by way of corporate income taxes. We also need to creatively find solutions which will eliminate the view that Singapore can no longer be competitive as a manufacturing centre. This could become a psychological barrier for potential investors. Many a time, I have been asked this question by many of my customers from the USA and Europe. Their perception is that Singapore can no longer compete in certain areas, including in the area of semi-conductor manufacturing. Sir, specifically for the cost of industrial land, which is an important issue, we need to match the cost of such land in the US and Taiwan. The differential land pricing for industrial land approach could help, which means that we cannot necessarily price a land at market rate. Whilst land price in the context of the cost of maintaining and running a company in terms of its operating costs may not be significant, it is a significant upfront cost which companies look at when they decide whether to locate their factory here or in other parts of the world.”
“Some examples of such associations from the US are, first of all, the Fabless Semiconductor Association (FSA); second, SEMATECH, the consortium of big and small semiconductor companies. They have had tremendous success in driving the industries in the US, and I think we should try this approach.”
“Sir, it has been many years since we defined our strategy of developing a second wing for the Singapore economy. Many of our companies, big and small, GLCs and private sector enterprises have tried to globalise, but with limited success. There are many reasons for our limited success, but I will not address them here. I would like to suggest a simple strategy which will greatly improve the chances of success for many of our companies as they try to globalise. We need to help to create a culture of partnership, a departure from our past practice of distrust between GLCs, big companies and smaller companies. The fact is that each company, whether big or small, has its own areas of competencies, and also no one company has all the strengths in all the areas of an industry. It is therefore only logical that we should encourage all the relevant companies to pool their competencies together to form a strong alliance when going overseas, much like what the Japanese and the French companies have been doing for so many years. This could be a very important role for many of our Government economic agencies who could play the role of matchmakers and facilitators. Sir, the clustering approach will address the size and scale issues that Mr Wee Siew Kim talked about just now. Sir, in the long term, instead of Government agencies, we need the private sector to lead initiatives like building consortiums and cluster associations. Currently, the EDB, NSTB and other agencies call the shots for many of our industrial groupings and consortiums. I suggest we reverse the whole thing and create a few consortiums asking private sector champions to lead them, perhaps with some secretariat support from the Government agencies initially until this can take off.”
“Sir, I would like to propose three areas to promote enterprise. First of all, bankruptcy laws. I would like to suggest that the Ministry look at trying to differentiate between bankruptcies caused by business failures, especially start-ups, versus bankruptcies caused by fraudulent or criminal cases. First, people who fail in attempting to start companies and attempting to be entrepreneurs. If we take them out of the system, it will be a big loss, because they are the people who can come back and do a lot more in trying to start up more successful companies later on. Second, on self-destruct laws, I support the call made by Mr Raymond Lim to put in place laws which self-destruct or have sunset clauses in them, for obvious reasons that they do not get outdated and do not become a hindrance over time, especially for businesses. Third, on the legal system for the new economy, while we are advancing in technology and in many other areas, I do not think our legal system is able to keep up, especially in the area of intellectual property, cross-border laws, etc. I suggest that we try to benchmark other countries and try to learn the things that have been done by others and implement such things as quickly as possible into Singapore. But, until we can do that, there will be issues which we still cannot resolve, and I would like to suggest that we implement a system of visiting judges, where we invite judges from countries with prior experience in the areas which we need and do not have right now. We can invite such judges from time to time to arbitrate on issues and resolve issues, and this will give confidence for investors to actually do more complex things and technology type of activities in Singapore.”
“Next, Temasek, as the shareholder, should implement stricter corporate governance requirements for GLCs that it owns. Practices like the recent loan given by one of Keppel's subsidiaries to major shareholders do not look good, and indicate inadequate controls from the Government, as a shareholder, through Temasek. Temasek should insist on strict financial goals for all GLCs and have a transparent system by sharing information with the public to erase the perception that GLCs have an unfair advantage and are governed by lower corporate standards. The Minister mentioned yesterday that the GLCs, in fact, are being operated very professionally and, therefore, there is no reason why we cannot share this information with everyone. I believe there is a big gap in perception of what it really is and what some others think. Finally, many GLC captains originate from the civil service or from the Armed Forces. This is not a criticism, but a fact. Many of them are unlikely to take the entrepreneurial risks necessary to create excellent businesses simply because of their background and because of what they are used to. Some do make the cut and are capable of performing even better than the leaders from the private sector, but these are just a few who have made it. I urge Temasek to consider bringing in many more people from the private sector, either onto the boards of GLCs or hire people with true private sector experience to head the management teams of the GLCs.”
“My focus group concluded, quite unanimously, and this includes my personal view, that the GLCs can still play a useful role, but their roles need to be changed and this will require significant changes on the part of GLCs and local private companies, and everyone needs to shift from a mindset of distrust and competition to one of partnership and cooperation, particularly when the companies globalise. I would like to be constructive in my suggestions and this is in the spirit of creating excellence in all Singaporean companies, whether GLCs or private enterprises. I have a few suggestions. Firstly, the focus for GLCs from here on should be to globalise, because they have already harvested the domestic market quite extensively. I am not advocating that they abandon the local market, but they should get out of their comfort zones and look overseas. Each GLC should set a target of achieving a certain target of foreign revenue, and the Government, through Temasek should drive this. Sir, when companies are corporatised from the Government, no moratorium or privileges should be given, and many Members talked about some examples and PWD is one of them. For the corporatised entity's own good and for the sake of promoting the spirit of private enterprise, they should compete on fair market practices. The Government should also not allow corporatised entities to carry the name of the "parent" statutory board, so that they do not get undue advantage of the name, and there are many examples of this happening. PWD is one. PSB Corporation is the other. In fact, in the case of PSB, the parent had to change its name to SPRING, and PSB Corporation maintains its name for commercial purposes, I guess.”
“Finally, on the LEFS scheme, while we have achieved limited success, it has not effectively reached out to many companies, especially those in the early stage of development. I would like to suggest that the LEFS scheme be expanded to cover the financing gap between LEFS and VC financing. In this respect, we should allow VCs or angel investors to be included under the LEFS scheme via a hybrid system where the VCs and the investors provide cash in return for convertible loans or preferred shares. So long as the instrument remains as a loan, the investors enjoy 80% guarantee under the LEFS scheme, and they too should be allowed to draw upon the LEFS funds, as the banks currently enjoy. In this way, it will greatly open up many more avenues for financing, and it will allow the VCs and angel investors to take greater risks, because the risk is being shared, as we are doing currently with the banks. Sir, my last cut is on Government-linked companies. I was recently asked to chair a focus group to look at the Government's role in business, as part of Mr Raymond Lim's Committee on Entrepreneurship and Internationalisation. I invited key people from the private sector, academics, journalists and also from GLCs to be part of my committee. I would like to say - and I have said it many times before - that GLCs have played a useful role as we developed our industrial economy, and we have created some world-class companies like SIA, PSA and a few more.”
“These waivers of tax deduction should only be applicable when there is no personal guarantee required by banks, to encourage the banks to move away from their conservative approach currently practised. I also would like to urge the Minister to accelerate the full liberalisation of the banking sector, so that more foreign banks can have full privileges compared to local banks. This will open up many more channels for local companies and individuals to raise funds. In this respect, can we try to attract the likes of Silicon Valley Bank and Softbank into Singapore? We should also liberalise our financial sector to allow our local banks to specialise in cash flow financing, as I said earlier, and they should set up their bases in Singapore, and some of them do this. Home-grown companies, when globalising, should get the support from their home bases. If their own home base financial institutions are not helping, they have very little hope of help from banks overseas. We should look at the Hong Kong's model of the SMELoan, which is a small bank and it does not take deposits but depends on equity investments. It has had a record of lower default rate than banks, and the model seems to be working for Hong Kong. We should try to duplicate it here. Next, I have mentioned this before, and that is to make it easier for companies to raise funds from public markets, and I am suggesting that we set up an over the counter or "bulletin board" concept for companies of risky nature to raise funds from the public. SGX should be compelled to take the responsibility to do this, and listing requirements should be simple and not so stringent and costs need to be low enough for companies to benefit. This could be an electronic exchange which is easily accessible to everyone around the world.”
“Actually, test bedding is already happening, and I am suggesting it be expanded so that everyone knows about it. Sir, the next cut I have is on financing and risk capital for Singapore-based companies. There are three elements that are needed to transform Singapore from a corporate-based economy to an entrepreneurial-based economy. First, we need the entrepreneurs or talent; second, we need the regulatory environment and infrastructure which is conducive; and, third, we need a well-developed financing environment. Currently, we have weaknesses in all three areas. For the purpose of this cut, I would like to suggest a number of possible schemes which may help plug the gap in the financing environment. Sir, I would like to suggest that Temasek should proactively provide risk capital financing to local enterprises, in addition to financing Government-linked companies. Temasek should also consider partnering local companies to make overseas investments in technology and in new competencies which may not exist in Singapore. So we should be willing to move out of Singapore. Larger companies, especially GLCs, should be allowed to tax deduct when they use part of their profits to invest in start-ups. This will greatly increase the availability of risk capital. Obviously, each company, including the GLC, should ensure that their shareholders' interests are not compromised when they do that. Thirdly, we should incentivise and compel banks to move from the current collateral-based financing towards cash flow and IP-based financing, by giving banks a 5-year tax waiver or double tax deduction when they lend money based on this new method.”
“Thirdly, on the issue of Government procurement procedures, I talked about giving opportunities to small and medium enterprises. When I suggested that, I really did not mean that they should be given the tenders, even if they bid higher prices than the lowest tender. There are many other procedures, rules and regulations that govern the tendering process, including track records. I am suggesting that the Government look at the rest of the things and still maintain the principle of lowest tenderer when awarding contracts. And in doing so, at least, SMEs and newer companies have an opportunity to participate in the process. Fourthly, Government can also play a developmental role by allowing companies to test bed their products. The fact that Nokia transformed from a shoe factory to the world's number one telecommunications player was because in the early days, the defence ministry in Finland allowed Nokia to test out their technologies and products. In the USA, big companies and the government too play a developmental role by helping start-ups, particularly in the technology area. The Government should therefore be prepared to allow a little higher cost and a little less efficiency as a result of allowing test bedding. In the last 3-4 years, this phenomenon has also resulted in excellent results in South Korea, where many world-class standards are evolving in the wireless technology area, again as a result of test bedding and allowing many entrepreneurs to try out their products. I suggest that the Enterprise Challenge, which is a scheme administered by the civil service, be greatly expanded to encourage test bedding, and civil servants should be given merit points for facilitating this in Government.”
“Sir, I will take them together. In my speech during the Budget debate, I talked about how the direct involvement of the Government has had a profound impact on the economy. With that speech as a backdrop, I have a few suggestions for the Minister relating to how the Government and its agencies should reposition themselves. And some of these suggestions may give the Minister an idea on how we can get close to achieving a couple of the seven wish list items that I mentioned in my speech. First of all, Government regulators and statutory boards should absolutely stay away from business. They should have very specific roles as regulators and should have very little role in influencing and facilitating the creation and growth of businesses. Currently, our regulators have too wide a responsibility, and they have a significant influence on the development of enterprises. Any existing companies currently owned by statutory boards should be immediately spun off, and they should not be allowed to form new companies. Secondly, I talked about Government being lean, and it should endeavour to remain lean over a period of time through, first, by productivity improvements and, secondly, by oursourcing non-core activities as much as possible. Sir, I am not suggesting that we retrench civil servants, but to reorganise and outsource activities where the same people could be doing the same thing in a private organisation formed to perform the tasks which were previously done by the Government. One question I have for the Minister is the Government expenditure of 5.6% of GDP. How does this compare with other countries? And as the GDP grows, this percentage, I believe, should come down.”
“We can follow examples that exist in a few countries and Australia is one of them. Next, stock options for employees should be taxed upon realisation of profits and not when exercised. While the Minister has allowed taxation to be delayed to the time that the moratorium ends, this seems to be just half a step forward. In many cases, at the end of the period, employees do not necessarily sell their shares. The suggestion that I am making will encourage employees to hold on to their shares longer, thus helping companies build employee loyalty. Finally, Sir, on the GST system. While I support the system, can the Government improve the efficiency of the tax rebates that exporters are claiming. Currently, a lot of this is tied up and this affects the cashflow of companies.”
“Sir, I would like to suggest a few initiatives related to tax that, I believe, will make Singapore even more attractive to investors and individuals. Sir, first, on the group consolidation proposal that the Minister made, could I ask the Minister to revise the limit from 75% to 51%? It seems that this is targeted to a limited group of companies, especially property companies. Secondly, on property taxes, can I suggest that we devise a new concept of a variable property tax system for businesses where the Government charges a low fixed rate of 1-2%, and a variable rate based on percentage of profits that the companies make, subject to a maximum cap. The third idea is one of a reverse pioneer tax status for companies that internationalise and have positive tax impact by way of incentives they get when investing in foreign countries. We should allow such companies to bring their income back into Singapore without taxing them, and allow the parent companies in Singapore to tax deduct the capital investment they make in their overseas subsidiaries. 2.30 pm Fourthly, preferential tax treatment should be given to companies which invest in improving productivity of manufacturing companies, so that they continue to have a viable presence here in Singapore. This is similar to certain incentives that we are giving to companies embarking on specific projects like environmental and water conservation projects. Fifthly, the concept of negative gearing for taxes imposed on individuals on income derived from rentals of properties. They should be able to write off expenses related to the maintenance of their rented properties against their income taxes and thus operate like businesses. In doing so, we can develop a sense of enterprise among our people.”
“Sir, I beg leave to withdraw my amendment. Amendment, by leave, withdrawn.”
“Okay. The smaller ethnic groups actually have problems raising funds. When we organise ourselves along the suggestion I am making, it will help them to lessen the problem. The second problem is that our SAP school children and Madrasah children do not have the opportunities to interact with children of other races. So I would like to suggest that schools implement a twinning concept where SAP schools and Madrasahs are twinned with secular schools so that, during academic time, the children can spend time in the various schools. But when they participate in CCA and ECA activities, the children from the SAP or Madrasah schools should do it jointly with the students from the twinned secular schools and, in this way, they will have an opportunity to interact almost on a daily basis. If they grow up doing this, they will get to understand each other even better. Finally, I fully support the implementation of the IRCC. I see it as an equaliser of races. It does not matter how big the size of the ethnic group is. Everyone should be equally represented in this group. And I hope that the Minister will consider funding this group sufficiently so that they can do a lot more than just being coordinating agencies.”
“We therefore need to do more to ensure that our people are really close to each other and go from beyond tolerance and understanding to fully accepting each other and adapting to each other's way of life. Each of us has to make personal changes. We cannot live in a cocoon and think that a particular race's problem is not our own personal problem because we are all living in the same neighbourhood and any problems in the neighbourhood will inevitably affect all of us. I would like to suggest three initiatives that will help us deepen racial ties. First of all, organising self-help groups along ethnic lines. I believe it is about time that we broke this into two components. The first component basically consists of administrative fund raising and coordination issues. This could make up of people from all ethnic races. The second component should be the component that actually reaches out to the various ethnic groups. Because that has been very effective, the ethnic group approach of reaching out to people has been the right thing to do. By organising the way we are organising right now ---”
“Some of these policies and practices causing the problems are: first, creating the ethnic based self-help groups where each feels that only their own kind will help them; second, high profile campaigns like the Speak Mandarin Campaigns which are all right on their own, but which were not very well explained in the early years leading to suspicions of the intent of such a campaign; third, school practices of segregating children by the language streams that they came from in the past. While this is less of a problem now, it was a problem before; fourth, the creation of SAP schools which again is all right for the intended purpose, but other races never fully understood the need for them; fifth, putting emphasis on mother tongue and using it as a means of grading and measuring children's abilities to move forward in education causing our children to focus a lot on their mother tongue and also emphasis on them interacting with each other so that they could practise the language. While policies are important, it is equally important that our people interact with each other in schools and in their daily lives to build up bonds. Today, we and especially our children do not have enough opportunities to interact with each other. Even when they go to our secular schools, they tend to largely congregate along racial lines. The long term trend can be detrimental and unless our race relations have sufficient depth and can withstand any stresses, we will have serious problems should any racial problems arise. We should not be complacent because the level of race issues and stresses we have seen is small and our laws could contain any potential problem. My opinion is that should we see any high levels of stresses, the seemingly good racial ties here may not necessarily remain good.”
“Sir, I beg to move, That the total sum to be allocated for Head U of the Main Estimates be reduced by $100. Sir, now, more than ever, the issue of racial harmony is something we have to spend a lot of time addressing. The events after September 11 triggered greater awareness of the type of problems racial and religious differences can cause. In Singapore, we saw signs of problems starting with the reactions to the September 11 issues and then followed by the tudung issue. Looking back a few years ago, we also saw glimpses of racial issues when hiring practices of certain type of employers were openly discussed here. While most Singaporeans behaved rationally through all the periods I mentioned, at the ground level there were quite a few who felt otherwise and raised suspicions about the other races. The levels of these suspicions are still not widespread and are not a cause of major concern yet. It nonetheless highlights how delicate the situation can be and therefore we cannot take things for granted. As a nation, we have made progress in many areas, including inter-racial ties. When I was growing up in the 1960s and 1970s, most of us were not so conscious of our races and we grew up thinking of each other as more or less the same. The changes which happened in the 1980s as a result of certain policies and practices started causing the realisation of our differences and thus resulting in some weaknesses in the race relations' foundations which we are still building.”
“Third, to spin off most of the GLCs, except for strategic ones like SIA, PSA and perhaps SingTel. And the Government should cut its ownership to less than 30% in each of these GLCs. Fourth, to help the SMEs with their problems before we could develop a mature financing industry, to create a fourth local bank to service the SMEs. Fifth, halve the petrol tax, halve the ERP charges, halve the foreign worker levies and halve the property tax. Sixth, eliminate the need for yearly Government issued licences and depend on income tax and GST to collect all revenues. Seventh, reduce the size of the Government and the civil service by 30% over a 5-year period. Sir, these are radical things, just to give you a feel of what people are thinking of. The list can go on, but I thought that I would give a feel of what being bold really means, from the perspective of the private sector. Finally, I feel that it is too early to rejoice. When the Minister revised the growth forecast from the previous 1-3% to the current 2-4%, I thought he was a little too quick off the mark. Things are still very unclear, including in the USA. There are pockets of recovery, but just a few. Good times will come back, as we know, but let us tread carefully for now and not let our guards down too quickly. By thinking that the economic recovery is going to come very soon, I feel that the Government may get complacent in trying to help address some of the issues that I have just mentioned. Sir, uncertainty still rules the day.”
“The signal that this gives to our society is that we are so tightly geared and fundamentally stretched that each time something changes, we have to resort to such measures to create some relief. This indicates that we are living to the brink and have very little room for changes. With such tight margins, life can be very stressful and one can understand why the Government has to come to the rescue with rebates and subsidies. We really need to permanently reset the whole cost structure so that Singaporeans and companies here will have much more margins, and each time they face a crisis, we will then not have to resort to rebates and subsidies. And we should spend the next few years building up the margin for Singaporeans so that their lives do not have to be so stretched and stressful. Sir, in conclusion, I started by saying that the Budget has not been bold enough, contrary to expectations that something significant should have been done in this year's Budget. We know that we have to wait for the final outcome of the ERC recommendations. I thought I should take the opportunity to give a sense of what I feel are bold measures and of what it should really mean when the Government says that there will be no "sacred cows" and that "no stones will be left unturned." Here is my wish list of radical things which we should do: First, a 30% reduction in rentals, whether it is JTC or HDB properties, and allowing property prices to decline and to find their right levels, without propping them up artificially. And if need be, the Government should step in to mop up any residual problems, even if it means dipping into the reserves. Second, bringing the income tax level down to 121/2% that Ireland has.”
“This approach differs from giving handouts and subsidies which we all want to avoid. We will see two possible outcomes if nothing new is done for SMEs. First, they will collapse and, second, they will relocate, and many of them are talking about relocating to the nearest location they can think of and manage, and that is to Malaysia. And I know that many of them are seriously thinking of this right now. Sir, the final issue about the Budget, and about most of the Budgets that we have had in the past, is that the approach that we have taken to address the cost pressures during the recession has been by temporarily bringing down rentals, charges, levies and taxes through rebates, and we have become a nation of rebates, subsidies and grants. While this is good for the short term, it does nothing for the long term. On the contrary, it sends the wrong signals to investors and companies that costs will go back again to the high levels once there is a sign of improvement in the economy. It may have worked in the past in keeping companies invested in Singapore, but I think, by now, most of them have wised up to the reality that costs will come back and hit them over and over again. So, instead of using rebates to address our cost problems, it is more prudent and more useful to institute real cost reductions, whether in rentals, taxes, levies or charges. It will allow companies to have a long-term view of things and plan to be in Singapore for the longer term. Sir, I also have an issue with the approach that we have taken each time when we run into an economic crisis. Each time, we have put in place rebates for companies as well as individuals.”
“And I also do not support a subsidy mentality, because I believe that it weakens companies and not strengthens them. All SMEs want are avenues which facilitate and not hinder their businesses. The issue is that our SMEs face obstacles in many areas, including when they deal with Government agencies. Those which are bigger know how to get around the obstacles, but the smaller ones, particularly the start-ups, have tremendous problems. They do not have the resources and time to manoeuvre around the obstacles that they face. The other important problem they face is the access to funds. Once again, SMEs are not asking for free and easy money. They just need the right channels and institutions where they are able to get the support. For the banks, the effort put in for too many small companies are just not worth their while and they prefer to deal with bigger clients, and a number of bankers have mentioned this very clearly. The issue for Singapore is also the fact that we are at a very infant stage of our venture capital (VC) market, created by transplanting some big names from around the world into Singapore. The problem with this transplant is that these VCs operate in a very narrow range of investment cycle. With VCs on the one end and debt financing through banks on the other end of the spectrum, we have one big vacuum which should consist of a whole slew of financing instruments consisting of angel investors, early stage VCs, hybrids, derivatives, junk bonds, collateral and IP-based financing, brand name financing and many others. If the Government wants to help out by not getting directly involved in businesses, then it should focus on developing the financial instruments that I have mentioned above. It will go a long way in helping our SMEs.”
“We have property taxes, petrol taxes, utilities taxes, foreign worker levies, COEs, ERP charges, business licences, Skills Development Fund contribution, and these are all that I could think of when I was writing this speech. I am sure there are many more that I do not have the time to think of. These all add up and do have a high cost impact for businesses. A couple of years ago, a prominent businessman from the Singapore Chinese Chamber of Commerce and Industry showed me a computation comparing similar businesses in Singapore, Malaysia, Hong Kong and Taiwan, and his analysis showed that because of all these hidden taxes, companies in Singapore are inherently delivering weaker profits and much lower margins compared to Malaysian and Hong Kong companies doing business in the same area. Fourth, Government charges like aviation and port charges, Government fees, licence fees and the likes are also significant. Adding to the cost problems are also our high telecommunications charges compared to many other countries in the world. The third issue that was missing in this Budget was help for the small and medium enterprises (SMEs). This is another regular topic for many of us from the private sector. There were high expectations of the Budget from local companies, and they were disappointed that help did not come promptly. Many are struggling and have faced two consecutive recessions and many have yet to come back to profitability. The additional cost burden, especially the increase in GST, could deal a final blow to some of these companies. I mentioned about the need to restructure our economy and to create an environment which nurtures small and medium enterprises. SMEs are not always looking for handouts, as has popularly been talked about.”
“The problem is that this additional 2% adds up to the cost upfront and affects cash flows and puts additional strains on businesses, while the tax is an after-the-fact phenomenon. Many companies in the short term may not even benefit from the lower taxes, because they will not be making money in the first place. I therefore urge the Minister to delay the implementation of the additional 2% GST until the business environment improves. Why the hurry, especially since the Government has the firepower to withstand lower tax collections for a short period? Unless we find a solution for our structural cost problems, we will have difficulties competing in any type of industries that we choose to compete in, including those in the high value added activities. Everything being equal, we will still lose out because of the cost when it comes to competing with any of the countries, whether it is Taiwan, China, Malaysia, Ireland or many others. So we should not brush aside the cost issues by saying that those industries dependent on cost should be eliminated from Singapore while we bring in new industries. The cost issue will linger on with us forever. It is a structural problem and needs urgent resolution. What are our cost problems? And everyone knows this. First, the high wages driven by high asset values. Second, terribly high land cost leading to high rentals, thus eroding margins for businesses. Third, the regime of hidden taxes which also erode margins. Let us for a moment try to add all the taxes, levies and charges which may seem small on their own in some cases, but all add up significantly. Let me list the ones that I can think of.”
“So, by going down to 22% with a consequential increase of 2% in GST, this is a significant increase in cash out-flow for many companies. The feedback that I have got from a number of people is that while a 20% maximum income tax level is good, we have not been radical enough. We are still worse off than Hong Kong, and if we include the many other taxes that Singaporeans and Singapore-based companies are paying, then we are still not very competitive. While we may look better than many countries like the USA and Germany, as the Minister has mentioned, we must compare this against the percentage reduction these countries have made as compared to the reductions we have made. The facts are as follows: In the USA, as the Minister has mentioned, the effective tax rate, after many provisions, is actually 11%. In Germany, the new tax rate is 25% compared to the previous 40%. This is a reduction of 37 1/2% for the 15%-point drop. Whereas in Singapore, we plan to reduce from 25% to 20%, and this is only a 20% reduction. In Ireland, the tax rate is at 12 1/2%. The countries that I have mentioned are the ones that we should compare against, as we are trying to do the same things as all of them. It is obvious that compared to where they have gone, our changes are not radical enough. The second issue with this Budget is that we have not addressed the single most important issue, and this is on the cost of doing business. I mentioned about our vicious cost cycle and the consequent impact on the cost of businesses. This year's Budget clearly did not address this very important issue. On the contrary, we ended up adding to the cost problems with the implementation of the additional 2% GST. We may argue that companies will be able to offset this with lower income taxes.”
“I personally feel that there were no real new initiatives to tackle the issues of the new world, except for the tax changes. I was hoping that this could have been called a bold new Budget, with creative initiatives, but frankly I feel that there has been nothing significant this year. To be fair, I believe that the Government is still waiting for the recommendations of the Economic Review Committee to be finalised before making the bold changes which Singapore badly needs. I hope that after the recommendations are ready, the Minister will not wait for next year's Budget to make more changes. I feel that there is a real need for us to implement measures quickly, particularly in the area of the cost of doing business in Singapore and by waiting too long, it may result in the premature collapse of many companies and the premature departure of many multi-nationals. I would like to touch on a few areas which I feel should have been addressed, but have not been done so in the Budget and, I hope, in anticipation of the ERC recommendations, these issues will be considered seriously soon. Sir, first of all, the tax system. While I am in complete agreement to go towards a consumption based tax system, I believe that we have been too quick to increase the GST from 3% to 5%. By all means, this should be the long-term target, but by doing it so early, we once again put tremendous cost pressures on our companies even before they could recover from the worst recession our nation has seen. The real short-term improvement that the Government is suggesting is a mere 0.5% reduction in taxes since, in the preceding years, we were already enjoying tax rebates, bringing the effective tax rate down to 221 / 2%.”
“One of the clear issues we have today, which is a cause for concern, is a structural problem and that is the lack of local private enterprises and local entrepreneurs who are able to develop world-class capabilities. How did this come about? We started rightfully with the industrial economy driven by multinationals and then one dominated by Government-linked companies. Our administrators basically focused on a regulatory system which was conducive for both types of companies to operate in Singapore and they were big. There was nothing wrong with this in the beginning, but we never got out of this mode, despite the many signals that we got many years ago when we started seeing sleeping giants like India and China opening up. What we should have done was to start shooting the laws to accommodate and encourage and grow local enterprises, particularly SMEs. We should have learnt from countries like USA where legislation has been put in place for many years with SMEs at the core. The focus for legislators and government administrators in the USA has been to create local private enterprises many years ago. It will logically follow then that if rules and regulations work for SMEs, there should be no problems for the same rules to work for larger companies. The likes of competition laws, Government procurement procedures, financing schemes and many others are examples of legislation with SMEs in mind. Time is of essence for us in Singapore. We must make the necessary changes to our rules to facilitate the development of our private enterprises. Sir, there were very high expectations for this year's Budget because it was supposed to be a Budget for a new and different world.”
“While we still have the opportunities to be competitive in certain types of industries if we focus on enhancing capabilities and productivity, and through the use of technologies, when Government agencies start picking industries, they will never be able to do a good job simply because they do not have a feel of business nor the experience of business acumen to understand what determines the success of a particular industry. For this reason, we have not been able to successfully create global champions like Starbucks and McDonalds. These industries would never have been on the radar screen of our economic agencies. Instead of planning the industries to the details and instead of driving industry development to the details, the Government should focus on the broad strategies and be involved in only creating and facilitating the business environment. Why are there no new world-class companies from Singapore? I still remember the Government's bold plan of identifying 500 world-class companies in a certain number of years. We have missed the target by miles and if you ask me, I would have guessed that we would have missed simply because the Government was not capable of picking industry winners. The various Government agencies have relied on old and irrelevant measures in picking the potential winners to groom. Schemes like the Promising Local Enterprise (PLE) which have been in place for so many years have had no success in finding real global winners except for a handful of companies which were excellent in their own sense. The yardsticks measuring promising companies have to be completely different from what we are used to. The third structural issue is basically rules and regulations designed for multinational companies and GLCs and not for SMEs.”
“Being impatient about the development of certain industries, the Government felt that they needed to step in and create companies, using the reason of market failure. On the other hand, the Government, through its protective policies, created monopolies which lasted for too long. What are the issues that GLCs have created? I will briefly mention some of them as they have been widely debated. The three main issues are: (1) the stifling of entrepreneurship by using their resources in the GLCs, especially easy access to funds, to do the same of what can be done by smaller players, that is, before they are publicly listed; (2) the crowding out of local companies, sometimes through unfair practices; and (3) dominating and predatory practices which result in foreign companies being compelled to work with the GLCs instead of local companies. The third structural issue is one of the Government influencing the outcome of the economy. The Government created many economic agencies which have tremendous influence on the outcome of our economy. If you talk to any private sector company, whether big or small, they will most likely agree that these agencies have had an impact on what they do and how they do their business. The Government has been dominant in the following three areas: (1) picking industries; (2) picking winners in each industry; and (3) deciding on how funding and incentives should be channelled. All these influences are outcomes of our industries here. When we have regulators also playing the role of industry developers, we run into problems. Today, you will see many private sector companies here which feel that they have to get the endorsement and the support of our economic agencies in order to get moving in their businesses.”
“As has been told by history many times before, the bubbles are never long-lasting. The Government's attempt to implement the asset enhancement policy basically backfired, resulting in a vicious cycle of artificial high costs of properties, high wages and the high cost of doing business in Singapore. The three policy levers which the Government used that have created this vicious circle are: firstly, the use of CPF investments in properties, resulting in Singaporeans over-investing in assets, especially in properties; secondly, the land sales policy and the approach of reserve pricing which artificially propped up the price of land, whether for private, commercial or industrial land; and thirdly, the prices of new HDB flats which increased at unbelievable rates throughout the 1990s. All the above levers were completely in the hands and control of the Government. Why do I say that this is the cause of our economic problems and hence our employment problems? The answer lies in the vicious cycle that I mentioned earlier. The high cost of owning properties drove the need for higher wages which added to business costs. Similarly, as commercial and industrial land and property prices went up, this eroded the margins for businesses. This therefore accelerated the changes in the type of industries which could operate in Singapore and also led to many companies having to exit from Singapore, many prematurely because of the high rate of increase of cost. The second issue which is structural in nature is one of Government-linked companies and is another significant factor and the creation of these companies, which are called State Owned Enterprises in many countries, is another deliberate Government policy.”
“Sir, today I would like to address a number of issues which are related to the state of the economy and will basically set the stage for a number of recommendations which I hope to make during the next two weeks of the Committee of Supply discussions. Let me start by saying what I have said many times too that Singapore's economic development model has done very well in the first 30 years of development. Our model of bringing in foreign direct investments, multinational companies and even of developing Government-linked companies was necessary to bring Singapore to where it is today and it is a model that many countries try to emulate. In developing strategies in the past, we did however develop some structural problems which I would like to address today before I talk about the Budget proper. Sir, the fundamental problem of how our economy is structured can be traced to the role of Government in influencing the economy. We are seeing our worst recession in our history since independence, and in my opinion, the approach we took in developing our economy got outdated as the new economy arrived. Specifically, I would like to highlight a few areas where the Government had played a role in causing some of the problems, because of its dominant presence. First, the asset enhancement policy. The asset enhancement policy has been a key policy since the 1990s and the key goal was to create wealth for all Singaporeans through owning properties that will increase in value over time. Little did we realise that this wealth was mostly going to be unrealised or perhaps paper wealth. Through a number of Government initiatives and policies, we drove property prices to untenable levels, much like how the Japanese asset bubble grew in the 1980s.”
“Sir, I have just got one small point to make. I support the motion. We have heard that there are NMPs who have made useful contributions and many did not too and they just occupied the seats in this House. So I would urge the Special Select Committee and the Leader of the House that when we implement the NMP system in this round, let us not just fill up all the nine seats that we have. If it means it is two, it means two. If there are four who qualify out of five, then let it be that, and not just stretch to nine to make up the number. Because in the last round, I think we have seen the quality dropping. Mr Speaker: Can we have one last speaker, please?”
“Dr Tan Cheng Bock (Ayer Rajah): Mr Speaker, Sir, can I just say a few words in response to Mr Inderjit Singh?”
“For example, it makes no sense to ask that the Government divests SIA or PSA, because these are areas we obviously have world-class competencies and the current structures will work well in the future. There are, however, many more businesses where the Government has majority control and which, in the long term, will not be viable once they compete in the global marketplace. Instead of hanging on to such businesses until they collapse, it is wise to divest those to competent shareholders, whether foreign or local. We have to realise that in a globalised world, Government's direct involvement in business can be viewed as a big negative and may not necessarily help our companies when they attempt to internationalise. Recently, we saw glimpses of this effect when the US Ambassador, Mr Frank Lavin, highlighted the concern of the Government's involvement as an issue which may hinder some of the negotiations leading up to the signing of the Free Trade Agreement. He quoted the practices of GLCs as a significant issue that has to be tackled before we can move forward. Sir, in conclusion, I would like to emphasise that we will only be successful in remaking the Singapore economy if we are prepared to change mindsets. The Government has to be prepared to play a new role, with a lighter touch, while Singaporeans and Singapore companies need to come forward to take on the responsibility of nation-building and in building our economy. We cannot expect the Government to do everything. Neither should the Government expect to be the sole driver in the whole process. Striking the right partnership model between the public, private and the people sector will be of utmost importance. We can do it and must start immediately. With that, I support the motion, Sir.”
“The problem is that both GLCs and the private local companies have developed a culture of suspicion and distrust such that they seldom ventured into a collaboration approach by combining their core competencies to create a cluster of core competencies and then using this new combined strength to compete with large foreign companies, either locally or globally. I feel we can best globalise if we work on pooling our competencies together and with a spirit of partnership where each company, whether big or small, contributes in creating very strong clusters capable of competing with the best companies from around the world. The second point about Government in business is on divesting and outsourcing. While we can accept that GLCs had a role to play in our economic development and still have a role to play in the future, it is not quite right for statutory boards to get involved in businesses. Over the years, we have seen many instances of statutory boards getting into businesses, which compete head-on with the private sector, and this definitely leads to unfair competition because of the strong backing of the Government agencies they are in. The Government needs to have more trust in the private sector and develop a culture of outsourcing as many activities as possible, especially to the private sector, and not only to the GLCs. Similarly, Temasek and other Government agencies should actively look out for opportunities to proactively divest companies which could better perform if they are run on a truly private-sector basis by inviting private-sector players to discuss opportunities to be partners at the shareholder level. I am not advocating that divestment be done blindly, but where it makes sense.”
“Whether we like it or not, whether we want to admit it or not, the Government and Government-linked companies do have a significant impact on the Singapore economy, whether directly as business units or indirectly by crowding out private enterprise and the private sector, or through incentive and disincentive schemes operated by Government agencies. I feel that many of our GLCs have been operating too much in their comfort zones, being given too many privileges in the domestic economy and, therefore, unfairly beating private companies in competition with them in the local market. However, in the long term, success in the domestic economy alone is not sufficient as the whole world globalises. I personally feel that many of our GLCs will fail when they globalise and face global competition, where true market forces rule. We, therefore, need the Government and the Government-linked companies to find new roles and find a new strategic position for themselves in this global economy. Some of the elements, which could constitute a good strategic position for them in the future, are: Firstly, being globally-focused instead of locally-focused, and a spirit of partnership with other companies. With the increasing activity in global Free Trade Agreements, countries and companies will have to compete on a level playing field. While this will be a threat in the domestic market, it is also an opportunity which we should be ready to cultivate when the time comes. Our GLCs should, therefore, use their strengths to quickly go out and lead the way of economic colonisation and find success in globalisation, instead of working in their comfort zones at home. To do so, GLCs should also think about partnership with other local private companies or, for that matter, with other GLCs.”
“Our entrepreneurs and enterprises should start thinking of alternative formulae of starting companies. The way forward may not necessarily be through brand-new start-ups but through acquisition of businesses and companies already successful in foreign countries. With our ability to raise funds and to tap funds and good management skills, we have the opportunity to take over businesses which have proven track records, and in areas where it may take too long for us to build up competencies if we start from scratch. As an example, YTL Corporation in Malaysia, a construction company, recently acquired Wessex Waters from Enron Corporation. It was a good buy. Wessex specialises in supplying water and water-related activities to 1.2 million residents in the UK. Theirs is an example of jump-starting a business, which may have taken too long to build up had they done it in a Greenfield manner. Importantly, they are diversifying away from a slumping domestic construction industry to new areas of competencies. We must learn from YTL of Malaysia. We have to go on the path of economic colonisation by developing our strengths, including all resources to be set up all over the world. We should be thinking of cultivating and harvesting competencies and capabilities from around the world as part of our formula of growing our economy. We have the means, the timing is right and opportunities all around the world are in abundance. Role of Government in business Sir, the final point I would like to make today is the role of Government in business.”
“For example, instead of setting up a giant biopolis in Singapore, why do we not set up a few smaller units all over the world, with a much smaller one in Singapore? Why do we not set up a technopolis in India instead of one big facility in Singapore? The Government can take the lead by diversifying its research institutes to other parts of the world. Sir, my visit to Xian in China last year left me with an impression that it is an excellent place for us to set up research institutes in the area of life sciences to tap the wealth of expertise and talent of the people there. They have the potential to do truly world-class and leading edge work and, similarly, there are areas of competencies all around the world and we should try to locate ourselves there too. Our net gain is that we immediately tap on the talents which we may have difficulty attracting into Singapore and we can, over time, also invite the best to come to Singapore, after years of cultivating them from where they are. I am glad to note that Mr Sim Wong Hoo has started the process by setting up the Creative-Dragon Science Park in Shandong, China, as a means to tap resources outside Singapore, and we hope that many more people will follow him, especially the Government agencies. As an example, Nokia, one of the world's most successful companies, coming from a country quite like Singapore in terms of size, Nokia used R&D capabilities from UK, customer needs and trends from Japan, and manufacturing efficiencies from Europe and Asia to overtake Motorola in a short span of five years. Acquisition of businesses as an alternative of starting companies Sir, the third route to economic colonisation is by acquisition of businesses as an alternative to starting companies.”
“If they do the traditional route of taking what they learnt here and spreading it around the world, we think that is going to be very difficult because they are latecomers [ie, Singaporeans are latecomers] to the process and also the pool of knowledge in which they are fishing is too small." Professor Williamson rightly points out that if we try to copy the models of the big developed economies of the US, Europe and Japan, we will not succeed and, for Singapore with a small domestic economy, we will never be able to learn the true needs of the world market if we do not quickly go out of Singapore to do our businesses. What this means is that we do not necessarily have to take the traditional route of growing global businesses by first growing a successful domestic market before we embark on internationalisation. Many of our companies, especially the Government-linked companies, are still thinking of the old model, and I feel that they must start thinking differently by sometimes doing more globally than locally. The Israelis are the best examples of how local companies went straight into international markets like the US and Europe to become the world's best companies in a number of areas. We have one home-grown example, ie, Interwoven, where the founder leap-frogged to the US market to create a successful technology business. Setting up centres of competencies all over the world Sir, the second approach for colonisation is setting up of centres of competencies all over the world. We really need a two-prong approach of setting up local capabilities as well as setting up bases of competencies in other parts of the world where talent and opportunities are in abundance. While we should attract talent into Singapore, we should also tap them from where they are located.”
“So when we say, let us bring in life sciences and the petrochemical industries, we should not do it at the expense of the other strengths that we have developed over the past 30 years. Those new industries are important too but it may take time for us to build those capabilities. In the process, we cannot lose our old capabilities. We should also think of ways of continuing to be champions in those areas that we have invested so much in in the past years until there comes a point when we cannot improve any more. In the process, we would have a long overlapping period between the old and the new industries, thus minimising the stress to the economy and to the people of Singapore. Economic colonisation My second point is one of economic colonisation - setting up of a true external wing. Singapore should aggressively embark on a colonisation programme. We have so far successfully developed the external wing of our economy and I feel the way forward is through this colonisation programme, which will accelerate the growth of our external economy. We have to start building Singapore all around the world. And I would like to suggest three ways that we can achieve this accelerated growth. New model of globalisation Firstly, a new model of globalisation. Recently, there has been a lot of debate on how we can create local multinational companies. I feel that our failure in developing world-class companies may have been in the approach we are taking and Professor Peter Williamson of Insead University, who advises us on some of these things, very well summaries it, and I quote him: "A lot of Singaporean companies want to become multinational.”
“The USA model is an example of what government agencies like the Fed control just a few levers and leave most of the economic development to private enterprises, while they create a business friendly environment. As an illustration of the problems of central planning, let me use an example of Belgium. Why is Belgium still successful in the textile industry? By our approach of economic planning, Belgium should have thrown out textile manufacturing a long time ago by encouraging relocation to low cost countries. Instead, what they did was to work on continuously strengthening their core competencies such that they always stayed ahead, and how did they do it? Well, what I heard when I was in Brussels, about nine months ago, was that they operated highly automated and mechanised factories, less dependent on manual work and more on machines. The factories are so big that technicians cannot go on foot, they have to go round on bicycles to go and check the machines. We therefore have to look at how we are restructuring ourselves. Many of our Government agencies, as a strategy, advocate throwing out the old industries to bring in the new ones too prematurely, either directly or indirectly, through policy changes or through incentive and disincentive schemes. Like the Belgians, instead of making complete transformations, we should stretch our competencies. The right thing to do is to focus on our core competencies, which we have developed over so many years and see how we can improve our productivity, efficiency and capabilities, such that we can continue to compete effectively in the same areas for a longer period of time.”
“We have to move away from a strong central planning approach to a distributed planning approach that many more people and not just a few good men are involved in planning and executing economic development. A partnership formula with the private sector playing an active role needs to be defined. Government should define the broad visions and leave as much as possible the economic planning to the private sector. Since things will no longer be clear, our models will have to be changed to incorporate concepts of fuzzy planning, where we will never be able to have enough information to put together concrete forecasts and projections and where we will have to constantly redefine the rules of the games as the world around us changes. In such an approach, it is wise for the Government and our Government agencies to define the general directions and broad goals and then be involved in just facilitating and not driving the economy directly. The Government can no longer be involved in the minute details of planning the economy. This distributed and fuzzy planning approach is consistent with what many of us have identified as a solution for the new Singapore economy. In this approach, the Government should focus on creating and nurturing a conducive environment, which breeds private enterprises and entrepreneurs who will in turn determine the success or failure of economies. In this model, we must accept some chaos, some unstructuredness, some mavericks and a much rougher ride for everyone, including the Government, and we must be prepared to take much higher risks than before. The Government needs to learn to let go and place more trust on the private sector for us to be effective in developing a new model of the Singapore economic development.”
“In a straight line planning model, once we decided on the formula for growth, the rest was left to the administrators to plan and all they needed to do was to make straight line projections like the amount of foreign direct investments to bring in, number of jobs to create, number of training places to establish and other similar measures. The straight line planning model, driven by a strong central authority, managed by a few good men, worked because all we needed to do was to do more of the same and to do it better than our Asian neighbours. In the last five years, we have entered into the era of the new economy and we have quickly realised that our planning models and theories do not work well as evidenced by our inability to forecast the economy well. We have not only seen near misses, in fact we have seen huge fluctuations and variations of what turned out to be the reality versus our expectations. The Government agencies have not been able to grasp the elements of the new economy because we cannot be planning an economy thinking narrowly within our own borders. In a globalised world, we have to think of the whole world as our market and when we do this, we will have to think of new models simply because the Government cannot possibly have influence outside our borders. There is therefore an urgent need for us to understand how we can effectively participate in and find new ways to plan this economy. The sure thing is that the Government alone can no longer monopolise and drive economic planning and development in the future. It requires the involvement of many more people, especially the private sector, which can influence foreign markets by their presence there.”
“There are three fundamental points I would like to make on how we can find the right elements to successfully remake the Singapore economy. They are, firstly, changing the way we plan our economy; secondly, the economic colonisation model for Singapore; and finally, the role of Government in business, including GLCs. Sir, the remaking of the Singapore economy is everyone's business. The Prime Minister, the Deputy Prime Minister and everyone involved in the process have invited every Singaporean to be involved and to come forward. So when Mr Steve Chia says that he hopes to be invited, I think he has already been invited. But he really needs to be a lot more proactive and take the initiative to do something about it to make proposals. I head the Indus entrepreneurs - and this is the chapter of entrepreneurs of Indian origin all around the world - and without the Government asking us, we have had about two months of activities in trying to come out with proposals in a few areas. In about two weeks' time, we will be ready to submit a report to the Government. So please do not sit and wait, do something about it. Changing the way we plan our economy Sir, the first point I want to make is about changing the way we plan our economy from central planning to distributed planning and from a straight line planning to fuzzy planning process. Looking back, while being an impressive development, our first 30 years of economic development have really been driven by a fixed model of growth, planned centrally where straight line planning was workable because of the type of economy we were growing.”
“Mr Speaker, Sir, I support the motion in the name of Mrs Lim Hwee Hua. Sir, the last five years have been very sobering years for the Government and the people of Singapore. While we saw about 30 years of almost uninterrupted growth, except for a couple of short downturns, in the last five years, things have been very different. We have seen two successive recessions in a short span of five years, something that we never expected. With the awakening of the two sleeping giants in Asia, namely, China and India, the five tigers of the old industrial economy are facing tremendous threats. All these changes are going to redefine the rules of the game in the new economy. The five old tigers of Asia will have to search for new roles to play in this new economy while they struggle to redefine their models of economic development. Singapore is not alone in its quest to restructure its economy. All the five Asian tigers are very much at it and, so far, only South Korea seems to have had some success in restructuring, while Taiwan and Hong Kong are seeing a possible hollowing of their own domestic economies but are aggressively growing the external wing of their economy through China. Remaking of Singapore Economy Sir, it is an opportune time for Singapore to be looking at how she can change herself. The industrialisation formula of the past, driven mainly by foreign direct investments, is in no way going to help us in the future. The future lies in an innovation-based economy, driven by entrepreneurs and private enterprise, participating in a global market where technologies and business models are constantly changing. We need bold new strategies to succeed.”
“Now is your chance, Mr Tan, to get back at some of us for the long speeches that we made while you were in the Chair. You have earned the right to make long speeches this time round, although I hope you do not. I personally look forward to seeing you in action to contribute towards the making of a lively Parliament during this term. Now, whenever you have itch to speak, you do not have to hold back, as you did when you were sitting on the Chair. Mr Tan should know all the tricks of how to catch the Speaker's eye, and I am sure he is going to get quite a lot of attention from the new Speaker of the House. On behalf of all the former and current Members of this House, I would like to thank Mr Tan for all that he has done for the Singapore Parliament and for Singapore. I am sure all Members will join me in wishing him all the best and success in whatever he chooses to do in the future. Mr Tan, a big thank you for your excellent contributions to the country.”
“As a first-time MP during the last term, I really appreciated his friendly approach with the new Members, helping us to quickly learn the ropes of being a Member of Parliament, both inside and outside the House. He readily helped, coached and mentored many of us so that we could in a short period of time start making contributions towards the parliamentary process. With his proactive approach of connecting with the new MPs, it made all of us feel very much at home and allowed us to quickly become more effective in doing our jobs as Members of Parliament. Especially for us Backbenchers, we also picked up skills on how to handle a debate and how to make Question Time more effective in getting the answers we were looking for from the Ministers. One thing that I also cherish about Mr Tan, as Speaker, is how lively he is outside the House, especially when we go for overseas trips. One can understand the need to be lively, especially after many hours of sitting and listening to speeches. I can safely say that Mr Tan is the liveliest of all the Speakers in the ASEAN Parliaments, and I am sure this is also the opinion of all the ASEAN MPs who attended our yearly AIPO Conference. As Dr Wang mentioned earlier, entertaining everyone with his songs of the 1960s and 70s, we always enjoyed the functions held after each of his conferences. You have to know your rock-and-roll when you are with Mr Tan on one of his trips. If not, then you have to dance, maybe a Bhangra dance, which I had to do in one of those trips with him. Perhaps singing was the way Mr Tan let off his stress accumulated after listening to many speeches. Finally, Sir, I am sure that we are all looking forward to the former Speaker finally speaking up in Parliament during this current term.”