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 15 of 20.
“Sir, the ethnic-based self-help groups have achieved limited success, but much needs to be done. While improvements have been made in primary schools, in the secondary schools, problems still exist. A higher proportion of Indians and Malays go to the Normal and Normal (Technical) streams, as compared to the national average. Performance of Indian and Malay students at the "O" and "A" levels also did not significantly improve if we compare to the progress made by the Chinese community. The second issue with the ethnic-based self-help groups is that we intentionally segregate and differentiate our children according to the races when it comes to helping them to improve themselves. We give our children the impression that people of their own kind are the only ones who care and will help them. For the smaller ethnic groups like the Indians and the Eurasians, such an approach immediately puts them at a disadvantage simply because they have less resources to mobilise, especially in fund-raising, to support their activities. While each of them do go to people of other races for funds, the proportion of funds that come from other races is very small, compared to the total sums that they collect. Because of the lack of appropriate resources, there is a limitation as to what they can do and to the quality of programmes that they can execute. This, perhaps, can explain why the Indians and Malays still have a long way to go to catch up with the national average of performance at the landmark examinations. This is a very dangerous trend, especially in the practice of meritocracy.”
“Sir, I beg to move, That the total sum to be allocated for Head V of the Main Estimates be reduced by $100. Sir, the Singapore 21 vision which we established two years ago would be an excellent guide for us to promote racial harmony, among other objectives, in our attempt to build a better Singapore for the future. Many Singaporeans were involved in the one and a half years' effort to define our vision for the future and the House also spent two days debating and accepting the principles of the S21 vision. Perhaps, many of us had high expectations of how the S21 vision would be implemented in an attempt to get to the ideals that we define. To many of us, the S21 vision has today been relegated to something like an on-going courtesy or keep Singapore clean campaign. We need to revive the implementation of the many actions identified within the S21 vision that was developed. While we have done many things to achieve physical integration of the various ethnic groups in Singapore through policies like the Housing and Development Board housing policies, more could be done in trying to achieve true emotional integration or bonding amongst all races. We need to urgently build this bonding and trust among the various races through concrete programmes focused on emotional integration. This is even more important in our schools where children have the greatest opportunity to interact and learn about each other. Practices in some schools to segregate students into classes according to the mother tongue option they study are very detrimental to our efforts to integrate Singaporeans. Some schools do it for administrative convenience, but the convenience is causing tremendous damage with respect to building a cohesive multi-racial Singapore.”
“Sir, the Prime Minister recently talked about the Asian IT Belt. Could the Minister elaborate on what the plans are to make this IT Belt a reality, and how Singapore will benefit from it?”
“Sir, my issue on electricity is the power disruptions that we have faced in the past few years. In the year 2000 alone, my company experienced 10 disruptions of electricity. So the whole industrial estate down there was affected. This is too many, especially for the high-tech wafer fab, petro-chemical and semi-conductor industries. I therefore have the following issues: First, there is a need for more accountability and penalties for the electricity distribution agency to compensate affected companies. In this case, PUB should be responsible to compensate companies affected by the power trips. Secondly, in liberalising the electricity industry, what safeguards will be put in place to improve and not worsen the standards of electricity supply? How can we be sure that we will be able to avoid a similar disaster like the one that recently occurred in California? Our high-tech industries cannot afford such type of power disruptions. It will just create problems to our reputation for bringing in high-tech industries.”
“It was only in the last two years or so when funds availability improved. This time round we will need to repeat the same boom we saw for the IT-type companies some years ago, before the life sciences industry. So funds will be very critical in trying to stimulate the growth of such industries in Singapore.”
“Sir, we have taken the right approach by focusing on life sciences as the long term driver of our economic growth. If we do not start now, Singapore risks becoming the receiver of technology instead of an innovator. This was the pattern of our economic development during the last industrial revolution in the last 30 years where our success as a developing economy was a result of Singapore getting the lower value chain of activities of the electronics industry while the innovation of technologies occurred in USA, Europe and Japan. In the last 10 years we have changed that trend but in the beginning, that was how our economic development happened. This time we must take a lead or at least be among the leaders if we want real economic prosperity as a result of a successful life sciences industry. I have the following three questions for the Minister: (1) What is the target in terms of contribution to GDP by the life sciences industry in the next 10 to 20 years? (2) Has the current effort been too Government driven? Do we want to go the route of GLCs again for the life sciences industry? Can we invite and incentivise the private sector to play a leading role in this case? (3) Can the Government set aside a high-risk fund, managed by the private sector to stimulate the industry? This would be helpful for two reasons. First, we need many to try, of which many will also fail, but we will need the critical mass to be involved in order to develop just a few good companies capable of competing in a global economy. Second, when we started the IT revolution a few years ago, funds were difficult to come by. A number of our budding entrepreneurs faced tremendous difficulties in the early stages and some even left for the Silicon Valley or other parts of the world.”
“Finally, I also talked about incentives to promote productivity improvements within our manufacturing companies. I hope that the Minister will consider schemes, not just tax incentives, that directly promote productivity improvements and in this way, we can continue to keep Singapore as a manufacturing hub for a long time to come.”
“Sir, one very useful role for the GLCs to play is to basically act as big brothers in bringing our SMEs with them when the GLCs globalise or do international projects. This is the reverse of the Local Industry Upgrading Programme (LIUP) where we give incentives to multi-nationals and large companies based in Singapore to help groom and upgrade SMEs in their Singapore operations. This practice of large national companies bringing along smaller companies for international projects is prevalent in Japan and in France. So, if we can do something that is the reverse of the LIUP to allow our Singapore large companies to bring SMEs with them, I think this will be very useful in trying to groom some of the world-class companies. We also know that many of our SMEs are not going to be viable in the long run, even if they are surviving in the short term. For such companies, it may be necessary to consider giving them incentives to encourage them to merge and consolidate among themselves. Collectively, such companies may have a better chance of becoming world-class companies, while on their own many may not even survive. We need to encourage value creation activities for companies based in Singapore. The Government may want to consider giving incentives to companies to facilitate them to break up their value chains and move the less productive activities of the companies to outside Singapore, to the region, where these activities can be done more productively. I spoke about this in the Budget debate. I hope the Minister can give an answer to this. In this way, we will be able to ensure that companies will continuously climb in the value chain of activities in line with what our economy needs, and can support in the long run.”
“Sir, last year, the Minister talked about creating many more world-class companies in the next few years. I have the following questions. Have we identified the right strategies and put in place workable criteria in selecting and grooming such companies? I would like to ask the Minister what is the progress so far for the target which we set last year, namely, to create a hundred world-class companies in a five-year time frame. The second point I have on world-class companies is that too many of our research institutes (RIs) are Government controlled and Government driven. We should consider outsourcing this to the private sector. The private sector industry players can form permanent groupings according to their industries and get some Government funding to manage this. The pace at which these RIs can then progress will be much faster and much in line with what is happening in other parts of the world. The third point is that we need a new Government agency to do the reverse role, if we really want to focus on developing Singapore-based multi-nationals. While EDB has done an excellent job in bringing in foreign companies into Singapore, and while NSTB and the PSB have helped many new companies to start up and grow to a reasonable size within Singapore, we do not have any agency that focuses and facilitates the globalisation of our companies. The Trade Development Board has done an excellent job in internationalising our trading activities and in linking our companies with businesses from around the world. They, however, are not chartered to groom and support home-grown multi-nationals, especially in the areas of manufacturing, engineering, construction and others.”
“Finally, while we try to help the industry through incentive schemes, I feel that these schemes should be market driven rather than subsidies that may solve a short-term problem while creating long-term inefficiencies. We need to move away from the subsidy mentality that I spoke about at the Budget debate. I believe that such an approach just hides fundamental weaknesses of companies. And we have seen whenever many companies run into problems, they actually come to the Government for subsidies or handouts, and I think this is not healthy because we will be competing with companies around the world, which basically operate based on market forces. If we continue to hand out subsidies, I think we will just weaken them, and not strengthen them.”
“Secondly, we should allow a greater flexibility of use of such shophouse space, including allowance for such spaces to be used for the type of infocomm industries that I mentioned earlier. We should no longer prolong the pain of the people stuck in these trades, especially the HDB shophouse owner. Thirdly, we have not been successful in promoting retail on the Internet due to a number of reasons, including payment security, efficiency of our logistics system and the lack of domain knowledge for those who have started doing e-tailing. We need the following: (a) a proper strategy including bringing in international expertise to jump start the process; (b) we need to put in place a better on-line payment service system that is trusted by everyone; (c) we should take the opportunity to promote Singapore as a regional or Asian e-shopping hub, taking advantage of our expertise in handling logistics in the region. Sir, fourthly, professionalism in the retail industry needs to be stepped up so that the value added per worker can keep pace with other industries, and this can then free up workers for other industries which constantly face a shortage of manpower. Fifthly, regionalisation of the retail sector can be given another boost. I believe some of our retailers did attempt to go to the region and they basically lost a lot of money because of the Asian financial crisis. However, we should not give up the opportunities to take advantage of future boom in the region or around the world. We need a few home-grown Isetans or Wall Marts which can successfully compete in the region or in the world. Can the Government devise proper incentives and support for this to happen fast?”
“Sir, I have spoken about the Lifeline Fund. I will move on to the next cut on the retail sector. Sir, the retail sector of the economy has had prolonged structured problems which, up to now, have not been effectively resolved. There are many people engaged in this sector, employing a significant proportion of our workforce. Data show that this sector is the most unproductive in terms of value added per worker, as compared to the other industries in Singapore. For example, the value added per worker for the manufacturing sector in 1998 was $84,000, as compared to $26,500 for the retail sector. The retail sector was therefore the worst among all sectors, even worse than the construction sector in terms of productivity per worker. In fact, if we compare the productivity and value added per worker of Singapore retailers with many other developed countries, we are performing quite badly, worse than most European and western countries. I am glad that the Productivity and Standards Board commissioned a study called Retail 21, of which I was a member, in an attempt to define strategies for the industry in this new millennium, and this was launched yesterday. In support of their findings, I would like to highlight a few critical areas that should be looked into. Firstly, with regional shopping centres and neighbourhood malls, HDB shophouses are losing substantial business to the point that they are no longer viable as businesses. This, coupled with changing lifestyle of Singaporeans who prefer to go to large supermarkets and shopping centres, signals a time for us to make decisive changes to the retail sector. The Government should devise a scheme for such HDB shopowners to exit easily from their trade without a major financial impact.”
“It will allow good use of the HDB shophouses and for the current shophouse owners to exit their businesses by leasing or selling the shop to start-up companies. It immediately increases the availability of commercial and industrial space and, therefore, this will reduce costs. The fifth point I want to make on entrepreneurship is the Buona Vista Science Hub. From what I understand, there are plans for JTC to create the Silicon Valley type of environment. I do not see how JTC can manage two systems under the same management. I therefore suggest that JTC leases the Hub to a truly private sector organisation to manage it and leave them to create that kind of environment that we want to create. Sir, there have also been problems seen by many talented people that we want to bring into Singapore, in bringing their families down here. The current immigration regulations are still restrictive especially for family members and I hope that the Minister can work with the Ministry of Manpower to make this easier. The final point on entrepreneurship is the 60-plus incentive schemes that the Minister for Finance talked about recently. The current issue is that these are just too many and too confusing, especially for start-ups as well as for the smaller companies to comprehend and to get around to apply this incentive successfully. Many of them just give up applying and are therefore unable to benefit from this scheme. I suggest that we take the opportunity to rationalise this to just a few schemes that are easily manageable, easily understandable by everyone and that can be more effective in trying to promote entrepreneurship and start-ups in Singapore.”
“Even if only a handful of companies make it, I am confident that the $20-$30 million will be multiplied many more times and ensure a generous return for the Government. However, the goodwill created by the Government will go a long way in improving the environment and in encouraging others to do so. I recently heard about the Prince Charles Fund in the United Kingdom, where the prince set aside a certain fund to invest in projects and start-ups which failed to find any interested investors or VCs. The main criterion for this fund is that the person or persons seeking the fund from the Prince Charles Fund must truly have exhausted all channels of funding before the fund is disbursed to them. We might think that this is a kind of charity and is doomed to go bankrupt. But from what I understand, the fund is actually growing and has an annual Internal Rate of Return of about 15%. The principle is the same for the Lifeline Fund. All we need are some winners for handsome returns. Sir, we should aggressively privatise the NSTB, EDB and PSB roles that duplicate the private sector type of activities. In fact, all of these agencies, over the years, have taken on activities that just duplicate many private sector activities, for example, funding, consulting, training and so on. We should consider forming consortiums consisting of private sector players who can manage such activities rather than just corporatise these entities which I think is the current Government's immediate plan. One way to resolve the serious problems seen by the neighbourhood HDB businesses is to allow the HDB shophouses to be used for technology start-ups in the info-communications, light and non-polluting type of industries. This will make the neighbourhood more vibrant.”
“What we really want is to develop the entrepreneurship culture and it does not matter what the content is. Thirdly, there is talk about the next $1 billion that the Government is willing to put aside and I suggest that we should do it differently this time by giving the fund to local entrepreneurs and businessmen to manage the funds directly as a national service. I am confident we have many capable people in Singapore who will be willing to do this service. Sir, during the Budget debate, I also spoke about the sudden tightening of the funding situation. While we cannot force banks or VCs to fund start-ups, we should set up a Lifeline Fund to help promising companies that are in trouble because of the over conservatism environment after the dot.com bust. We risk losing good companies and people because they lack funding. The Technopreneurship 21 Private Sector Committee suggested this sometime last year and I hope the Minister will seriously consider this request. The proposal is as follows: Firstly, to set aside $20-$30 million to fund 50 to 60 companies. Secondly, this fund can be jointly administered with a private sector entity, for example, the T21 Private Sector Committee or any other private entity, that Government wants to identify. Thirdly, use this money to co-invest with private sector funds or individuals so that we can lighten the burden of those who try to save these companies. Fourthly, this needs to be administered quickly and speed is very important because there are still many companies at the brink of collapse and therefore the criteria requirements for investment need to be simple. Fifthly, the Lifeline Fund can take a reasonable equity in lieu of the life-saving investment.”
“Sir, in the Budget debate a few days ago, I spoke about the need to strengthen the entrepreneurship drive in Singapore because of the drop of confidence among entrepreneurs and investors. While the many companies started by many young entrepreneurs have failed in the past one year or so, there are many more who are willing to try, but the environment has changed quite drastically to one of conservatism and, therefore, to one that is quite detrimental towards our efforts to promoting entrepreneurship. The trend that I have seen recently is that this time, we are seeing not just the young Singaporeans who are trying their hand at being entrepreneurs, but also many more experienced and older Singaporeans who have many years of working experience and domain knowledge who are leading the charge in the next wave of start-ups. These "gray-haired" entrepreneurs, as I call them, in my opinion, have a much higher chance to succeed as they partner with the younger people who bring technology to the table. It is a very encouraging sign and we should support it. I have the following issues to raise. Firstly, when NSTB launched the US$1 billion fund which was used to co-invest mainly with foreign VCs, there was a requirement that only about 30% of the fund was required to be invested locally. Many foreign VCs therefore took the advantage of this scheme and used the funds for foreign projects and investments. I therefore suggest that, first of all, we should tighten the 30% requirement so that more of the funds must be invested locally. We should require the VCs which benefited from the funding to invest the majority of their funds in Singapore projects. Secondly, allow the funds to be invested not just in high-tech, but also low-tech projects, as long as we promote entrepreneurship.”
“I would like to ask the Minister whether through the process we have identified any highly susceptible facilities like sand bays, playgrounds or swimming pools and so on, that are actually causing a bigger probability of this disease being spread and are we going to review the building and maintenance policy of such facilities. The other question I have, which is still not very clear, is why we have had this disease at a steady state and what was the reason for the sudden increase this time round.”
“What is important is for us to continue to take measures to reduce the number and to keep it to as low as possible, bearing in mind that this disease is, generally speaking, not harmful.”
“Sir, is the Minister confirming that we have completely eliminated or at least we have brought it down to the level that it was at the previous outbreak status in terms of the number of children contracting the disease? In terms of precaution, is the Minister saying that just cleanliness and hygiene is an issue or can we actually take other medical precautions to prevent our children from contracting this disease in the first place? The Acting Minister for the Environment (Mr Lim Swee Say): Sir, the hand, foot and mouth disease is an endemic disease, ie, it is there all the time. Last year, before we imposed the compulsory reporting of HFMD, we had about 25 cases a week. During the recent outbreak, it went up to as high as 258 cases per day. Since then, it has come down to about 10 cases per day. 10 cases per day will work out to about 70 cases per week. It would appear to be still higher than the 25 cases per week last year. However, there was no compulsory reporting last year whereas today there is compulsory reporting. Our assessment is that at 10 cases per day, we are now back to the normal situation. Mr Inderjit Singh also asked whether beyond cleanliness, is there a medical solution. Sir, at this moment, there is no medical cure to the hand, foot and mouth disease, in particular, the EV71 virus. There is also no vaccine available. However, I want to highlight that when we say "there is no cure", it does not mean that every child who has contracted the disease will face the danger of death. As an illustration, in the outbreak in Taiwan, there were about 1.4 million cases and over 70 death cases, ie, one casualty out of 20,000 cases. I want to emphasise that there is no need for the public to be alarmed that the hand, foot and mouth disease is there all the time.”
“Such an approach which Singapore has adopted, ie, levelling of opportunities, is more sustainable in the long run and will produce the best outcome for all Singaporeans. We must not restrict the growth of the top income earners and, at the same time, we should continue to focus on uplifting the lower income Singaporeans through the means that I mentioned earlier. Only then can we ensure a strong and united Singapore. We are fortunate that the Government has already proactively addressed the issue of widening income gaps, and this is precisely why we will not run into a situation of riots or unrest that the NCMP has brought up. I feel that the NCMP does not sufficiently understand the issues of the new economy and therefore has raised issues that are so misleading. He needs to plug into the new economy if he is serious about addressing such issues.”
“Fourthly, we should have sufficient safety nets to help those in society who cannot keep up with the pace or who just cannot overcome the obstacles, so much so that they have difficulties in making ends meet. No matter how much we do, we will always have such people in our society. In fact, this is a fact of life in every country in the world. There can never be a situation where you have zero percentage of the population who are in this position. Comparatively, we do not have too serious a problem today, if we compare ourselves to even countries like the USA where there are many people living on the streets. We do not have a single family living on the street in Singapore today. And we must, of course, continue to systematically help such people who will tend to lag far behind in society for whatever reasons. We, so far, have a good track record and should continue to keep it this way in the future. Sir, as I mentioned, there will always be people who face tremendous problems and difficulties, and this is a fact of life in any country in the world. Therefore, hardship cases were present in Singapore in the last 30 years and they will continue to be present. The real issue is how can all of us reach out to such people and try to reach out, locate them and help them as much as we can through all the various schemes that exist. Therefore, we should not mistake these hardship cases as an outcome of the widening of income disparities. We should continue to evolve on how we handle and resolve such hardship cases. Sir, in the final analysis, the key solution of the widening income disparities is to balance opportunities rather than balancing income levels through artificial or unrealistic means.”
“We are already seeing problems of our older workers who have become unemployable as a result of their old skills becoming outdated and irrelevant in the new economy. Initiatives like the Skills Redevelopment Programme and the concept of life-long learning must continue to be developed to address this issue. Sir, the NCMP has a lot to learn about retraining. Even cleaners, the example that the Member brought up, can learn a lot, especially when we decide to automate and mechanise the industry. I have actually seen training manuals two inches thick that contain a lot of materials on how cleaning can be done more efficiently. And I think our cleaners and our road sweepers can benefit from such training and, as a result of automation and mechanisation, they will be able to earn a lot more income because of the higher value added that they add to their jobs. Sir, thirdly, a related issue which I think is very much relevant in the new economy, as it was in the old economy, is that everyone should have access to affordable housing and medical care. We should never over price these necessities to the point where only the well-off can get good medical care and good homes. The Government has a direct role to play in ensuring this happens fairly and should continue to be accountable for equity in the future. As long as we continue to ensure that every Singaporean has access to housing and medical care no matter what his income level is, we will continue to avoid any issue of envy or the feeling of being left out. And I think we have many programmes, eg, Medifund and the various top-up schemes and assistance schemes that actually will be able to help families who are not able to afford such necessities.”
“Similarly, for those who are willing to work hard and improve themselves, they have been able to attain a better standing in society, because the country allows them to do so. No Singaporean is expected to remain poor forever and our society allows everyone to rise up the ranks, whether in position or in income earning ability. This is what I mean by equal opportunities. The Singapore Government's answers to the new economy are and should be the following. First of all, a good education for every Singaporean child, who is trained to learn for life and trained to plug into the knowledge economy. We should never end up in a situation where a child from a lower income family does not do well in studies as a result of the family not being able to afford it. Every child should continue to be given equal opportunity to excel in his or her studies, and our education system today allows it. In fact, I was surprised that the NCMP mentioned free education. I thought we already have free education starting from primary school. And for families who are in difficulties and cannot afford to pay school fees, there are many avenues of help, and I have not come across, in my constituency at least and I am sure many Members will agree, of any child who has not been given a chance to fulfil whatever level of education he or she wants as a result of not being able to pay for it. So I really did not understand the issue of free education that the Member brought up. Secondly, an opportunity for all Singaporeans to be retrained easily and affordably at any point of their lives is also an important thing that the Government should focus on.”
“In my opinion, the best bet for us is not to try to balance income levels, but to have a level playing field for opportunities, so that no matter what walk of life one comes from, he or she will have an equal opportunity to earn as high an income as possible and have a chance to make a jump from the lower 10% earners to the top 10% earners in the country. Everyone should have a chance of achieving what they aspire to achieve and their success or failure should be the outcome of their own effort and capability, and not because we created some obstacles for some of them. We cannot just think of redistribution of wealth. Otherwise, we risk losing our wealth creators. I therefore hope that the Government will continue to emphasise the concept of equal opportunities for all Singaporeans, which has brought success for Singapore up to now. I sincerely believe that in this new economy, it will be even easier to make that big jump, to create wealth for oneself, provided we have a sufficiently well trained population. It is therefore critical that the Government equips all Singaporeans with the right tools so that they will be able to benefit from the tremendous opportunities that the new economy provides. Sir, I am sure Members of this House will agree with me that Singapore already allows a great deal of social mobility for everyone, no matter what their background is. Over the last 35 years, since independence, we have seen so many examples of families who have seen hardship and poverty, and who have later broken out of their social position as a result of their children being given opportunities to excel in their studies, thus allowing them to take on good and well paying jobs.”
“We cannot artificially prop up the wages of such people through practices like the minimum wage system, because we will risk over pricing ourselves and, hence, cause an acceleration of companies relocating out of Singapore to countries that offer cheaper infrastructure and labour cost. To be realistic, we therefore have to accept the fact that more wealth will be created by just a few people. On the other hand, every society will always have its share of people who cannot successfully catch up with progress and who will lack the necessary skills to do well. Therefore, income disparities will continue to be worsened as we progress in this new economy. While we will have very high income earners who will be able to enjoy very comfortable lives and who can choose to live in any country they choose to live in, our low income earners should not be deprived of the necessities of life and they should also have a share in some of the luxuries of life in Singapore. In other words, we must ensure that all Singaporeans have a reasonably good quality of life no matter what their background. This must be the Government's key responsibility so that we will continue to enjoy the good social cohesion that Singapore has enjoyed in the last 30 years or so. The real question then is: how should the Government and the people of Singapore prepare to tackle this issue so that all Singaporeans, no matter what their background or income levels are, will have a good life in Singapore and no one should feel deprived or live in envy of others who enjoy a higher income level?”
“Paying them high salaries is well worth the expenditure if they can create competitive advantages for the organisations that they work for. We should therefore compare the worth of our top talents against the global workforce in a global market place. When we look at things from a global perspective, then we have no choice but to accept the fact that the wages of our top earners will have to be determined on a global basis, and we have no choice but to allow each to achieve his full potential of earning capability. We cannot artificially suppress anyone in order to address the issue of income gaps. So, the obvious thing to do is to let things go and allow our top talents to earn however much they can. When this happens, the sure thing to happen is that those at the top end will be extraordinarily rich, and this will worsen the issue of the income gap compared to the lower income earners in the country. In every society, there will always be people at both ends of the spectrum. This is the reality of life. On the other hand, we also cannot artificially prop up the wages of the low income earners in order to close the gap. Because, just as the competition for talent at the top is a global one, similarly, the competition for jobs at the lower end is also global in nature. So our unskilled workers who form the lower income earners in the country will have to compete with workers from countries like India, China, Indonesia, Bangladesh and other countries around the world. Price of our labour must be competitive compared to labour from these countries.”
“Should we create an environment that retards or inhibits such people or should we have an environment that further encourages more people to try? Sir, to ensure Singapore's continued growth and prosperity in the future, we have no choice but to embrace globalisation and to participate in the new economy and to allow practices consistent with the development of the high growth knowledge-based economy. Sir, in this new economy where opportunities will be more equal than in the past, everyone will have the opportunity to create wealth, but not everyone will want to or will be able to participate as effectively in the knowledge-based economy. However, in such an economy, those with skills and the relevant capabilities will command a higher premium and therefore higher wages. Ultimately, entrepreneurs and technopreneurs will help create wealth for the country and hence create more jobs for others in Singapore. If we do not encourage such an environment that encourages technopreneurship or entrepreneurship, we will lose our talented people to countries like the USA where they will be given ample opportunities to excel. The competition for talent is global in nature, as I mentioned. Since our people will have more choices and will be a lot more mobile than in the past and since we have other countries equally hungry for the best talents from around the world, if we do not satisfy the demands of such Singaporeans whose skills are valued in other countries, they will pack up and leave. Similarly, even in big companies, or for that matter in the Government, the capable and talented people will have to be well rewarded if we want to keep them.”
“In my opinion, this is precisely the root cause of the issue of income disparities. The new economy will see wealth creation being accelerated by those who dare to take the risk and to venture into new areas of technology and business. Wealth creation in this new economy will be quite different from wealth creation that happened in the age of industralisation or in the old economy in general. While the enterprises in the old economy created wealth through bricks and mortar and also through bricks and mortar businesses and this typically took a long time to be created, in the new economy, entrepreneurs will be able to create wealth at a much faster pace than any time in history and the quantum of the wealth created will be so huge and unimaginable in the old economy. People like Bill Gates created so much of wealth in such a short time that they will not be able to spend all their money in their lifetime, nor in several generations to come for his family. Sir, Richard Li from Hong Kong created his few billion dollars worth of wealth in just three years, matching what his father created in 30 years of his lifetime. Such is the nature of the new economy and such are examples of things to come in the next phase of economic development in the world and by default, such will be the nature of things to come for Singapore from now onwards. In the future, more Singaporeans will be more daring and willing to try and hence will have a chance to strike the gold at the end of the rainbow. We are already seeing many Singaporeans seeking opportunities in the knowledge economy, giving up alternative, stable employment in traditional industries and businesses. The question is: should we discourage or encourage such people?”
“Sir, I beg to move, To delete the words after "House" in line 1 to the end, and to insert - "(1) notes that globalisation and the knowledge economy are widening income disparities worldwide; (2) reaffirms the strategy of embracing globalisation to create growth and prosperity for Singaporeans; and (3) supports the Government's policy to equip all citizens to benefit from the new economy, to uplift lower income Singaporeans and to strengthen social cohesion." Sir, the widening of income disparity, as I mentioned earlier, is a worldwide phenomenon and is affecting all countries that are embracing the new economy and those who have opened up their economies as a result of globalisation. In fact, it is happening in the USA, the world's biggest economy, in the OECD countries and it will also happen in all other countries that, as a result of the world becoming one big market, will have no choice but to globalise their economy. A country could decide to isolate itself from the problem by not globalising and not participating in the phenomenal growth of the new economy. But obviously, this will not be a rational decision because the world will not wait for those who are not able to change and accept and participate with the new rules of economic development. So we have no choice but to participate in this new economy if we want to survive as a country in the years ahead. If we look at the Gini coefficient in all countries that are already at an advanced stage of globalisation, all of them are recording a widening of income disparities. Sir, as the Deputy Prime Minister put it in his speech during the debate on the Ministerial salaries, globalisation has created a single world market for talent.”
“As far as I know, there is no full-time job in Singapore that pays that kind of wages, but this may be so for part-time jobs. So I suggest that the NCMP study the statistics a little more to understand the real situation. I also fail to see how a new Industrial Relations Act or a new Employment Act or the reconstitution of the NTUC or the National Wages Council and the rest of his suggestions can solve the issue of the widening income disparities. This shows a lack of understanding on the part of the NCMP on what are the real causes of the problems that we are discussing today. Sir, during the debate on the Ministerial Statement by the Deputy Prime Minister on the new salary revision for civil servants and also during Questions for Oral Answers on 30th June this year in this House, the issue of widening income gaps between the top and the bottom earners was addressed to a certain extent by some Members of the House and by the Deputy Prime Minister and also by the Minister for Trade and Industry. From the discussions in the House, it was obvious that the issue of the widening income gap is not unique to Singapore. In fact, it is an issue which is part and parcel of the new economy. From the discussions, it also shows that the Singapore Government is not sitting on its laurels for the problem to become a chronic issue. The NCMP should judge the Government on the proactive actions it has taken to address the issues. Obviously, he has not been reading about and following the developments in the country in recent times, especially on how the country is preparing to address the issue of participating in the new economy. Sir, with this in mind, I am moving an amendment to the motion standing in the name of the NCMP.”
“Sir, first of all, I would like to comment on the NCMP's observation that there are 14,700 Singaporeans earning less than $200 per month.”
“Finally, Sir, since we have chosen a private sector benchmark for the system of compensating our Ministers and civil servants, I feel that we should accordingly expose the Ministers and civil servants to the risk of employment, as faced by the top management in the private sector. So while the top managements in the private sector are paid very high salaries, they face tremendous risk in whether their careers should continue within the same company. In my opinion, we cannot just adopt the good part of the private sector practices and leave out the bad part. I therefore feel that while we have accepted a transparent system of compensating Ministers and civil servants, we should accordingly have a transparent system of how their performances are measured and how they are penalised for their poor performances. And penalising means not getting a bonus, and it may not be a sacking as you know, it takes time. It is only fair that Singaporeans know about this part of the formula and that we are sincerely practising a system where people do not get rewarded even if they do not do their jobs well. I know that this is a very difficult thing to do, especially for the Cabinet, but I would say that this comes as the hazards of the job, in return for such an attractive compensation package. If we can show this in practice that we are really compensating the good performers and not rewarding the poor performers, then I am sure that we will have no problems in getting Singaporeans to support the system that we are putting in place. The problem is that many of them are just looking at the good part of the story and not the other part of where poor performers do not get rewarded. Sir, with that, I support the proposal that the Deputy Prime Minister has put up.”
“With the changes in the formula that the Deputy Prime Minister announced, specifically in increasing the total number of people used as a benchmark and using the median instead of the average of 48, I believe we should, to a certain extent, address the issue of the outliers. It is also prudent to discount the variable component of the private sector salaries in computing the benchmark for Ministers and civil servants, and especially stock options tend to really skew the data out of place. The reason is that, as the Deputy Prime Minister mentioned, the point of exercise could be the result of stock option accrued over many years of employment. So, therefore, it was not fair in the past to use this to compute the average. Similarly, by making smaller increments in the basic salary and by allowing huge performance bonuses, we are getting closer to the private sector's method of compensation where it is more equitable. The Deputy Prime Minister earlier announced that about 40% of the increment or benchmark salary actually goes to the variable component, and I think it is a good move, and this will only be paid if the performance of the Minister or the civil servant is good. I would urge the Deputy Prime Minister to continue to fine-tune the formula so that we can better achieve the intended goal of a private sector system of compensation package. I especially support the fact that should a Minister or civil servant do extremely well and typically there will be just a handful of people each year, then we should not shy away from giving them huge bonuses, be it six months, 10 months or even 20 months of bonuses, and this is what is being practised in the private sector. This is not given to everyone in the company, just a handful of them who really did very well.”
“So a relative measurement in such a situation is also not useful. The relative measure of a CEO's or Minister's salary should be really the competition and therefore a company or a government should continue to attract, keep and motivate them. To be able to continue to attract, motivate and keep them in the company, the compensation package should be more attractive compared to the alternative employment and package that the competition can provide. In this case, for the Ministers and top civil servants, the competition is the private sector. For our CEOs, it will be another company. Sir, the formula chosen by the Government basically aims to use the private sector as a benchmark. I can accept this formula because the private sector does provide alternative employment opportunities for the Ministers and civil servants and therefore the competition is there for the same talent. However, I feel that the formula used in the past was not quite a good measure of what salary increments the top private sector earners really received. The biggest flaw in the formula was that every year, the top four earners in each professional group were most likely not the same people in the following year. In fact, these people were probably the outliers within their profession and taking an average of such outlier numbers results in something that does not truly reflect what the best earners in the private sector really receive. And it does not really reflect the essence of what the formula was supposed to do. Secondly, the top earners in most cases made their money as a result of extraordinary performance and received extraordinary bonuses or stock options, as the Deputy Prime Minister rightly pointed out.”
“Sir, the man in the street, however, will see the quantum of salary increases for the Ministers, as so huge and unimaginable for them to achieve easily. I do feel for the man in the street and therefore it is the responsibility of the Government to ensure that every Singaporean has the opportunity to achieve their full potential and earn as much as they deserve to earn. Everybody should be ensured of a good quality of life in Singapore and it is the responsibility of the Government and the Ministers to ensure that this happens. If the Government fails to do so, and the Ministers fail to do so, then the people in charge do not deserve to be paid what they are being paid, just as in any country, where the CEO and the top management are held accountable for their poor performance and their compensation package is affected accordingly. I also feel that it is not useful to compare the quantum of the Ministers' salary to that of the man in the street, because if we do, then obviously there is a tremendous skew and the gap will be really big. I feel that we should look at the Ministers' compensation package on a stand-alone basis based on the responsibility they have been charged with and this cannot be easily compared with anyone else in Singapore. We must look at the issue on an absolute basis. Any relative measurement will result in too much of an emotional debate, as my colleague Dr Michael Lim talked about earlier. In fact, it will be emotional because of our inability to compare accurately the roles and responsibilities of the jobs against which we are comparing. Sir, having said that, it is also a common practice in the private sector for the top management to be paid a very high compensation package, as compared to the average worker in the company.”
“Mr Speaker, Sir, it is very difficult to do a benchmark and define a formula that can reflect what a Minister or a top civil servant in Singapore should be paid. The general feedback from many Singaporeans is that we are paying our Ministers and civil servants too high a salary as compared to any other country in the world. But the question we should ask ourselves is whether we can really make a fair comparison by looking at the salary scales of Ministers and top civil servants in other countries. My contention is that we cannot and should not because there is no other country like Singapore around the world. The nature of things here is very different compared to those in any other countries. So Singapore leaders therefore decided to define a unique formula that suits our system and the system basically addresses issues like corruption prevention, attracting the best talent to join the Government and compensating for what the Ministers lose out by not participating in the private sector. In my opinion, we should look at the salary formula on a stand-alone context of the Singapore environment and in the context of addressing the issues that I just mentioned. Just as the board of directors and the top management of each corporation or company will have to determine the best compensation package to attract and retain the best talent and to motivate them to do well for the company, in the same way the Government of the day in Singapore has determined the salary formula and compensation package that the Deputy Prime Minister has just announced. And it is best suited to achieve the objectives of recruiting and retaining talent and to keep the Government clean.”
“My next question was: does this apply to a company that has already gone public? Will the stock option then also be tax exempt?”
“Finally, are there any restrictions as to what ownership the employee can have in a company, whether there are any conditions on employee ownership of companies, which means that an employee can own a substantial portion of the company in the beginning and yet enjoy 50% exemption in the new scheme?”
“Mr Speaker, Sir, first of all, I would like to thank the Minister for announcing the scheme, and I think that this will really encourage many entrepreneurs to have an alternative form of compensation, instead of a higher salary, maybe a lower salary and a higher incentive in stock option. This will help companies to at least improve their chances of success by lowering their cash flow. I have studied various stock option schemes and share ownership schemes in many countries and I think that the implementation of this scheme will probably be the best in the world. I have a few questions for the Minister. First of all, will employee share ownership at inception of companies, that means these are not stock options, but equity in return for expertise that you bring to the table, be tax exempt in the first place? Second question is: Will this scheme apply to companies that have already gone public but have yet less than $100 million worth of assets? On the point of Singapore incorporation, I support Mr Leong's point that more and more of our businesses are becoming very international, and while we may have the intention of wanting to operate out of Singapore, the real value sometimes will be generated in countries outside Singapore, for example, in the US and Europe. Therefore, I hope that the Minister can be flexible on this requirement of local incorporation. The third question is the definition of "working hours". In the Internet economy, we talk about 24-by-7, which means that 24 hours in a day are considered working hours. So, is there a definition that the Minister will place on these working hours?”
“Sir, so far, we have been talking about HDB and town council regulations. My question is: do we have equivalent killer litter regulations for private apartments and condominiums?”
“Sir, the Minister mentioned that the law will be reviewed. Can I suggest that in reviewing the law, maybe we want to consider passing the onus on the eligibility to rent a room or a house back to the tenant, or to the employer? And to implement a system like a certificate of eligibility where MOM or SIR actually issues for potential tenants a certificate of eligibility for foreigners, and a way to cross check travel documents. I think, in this way, we probably pass back the onus to the tenant. We separate the landlords from employers who actually employ illegal immigrants.”
“Sir, can I ask the Minister to clarify whether the due diligence process requires just a one-time check to verify the documents? In other words, if at the point of checking, the foreigner is indeed legal at that point of time, and subsequently, either a work permit or visit pass expires, then the person becomes illegal, is the landlord required to continuously check the documents to verify whether the visitor is indeed a legal visitor?”
“But I do not think it is a matter which NTUC will be well advised lightly to go into. It is very difficult to run a bank. Even people who are very competent at running big banks find it difficult to make money. To want to run a small bank and not to lose money, you have to be very, very confident of yourself.”
“Sir, I welcome the suggestion of CPF money being transferred to banks other than DBS. But given the current situation of the many branches that DBS has, compared to the other banks, Singaporeans will be forced anyway to go to DBS because it is more than just savings for retirement. They need to use the bank for many other transactions. Can I request the DPM to consider the suggestion of giving approval to banks to have more branches and ATMs before implementing this CPF transfer scheme to alleviate this problem of $2? The second question I have is back to the suggestion of a cooperative bank. I think it is a suggestion worth considering. We have proven in many cases that the cooperative type of approach does provide an alternative and viable approach for many other services. This includes NTUC Fairprice in the food services. In fact, NTUC has been involved in housing and there are many other examples where the cooperative system has provided a viable alternative to a commercial deal. I think maybe we should give an opportunity for a cooperative bank to work and perhaps NTUC may want to take up the challenge to open up a cooperative bank if the Government is willing to issue a licence. BG Lee Hsien Loong: Sir, first of all on ATMs. While DBS has the widest branch network, the other banks have a very wide ATM network that is equal size to DBS Bank. If it is just a matter of withdrawing your salary which has been giroed in every month, you can have an ATM anywhere in Singapore, whichever bank you bank in. I do not think that is a practical problem. On cooperative banks, I have explained my position why I do not believe they are viable. If NTUC submits an application, MAS will have to consider it very seriously.”
“Sir, I have two questions. The first one is on the verification of the work permit or the employment pass. Does the prospective landlord have to submit the original copy of the document to the Work Permit Department? The second question is on the finger-printing check. I think that is the best foolproof check to verify whether a person is truly a legal immigrant or legal worker. Could this finger-printing check be designated to all neighbourhood police posts, for ease of access to all Singaporeans?”
“Sir, one other suggestion I have is for the Board to be responsible for supporting and growing the smaller companies from the point of them being in the start-up stage to the point when they become world-class companies. Currently, both the Economic Development Board and the Productivity and Standards Board have a bigger role to play in supporting such companies. In my opinion, the NSTB could play a more effective role than both of these agencies that I have mentioned, especially for the technology-type of companies, if we are serious about growing many more world class companies in Singapore. The Bill is also being amended to allow for the appointment of two Deputy Chairmen. I would like to suggest that one of the Deputy Chairmen's position be filled by someone who is still in the private sector to complement the strength of the existing members of the Board. In this way, industry perspective and current trends will always be available and will be useful in the decisions of the Board. The Vice-Chairman should also have executive functions for greater ownership and effectiveness in executing his or her role. Sir, the changes proposed in this Bill, in my opinion, are good and I hope that the Minister of State will consider the suggestions that I have made in executing the Bill. Sir, I support the Bill.”
“But these are still necessary so that we could steer the country and the private sector to the desired directions, the results of which would create the future industries and therefore the wealth for the country, and also future jobs for Singaporeans. The second role is one that can have an immediate or short term impact and which could also result in financial gains for the Board. The amendments in clause 5 of the Bill basically reflect this role. In this role, the NSTB acts as an incubator and as an angel investor, or as a venture capitalist which can help stimulate many new start-ups to set up shop in Singapore. With its infrastructure, the Board can also help start-up companies with a network of companies that it is incubating and with the connections that the Board has, and this will help them basically progress in setting up their companies and in progressing further. The role of being an incubator and an investor is also a useful role in creating a dynamic environment where many new companies can thrive and grow to become world-class companies. In this capacity, the Board should not restrict itself to the local market, but rather it should participate as a global player entering into the best technology centres around the world. Sir, in my opinion, it would be wise to at least have a separate organisational structure for each of these two roles that I have mentioned. In fact, in order not to lose focus, it may be a good idea to have separate agencies handling these two roles, with the possibility of the second role or function being privatised in the long term.”
“Mr Speaker, Sir, I would like to make some general comments on the Bill. Sir, many Members of the House have recently given many excellent suggestions on how we could effectively participate in the new economy that will be mainly driven by information and the technology sectors of our industries. It is quite obvious that more can be done in creating a conducive environment that can nurture entrepreneurs as well as many more new start-up companies, and also in supporting the many new small companies in Singapore to be groomed to become world-class companies in the long term. It is therefore timely that an agency be given the task to focus on doing the things I just mentioned, and the National Science and Technology Board is the best agency to assume this role. I must say that in the past few years, the NSTB has played a proactive role in trying to promote technopreneurship and in encouraging the development of technological activities, and we have been very successful in doing so. The expansion of the functions and powers of the Board is therefore an excellent measure for promoting and supporting technopreneurship and to organise Singapore to continue to be the centre of technological development in this region. Increasingly, I feel that the role of NSTB is being divided into two parts. The first role is of initiating and promoting longer term development efforts, the results of which may not be so obvious in the short term, and which will involve huge investments that may not yield financial returns for the Board or for the Government in the short term or in the long term.”
“In practice, I am told that the education administrators even tell them it is a mere formality and they will come to no harm by signing these guarantees. Sir, this is a very bad practice. Such guarantees, besides being difficult to enforce, make a mockery of the whole process because of the way it is lightly treated. Surely, there is a better way to ensure that foreign students serve their bonds. On a separate matter, could the Ministry update us on the number of such foreign students who are studying in Singapore on Singaporean scholarships, bursaries and other types of financial assistance? How many of these students remain in Singapore and how many break their bonds? For those who stay, is there any record of how many actually settle down in Singapore or at least of the average length of time they stay to work in Singapore?”
“Thirdly, perhaps maybe a part-time law degree or Masters in Law for people who have had a first technical degree would be useful. I think, at this moment, many of us and many people in this industry are turning to lawyers from the United States or many other countries to file intellectual property issues for them, because not enough of our lawyers in Singapore are capable of doing it. So I think this is an urgent issue that needs to be looked into. 1.15 pm Assoc. Prof. Toh See Kiat: Sir, there are many foreign students studying in our midst. Most of them will return to their home countries eventually. When they do, they could be serving in important positions in business and government. Many will remain friends of Singapore for the rest of their lives. Some will stay in Singapore and enrich our lives and our talent pool. As we have spent a lot of money to partially or fully finance their studies here, many of them are made to sign bonds that they will work in Singapore for a number of years. To ensure that the bonds are taken seriously, the foreign students are asked to get guarantors for their bonds. For some strange reason, these bonds are signed not in their home countries before they come to Singapore, where their friends and relatives could be roped in - but in Singapore. The result is that the students will ask their lecturers or fellow students, both foreigners and locals, to be guarantors. If the foreign student disappears after graduation, the guarantor has to pay damages. There is, in fact, no incentive for the foreign student to stay on as his guarantors are nothing more than strangers to him most of the time. The guarantors, who are students, do not understand the full legal import of their guarantees.”