Inderjit Singh
Singapore
“You do not want our monetary policy easing to offset some of these as it will result in an inefficient allocation of resources. I think our SMEs will also be similarly affected by higher import costs.”
“Thus, SPRING can become something like a Municipal Service Office (MSO) for SMEs. SPRING has already set up an outreach mechanism through the SME Centres. This structure should stay to be the outreach arm.”
“I want to thank the Minister of State for agreeing to the suggestion of the first- and one-stop agency. We have higher expectations, so, I hope we can make it work. But my question on REITs was not answered.”
“She worried about the eroded sense of belonging that she and her friends felt and their view that Page: 24 the Government was more interested in luring foreigners than bringing Singaporeans home. She said that friends and relatives asked if she planned to stay in Australia after her graduation. In 2013, she was unsure of her answer.”
“I recently read that, in Malaysia, the EPF holders are paid 6% for their savings for a number of years, and this is much higher than the return we are paying to our CPF holders.”
“I believe Minister of State Mr Teo Ser Luck mentioned just now the company formation rate of about 14,000. I would like to ask are we monitoring the rate of companies folding up. I have heard recently that the rate has also increased, especially in some sectors that are very dependent on rental.”
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“Sir, from the experiences of many people who have been involved in the setting up of technology-based industries in Singapore, the important lesson that all of us have learned is that we have serious weaknesses in the overall industry infrastructure as far as the protection of intellectual property is concerned. While in Singapore, we do produce a number of lawyers, there are too few specialising in this area of intellectual property protection. So if we are serious about promoting the new economy, especially focusing in the info-com area, we would need to build up our strength in the area of intellectual property protection. In fact, the best intellectual property lawyers are those who have some form of technical training as their first degree; like engineers and scientists, who subsequently take on law as a second degree, they are the best lawyers who actually promote such an industry. Sir, I have three questions for the Minister: First of all, of course, can the universities in Singapore focus on producing more lawyers whose expertise is in the area of intellectual property protection? Secondly, can we allow some flexibility in the admission criteria in our universities where we allow people who have had a first degree, preferably a technical degree and have had a number of years of experience and who subsequently want to have a change in career, to take on law? Will the university criteria be modified to allow such people to take a second degree in law? I am sure there will be other Members who will ask for many other areas for a second degree but since we are talking about promoting this knowledge-based economy, my interest is to ask for a second degree in law for the protection of intellectual property.”
“Sir, I feel we have already achieved our objective of requiring every Singaporean to learn his mother tongue, in order not to lose our traditions and cultures. But I feel that we now need to look into the future and not let the mother tongue be an obstacle in developing our own local talents to be world ready.”
“But because of the importance and heavy weightage we place on this subject in deciding things in our school system, our children end up spending a disproportionately longer time in studying this subject, and I think some Members talked about a lot of time is spent on studying the mother tongue, tuition and extra classes and so on, so much so that you leave very little time for the three other important subjects - Mathematics, Science and English. I therefore feel that it is about time that we stopped using the mother tongue subject as a restrictive gauge to measure a student's academic ability. Sir, I would like to ask the Minister three questions. First of all, will he consider changing the education policy to place less weightage on the mother tongue subject in computing the landmark examinations' aggregate score by placing more emphasis on subjects like mathematics, science and English? While we can still place some weightage on it, I think the weightage needs to be much reduced, and we should emphasise more on the other subjects. Because we are using this to measure whether the student did well or not, whether this student is going to become a scholar or not. Secondly, in practising streaming, will he consider excluding completely the mother tongue subject as a criterion for measure? While we can measure all the other subjects, maybe we should not use mother tongue as a criterion. As I mentioned, the current practice is unfair for those who may have done very well in other subjects but not in mother tongue. Thirdly, will he relook at the university admission criteria and maybe we should exclude this mother tongue pass requirement at 'O' levels as an admission criterion to university.”
“Sir, I have a slightly different view. I think at least the result of what the Member was talking about is that our university graduates are not proficient in both English and Chinese languages precisely because we have had too much emphasis placed on mother tongue in our education system. Sir, I believe that the recent changes in allowing students the flexibility in choosing different mother tongue options through the implementation of the CL(B), ML(B) and TL(B) options are good and timely. That is going to make it even more difficult to be proficient. I feel that all this time, we have placed too much emphasis on mother tongue in deciding on the streaming of students, computation of aggregate marks for the PSLE and other school examination levels. This has resulted in unfair ranking and student performance measurements. Many students who did very well in all other subjects, but did badly in the mother tongue were penalised by streaming them to lower streams or in them not getting the best subject options in secondary schools. While I am not doubting the importance of learning one's mother tongue, I however feel that it is about time we changed the way we treat this subject as compared to the other more important subjects in the school system. Mother tongue is important but, as a subject, I think we need to reconsider how we treat it. Sir, we are not going to create successful knowledge workers by doing well in the mother tongue subject alone.”
“To clarify, the day that I went into my class, we never streamed after that. In fact, I cannot remember whether it was A or B. But we went through that together, none of my classmates got segregated into the various streams as we went along. Yes, it might have been A or B. But we had nothing to measure how we were streamed into A or B the day that we went into primary 1.”
“Sir, as far as I remember, we have no streaming in our primary school. The only time I got segregated from the rest of my classmates was after my PSLE examination. And the next streaming was at secondary 3 when we were streamed to Science or Arts stream. So the system that I went through did not have any streaming until the PSLE. So I actually cannot understand the system that he went through. RAdm Teo Chee Hean: We have been in schools and there have always been A classes, B classes and C classes. That also is a form of ability streaming. I am sure that the school that Mr Inderjit Singh went to must have had some form of that too.”
“Similarly, the measures of creativity and EQ deserve more emphasis as we move ahead and ECA, project work and life experiences should feature strongly in our new measures of success. To be successful in the 21st century, we need to develop a more adaptable society, able to pick up new capabilities and skills all the time, and not just once in their lifetime. 4.30 pm Finally, Sir, I am curious to know how the concept of mass customisation of our education system is working. The Minister announced this some time last year. The question I have is: is it really possible to implement the system? Perhaps the Minister can share with Members of this House how this system can be practically implemented.”
“The system basically divides our children into categories and put the people of the same capabilities in the same place and segregate people of differing talents. This is once again good for efficiency, but bad in that it does not allow our children to benefit from learning from people of differing talents. I strongly believe in the strength of diversity that if they can learn from people of different talents or different abilities, they probably would turn out to be better students or adults in the future. Our children are missing out on the important opportunity to learn from others. Sir, all of us in this House, including the Minister, came through an education system that mixed people of differing abilities together for many years of our school system. I am sure that you must agree with me that the outcome has not been a bad one, where all of us have been able to compete effectively with the world's best countries. I would like to ask the Minister whether there is any other education system in the world that practises streaming in the way that we do here in Singapore. Sir, if we are serious about the concept of life-long learning, then our current methods of measuring success and failure need to drastically change. It is more important to ensure that a student has learned the ability to learn in the future than to learn to score well in examinations and in doing so, achieving academic excellence which we very much want our children to achieve today. Learning to score well in examinations is not going to inculcate the value of life-long learning, so we really need to develop other measures of success in our education system.”
“My question to the Minister is whether we are looking at the right models of education from around the world and to adapt the best practices to suit Singapore. In my opinion, our system basically trains our children for one-career model of life, very much like the traditional Chinese and Japanese systems which placed scholars among the top rung of society. As BG George Yeo recently put it in one of his speeches, such a system actually prevented the Chinese from exploiting the benefits of trade and new technology and, therefore, they are losing out in this competition to western countries. In my opinion, we really need to look at some western models in order to achieve the new outcomes of our education system. Sir, without doubt, the Americans were the leaders for innovation, technology and economic development in the past century, better than any other nations around the world. Similarly, they will have an excellent chance to remain the leaders in this century. I therefore feel that it is about time we learned from the Americans and other western models of education, not to copy them wholesale, but to pick the best practices among them and develop our own model for Singapore. I really feel that we can learn a lot from their systems, which may not be the most efficient in the world, but do produce the results. So, what good does it do to score the highest marks in the Science and Mathematics competitions around the world when the desired outcomes of an education system cannot be achieved? So I suggest that we be prepared to give up some amount of efficiency in our system to achieve the end results for the country. I also feel that we should re-look at the practice of early streaming of our children. This has been my pet topic for some time.”
“Sir, our drive to develop a nation of entrepreneurs with the required creativity to invent and innovate and to inculcate the concept of life-long learning further reinforces the need for us to re-look at our current system of education which served the purposes of the nation in the past and, which in my opinion, requires changes in a number of areas if we are really serious about achieving these goals of developing every Singaporean to his or her full potential. I believe that one of the key considerations of the education system that we have in place today is to achieve efficiency in the delivery of education and hence, we have been doing things like streaming, teacher postings, assessment, measurement of school performances and other like things. While from the point of view of the system and those managing the system, this looks very good and the outcomes of which are easily measurable, the negative impact is that we develop a nation of people who fit into just one model of success. To develop a nation of entrepreneurs capable of participating in the knowledge economy, and I am not saying that every Singaporean needs to be an entrepreneur, but if you want to get a few of them, then we really need to set our sights into something very high. At least some of them will make it. We need to ensure that our people will always be able to adapt to changes by constantly learning new skills, and it is time that we took a serious look at how we should modify our education system. Because the impact of the education system will only be felt 10 to 15 years from the time it starts, in my opinion, the issue has also become an urgent one.”
“Sir, I join Mr Lew's call to upgrade our private estates and I also have a similar question. But the issue I have is how do we handle the upgrading of the private estates. In the HDB estates, the town councils have the natural responsibility to maintain and upgrade these estates. And it is going to be a difficult problem for the private estates because we do not have this natural organisation. I would like to suggest that maybe it is about time that we considered extending the role of town councils to cover the management of the private estates in addition to the HDB estates, at least, for the common and public areas. After all, in each constituency, the town constitutes both the HDB and the private estates. As far as the MP is concerned, he has to manage all of it. Maybe it is about time that we extended the role of town councils to at least handle the upgrading as well as maintenance of the estates effectively.”
“For example, in the long term, I would suggest that the CPF rates could be 15% contribution each from both the employer and employee and 5% each from the employer and employee to the SRS or an equivalent scheme. Sir, I hope that we will take this opportunity to address the issues that I have raised because these are national issues and not employer specific.”
“In its place, I suggest that we implement a national compulsory saving scheme or a fund where both employees and employers contribute some money to the employee's account and the money contributed to such accounts can be used for a number of purposes. For example, one way to motivate employee loyalty is to pay them a gratuity every five years or so of employment. The employee can also borrow from his or her own account in times of difficulty, like when a retrenchment comes, very much like what some insurance policies allow you to do where you can borrow from your policies when you need to. Such a fund can also be used to address a number of social and welfare issues, not possible with the CPF. In fact, many Members, just before the suspension, talked about the use of CPF for various things, including for education. From the employer's perspective, if an employee leaves the company within the first or second year of service, the company should be able to claim back part of its own portion that he contributed to the employee's account, to compensate for the cost of hiring and training. The employee's portion can remain in the fund for the employee to use in future for whatever uses. Sir, the Supplementary Retirement Scheme (SRS) is an excellent way to implement some of the things that I am suggesting. In fact, it is very timely that this scheme has come about. We can do many more things without touching the CPF. Furthermore, I would like to suggest, as we go about restoring the CPF savings rate in the next few years, we should take the opportunity to revamp the system and the quantum that goes into the CPF and the SRS.”
“Sir, while companies should be primarily responsible for motivating their employees through the various incentive schemes, there still remains an issue of rampant job hopping among young Singaporeans. Despite the tough employment environment last year, many employers still faced serious problems in employees changing jobs over trivial reasons. This is especially so for our younger workers and those employed at the lower ranks in the companies, and especially too for those who work in shifts. Employers have been fortunate that the Government allows them to hire foreign workers to make up for the shortage of workers up to now. In many cases, employers have depended on the foreign workers to be their stable backbone to keep their operations going, while having to live with a much more volatile local workforce at those levels. Surely this is not the type of image we want for our workers in Singapore. Sir, the reason why I am bringing up this issue again is because I am concerned that even in the years when the job market was tough and when we had record retrenchments in the last few years and uncertainty of jobs and job security, our younger workers still did not take their employment seriously. I know that the Minister will push the issue back to the employers but, in the long term, the issue will become Singapore's competitive disadvantage, and it is a national problem and will need a national solution for this. Many of us have asked that the CPF be used as a tool to control job hopping, but the Minister has many times objected to this because the purpose of CPF is mainly for retirement savings. I can accept this argument.”
“Sir, I just like to add to the concern Mr Leong has raised. Basically, in the high-tech industries, eg, wafer fabs, chemical industries and pharmaceutical companies, one of the concerns among investors to locate their factory in Singapore is the availability of water. And I think we need to make them feel comfortable that Singapore will have enough water, so as to attract such industries in the future.”
“I would like to ask the Minister to consider increasing this back again to around 55% and to fund some of the industry organisations, like the Chambers of Commerce, to actually help such companies attend such trade shows. Finally, I believe the infrastructure costs in Singapore still need to be addressed. PSA charges are still not competitive compared to the best ports around the world, like in Rotterdam. Telecommunication charges are still an issue. If they are serious about promoting this industry, we should look at all these things.”
“Sir, there is a perception that the Government and the Economic Development Board are no longer considering trading as an important economic activity in Singapore. In fact, I have heard a number of good traders who actually have left Singapore for trading cities like Hong Kong and Dubai, citing cost, support and also financing ability as reasons. In my opinion, for us to promote the e-commerce industry in the future, the trading community actually can play a very important role to promote this concept of a click and mortar concept where the traditional businesses are made efficient by the use of information technology to compete effectively in the world arena. The traders probably, having traded around the world, are the best people to promote this portion of the growth that we want in the Internet economy. Sir, last year, I also spoke about possibilities of implementing trade financing schemes, similar to the LEFS scheme for the manufacturing sector. After speaking in Parliament last year, I discussed some potential approaches with the Trade Development Board officers. I think they have come up with some possible plans. And I would like to ask the Minister whether he will consider implementing them because these plans will not incur too much of Government funds. But what we need is for someone to get it started and, I think, if it has started, the Government can take a step back because the scheme will run by itself - run by the private sector, the banks and the insurance agencies. The other thing I would like to talk about is trade exhibitions and shows. I believe since 1994, the subsidy given to our companies in attending shows and exhibitions overseas has been reduced drastically from about 70% down to about 35%.”
“Fourthly, while many things have been said about the practices of GLCs, I do however feel that the GLCs can play an important role if they are privatised and run independently. GLCs could also partner our local SMEs for global projects as is being done by a number of countries, for example, in the UK and Japan. GLCs should therefore be given appropriate incentives to help such SMEs to secure overseas business together with their projects.”
“The question I have for the Minister is, how many of these PLEs have, in the past, actually made it as world class companies and in return how many of the world class companies that come out of Singapore were identified as PLEs before. I suggest we induct the private sector to help determine and choose PLEs for these Government agencies. This is an example of the outsourcing of Government of Singapore to the private sector. At this point of time, we need the focus agencies to nurture, groom, grow, guide and launch local companies into the global market place if we are serious about creating the 100 or so world-class companies that we talked about last year. So my previous suggestion of these independent organisations should be considered seriously. I suggest we spin off the PSB or part of PSB into a jointly managed consortium managed by both the private and public sectors with complete independence of management but perhaps guided by a board consisting of people from both the public and private sectors to provide strategic direction. This can be jointly funded again by the public and private sectors and there is an organisation called the SEMATECH in the USA. With such an independent body, the SME 21 will have a much better chance of success because of the direct private sector involvement to allow faster decisions to be made. I also suggest that we devise some incentives to encourage the merger and consolidation of our SMEs. Many of them may not be able to operate, given their small size and inefficiencies they may have. The feedback that I have is that current regulations in Singapore create too many obstacles for companies to merge.”
“Sir, the support for small and medium enterprises (SMEs) has always been a topic discussed by many Members in this House. The real issue is that we have not been able to find the right formula to help our SMEs effectively. The many schemes available are not fully benefitting the smaller companies and we need to relook at how best to incentivise such companies. While the Productivity and Standards Board (PSB) is working hard at it, I believe there is a serious misalignment of the needs versus the help available for such SMEs. The SME 21 is a good plan but, in my opinion, the implementation is not going to be easy and we may end up with just incremental changes but what we really need is some revolutionary changes if we are serious about creating many more world class companies out of these SMEs. In my opinion, we need an EDB-style organisation which is able to grant incentives like pioneer status or other incentives that Mr Ong has talked about earlier on. This agency should, first of all, have a focused look at growing local world class companies while EBD should continue to focus on multi-national companies. In my opinion, with the current set up, the EDB cannot effectively focus on both sectors. Such an organisation will also have the flexibility to select, groom and help grow companies from the start-up stage to the time they become world class companies or MNCs in their own right. Such an approach where some agencies follow the life cycles of a company will allow faster action and support to the specific needs of such companies. Because such agencies will know the needs of such company well having followed them throughout their life cycle. Secondly, in my opinion, the selection criterion for promising local enterprises is outdated.”
“A market leader could resort to predatory pricing to kill off competitors, deny access to smaller competitor on the pretext of its inability to pay on time; collect deposits from customers on all sorts of pretexts and not return the money promptly or at all; clog up competitors' distribution channels with massive numbers of small purchases; set so-called recommended retail prices with severe contractual penalties for breach of that price; or quietly collude with other service or goods providers in an unwritten pact, therefore no evidence, which obliges them to maintain the same price levels whatever the true economic costs of doing business. Sir, these are not hypothetical situations. They have actually all happened in recent months and even for years on end - in the telecoms industry, petrol stations, supermarkets, car dealers, the list goes on. Sir, when are we going to stop closing an eye to such inequity? These situations can be nipped in the bud if we had a Fair Trading Act. CASE will be submitting a paper to the Ministry on such an Act after our visit to Australia and New Zealand in May. We will bring a team of consumers, businessmen and officials to observe the impact and effectiveness of such a law and make recommendations on our return. I hope the Minister will give the paper careful consideration when it is submitted.”
“Even countries with supposedly strict competition laws close an eye to the realities which have resulted in the mega-mergers I have mentioned and to those like DaimlerChrysler, PriceWaterhouseCoopers and the Citi Group. In this light, it will be fundamentally anachronistic, it would seem, to ask for laws protecting consumers from monopolies and cartels. But I shall try. I want to make a case, Sir, for limited regulation in situations where the market is effectively closed; the market for petrol in Singapore, for example, or the market for household goods and consumer equipment. Then there are the public transport and public utility sectors. In these situations, market dominance is still possible because the consumer has no real choice when it comes to alternatives. 6.30 pm I am happy, of course, that in public transport and utilities, the monopolies, duopolies and cartels are closely monitored by the regulators - who indeed are also looking to create competition wherever they can. Witness the telecoms and the power supply industries, and the beginning of free competition in public transport. Deregulating and liberalising previously closed sectors is not good enough, Sir. Closed markets cause our businesses to be complacent and cumbersomely inefficient, stifle their growth and hamper their ability to survive in the global economy. Look at our banking industry and legal profession, for example. Hence the beginnings of change there also. I want to urge the Ministry to look into monopolistic conduct and business practices and make these illegal. We may not break up our relatively small companies in the name of competition but we certainly can discourage them from unconscionable conduct. Much of this market unfriendly conduct may even look innocuous.”
“In Singapore, the merger of the two banking giants of DBS and POSB became history with the merger of SIA and Virgin, a merger of sorts. And then there was the near merger of SingTel and C&W HKT. Even so, our mammoth SingTel is actually only 26th in size compared to the telco giants currently existing, and the merger would have them up only by a few notches if they had been successful. Global monopolies and cartels wield much power. Witness the De Beers monopoly of diamonds and the OPEC oil cartel, which is still a force to reckon with. Local monopolies are treated differently in different countries, of course. In the OECD countries, monopolies are theoretically prohibited by anti-trust and anti-monopoly laws. The philosophy behind these laws date back to the 1930s, when big was regarded as bad. Monopolies and cartels are bad for the consumer, because of their power to control prices and manipulate markets to the great inconvenience and disadvantage of the consumer and smaller businesses. This is particularly so in consumer products and services which for the most part function in imperfect and captive markets. Hence, the Internet and global competition will ensure that the power of localised monopolies is reduced or nullified. This is because the Internet allows the consumer to buy not just from MPH or Times Bookshop, but also from BarnesandNoble.com and Amazon.com. It allows the consumer to get information about prices, quality and availability of products and services more readily and thus makes for a more perfect market. In this brave new world, it becomes increasingly difficult to enforce or to justify laws regulating monopolies and cartels.”
“In my opinion, this will make our housing estates more vibrant, allow entrepreneurs to have their offices near their homes, and also become an integral part of the community where they work. I believe this will also help alleviate the problem of excess retail space that we are facing in our housing estates today. Sixthly, to bring in more talent has always been a big issue for Singapore. I would like to ask whether the Government is willing to consider setting up centres of excellence in a few countries, like in India, China, Philippines, Thailand, the USA and a few other countries around the world, where some of our activities, whether it is private sector or Government activities, can be outsourced to these areas. And these are the areas where we can groom and identify talent who could in turn flow back into Singapore. We will have a better chance of attracting the best talent this way and, at the same time, have access to as much and to a bigger pool of people as possible. Seventhly, we need to strengthen the generation, maintenance and the use of intellectual property as a competitive tool in promoting our high-technology industries. Currently, I believe that we do not have enough intellectual property lawyers nor a strong infrastructure to support this important area. And I think we need to spend some time developing this if we are very serious about starting up many more technology companies in Singapore. Assoc. Prof. Toh See Kiat: Sir, in recent years, big has become beautiful. The bigger, the better to participate in the global economy. Hence, there seems to be a race to make the next merger bigger than the last. Very quickly, the mega-merger of AOL and Time Warner was eclipsed by the Vodafone-Mannesman mega-merger.”
“But sometimes they get distracted in trying to fulfill the requirements of such agencies, and this is really a waste of time. Thirdly, the proposed Science Hub at Buona Vista is an excellent start of how we can create this conducive environment. And I suggest that in this Hub, we should allow some amount of untidiness, some chaos and practise as much flexibility as possible, as compared to what we cannot practise out in Singapore, in general. We should try to, as much as possible, duplicate the Silicon Valley type of environment in this area. In fact, once we have learned from the Buona Vista Science Hub, I think we can afford to make the whole of Singapore a science hub where we can practise all of the things that we have learned from Buona Vista. This is one way that we can become the Silicon Valley of the East. Fourthly, to support the Industry 21 programme which the Economic Development Board announced last year, I suggest that we set up permanent industry groupings. Instead of relying on ad hoc groups, I believe that if we have permanent industry groupings, this should allow us to focus a lot more on the various sectors that we want to promote. I suggest that these permanent groupings be funded jointly by the Government and the private sector, and through this, I believe a more focused approach will help us succeed in achieving the Industry 21 programme. Fifthly, to promote more cottage industries, I suggest that we liberalise the use of HDB shophouses for info-communications type of companies. This can be an extension of the home-office scheme that we have implemented recently.”
“Sir, the Technopreneurship 21 Committee launched by the Government is one excellent example of how the Government and the private sector can play their part in trying to promote entrepreneurship and technopreneurship in Singapore. Today, in the knowledge-based economy (KBE), Singapore, more than at any time before in its history, has a best chance to compete with the world's best countries on a level playing field. We have no lack of ideas and talent but we need a more conducive environment and motivation factors that can be created by both the public and the private sectors. While I am not advocating too much of Government interference, I do feel that in making the transition from a paternalistic approach of governance to one of an entrepreneurial governance, the Government can become a catalyst and a facilitator, and once we have taken off, they should take a few steps back. The National Science and Technology Board's role needs to be one of a facilitator and incubator, and perhaps a funding agency to do well in promoting entrepreneurship, rather than being the main driving force. The NSTB, to do this role effectively, will need to hire as many industry experienced people as possible, so that it can be effective in executing its role. Secondly, the governance with a lighter touch will help us create a more conducive environment. I have heard of many cases of restrictive Government practices like the sub-letting of JTC and HDB premises, the Building and Control Authority's and the Fire Safety Bureau's stringent requirements and restrictions make it very difficult for setting up such offices, especially for a small group of entrepreneurs who need to spend more time focusing on the real value added activities.”
“So there are portals that we see developing which will be in danger if they do not build fundamentally strong ideas and strategies. Fifthly, one useful role I believe that the National Science and Technology Board can play is to regularly organise lessons, sharing seminars or gatherings, where we can invite both the local and foreign technopreneurs to impart their experiences, both good and bad, so that we can avoid making the same mistakes others have made in the past. Up to now, we have been painting too rosy a picture and have highlighted mainly the successful companies and very few failures have been highlighted. We should, in fact, celebrate both failures and successful companies, especially those failures who eventually made it again after they have failed the first time. Sir, we have no choice but to participate in this new economy and, in doing so, we should be well-prepared and play with the desire to win big. We therefore must ensure that we build a conducive environment for this to happen.”
“In fact, we have already used about half a billion dollars of the $1 billion fund in these last six months. While I am not advocating that we should slow things down, I do, however, feel that we need to inject some realism as to what the Internet economy is all about. At the end of the day, a business is still a business, and a sound model and strategy are still needed in order to compete effectively globally. So I hope that our young and aspiring technopreneurs will look beyond the initial hype and the short-term possibilities and focus on building sustainable businesses for the long term. The typical terms used in the Internet economy are: a) The "burn rate" which refers to the rate at which you spend the money in sustaining the business. b) The "last man spending" which refers to when the money eventually runs out at the rate at which it is being burnt. The last company that remains in business is the one that is going to be the winner. These are very interesting terms but every entrepreneur should treat his every cent as his or her own and he should not develop the attitude that someone else's money is being burnt, and this is the danger of liberal availability of funds in trying to promote such an Internet economy. Fourthly, to be successful, we need to focus on building businesses that have good or unique technology content or unique technology applications or those who make our traditional brick and mortar businesses more efficient with the use of information technology. I therefore urge both the private and public sectors to focus in these areas if they really want to be successful and, in the long term, when the bubble bursts and the hype goes away, only the fundamentally strong companies are the ones that will be left standing.”
“Sir, I would like to share my thoughts on how we can participate in the Internet economy and what all of us, both the public and private sectors, can do in order to compete successfully in this economy, especially in the area of e-commerce. First of all, the barriers to entry in the e-commerce arena are typically very low and we will see many almost similar businesses sprouting all around the world as compared to those that we start here in Singapore. One important lesson to learn is that while we may have thought of a seemingly unique idea and business model, there are many more smart people around the world who have probably also thought of it at about the same time. Therefore, the first mover advantage is going to be the key and the first mover is the one who introduces the idea first to the marketplace. Having become the first mover, speed and constant innovation and improvement will help us keep the lead and I will not belabour on the Internet speed again. It is crucial in this area if you want to be successful. In order for our companies to be successful, they will need very good and cheap infrastructure which, in my opinion, is still an issue in Singapore. Some Members, in their earlier speeches during the MCIT debate, have compared the cost of using broadband network here with those around the world. We are still not competitive and while for big businesses, the cost may not be a major issue, for many of our start-up companies, the cost is still very painful. Thirdly, my concern is that in our eagerness to promote the information communications industry, many investors, including the National Science and Technology Board, may be disbursing funds a bit too liberally.”
“This will require a different set of incentive schemes and I suggest the Ministry study possible options to encourage the growth of such companies in Singapore. Fourthly, I have a concern that there will be increases of utility charges as we go on. In fact, electricity charges have already gone up by almost 20% recently while prices of water will be going up later this year as was announced by the Minister for Finance. While I understand that we need to price water realistically, I believe that the Government could have held back any increases by another year to minimise any increases during this transition year and which we can continue increasing as we go along in the future. On the issue of the cost of electricity, I feel that the power generation and distribution infrastructures in Singapore are not operating efficiently enough. In fact, I believe that the cost is about two to three times more expensive in Singapore as compared to the United States of America. I strongly feel that we need to completely privatise the current power generation and distribution services and to open up these to true foreign competition. Fifthly, still on the issue of power, there have been too many instances of power dips, causing serious disruptions to our high-tech industries like wafer fabs and also some semi-conductor manufacturing facilities. These dips and disruptions cause money and I feel that the company should not bear the full burden of this cost and that the power distribution company should also be liable for part of the cost incurred by the affected companies.”
“Many Members have expressed their concern that by rolling back some of the cost containment measures, it may affect the cost competitiveness of our manufacturing sector and businesses in general. I would like to touch on a few of these issues. First of all, I am concerned that the JTC rentals of factories will go up as a result of the property tax rebate reduction from 55% to 25%. Similarly, the rental rebates implemented in 1998 will eventually be removed, bringing land cost back to pre-crisis levels. If this happens, we will once again become uncompetitive as compared to our neighbouring countries where permanent reductions in prices have occurred. I therefore feel that through land intensification measures, we can keep our future land and rental costs low and any future increases will continue to be benchmarked against world prices so that we remain relevant in these industries. Mr Leong has given some excellent examples of how we can keep land cost low in the future. Similarly, we should watch out against any drastic increases in Government fees and charges in the next few years. These too should be benchmarked against global prices before increasing any of these in the future. Thirdly, we have been pre-occupied by cost issues in most of the measures that we have implemented in the past couple of years and I think we should now go beyond cost and focus on value-added activities as the focus on how we can become competitive in the future. One possible concept is to encourage more assetless companies who can outsource their make functions to any part of the world, while focusing on the value creation activities with the limited resources we have here in Singapore.”
“Sir, we are familiar about the current interest and the type of industries we want for our economy to grow and we have focused a lot on the info-communications area, electronics, semi-conductor, pharmaceutical and chemical industries and I believe that some of us will start planning about the type of industries we want 20 to 30 years from now. I would like to ask the Minister as to what, in his opinion, we should be focusing on in the longer term. Are we doing enough in promoting life sciences, bio-technology and genetic engineering in Singapore? Sir, may I move on to my next cut?”
“Sir, as far as I can recall, we only had one point in history where the COE prices really fluctuated from a big amount to $50. Other than that, I think throughout the time the COE system has worked, the prices were determined by market forces. In my opinion, if we had continued with the old categories and let market forces decide on how to distribute the number of quotas for the various categories, I do not think we will see major price fluctuations, as what the suspicion is.”
“Sir, I agree with Dr Wang that the decision to buy a car is made first before getting a COE. But I want to go back to the point that the Minister of State made on price fluctuations. In my opinion, why do we not let market forces decide, rather than we try to control price fluctuations. On one occasion, the COE price dropped to $50 and $50,000 on another occasion. We should let the market decide and if people decide to bid in that way, I think we should let it be and give the flexibility to the market.”
“Sir, looking at the reply from the Malaysian Finance Minister, I do not see any guarantee on his part that KLSE will keep to its obligation, as opposed to Dr Richard Hu's response that he will ensure that SGX will abide by the agreement. The Malaysian Finance Minister responded that he is confident that KLSE will ensure the obligation. Also, in his letter, he mentioned that KLSE is a private sector organisation. In effect, he has not guaranteed anything in his response. BG Lee Hsien Loong: Mr Speaker, Sir, I have released the letters in order that the actual exchange of correspondence be on the record. I have read out the words in the letters and so has Mr Inderjit Singh, and I leave it to each MP to make his own assessment and conclusions.”
“Thirdly, I would like to suggest that entrepreneurs be allowed to carry forward the losses in their investments in their future income tax computations. Fourthly, and these are for companies that are required to raise capital for capital intensive type of companies, I would like to suggest that pre-production expenses should be tax deductible because a lot of preparation is needed for such high-tech companies before they can go into production. For the capital intensive companies, you cannot wait for the time of production to collect the money from your investors. All of the equity is raised very much earlier so that you are ready to invest once you are ready to run production. The current practice discourages the early raising of equity capital because the interest earned for the capital that you have raised and has not been expanded on, the capital that is kept in the bank, is taxed even if a company were to have made huge losses in the whole process. Fifthly, I would like to suggest that we grant pioneer status type incentives for individuals and local start-ups. Just as we value foreign investment capital by granting companies pioneer status in the past, we should similarly value the intellectual capital brought by these people and the local companies. Sir, I am encouraged that the Minister has said that he would be looking out for suggestions on how we can further improve the system. I hope that he will take into account all the suggestions put forward by the Members in the next few hours.”
“For these benefits that they bring to the company and to the country, the tax the Government charges on him, the tax loss as a result of the implementation of no-tax on the employee options on these shares, would be all worth it for the country. The second category of shares is the stock options given to founder-employees. If these are given to the employees in the first six months of a new start-up, then I suggest that these too should be tax exempt or minimally taxed for the same reasons I gave earlier. These are quite different from the free shares that are given at the start of the company. The third category of stock options is given by successful or listed companies and these can be treated differently from start-ups, but I still feel that they should be treated differently from income tax as they are being treated currently. The reason for this is that in the case of income, there is a certainty of income for the employee, but in the case of a given stock option, there is some element of uncertainty because if the stock value does not appreciate, then the employee does not gain very much from it. For this difference, I believe they should not be subject to the normal tax system. This is one example of how a differentiated tax system can work in Singapore. Secondly, I would like to suggest that we should encourage angel investors by allowing them to write-off losses from their income tax when companies they invested in fail. I believe that the current practice allows for write-offs of losses when shares are sold at a lower price. This is not attractive enough because when a company collapses, there is no opportunity to sell the shares. In fact, the shares are then worth nothing.”
“Sir, more could have been done to encourage and accelerate our technopreneurship drive during this year's budget. Nonetheless, I hope more will be done as we progress to the new economy. To encourage entrepreneurs, they should be given more incentives to own a larger portion of the company that they started up without having to worry about tax. The entrepreneur who brings in $1 million worth of ideas and an investor who brings in similarly $1 million worth of money to the business are currently in our tax system treated differently. The investor will not pay for capital gains tax while the entrepreneur who brought the idea but has a share in the company has to pay the full tax for the capital gains that he may have got as a result of the gain in the share value. I would like to suggest that as part of the review and part of the announcement that is going to come in May this year regarding employee stock options, we should review the taxation of stock options into three categories. The first category of stocks is typically for those new start-up companies where technopreneurs are given free shares in lieu of their expertise and experience that they brought to the table. Such entrepreneurs should not be taxed for these shares at all. In the beginning, the value of the shares cannot be clearly determined because if the company collapses, then the shares are worth nothing at all. But if the technopreneur is able to make it a success, he will generate wealth for the company and for the country and therefore more jobs would be created and he would have contributed tremendously to the economy.”
“For example, investment in property should be allowed to be negatively geared for individuals in Singapore. I believe this is currently practised in a few countries, including Australia. We should also provide incentive for SMEs to merge by allowing the offsetting of losses and by removing restrictive legislation like ownership requirements set by the Government. I believe Mr Leong talked about this earlier. Sir, the other area that has also been talked about in the last few days is the taxation of e-commerce transactions, as part of our overall tax system. We need to clarify how we are going to participate in this e-commerce arena. We need to put in place a tax system that is well integrated with the rest of the world and, at the same time, facilitate the growth of this sector of our economy. Finally, Sir, while we worry about becoming a tax haven if we lower corporate taxes to below 25%, can we avoid this being labelled as a tax haven by highlighting the other many taxes that we pay? For example, we have GST, property tax, fuel tax, utilities tax, ERP, COE and so on. And I am sure if we add all these taxes, our total tax is greater than 25%. So if we can highlight all these taxes, then we can lower our corporate tax to below 25%, and we can avoid labelling ourselves as a tax haven. Finally, Sir, I hope that we will be prepared to put in place a differentiated tax system to allow greater flexibility and to encourage certain economic activities that will be beneficial to our economy.”
“Sir, many Members have spoken about our tax system during the Budget debate in the last few days. As I mentioned in my speech on Monday, I feel that we can develop a differentiated tax system for different economic activities and go away from a "one size fits all" tax system. I will talk a bit about this later on when I talk on tax for technopreneurs. I would like to suggest a few things about our tax system, and this will encourage more start-ups and to accelerate the regionalisation drive. We should therefore review some of our tax practices to create a more conducive environment for this to happen. First of all, group offsetting of local and overseas subsidiaries. I know that this has been brought up many times. I will not describe the details of how it should be done. My colleague, Mr Leong Horn Kee, also talked about this during the debate earlier this week. I suggest that we do not worry too much about the tax leakage that may occur because I believe that only a small proportion of individuals or companies will have the intention to do so. Most of the other companies will do it for the true and legal purposes. The resultant benefit for businesses will be tremendous. So we should not punish the majority to avoid the bad practices of a small minority of companies that may go about doing this thing. Sir, cross-year offsetting of losses should be allowed for companies including start-ups. This will lessen the burden on investors and shareholders and we should allow greater flexibility on how this can happen. I believe many businesses still do not understand and do not fully comprehend the current requirements that allow some amount of offsetting of cross-year losses. I would also like to suggest that we introduce negative gearing for individuals.”
“We treated different races more as one than today's younger generation and this is my fear that it might lead to greater alienation of the various races if we continue this practice. Similarly, practices in some schools to segregate children into different classes based on the mother tongue they speak, for operational efficiency, are bad. In fact, there are many cases where students group together and speak their mother tongue at the expense of their friends who do not understand the language. This may lead to racial enclaves in school. In fact, some of this is already happening now and we need to address this issue urgently. We really need to do more to develop an integrated society and focus more on increasing our overlapping common traits so that in the long term a unique Singapore Tribe model of diversity and similarity can develop. Emotional bonding cannot be left to legislation but requires a "heartware" approach. We need to ensure that the Singapore 21 Vision becomes a reality for all.”
“Mr Speaker, Sir, last year we had a very lively debate in this House during the debate on the Singapore 21 Vision. During the debate, the Prime Minister introduced the concept of the Singapore tribe, a unique group of people making a nation. Sir, the key issue is whether we, as a country, are doing enough to build emotional bonds among Singaporeans. Are we serious about building a Singapore Tribe? The recent Singapore Press Holdings' survey on race relations is an important reminder that we still have some way to go. Sir, legislation has been used as a key approach to ensure inter-racial ties are maintained, but this may not lead to greater emotional bonding. A strong Government able to keep peace by creating rules that require its citizens to live with one another and the fear of breaking the rules may give the false impression that things are all right. They may instead lead to superficial bonds and we may have the false comfort that everything is all right. Sir, I feel that the mistrust and historical problems need to be addressed urgently and the recent survey on race relations revealed that while things have improved, this is still a lingering problem among Singaporeans. I feel that not enough has been done to build a Singapore identity to maximise the common overlapping areas of all the races, as Prime Minister Goh puts it in the S21 speech. Practices like the ethnic based self-help groups tell our people that we should only help our own kind and that only our own kind will help us. This is a very divisive approach, in my opinion, while it may have other benefits in all of us helping one another. Sir, my generation did not grow up in such an environment.”
“Sir, the civil service reward system also needs to be looked into, and I feel that they must not be left out in the booming knowledge-based economy. Policy makers must feel motivated that they should benefit from the booming economy, just as everyone else in Singapore. I suggest a share ownership scheme and also a more flexible compensation package to allow them to participate in the economy. For example, a unit trust could be set up for investments in start-up companies in Singapore, and this can be part of a civil servant's compensation package. We also need a more aggressive approach of policy making and be willing to take more risks. My impression is that many key civil servants rather not rock the boat and they rather implement safe policies so that their careers are not affected as a result of a wrong or failed policy. In fact, they should be rewarded for daring to be different and proposing radical changes, even if the policies are not the best and stable of all the policies implemented. Finally, Sir, I suggest that the Government's spin off value-added components of the statutory boards of Government and of GLCs into companies, then fund these new companies and let the founders and initiators who may be civil servants to leave the civil service and run these businesses backed by funds from the Government. Sir, I would like to conclude by saying that we have an excellent civil service in place, staffed by many good people. What I am suggesting is a change in our system and not the people, and it is not intended to point at any particular group of Singaporeans. Collectively, all of us have a very important role to play and I think if we work together, we can make a big difference.”
“My experience with them in the last three years has allowed me to understand them more, and conclude that we have good and committed people in the civil service. However, the private and people sectors assume that the civil service know all the issues facing the world outside the civil service. And the civil servants assume that citizens know all the policies of the Government well. The lesson that I have learned is that this is not true at all. This therefore means that there is an important need for greater interaction and exchanges, including the hiring of more people from the private sector into the key civil service positions. We need to create a true partnership relationship between the people/private and the public sectors. Sir, the concept that the private sector individuals be involved in the governance of Singapore should be seriously considered. I suggest that we have two or three people who can be involved in Cabinet style discussions to discuss policies, who are from outside the central government. My reason for suggesting this is because our system is very central leadership focused and key issues are discussed at Cabinet or by a core group of people in leadership positions, and decisions are made by the same people. Similarly, such outsiders can also be mirroring the Permanent Secretaries and senior civil servants in some policy discussions. A more rounded discussion will lead to more polished policies. In fact, in any Government position, it is valuable to have people from outside the circle who can be a source of valuable input and, at the same time, be responsible for their suggestions, quite different from using them just as input tools as we do today.”
“Sir, our model of governance has been one of a stable and strong central government and civil service, and it was an excellent model for the building of Singapore in the past 34 years. As we now compete in the world with the world's best countries and on a global playing field, the challenges of nation building and economic development are completely different from before. As such, there is a serious need for us to review how our Government is organised. Certain sectors of governance need to have strong and central control, but others can be more open and flexible. And I feel that the governance of Singapore should be outsourced as much as possible with the people and the private sectors taking on more responsibilities than before. There is no necessity for the Government to have a strong hand in every aspect of economic development and of our society. In the USA and Taiwan, there are fine examples of how the private sector is the key driver of economic development and there is very little central control exerted in many areas of the countries' management. Secondly, the transparency of policies and practices will do good for everyone. At the moment, those outside the Government service have very little visibility and do not have a good understanding of public policies. Any attempt to get more information typically results in a bureaucratic form of obstacles. In my opinion, the more the people in the private sector know and understand our policies, the more efficient the whole system will be. Things will move even faster. So I urge the Government to be more transparent and share more information with Singaporeans when they require. We have excellent and brilliant people in the civil service.”
“The various industry organisations and Chambers of Commerce can do a good job in this area. Sir, e-commerce is the future for Singapore and our traditional traders risk collapse if they do not embrace the Internet economy. However, in the meantime, our traders still need some help, especially in the area of financing their trade and in modernising the whole order fulfilment process, to compete in the new economy. I feel that the Government is not doing enough and is too quick to decide that the trading sector does not need any more help. Similarly, I believe that the legislation and tax regime are not fully ready to participate in the e-commerce world and there is an urgent need to address this issue. Sir, the new economy is already here. We have no lack of capable people with many ideas. What we need is a conducive environment and a sea of entrepreneurs in the private, people and public sectors to come up tops. We have the ability and the will power to make it happen. We must be prepared that we may have to adjust and re-adjust our policies and strategies as we move ahead and learn. We must be prepared to give up certain efficiencies for the sake of success. Now is the time to act, so I hope the Government will urgently address the issues that Members will raise during the next 10 days of debate regarding the promotion of enterpreneurship. Mr Speaker, Sir, I support the motion.”
“We should fully privatise all GLCs and let them be driven by market forces. In fact, it will do the GLCs a lot of good if they are run purely on a private enterprise basis. Thirdly, since we are just coming out of the economic crisis, I feel that this is an excellent time to incentivise local companies to restructure and consolidate. They should focus more and more on the value creation proposition and be less dependent on just cost factors in the future. Many European countries have been able to breed world class companies despite their high costs and this is because of their focus on technology and value creation. Nokia and Ericcson are just two examples of such companies coming from these countries. Fourthly, we should watch against rolling back too quickly all the cost containment measures implemented last year. Delaying any cost measures by another one year will allow companies to regain their full strength and they will not have to worry about cost at this stage. During this time, they can focus on their restructuring plans. If we roll back the cost measures too fast, we may risk a reversal of the recovery seen by some companies. We should wait a little longer before changing things. Fifthly, in my opinion, after so many years, we have failed to find a good solution or formula in helping our local small and medium enterprises (SMEs). I believe a major restructuring is needed in how we support and nurture SMEs. If we do not do things differently, the recently announced SME 21 plan will have little chance of success and I will give my suggestions on how we can do this during the Committee of Supply discussions. But the gist of my suggestion is to let the private sector handle this, including the administration of grants and incentive schemes.”
“While once upon a time a single career path and hence a once-in-a-lifetime learning and training was sufficient, in the future environment, this will lead to an early end of our earning ability. I therefore feel that it is about time that we revamped our education system and the values we believe in, including the practice of meritocracy so that our workers can become effective knowledge workers of the future. Developing Local Companies into World Class Companies The third area I want to talk about is the development of local companies into world class companies. Sir, the promotion and growth of many more successful local companies who can compete head on with any other of the world-best companies is a very important task in the next few years. In this respect, I feel that we should have taken the opportunity to give more incentives to companies to regionalise and globalise in the current year's budget. We now have a unique opportunity to acquire or merge with or invest in good companies around the world, given our financial strength and strategy. In our quest to create world class companies, we have been focusing too much on our GLCs. Once again, the SingTel and Cable & Wireless HKT deal has shown us that despite being highly successful locally in Singapore, many of our GLCs will not be able to compete effectively outside Singapore. We have also recently seen a number of other failed deals by some other GLCs and my worry is that while we can compete effectively in our small Singapore market, we do not have the ability to compete globally. I do not have the full answer as to where the problem really lies, but my feel is that there is too much of comfort with a large Government ownership in such companies.”
“For example, I feel that the employee stock options and share grants in start-up companies could be treated differently from those given by companies already established or companies that have already been listed. Similarly, technology savvy investors could also be given preferential treatment on how they are taxed or how they can minimise the burden of investing in companies that eventually collapse. Secondly, capital raising should continue to be liberalised. We should make it easier to raise funds for start-up companies either through angel investors who are well incentivised to do so and also by making it easier to list new companies on a stock exchange and by allowing international access of funds to Singaporeans. Thirdly, the Government should allow the private sector companies or individuals manage its funds. If the Government can identify a pool of well established local businessmen and entrepreneurs, we can develop a cluster of small funds that can act as catalysts for many more new start-ups in Singapore. Currently, the Government funds are being invested in only a few large and well established venture capitalists who can serve a different purpose from the smaller cluster of funds. Fourthly, in the new economy, we will be seeing an acceleration in innovation, never seen before in history. The way businesses and companies are run will be re-invented all the time. To participate in this economy, all Singaporeans need to become knowledge workers who must be prepared to accept constant change as a way of life and to survive, everyone needs to continue to learn new skills.”
“In fact, this type of uncertainty and chaos is what that threw up the truly entrepreneurial group of Ministers and civil servants during the era of our first generation leadership of Singapore. Too much of structure will create complacency in society and weak leadership. Promoting Entrepreneurship Sir, without doubt, the promotion of entrepreneurship is the most important activity all of us should focus on in the next 10 to 15 years of economic development, because the nation needs this new breed of wealth creators who will then generate jobs and create a better standard of living for Singaporeans. In my opinion, it was a disappointment that nothing new was done and no new initiatives were introduced in this year's budget regarding promotion of entrepreneurship. Any spending in entrepreneurship development should be seen as an investment and not as a handout. I would have hoped that the budget surplus that we surprisingly got could have been better spent in this area. I would like to suggest a few things on what we can do about promoting entrepreneurship. Firstly, our tax system needs to change with time. I feel that we are too caught up in devising a single tax system for all our economic activities. I suggest that the Minister consider a mass customisation approach, as the Minister for Education had considered for the education system, to our tax regime as it needs to be proactive in supporting certain types of activities like technology and info-communication start-ups. We should treat entrepreneurs and start-up companies differently, be it in how we tax them or in the incentives, grants and Government charges levied on them. We should also facilitate their growth and help remove bureaucratic obstacles.”