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, the Minister mentioned about plans to attract medium enterprises to Singapore. Can the Minister elaborate a bit on the plans and also which economic agency will handle this task of bringing these companies to Singapore?”
“Sir, in conclusion, I will give credit to Budget 2010 that it has attempted to help companies through the adoption of innovation and technology and to improve the productivity of the workforce. However, we should not waste this opportunity to signal to SMEs that we would like to help them grow and that we have a clear and precise policy to create a level playing field for all of them. I think our SMEs will very much appreciate this gesture from the Government. If we want to grow globally competitive and world-class companies here in Singapore, we will need to take bolder and more definitive steps. I think if we miss this boat this time, it may take us a longer time to catch up and this will be costly for the long-term economic growth of Singapore.”
“Sir, we will need to re-orientate our approach to turning Singapore into an entrepreneurial hub and to calibrate the playing field, Government-support mechanisms and focus should be on economic activities and spin-offs and move away from local ownership as a qualifying criteria. We should remove the 30% Singaporean ownership criteria for Government grants, loans and incentives so as to support enterprises based on economic activities and not the type of ownership. In this way, we can successfully bring in many entrepreneurs from outside Singapore to be based here. Sir, on R&D, the ESC has repeated the need for innovation and R&D, and this is something all past committees have also highlighted and I believe we have not fully achieved the desired results. While we have done very well in the input factors for example, the amount the Government has spent on R&D, like the $12 billion that Ms Sylvia Lim mentioned, the equivalent outcome of this R&D is far from desirable. The substantial investment in R&D in this recent past has yet to yield the results that we want, especially in commercialisation and tangible start-up spin-offs. The lack of appropriate businesses as receptacles to translate R&D to commercialisation is one reason. The selection of research projects without inputs and guidance from innovative businesses creates another gap. Therefore, without an active involvement of innovative business ecosystem, expenditure on research may not yield the returns that we expect. In this aspect, "Enterprise Singapore" could play the role of creating that eco-system. A distributed approach of commercialising R&D residing in respective agencies has so far failed to yield the results that we so desire.”
“I am also glad that the ESC's recommendation of a fund to invest in growth companies has been announced. I am glad that this is finally being recognised as a need. Sir, in 2003, a committee which I headed called the SME Financing Panel made this similar recommendation and we produced a report in 2003. Seven years later, the ESC has seen the same need and the Government has responded by setting aside $1.5 billion for this. Sir, the effectiveness of this fund depends on how it is managed and we must remember that the US$1 billion Technology Innovation Program (TIP) fund used to create Venture Capitalists (VCs) here did not succeed in getting many of our local start-ups funded as the VCs chose to invest outside of Singapore after the VCs received Government funds and tax incentives. A growth fund is needed because of market failure and therefore it is unlikely that many private funds will invest in targeted companies that may not yield the type of returns that they may desire. The Government may need to become more proactive in investment decisions rather than to leave it to third party investors. But it is also not optimal for the Government to make investment decisions. I think the best way to go about doing this is for the Government to set up a panel of established business leaders who are given the flexibility to identify suitable businesses to invest in, very much like the SPRING SEEDS programme where we have a panel of private sector experts making investment decisions on behalf of the Government and this has worked well for many years.”
“"Enterprise Singapore" can, therefore, adopt a more targeted and "account management" approach than the other agencies in growing GCCs and involving the Whole-of-Singapore approach to provide the entire value-chain support to grow them from start-up to become world-class brands. An additional role of "Enterprise Singapore" could be to help in attracting, anchoring and nurturing promising world-class foreign start-ups and SMEs to locate in Singapore as EDB has successfully done for large MNCs in the past. These SMEs could one day become our GCCs and it does not matter where they originated from as long as they finally have home bases here in Singapore. I am glad that the Minister mentioned this is one of the strategies. Sir, Singapore has seen the start-up, growth and internationalisation of Government-linked companies (GLCs) due to the support from Temasek and Ministries' funding and also the Development Bank of Singapore of those days. Many successful Singapore GLCs may not have been around without such support and we need to create more of such companies to add to the wealth and the growth of the nation. "Enterprise Singapore" should, therefore, be complemented with a new Investment Agency or Temasek II, as ACE has called it, which will play a developmental role in investing and grooming promising locally-based private companies to be the GCCs of the future as the Government did for the GLCs in the past. Besides growing local companies, Temasek II should also bring potential foreign GCCs into Singapore by investing in such foreign SMEs. As governments around the world withdraw the massive economic rescue packages, there is a window of opportunity for Singapore to aggressively attract some foreign SMEs here.”
“Sir, I would like to speak about how we can better support local enterprises and elaborate on what I mentioned during the Budget debate. Sir, the Action Community for Entrepreneurship (ACE), submitted several recommendations to the ESC. Firstly, ACE feels that there needs to be a clearer focus from the Government on local enterprise development. Currently, since resources are accorded by the Government to enterprises based on incremental economic activities – which is a value-added method that we have been using right now to evaluate the potential of companies – this disadvantages SMEs compared to foreign SMEs as the former build from a higher baseline. Singapore should support enterprises based on absolute total return rather than incremental economic activities to create a more level playing field for all. To aid in this objective, ACE proposed the establishment of a new local enterprise development agency or "Enterprise Singapore", which will be a single agency to develop globally competitive locally-based enterprises. Whilst the intent of SPRING and IE Singapore is to have specialised expertise to assist and support companies, this has also resulted in gaps to provide a seamless, comprehensive and integrated assistance to companies. Potential SMEs which could become Globally Competitive Companies (GCCs) but have reached a certain size, may not also be able to get the support from either agencies and, therefore, they are not well served under the current system. Other agencies with domain expertise like A*STAR, IDA, MDA and other agencies within the Government may not have a clear enterprise development role, nor are their KPIs directed in this focus.”
“By easing some of the valid social concerns that they have, Singaporeans may be motivated to increase their efforts in other areas, including perhaps labour productivity and taking on jobs that they would otherwise not take in the past. Sir, I have highlighted some of the short-term assistance we may render to help our companies and households to come out of this recession as quickly as possible, while proposing some long-term measures to strengthen our capabilities for SMEs. We must seriously work on this if we want to build a resilient economy for the future. Sir, on the whole, I support the Budget.”
“Sir, the WIS should also be paid in more frequent pay-outs than the current system to aid in the regular cashflow of households. Ideally, monthly would be a good option, but if this becomes administratively difficult then we can certainly follow the Jobs Credit model of a quarterly payout. Sir, by using this three-pronged approach of levy, WIS and Jobs Credit Scheme, we can address the concerns faced by companies and by Singaporeans and strengthen existing measures. Sir, while I see this year's Budget being somewhat helpful in extending help to companies and households, I feel that more can be done to provide greater assistance and safety mechanisms in the face of uncertainties ahead. I want to reiterate that I do not think that the foreign workers and the population policies of attracting new immigrants into Singapore are wrong. I support these policies as Singapore needs to do these to grow and to be prosperous in the future. I do, however, have a problem with the rate at which we added people and tried to grow the economy with little concern on the impact on Singaporeans. I am sure that when the idea of the need for a much larger population was conceived, it was not intended to happen overnight. So there must have been an error of judgment by the implementers. I was once told when I argued against these that the "Grow at All Cost" policy was intentional and that the Government will deal with the impact when it happens. The impact has happened and the outcome has been negative in some areas. I wish that the policy makers had been willing to listen and slow down a little. Had they done so, we could have avoided all of these problems that Singaporeans are seeing. But this is our chance to make amends.”
“That way, we can finely balance between supplementing the talent in our workforce yet, calibrating the flow of foreigners and leaving some jobs aside for Singaporeans. How can we help Singaporeans take on some of these jobs? I think the foreign worker levy hike announced in the Budget is a good start. I feel that the levy hike cannot be a standalone policy and we will need a set of policy tools to effectively manage the issues. I see two more measures that we can use to complement the wage hike. First, by leveraging on the existing Jobs Credit Scheme, we can provide incentives to employers to hire more Singaporeans. By offering companies some monetary incentives, we can also help them allay some of the cost increase incurred by the levy increases, provided they hire Singaporeans. Sir, I have also previously suggested a minimum wage scheme but critics argued that it would in fact lead to more job losses due to higher wage costs for employers. But we all really need to move up the value chain and this scheme will in fact compel all of us, workers and companies alike, to focus on productivity improvements to compensate for the higher wages to compete, instead of always depending on cheap labour to compete. In order not to burden companies too much with a minimum wage scheme, we could use existing schemes to implement a tweaked minimum wage system. We can start by leveraging on the Workfare Income Supplement (WIS) Scheme. Sir, the Budget revealed that the scheme will now top up wages up to $1,700 but I feel that it is time to set the minimum wage to $2,000 because of the higher cost of living. The Government may gradually transfer part, if not all, of the burden of the WIS on the employer.”
“9% for the top 20% Singaporeans. As inflation rate differs for households across the income groups, lower-income households will be worse hit. Budget 2010 tried to address the widening income gap issue through the progressive property tax and enhancements to the WIS scheme. However, the problems of depressed wages and lower purchasing power are real ones and require greater attention and more action. Sir, in the 1990s, we talked about modeling ourselves after Switzerland. We wanted to be the Switzerland of the East. Have we gotten there yet? Yes, I agree that in terms of GDP per capita, we have done really well. But is this an accurate reflection? I was reading through the latest UBS Price and Earnings survey the other day and found that Singapore was ranked 40th in the world in the international comparison of wage levels. Our gross wage level of 26.8 was even lower than Dubai, Hong Kong, South Korea and Taipei, not to mention about a quarter of Zurich's 115.8. In terms of purchasing power, Singapore was ranked even lower – 50th. This is lower than many of the Asian Tigers, including Kuala Lumpur. Needless to say, Zurich's annual income of 106.9 was almost three times higher than that of Singapore's 39.9. So it goes to show that while our GDP per capita is high, we do not see a similar standing in our wages and purchasing power for everyone. This is another indication that the wage divide in Singapore is high enough to distort the per capita figures towards the higher extreme. Do we need to bring in so many cheap workers altogether? Sir, I recognise that there are some areas where we cannot do without foreign workers, but if we need to bring them, then why not focus on bringing them in the key sectors where they are most needed?”
“I hope this is wrong but this is what I have heard. If Singaporeans are even deprived of such opportunities then is it fair for us to assume that they are shunning such jobs? But if they need to be motivated to do them, they must at least be able to earn a decent income to ensure that their families do not suffer. You cannot compare the financial obligations of a Singaporean with that of a foreign worker. A foreign worker can work for a low sum while saving on his personal expenditure. Singaporeans, on the other hand, have families to house, bills to pay, children to educate, and so on, all in the face of rising costs. We cannot expect them to work for the same wage that a foreigner would be willing to. The Singaporean, unlike the foreigner who can go back to his home country for a low cost living, has nowhere else to go but here and contend with the cost of living here in Singapore. We all know that the wages of many lower income Singaporeans have remained stagnant for almost 10 years, maybe some rise last year. For some of them, wages actually have gone down. And the cost of living has continued to rise. So while the median wages have risen as the Minister mentioned in his Budget speech, the wages of lower income Singaporeans remain low while the foreign talent and the new immigrants may have helped raise the median income levels. Sir, income inequality creates price distortion as income growth for the top earners allows them to spend more resulting in an "expenditure cascade" and add upward pressure on prices of necessities such as food and housing, which are two important and large components of a lower-income household’s expenditure. Sir, in the first half of 2009, the inflation rate for the bottom 20% income group was 1.6%, compared to 0.”
“Sir, the impact on wages has been similar and this has been caused by these two policies that I have mentioned. As many as 300,000 foreigners came to Singapore to work during the job boom in 2007 and 2008. So by last year, foreigners accounted for about a third of the three-million-strong labour force, up from only one quarter in 2004. By allowing cheap unskilled labour to pour in, through our liberal foreign worker policy, we have depressed the wages of Singaporeans, particularly those from the lower-income who have to contend with cheap labour from overseas doing the same job for much less and so have their bargaining power for higher wages eroded. In fact, as you go down the income bracket, the salaries become even more depressed due to the larger supply of foreign workers available. We often hear that Singaporeans do not want to do these jobs so we need to bring workers from outside to do so. However, the problem is that Singaporeans do not want to do these jobs primarily because they are paid too little to do so. Sure, some may not do it because of the prestige or social status factor but I think Singaporeans, when it comes to the crunch, are practical and given the choice, they would rather do these jobs than to remain unemployed and unable to support their families. The question is: Are we even giving Singaporeans enough opportunities to do some of these jobs? I hope it is not true but I heard the other day from a grassroots leader that a taxi driver told him that there are about 300 or more people being trained in China by one of our large taxi operators who are bringing them to Singapore to work as taxi drivers. They are using a Singapore map to train in China, I was told, and later on they will be brought here.”
“Even though PRs may be restricted from buying new flats, they still indirectly inflate the prices of new flats as new HDB flats are pegged to prices in the resale market. Furthermore, there are many PRs who also rent HDB flats anyway and this contributes to the upward pressure of HDB flat prices. So, HDB flats, which were built for affordable housing solutions for Singaporeans have now become expensive. We have also created unnecessary problems for our otherwise efficient transport system as it fell victim to congestion and compromised the welfare of Singaporeans. It is almost impossible to find a seat on buses and MRT trains these days even outside of the regular peak hours – this I have been hearing from too many people. Our roads are jamming up too regularly and at off-peak times too. It is just too stressful to drive on our roads these days. The ERP has not helped because we just have too many cars and too many people on the roads. Today, all of our public places are overcrowded. Many of my grassroots leaders and friends have told me that they avoid going to shopping centres and other public places because they feel these places are just too crowded for comfort. Sir, I feel that in making policies, we could have made better political judgment when implementing these two policies that I have mentioned. Could we have grown the economy at a more steady and sustainable pace and did we really need to grow our population by another one million people in a span of five years. Should it have been a 20-year target instead? And before growing the population to the current levels, we could have spent resources growing our infrastructure and housing and have these ready to absorb a larger population and worker base.”
“What I do have problems with is the way we have implemented these policies in trying to achieve our long-term goals and the rate at which we have grown our population and workforce. Sir, long term must be long term and we cannot try to short circuit our national development by trying to do everything too quickly. We must not compromise nation building and I feel that, here, policy makers have lost touch with the reality on the ground and underestimated the impact on Singaporeans and on Singapore when they over-zealously tried to implement the two policies – first, the "Grow at All Costs" economic policy and, second, trying to grow the population instantly – and is what I called the "Instant Tree Mentality". Sir, two years ago, during the Committee of Supply (COS) and Budget debate, I raised both of these issues and that these policies have created difficulty and unhappiness among Singaporeans today and, believe it or not, even new citizens, some of whom have complained to me about the discomfort that they are feeling at seeing so many people around them today. And this feedback has come from PRs. If our new arrivals feel this way, it is clear why Singaporeans are unhappy. It was for this reason I raised these two issues during the Budget debate, but unfortunately we did not take it seriously at that time. Sir, by bringing in too many people too quickly, we now compete for the same resources and, therefore, the cost of living has gone up rapidly. The clearest manifestation of this is the cost of HDB flats. Our HDB prices went soaring up as foreigners began competing for more affordable living space. I believe I read from the papers that 25% of PRs make up the buyers of the HDB flats from the open market. And this is significant enough to drive prices up.”
“In the past years, we had done well in plugging the seed-stage funding of companies, what is missing is growth-stage funding. Many local enterprises cannot find private funding and this is where the Government needs to step in. So, while the ESC and Budget 2010 have addressed some of these recommendations from ACE, I feel these are not radical enough. If we are serious about creating future local multinationals, we must be bolder and make bigger picture changes. In addition, we must always keep a watchful eye on costs and I believe we have learnt from the past that we cannot ignore some of these cost pressures that come during growth periods. The Budget and the ESC, unfortunately, failed to address the cost issues significantly enough. We should remember that it is better to have sustainable and manageable growth now rather than to go for a boom and bust model, a mistake that we have made in the past, which puts tremendous pressures and strain on everyone and companies. This time the worst has happened – property prices have significantly escalated during a recession year. The after-effects of this will be detrimental. Sir, I would like to talk about the social implications of the "Grow at All Costs" and the population policies. Sir, Singapore has become too crowded and I want to raise this issue on behalf of my residents and many fellow Singaporeans. We are a young nation and just before we could create an identity for ourselves, Singaporeans are finding themselves losing space and commonality among people here. I want to first say that I agree with the need for Singapore to grow its population by supplementing birth rates with immigration. I have also no issues with the need for us to bring in foreign talent and foreign workers into Singapore.”
“The target of having 1,000 local enterprises with revenues above $100 million in the next 10 years is a good one but we must remember that the Government through EDB tried to do this some years ago through the Promising Local Enterprises (PLE) Scheme by attempting to pick winners but this failed. We need to learn from that failure so that we do not make the same mistakes. Sir, last year, the Action Community for Entrepreneurship (ACE) made several recommendations to the ESC. I would like to briefly mention the recommendations we made but because of the time constraint, I will elaborate during the COS for MTI. The recommendations we made were: (a) First, to have greater local enterprise development focus – due to the lack of past clear emphasis and adequate Government support for local companies, there is still a dearth of Singapore global brands. There is, therefore, the need for this clear local development focus. (b) Second, the need for a new agency – it would also have been timely for the establishment of a local enterprise development agency or "Enterprise Singapore", which will be a single agency to develop globally competitive locally-based enterprises. Additionally, this agency could also focus on attracting foreign SMEs to locate operations in Singapore. These could, over the long term, become our own future multinationals. Currently, no economic agency, not even the EDB, is doing this role. (c) Third, setting up of Temasek II or an equivalent investment agency – just as the Government provided developmental funding in nurturing our GLCs which are today big multinationals, we now need such a fund which can help nurture and grow our local enterprises to become larger and succeed as they globalise.”
“Mr Speaker, Sir, thank you for allowing me to join the debate. Sir, the Resilience Package helped us survive the downturn but now we must quickly shift gears and build the economy for the future – one capable of withstanding future shocks. Such an economy needs to be diversified enough, between GDP and GNP, and also between type of industries, local and foreign. I am happy that this year’s Budget has attempted to operationalise the Economic Strategies Committee's (ESC) recommendations. Many of the ESC's recommendations seem to repeat what many other committees in the past had recommended. The fact that the ESC has come out with similar recommendations just shows the importance of these and that we did not successfully implement some of the things that we said that we wanted to do before. While I am glad that the ESC has shown seriousness in addressing issues faced by local enterprises, I feel more could have been done had the ESC really understood the issues that SMEs face on the ground. While I acknowledge that multinationals will continue to play an important role in Singapore’s economic growth, equal emphasis should be placed on developing local enterprises so that Singapore may grow its own world-class group of companies. This must be the clear future focus for the Government if we want a vibrant economy for the future. Sir, for the way forward, we must commend the ESC for recognising this need but I ask the Government to translate this to a clear objective for MTI and the Government as a whole.”
“Therefore, it would be reasonable for schools like the Canadian International School, for example, to give priority admission to Canadian students. In another example, Foreign System Schools may, at some instance, limit the maximum number of students from each nationality group in order to balance the overall population, and yet provide the principal focus on students from the home country. As such, the Foreign System Schools should be given special consideration for this condition especially with regard to nationality of students. Sir, in conclusion, upon the passing of this Bill, my main concern is how the Council for the Private Education is going to implement the regulations based on clear, fair and practical guidelines that support the legislation. Where it is necessary to review certain guidelines before actual implementation of the regulations, I hope that the Council will hold further public consultation with various stakeholders and take into consideration the vast profiles of these stakeholders that are present in the private education sector here in Singapore. While the Private Education Bill has to be commended for putting in place a more structured framework in which PEIs will operate, it is important to note the differences that exist across the spectrum of PEIs in Singapore, particularly the foreign schools, and I have mentioned some of the reasons why and, in fact, it may have a counter-productive effect on their operations here in Singapore. This is an important consideration and should be noted before the Bill is implemented. Sir, on the whole, I support this Bill. 4.12 pm”
“If it does apply to these schools, then I am afraid that this section may have a built-in deterrent for foreign schools coming to set up here as for many of them, marketing and branding are built around the reputation of their name back home. Sir, next, on the EduTrust Certification System. The guideline to the assessment criteria of the EduTrust Certification System does provide the PEIs with an adequate understanding of the requirements of the Council in awarding the EduTrust Certification. However, I have got a few points to raise. First, on note 4 of Criterion 1.1 where it refers to "Defining vision, mission and education goals", what is the definition of a governing board for PEIs? Does the governing board need to be geographically located here in Singapore? Is the Council prepared to recognise existing governing boards from the PEIs home country (for example, the University of Chicago’s Board of Governors in the US) for the campus here in Singapore? Next, criterion 5.3.2 – "Student selection and admission process" – I agree and support this guideline, which ensures that the PEIs have non-discriminatory policies on student selection, admission, retention and expulsion which are to be effectively communicated to students. This would offer equal opportunities to all students and ensure that they are on even ground when considering their admissions. However, PEIs sometimes are required to give priority admission to certain groups of students, and exceptions should be made for such situations. For example, the Foreign System Schools. They exist here to provide education for expatriate children similar to what their peers will receive in their home country.”
“While I broadly agree with this and support the regulation to prevent any misrepresentation of the role of the Council and the meaning of being a PEI registered with the Council, I, however, wish to seek clarification that the use of such terms in advertising or collaterals is permitted where reference is being made to a specific agency or agencies of foreign government bodies that do accredit, endorse, support, or validate the programmes and operations of schools where such advertising or statements are not done in a way that is false or misleading in any material in particular. The ability for some of these foreign schools to make such statements (whether false or misleading) is essential, both for schools to attract students and for Singapore-based companies to attract foreign executives and their families to work and live here in Singapore. Sir, further, it is stated that the Council will not allow schools to display the name of any foreign institutions in any form at their premises to prevent the misleading impression of these foreign institutions being present here in Singapore, given that the PEIs are just providers and facilitators of their foreign partner institutions, that this restriction does not apply to Foreign System Schools and to foreign universities operating a full campus in Singapore, where such schools are extensions of their home institution and operate under the governance of the home institution. For example, the University of Chicago, James Cook University, INSEAD, and New York University Tisch School of the Arts.”
“Moreover, course information from, for example, the German European School (GESS) would be largely in German and, hence, an overly prescriptive regulation of courses offered by the GESS would require a regulator with strong grasp of the German language and the German education system to implement. In search of efficiency, the Council may overlook the need for special resources to effectively evaluate courses offered by PEIs, especially when they are not presented in English. Next, on advertising for PEIs. Sir, clause 45 explains the circumstances where PEIs are prohibited from advertising. This section states that no person shall issue "any advertisement relating to a private education institution which is false or misleading in a material particular". I can appreciate the Council’s rationale for this prohibition but it raises concerns in terms of how this policy will be administered. One of the points of this clause also states that "A PEI shall only use the term 'registered with the Council for Private Education' in its advertisements or publications". It is not allowed to use any of the following words: "approved"; "accredited"; "endorsed"; "supported"; "validated" or any other words in association with the Council in its advertising collaterals.”
“Many private schools, especially the foreign schools in Singapore, are typically used after school hours for many activities, such as sporting, cultural events and for expatriate community activities as well as some other business activities. For many expatriate groups, the school premises provide a focal point for the community. The clause should therefore be revised to permit such use, as long as it does not disrupt the educational activities of the institution. Clause 42 of the Bill states that permission has to be sought from the Council to offer or provide courses. Sir, it should be noted that the curricula of schools, like the Foreign System Schools (FSS), for example, vary in accordance to their respective home country school systems. The Council has to specify the criteria that it will adopt in determining whether to permit the courses offered by the FSS, and to provide clear guidance to standards that these FSS will have to be measured against. I agree that it is proper for the Council to check on the legitimacy of the courses and subjects offered. So, for example, a PEI providing education in business studies does, in fact, offer such courses, and PEIs do not offer courses from degree mills. So, this, therefore, is necessary. However, I would like to point out that PEIs, especially the FSS, usually offer unique classes or programmes aligned to their home country's school systems in order to serve the needs of foreigners resident in Singapore. Therefore, to regulate the appropriateness of individual courses based on the Singapore curricula standards may not be a fair measure, as these courses are developed and offered based on standards determined by accreditation agencies or regulatory bodies of the home countries that these schools are governed by.”
“While putting in place rigour, the Private Education Bill should therefore also contain an element of flexibility, particularly for the foreign schools and foreign enterprises that are coming here. Therefore, I would like to make some comments on where flexibility may be added in this Bill. First, registration of Private Education Institutes (PEIs) with respect to clause 34 of the Bill, which specifies that the requirement for the registration of the PEIs. The broad nature of this section also includes schools with no operations here in Singapore. There are many excellent schools around the world with no presence in Singapore and that may not undertake to register here. It is possible that people here in Singapore may wish to engage in the provision of such private education beyond Singapore and not choose to do so within our geographical boundaries. As such, there is no need for him to register in Singapore as he is not catering to the Singapore market. However this clause would deter such people in Singapore from venturing overseas to offer private education and work against Singapore’s broad entrepreneurship strategy of internationalisation. To avoid such implications, I suggest that this section be redrafted by zooming in on the provision of private education in Singapore only. Section 1 of clause 36 specifies the grounds for refusal to grant or renew the registration of PEIs. This clause states that the Council may refuse to grant or renew the registration of a PEI if its premises "are to be used wholly or in part, for any purpose other than providing private education …" This clause is overly broad.”
“Mr Speaker, Sir, I support the Bill. This Bill is well-timed as it moves Singapore to the forefront of education accountability and in doing so, enhances our growing reputation as a regional educational hub. In fact it is about time that we introduced this Bill because we risk diminishing our reputation as an educational hub in light of the recent cases of abuse and fraud in the area of private education and we have seen quite a few in the last couple of years. Sir, when it was first decided that Singapore would position itself as an education hub, it seems that none of the Government agencies came forward to take ownership of this vision. It was thus left to MTI to drive this forward. While MTI has exercised its efforts to boost the education sector in Singapore, it however lacked the required appropriate structure and the specialised rigour that MOE could provide. This flawed framework potentially endangers the private education sector in Singapore to develop a poor reputation. As we aim to position Singapore as an educational hub, it is crucial that we are not seen as or become a degree mill. Therefore, in order for us to grow our private education industry while ensuring that quality is not compromised, balance would be needed between attracting enterprises and ensuring adequate rigour is in place to govern the sector. However, just as it applies to any legal framework that regulates the private market, it is important that this Bill does not create negative externalities for private education sector and thus stifle private enterprise. Some of the private education players in Singapore are well-established and reputable institutions, and the foreign ones well-known in their home countries add diversity and depth to the education sector here.”
“Sir, this issue of succession planning, and then the reversal, has created a bit of a dent in the reputation of Temasek and indirectly the reputation of Singapore, because they link the Government to whatever decisions Temasek makes. While the Minister does not want Temasek to share the search criteria with everyone but, as a shareholder, will the Minister require the Board to clarify the process with him, so that we do not make another embarrassing decision in the future? My second question is the "golden handshake". While Temasek did not have a contractual obligation, was there a goodwill payment? I think people want to know whether a payment was made.”
“Sir, I think the requirement to license managing agents or registered organisations is unfair. NEA is trying to pass the buck to someone else. Most of the markets in our constituencies are not run by official registered organisations. So it looks like the CCCs or the Town Councils will have to bear this burden. I think NEA need to bear greater responsibility rather than to pass the buck to the rest of the organisations. Assoc. Prof. Dr Yaacob Ibrahim: Sir, we are not passing the buck as alleged by Mr Inderjit Singh. Someone has to be responsible for the temporary market. First, the temporary market is not allocated under the HUP. It is up to the adviser and the grassroots organisations to decide. So if they so decide to have a temporary market because the stallholders want one, therefore, they have to be responsible. In fact, so far we have 35 temporary markets, of which 29 have been managed by the CCCs and six of them have been managed by the Town Councils. So there are entities out there able, capable, willing to manage. It does not mean NEA will not be responsible. We will still be enforcing the hygiene standards. We will still go down and check to ensure that there are no lapses. But someone has to bear the responsibility. We will be responsible for permanent centres. But temporary centres are a result of the decision made by grassroots leaders and their advisers, not by NEA.”
“Sir, I would like to ask the Senior Minister of State whether he agrees that if we want ASEAN to be taken seriously by the world, concrete steps need to be taken, not just on this issue, but all the things that Myanmar has been blocking ASEAN from doing. Hoping for them to come around is going to take a long time. Is it worth sacrificing ASEAN for this sake? We have five members before – can we re-start at nine and then hope to get to 10 one day? I think that may be a better approach for ASEAN to gain credibility and then build up the numbers again.”
“Mr Speaker, Sir, I would like to thank the Minister for the reply. I would like to ask – given that the environment is uncertain and that we cannot expect the same type of returns moving forward and also the seemingly changed investment philosophies for both Temasek and GIC – is there a plan for the Minister to review and to issue new guidelines for GIC and Temasek for future investments.”
“So, civil servants will tend to favour the status quo and continue implementing cookie-cutter solutions, even when conditions require discretion and thought and exploration of alternatives. Another example - some time ago, I read in the Straits Times about how one of our Members here could not get through to LTA to re-route some of the bus services on the ground, and the Prime Minister had to intervene and LTA relented. The point is that it was possible to make a change, but it took a very high degree of political intervention, in this case by the PM himself, for what should have been a simple change at a much lower level. Things did change, but had the Prime Minister not intervened, the status quo would have prevailed. And I have had many similar experiences but I will not discuss them here today. My main point is that political leaders must remember to exercise political judgment and not leave it to the civil servants to suggest solutions sometimes. In conclusion, Sir, the President has presented to the House and the Government an excellent opportunity to reshape our future. The outlook remains uncertain and we have to ensure that we make the right decisions, devise and implement the right policies which will help us ensure our future success. I believe that while we must learn from our past, the future will be different and we will require something different from the past, not the same old solutions, if we want to succeed. This will require an enterprising leadership and the support of all Singaporeans - and together I am sure we will succeed no matter how tough the environment may be. ADJOURNMENT OF DEBATE”
“This is no longer something that Temasek does aggressively. It is important also that our reserves that we place with GIC and Temasek be reviewed. Should we place so much of our reserves with both GIC and Temasek or should we place our funds in safer investments managed by people who understand that these are meant for long-term investments and as a shelter for Singapore? Sir, the final point I want to make today is related to policy and decision making in Government. We have a system where most policy changes and decisions are made by the Cabinet. Parliament does not initiate this process although we provide input that we hope the Ministers will take into consideration. Now that we have a new leadership firmly in place, and with the challenging times upon us, I would like to make this call to the frontbench to exercise more political judgment in the policymaking process. In an entrenched system like ours, there will be a tendency to follow the status quo and remain in the comfort zone. Over the years, I have seen a greying of area between what the civil servants and the Ministers decide. In our system, we will need our political office holders to drive changes and lead the decision making process as they are the best to inject political judgment into policy and decision making. They are also the ones who have to answer to the public. Sir, I remember the Prime Minister in one of his early speeches as Prime Minister telling us about how the civil servants are able to present to him a justification depending on what he wants the outcome of a policy to be. In other words, they can come up with very good reasons for either of intended outcomes, even though they may be very divergent.”
“GIC also invested in limited instruments which they were familiar with. Temasek used to invest in Singapore or Government-linked companies at the very early stages, bringing them to become Singapore multinationals. Temasek was not seen to be a fund investing like GIC. But over the years, both GIC and Temasek have converged on their investment philosophies and are starting to look almost alike. Temasek, in fact, moved more into what GIC used to do - investing overseas - and GIC has also been recently investing in more risky investments, which they did not do in the past. I would like to see a complete review of how our reserves are to be managed moving forward. This will require top-level policy thinking on what are the core objectives that these two funds should serve, and how they should be managed. Our reserves are meant as the very long-term shelter of Singaporeans. Is it appropriate to allow GIC and Temasek to continue investing the way they have done in recent years, making somewhat speculative investments in certain cases, like the way private wealth is shown to be managed? Is this convergence of Temasek’s and GIC’s historical investment philosophies the right thing for our reserves? Should we be reviewing and redefining or reminding them what each of them should be focused on, so that we can further diversify the portfolio where our reserves are invested? Sir, if there are no plans for Temasek to go back to investing in Singapore-based companies to help build future local MNCs of Singapore, then I suggest that there is a need for a new entity to be created for this purpose. As I mentioned, we have created many successful companies out of Singapore where Temasek used to invest in them in the early stages.”
“We are all proud that Singapore has made the leap from third world to first in one generation, but still we see a cross-section of our population struggling even for the basic necessities in life, let alone the comforts of what a first world economy should provide them. The Government has from time to time implemented ad hoc help measures, like U-Save, GST credits, New Singapore Shares and recently the Workfare Income Supplement. The fact that we have to keep doing this redistribution indicates that there is something in our model of economic development that needs adjustment. We need a more permanent solution and while we wait for our skills redevelopment measures to bear fruit, I believe we need to take more proactive steps like reserving certain jobs for Singaporeans and also instituting some form of a minimum wage system, to make such jobs attractive enough for Singaporeans who want to do them. Whether we do this through the WIS or directly through employers is something the economic review committee can study by consulting companies, employers, unions and workers. Sir, next on managing our reserves. A lot has been said about the losses and Temasek and GIC have made in the last couple of years. I do not want to discuss the specifics of these losses today as I have filed a parliamentary question that I hope the Minister will answer at the right time. My question today is a more fundamental one of how reserves should be managed and invested. Over the past few years, both GIC and Temasek have evolved in their investment strategies, and they are both not doing what they were chartered to do at inception. GIC used to focus on very long-term investments, following investment principles which were somewhat conservative but delivered good returns.”
“This was triggered by a former Chairman of EDB who said that there was no need for local entrepreneurs and that dependence on multinationals to fulfil Singapore’s social need was sufficient. With the greatest of respect, this, in my opinion, is short-sighted and is the result of us being too comfortable with past successes. Such complacency will stifle our future economic growth. Local entrepreneurship and building local multinationals that can become our future economic anchors are urgent issues for the Government and a key area that an economic review committee can look at. Sir, the next issue is on the income divide. The President in his speech talked about the widening of income gaps and about helping Singaporeans cope with this rising trend as a result of globalisation. I fully agree with all the initiatives for the long term, like skills upgrading and bringing in higher value-added jobs through foreign MNCs. This must be a logical thing to do for the long term, but we have been at it for a long time now and many Singaporeans are still seeing it as a struggle coping with the high cost of living that we have here. The reality is that the wages of lower income Singaporeans have remain artificially depressed for a long time due to competition from low value-added jobs from foreigners and they have not fully benefited from the fruits of Singapore’s success in the globalised world. I do not think we can continue with the current liberal foreign workers policies for long as Singaporeans in the middle and lower income brackets will generally become worse off over time.”
“We must question how much benefits we are deriving through the MNC strategy today where we are also giving up so much - by way of tax forgone, cheap land and other input factors that we make it very attractive for MNCs to set up bases here, and also the opportunity cost of not adequately supporting our local entreprises. Sir, more Asian cities will be able to provide similar incentives and the question is whether we can compete with them, especially with India and China, which have a lot more to offer. We therefore need to develop a new model for economic growth while we continue to sustain our multinational strategy. I am not suggesting we abandon our MNC strategy overnight but that we must develop an equally strong economic driver that can take over the lead if the MNC strategy starts to fail us. If the MNCs then continue to be a part of our growth, well and good. If they do not we would have been wise to develop options. While in the past we have been helping strengthen the SME sector, the strategies put in place and resources allocated for this have been a far cry from what we have allocated and spent in supporting the MNC strategy. This has resulted in relatively weaker local enterprises. This does not have to be so. Singapore has created world-class companies before, especially in our early years and they are our Singapore brand-name multinationals today. In recent years however, we have seen too few succeed. I cannot shake the feeling that this is because we have not been wholehearted in wanting to create our future Singapore MNCs, contented as we are with the foreign MNCs coming to Singapore. Sir, this was manifested recently in a mini-debate which was published in the papers.”
“In fact, I suggest a co-chair from the private sector with sufficient breadth of experience to advise the Government - perhaps someone like Mr Koh Boon Hwee or Mr Ho Kwong Ping, who can co-chair a committee together with the Minister for Finance. Sir, the economic downturn is going to lead to a new world order which will challenge the fundamentals, as I said, that we have used to build our economy up to now. An economic review committee is even more important today than in 2002 when we had such a committee convened. At that time, the core drivers of the economy remained quite similar, although we expanded the economic sectors, especially the core areas of attracting foreign direct investments through multinational companies. We have now however started to see major changes in other countries we have relied on for the flow of investments into Singapore. If the Obama government succeeds in tweaking their tax laws making it difficult for us to attract American MNCs into Singapore, we may see a major exodus of such companies and see less coming to Singapore in the future. There is no reason, Sir, why other developed countries that we have always depended upon for investments will not behave the same way that the USA is behaving today. It is therefore timely to review our economic growth models to reduce dependence on multinationals who re-export their products that are manufactured in Singapore. We have been up to now content with our local enterprises being sub-contractors supporting the multinationals.”
“Mr Deputy Speaker, Sir, thank you for allowing me to speak today. Sir, I rise in support of the motion in the name of Mr Michael Palmer. Sir, the President has set the direction for the Government and has made some very significant suggestions to tackle issues ranging from the economy to the political as well as social challenges Singapore is facing today which is a very changed world and one where many of our fundamentals as a nation are being questioned and challenged. I would like to touch on four issues today. First, on the restructuring of the economy. Sir, when listening to the President’s speech, I was happy to note he suggested that the Government work with the private sector to relook at how we need to restructure the economy once again. I had suggested the formation of an economic restructuring committee during the Budget debate and the fact we have not yet done so is disturbing, as I thought that the signals are clear that we needed to do something quickly and quite urgently. Sir, in times like these, the Government has to show leadership and initiate such a review as our economy is under stress and many companies are still struggling to survive the global economic meltdown. Sir, from comments made by the Senior Minister as reported in the newspapers, which I read today, I understand that the proposed economic review committee is just a Government Ministerial committee. I do not think we have enough experts in the Government and among the Ministers who have a good feel of the business world, especially issues that companies are facing in the private sector. I therefore would like to suggest that the Prime Minister relook at this and have greater private sector involvment in the committee.”
“Sir, on behalf of the GPC for Finance, Trade and Industry, I would like to thank the Senior Minister of State, Ms Lim Hwee Hua, for her comprehensive answers to our very difficult questions, especially those related to the reserves, GIC and Temasek. We thank you for all the answers. I would also like to take the opportunity to congratulate the Minister for Finance on devising an innovative Resilience Package. The $20.5 billion Budget is indeed large, significant and wide-ranging. I am sure that we will see the benefits soon and we want to thank the Government for the Budget this year. I hope that we will really help the companies and the people as expected. Sir, with that, I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. The sum of $570,816,400 for Head M ordered to stand part of the Main Estimates. The sum of $278,692,900 for Head M ordered to stand part of the Development Estimates.”
“Sir, on the liquidity issue, I want to just ask: Given that both Temasek and GIC have got paper losses and we are expecting the returns on NIR based on expected return whereas their real return will be lower than that in the next few years as expected, will they have enough cash to return to the Government or will they be forced to liquidate assets to realise their losses? I understand that the Government has the money and I am glad that we have the money. Sir, on the issue of role of Temasek to focus externally, I generally agree in the refocus of Charter of Temasek to invest externally. But with the benefit of experience in the last few years, we have generally been unsuccessful in many of our overseas investments, maybe in this environment it may be a good time to reassess this and bring them back into Singapore. But I can understand that we cannot direct Temasek to invest in companies, to rescue companies. Can I then ask if the Minister will be willing to set up another fund to help rescue companies, if not through Temasek, maybe set up a special fund to rescue companies? 3.00 pm”
“Was there special effort put in to encourage inter-Ministry projects? Third, we need to review the yardsticks used to measure the performance of Ministers and their Ministries, which should also lead to an assessment of their compensation. The current use of GDP to reward Ministers and Ministries with higher monetary rewards is insufficient and is comparable to using a share price in measuring the performance of CEOs in the private sector, which is not a good approach. Fourth, as we head towards uncertain times, we need to ensure that we have enough ammunition in our arsenal to fight the long battle that we are about to go through. Fiscal prudence is a virtue that we should exercise so that we are able to survive this downturn and have enough resources to restructure our economy to remain competitive in the long term. I support the expansionary Budget this year, but can the Minister assure the House that we have enough resources to battle this for the long term and not deplete our resources too quickly? Cut Costs”
“Sir, I would like to make a few points to emphasise prudence in the current fiscal year. As we embark upon an expansionary budget, we need to ask ourselves a few questions to maintain fiscal prudence and to ensure that the Government's well-intended measures are effective. The first question is, if an expansionary budget will lead to overspending without adding much value to the "real" economy. While Governments around the world are announcing high spending stimulus packages to bail out their economies, we must be careful in not to rely on a "trickle-down economics" approach. Do not get me wrong. I am not saying that we should not spend, but we should spend it in a structured manner so that we create 'real' value in the economy. Given the current economic climate, what measures are in place to ensure that the Government spends prudently? The point I am trying to hit home here is that fiscal spending should strike a balance between the short-term needs for an expansionary budget and longer-term fiscal sustainability, while aiming to avoid any wastage in the short term. Second question, as the Government spends more on many new initiatives, how do we ensure that a more holistic view is adopted in resource allocation across agencies, and that our spending goes towards achieving its desired targets? For example, does the Government plan to publish the Ministries' outcome indicators or the public sector's outcome indicators as a whole? It is very easy to spend money when you have it and $11 billion is a huge amount to spend in one year. Can I ask the Minister what processes he will use or has used to decide which projects get funded? Is there a minimum return-on-investment threshold which he used to decide who the resources will be allocated to? Which Ministry?”
“This will go a long way in helping companies. I brought this question up during the MTI COS but was not answered. Maybe I will bring it up to the Minister here about how some of the banks are abusing the Special Risk-Sharing Initiative (SRI) by converting their existing commercial loans to SRI loans and I think this will defeat the purpose of us in trying to create new loans for companies. Can we put in some control so that this is not over abused? Translating Policy Changes into Action Effectively”
“On the R&D and innovation initiatives rolled out in this Budget, I welcome them and I think that these will be useful for companies to restructure and strengthen themselves during this prolonged downturn. The main issue for such companies is going to be the general requirement of all Government grants for companies to spend the money upfront and then claim back from the Government later. Would the Minister consider upfront cash grants to encourage companies to do the necessary R&D or innovation work, rather than to put it off because they do not have the money upfront to do the work? There may be some Government business opportunities which are suitable for our SMEs but they may not yet have the capabilities to take these jobs. Would the Minister consider implementing some focused initiatives where it plays a role in helping companies build up their capabilities and capacities to take on more projects that may be available from the Government? How can the Government help companies identify these opportunities and build their capabilities to handle them? I believe in the US, some of the government agencies are doing the same. They play a developmental role to help their enterprises gain some of these capabilities. While the workers have played their part by accepting the National Wages Council (NWC) recommendations for wage cuts, should the Government too not play its part by reducing and not just freezing Government charges? Sir, I also welcome the move to get IRAS to review the annual values of properties based on the current market conditions. My question is, when will this be completed and implemented for the property tax changes? Can I also ask MOF to direct JTC, SLA and HDB to do the same reassessment on market rentals rather than to rely on old market data?”
“Sir, I would like to raise some points on how we have proposed to help businesses weather the current storm. Sir, the Government has decided to cut the corporate income tax rate to 17% and I understand what this will do for our long-term competitiveness and it is a good preemptive move to prepare for the future. However, we have many international enterprises operating in Singapore, and many of our local companies have overseas operations. Our Corporate Income Tax (CIT) rate move can inadvertently reinforce perception that Singapore is a tax haven and create difficulties for these companies. President Obama has in fact recently announced that he will take drastic measures against countries that fall in his tax haven list. This may put Singapore in a precarious position vis-a-vis the US. What is the Ministry's position on this? Sir, I am happy that the Government is planning to shore up demand by spending more this year. I hope that the Government will divert as many purchases as possible to local enterprises. Changing the Government's procurement policies to help SMEs benefit more from Government spending will be critical for us to see the real impact to our economy. If we do not change, then I am afraid only a few large companies and many foreign ones will stand to gain from the increased Government spending. While we want to play within the rules of WTO, I am sure we can still tweak the procurement policies to find the right balance. Perhaps, the Minister can give a breakdown of how the estimated $11 billion of Government spending will be spread among the various sectors of the economy.”
“Temasek seems to have adopted the Wall Street model and hired many people with such expertise, while GIC seems to have not changed much compared to the day they started operating and depends largely on tested people and processes. I am not sure which model will work for us in the future and in the long term. But from what we have seen recently, the way investment decisions have been made, whether in Shin Corp or ABC, childcare operator, or in Merrill Lynch or UBS, Temasek seems to follow the Wall Street model of investment while GIC is far more conservative. Will the Minister be reviewing the approaches taken by both so that we can ensure that our reserves remain protected and are able to grow? Sir, there has been a lot of talk at our coffee shops and also at the grassroots level and among our residents about this $50 billion loss, if the number is correct, it is huge. Compared to $300 billion reserves that has been reported in reports that I had seen, this $50 billion translates to about 17% erosion of our reserves and if you add the other assets that may have been eroded, that have not been computed, that is huge. So the question in the public's mind, would we have undone what our past generations built up for us? And will we be able to protect the interest of Singaporeans, moving forward? An important question is, can we remain confident that we have reserves to help us in the future? GIC and Temasek”
“If next year GIC comes back and forecasts a drastic drop of its long-term expected returns, how will it affect the Government's ability to operate with lower level of revenues from the NIR? Will the Government have to redraw its long-term development plans again? And these development plans are important for our future. I hope that we do not have to do it. 1.45 pm Sir, when I raised the question of supervision of the Sovereign Wealth Funds (SWFs) in Parliament last year, the Minister responded that MOF would not like to micromanage them. However, today, we have seen a large proportion of our reserves being eroded because of the severe drop in values of the investments made globally by both of our SWFs. This warrants a review of how MOF mandates GIC and Temasek on their roles and a system of reporting and supervision by MOF. Central to this argument is that Temasek and GIC draw from our reserves to make their investments. Since it is effectively taxpayers' money that makes up our national reserves, increasingly the public is asking for greater Government involvement and oversight of the SWFs, especially in light of the spectacular losses we have seen in recent times. I have a few questions for the Minister in this regard. Who decides on the level of risks both GIC and Temasek can take in managing their funds? Is there a mandate from the Minister for Finance on what their expected rate of return should be and the risk profile that their funds should be allowed to operate with? Sir, I briefly studied the Annual Reports of both Temasek and GIC and cannot help but draw a conclusion that both, organisationally as well as operationally, GIC and Temasek are operating with different sets of culture.”
“Are we going to quickly deplete our reserves as a result? On the NIR formula, I would like to ask the Minister how much money will be made available to the Government for the next few years. We understand what is available this year. What about the next few years? We should know this since the formula is based on long-term expected returns and not long-term actual returns. Also, can the Minister share with the House how the process has worked out in the first year with this new formula? Second question I have is whether both GIC and Temasek have enough liquidity to contribute to the NIR that the Government needs for this year and the coming years. My worry is that the losses suffered by our two SWFs may be paper losses, and they might still be holding to these papers as liquidation will translate these to real losses. If they do not liquidate, will they still be able to return to the Government what is due and what the Government needs? Sir, the NIR approach defines "returns", which the Government can tap as long term expected returns and is based on a 20-year horizon. For the last 20 years, GIC had returns better than its peers around the world – a return of 5.8% before and 4.5% after inflation. I am sure that the Minister would have used this number as a basis to compute how much he can draw as this 4.5% is the basis he would have used to compute the long-term expected returns. The question I have is whether our current reserves and our SWFs managing them are capable of returning such levels in the next 20 years after the whole global landscape has been reshaped. Have GIC and Temasek come back to the Minister to propose any changes to their long-term expected returns after what has happened?”
“Sir, I beg to move, That the total sum to be allocated for Head M of the Estimates be reduced by $100. Sir, I want to make two points with regard to our reserves. The first concerns the role of our Sovereign Wealth Funds (SWFs), Temasek and GIC, and the impact this has on our reserves, while the second has to do with the impact of the financial crisis on the returns of our SWFs and, consequently, on our reserves. Erosion of Our Reserves and Availability of Funds to Fund Government through NIR As I mentioned in my Budget debate speech, I am glad the Government had the foresight to change the way we can use our reserves by switching from the NII to the NIR computation. In effect, the Government is now able to draw more from the reserves, including using the increase in capital values of the reserves, which was not allowed in the past. This year, we will therefore be taking two bites at the reserves compared to the past, once through the NIR, and then through the $4.9 billion that was announced in the Budget. From the Budget Book, I notice that the amount available for the Government expenditure from the reserves has gone up from $3.7 billion in 2008, when we used NII, to $7.7 billion this year using the NIR formula. And I suspect this is still not 50% of NIR, which is the amount allowable after we changed the Constitution last year. However, it has recently emerged that both Temasek and GIC have suffered significant losses in the financial markets, which according to some reports I have seen, amounts to $50 billion collectively. This is significant. So the first question I have is – will the Government still be able to tap the reserve amount it needs in the coming years now that the base of the reserves has shrunk?”
“Sir, I would like to take the opportunity on behalf of the GPC (Finance, Trade and Industry) and all the Members to thank the Minister, Senior Minister of State and Minister of State for all their answers. We are very happy with the replies. I think they answered most of the queries that we have. We understand that this is a challenging environment so we wish MTI all the best in trying to tackle this on behalf of Singaporeans. You have our support. I would also like to, before I withdraw my cut, offer one more acronym. The Minister has mentioned a few. I would like to suggest one more: Goal – "Government Offers Additional Lending". I hope that we can do this at the next announcement. Sir, I beg leave to withdraw my cut. Amendment, by leave, withdraw. The sum of $740,357,600 for Head V ordered to stand part of the Main Estimates. The sum of $8,691,512,200 for Head V ordered to stand part of the Development Estimates. Head L – Ministry of the Environment and Water Resources”
“Sir, on the issue of financing, I would like a clarification from the Minister regarding a comment by SPRING Chairman, Mr Philip Yeo, which was reported in the Lianhe Zaobao. Let me quote Mr Philip Yeo said that, "If the Government were to provide enterprises with loans directly, all Members of Parliament would lobby the Government for loans for the enterprises within their constituencies, creating political suicide". Sir, I would like to ask whether this is the Minister and the Ministry's view about all the requests that the MPs have been making. I am, in fact, disappointed that this came from the Chairman of SPRING who should be more sympathetic towards SMEs. His comments belittled the issues taken up by the Members of Parliament who have real concerns for SMEs and want to help solve liquidity problems. I wish that the SPRING Chairman was a bit more sympathetic. Can I ask the Minister whether he agrees with this view?”
“We should, perhaps, set up what I call an Opportunity Fund to support small or micro enterprises, targeted at helping people who are out of jobs but have some business ideas. Even if a few succeed, we can create a vibrant environment of many start-ups. SPRING could perhaps work with the various CDCs to co-fund this Opportunity Fund. Finally, the need on creating demand for our SMEs. While SPRING is focused on growth locally, IE Singapore is focused on growing demand externally. I think IE Singapore has not been effective in bringing our SMEs overseas. SPRING, I think, can do a better job. At the same time, EDB is not interested in attracting foreign SMEs into Singapore and I think there is value in bringing some of them who are thinking of relocating. For this purpose, for gaps that are appearing, I suggest that we relook at how our economic agencies are organised to do this job more effectively. Help for SMEs and Entrepreneurship”