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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“Similarly, those coming from India may have a history of religious conflicts and may view people of other races and religions differently from the way the various races and religious groups in Singapore look at each other. How can we properly integrate these new immigrants into Singapore without the related social problems? I would like the Prime Minister to assure Singaporeans that these immigrants will not create a big social problem for Singaporeans. Community Integration and Bonding”
“Sir, many Singaporeans feel that we are a little too aggressive in accelerating the influx of new Singaporeans. While I understand the need for a bigger population, the ground reactions have been a little unsettling as Singaporeans are now seeing many of these people in their neighbourhoods. The recent survey reported in the Straits Times about how Singaporeans perceive the Chinese from China, which was mainly negative, is an example of the reactions from Singaporeans. Similarly, the new Indians are better educated and wealthier and are keeping among themselves and Singaporean Indians by birth feel a bit threatened. We have yet to successfully integrate the new Singaporeans into the Singapore society. The issue of massage parlours which popped up in our HDB neighbourhoods, employing study mamas and also those who are here on study passes are social issues that we have to grapple with. Many Singaporean middle-aged and older men are getting into trouble with these foreigners. These foreigners know of a famous number - 5562 - these are the two CPF withdrawal ages. Some men are losing money which they freshly withdrew from the CPF to some of these foreigners, and this is happening in our neighbourhoods. Sir, what worries me most is the issue of racial integration. While in Singapore we have put in a lot of effort since independence to ensure racial and religious harmony becomes the bedrock of the Singapore society, I am not sure the new immigrants will immediately come on board on this. Particularly those coming from China where the society is almost homogeneous, I do not think we can expect them to immediately understand and appreciate the other races in Singapore.”
“Sir, in conclusion, the Budget this year is a significant milestone for Singapore, one of the boldest in a long time. This Budget will be remembered for two significant changes in the Government's mindset. First and foremost is the introduction of social safety nets for lower-income Singaporeans. Social safety nets were almost a taboo in Singapore, but now we have the WIS. The second reason why this Budget will be remembered for a long time is because of its particular focus for businesses, especially for SMEs. SMEs many a times felt left out in past Budgets. The Budget this year will go a long way in making Singapore a competitive economy and an inclusive society. I am sure every Member of this House will wholeheartedly support this Budget. So far, we have not heard any complaints actually about the overall Budget that has been announced for all Singaporeans and for all quarters of society. Sir, I therefore support this wonderful Budget that the Minister delivered. 12.58 pm”
“The second issue created by this differential tax rate between the corporate tax and the individual income tax is this, ie, individuals at the 20% top bracket will now have to pay an additional 2% tax on the franked dividends received in 2007 and beyond, if the tax changes do not happen. So, the net effect for the higher-income earners in Singapore is that they will end up paying higher income tax, higher than the 20% level that they had paid in the past. Estate duty Sir, the second disappointment was the estate duty. The Government has been considering this for some time, but has again decided not to decide. This surprised and disappointed some among the high net worth Singaporeans as well as foreigners resident here, because, last year, when the Prime Minister delivered the Budget speech, he indicated that, after two years of deliberation, he will make some changes to the estate duty this year. At least, this is the impression that all of us have. Sir, many countries have already abolished estate duty. Aside from Canada, India, Australia, New Zealand, Italy and Sweden, among others, our nearest competitors, such as Hong Kong and Malaysia as well as Macau, have done away with it. Many arguments have been made in favour of abolishment of estate duty and I will not repeat them here. I feel that we have a case to abolish estate duty again, not just for Singaporeans in Singapore but also as we try to attract many more high net worth individuals to form the 6.5 million population that we are targeting. These high net worth individuals will be paying higher taxes and will spend here and therefore contribute towards higher GST collections by the Government and, if we add all these together, they may just outweigh the loss in estate duty tax collections.”
“So, wage levels are very much not in the Government's control. We have little choice but to put in place a wage or income supplement measure. Under these, we will allow companies to pay what they are willing to pay for a certain category of job, with the Government coming in to supplement the wages to allow Singaporeans to support a certain lifestyle and to cope with the cost of living. That the Government has done so is recognition that it is able and willing to re-examine even sacred cows when the need arises. This, I think, is good news for us. It is a fundamental shift in the Government's thinking on welfare. Sir, now I move on to discuss the issues that were left out of the Budget. First, as expected, some of the participants during our feedback session expressed disappointment that the Government failed to address two areas which, if addressed, could have made the Budget cover all bases. No cut in individual income tax First, is the cut in personal income tax. This was one of the most anticipated changes for individuals which did not materialise this year. I can understand the Government did not see a need to do so, especially in a good economy. I thought that it would have been something that we could have done not just for Singaporeans but also to attract more high-income earning foreigners to take up residence here. We all know that there is a global competition for professional talent and it is heating up, and it is a race by many countries to attract the best to their shores. The reduction of the personal income tax to 18% would have been very useful in our quest to attract talent. We may have lost the opportunity to attract some of these professionals who may now choose to locate themselves in Hong Kong.”
“A big factor behind the labour shortage are the regulations in place determining the proportion of foreign workers to local workers, as well as the source or country of origin of the workers. I suggest, therefore, that the labour rules need to be changed to give greater flexibility to companies in selecting their sources of labour, instead of depending on the Government to dictate which source is traditional and which is not. I understand the need to balance this liberalisation to keep wages at acceptable levels for Singaporeans too, but we need to keep in mind the larger picture of keeping industries here in the first place. Introduction of Workfare Sir, this is definitely a positive move, and my comments are as follows. First of all, we have seen from the results of the data published by the Department of Statistics that wage levels of Singaporeans rose marginally in 2006 and, this, after two years of good economic growth. However, wages are almost stagnant, and that too, when Singapore is experiencing good growth and a tight labour market. It is therefore clear that there are many Singaporeans who need their wages to be supplemented to achieve or maintain an acceptable standard of living and lifestyle, especially as costs continue to rise. We have finally come to the point where we recognise the need for some subsidy for lower-income workers to keep their wages at an acceptable level. This is good. But it is also a sign of the times to come. We may need to expand Workfare, especially when it comes to delaying the departure of important industries and keeping these sources of employment here in Singapore. Sir, globalisation has levelled up the labour marketplace. If we price our labour too high, companies can easily relocate elsewhere in the region.”
“Second, wages have gone up, plus the additional one-and-a-half percent increase will also impact the cost of labour for companies here. Third, input costs will also go up as a result of the GST increases, and this is more significant for smaller companies that are not GST-registered. Over the past year, we have also seen cost going up in the areas of utilities, transport, stamp duty and many others. We need to slow down this trend of cost increases. Let us look at two areas in particular. Higher rentals First of all, high rentals. One of the issues that came up strongly during the discussions with the industry groups we had was the inflated rental market that is hurting businesses and individuals. In fact, the lack of space is an issue for them too and, therefore, cost is going up. There is also a worrying trend for SMEs of JTC looking like it will exit the business of being an industrial landlord. JTC has fulfilled a key role in providing leases of industrial land at rentals that are comparable to industrial space costs in competing economies. The divesting of assets by JTC to commercial entities, eg, to REITS, would generally mean higher rentals in the future. If we leave it to market forces, inevitably, because of land scarcity, industrial land will get outpriced. Certain activities might still be viable here, if not for the price of rentals and land. I suggest that the Government re-look at JTC's plans. Labour cost Sir, labour cost remains a key concern for businesses. In addition to the increase in CPF, tightness of the labour market has also resulted in increasing wages. The sectors badly affected are the construction, food and beverage as well as the hospitality industries.”
“Now that we have come up with some good fiscal measures, we need to therefore shift the focus on the need to restructure the way the Government supports SMEs, and many Members of this House have spoken about the one-stop local enterprise champion agency that will be able to better support companies, and I will elaborate more on this during the Committee of Supply on the Ministry of Trade and Industry. But, Sir, today, companies start to globalise the day that they are started up and they need a more wholesome support from one agency instead of having to go to three different agencies, eg, EDB, SPRING and IE Singapore, which may not necessarily be the right approach for them. Issue of cost-competitiveness Sir, while the Budget measures announced this year are far-sighted, there are, however, issues on cost-competitiveness that the measures do not address. I will consider these here. As in the past, when the economy was booming, we inevitably allowed cost to increase on a broad base, sometimes making Singapore relatively uncompetitive for certain businesses. This has happened to us before. In fact, it happened to us twice in the 1990s and, when that happened, the Government had to form the Cost Review Committee in 1993, followed by a Cost Competitiveness Committee in 1997, and this was to address the cost increases over the years when the economy's performance was good. Then again, in 2001, we had the Economic Review Committee to evaluate our competitiveness and cost was also one of the major issues at that point of time. We therefore cannot allow cost increases to again derail our economic growth. We are, in fact, already seeing what I call a triple whammy for cost increases for businesses. First, rentals have gone up and continue to rise.”
“We have been struggling to find a way to equitably offset the impact of GST for this group and have not been successful so far. By zero-rating certain items, this group of Singaporeans will have the comfort that they will also be able to manage at least some of the impact of the GST increase. I think that if we zero-rate some items from GST, the middle-income or the sandwich group will come out better overall in terms of deflecting the full impact of the GST increase. This will also address some of the insecurity that they typically feel whenever things like GST increases happen. Budget for SMEs and businesses Sir, let me now shift to the impact of the Budget on the SMEs and businesses. The financial services sector has welcomed the removal of the 80:20 rule which was restrictive for non-resident funds. This will no doubt make Singapore a much more attractive place for such funds. As has been the case for the past years, the financial services sector again received many enhancements for incentives which will go a long way to entrench Singapore as the main financial hub of this region. Without doubt, this Budget is one of the best for small and medium enterprises, with many measures to help SMEs become more competitive. We have the 18% corporate tax reduction, the partial tax exemption threshold rising from $100,000 to $300,000, rebates on CPF contributions for two years, and the lowering of the foreign workers' levy by $30. Even the Workfare Income Supplement (WIS) scheme will help SMEs. They are, therefore, all pleased that the Government is now paying special attention to them.”
“But my question is, "So what if they do benefit?" Along with them, the low-income spending public would also benefit significantly too. So why not such an exemption for basic items? I think it is worth considering such a GST exemption system to give comfort that the long-term impact of any GST increases will be manageable and will not depend on how generous the Government is with offset measures or when the offset measures expire. This will eliminate the need for ad-hoc subsidies and rebates from the Government each time GST increases are implemented. The net effect will be peace of mind and a feeling of assurance that future GST increases will not price essentials out of reach. Moving away from a crutch mentality Frankly, by giving out offset measures in the form of subsidies and rebates almost continually since we first implemented GST in 1994, we have developed in Singaporeans an entitlement or subsidy mentality. I do not think that this is a healthy situation for the country in the long term. I would rather have a system where Singaporeans do their own calculation of what the impact of GST will be for them and they manage their spending. Knowing that certain important items are GST-exempt will give them the comfort that they will be able to manage comfortably as long as they do not overspend on non-essentials. I am sure that the income loss from the GST exemption system will be much less than the $4 billion or other such sum of offset measures that we give out each time the GST goes up. Middle income insecurity Sir, another issue to consider is that the offset measures were targeted mainly at the lower-income. The middle-income group received little attention in this present Budget. This is the sandwich group of Singaporeans.”
“Offset measures, however, are ad hoc in nature and quite unsettling as everyone knows that there will come a day when the relief that they provide will come to an end. There is a need for something more permanent than offset measures. One possible solution is to zero-rate or GST-exempt certain basic products and services, such as food items like rice, flour, salt or sugar; education expenses at all levels; healthcare and medical treatment, and perhaps even HDB purchases and rentals. The Government may say that exemptions are difficult to administer. But the Government is already introducing $4 billion worth of offset measures with a very complex set of implementation measures that will cost the Government significant money to administer anyway - considering the variety of reliefs that are being provided, ranging from things like U-Save, SC&C rebates, CPF top ups, to cash payments. If despite this, there is still a difference in views about whether we have found the right balance of who gets what and whether we have distributed enough to certain categories of Singaporeans, then I suggest implementing a zero-rated GST system or GST exemption system for certain categories of products and services, which I have mentioned, without the complexity of administering that comes with it. Considering that GST exemption is already practised for certain types of businesses and that this year, in fact, the Minister further allowed zero rating for the service, purchase and leasing of containers, the argument on difficulty of administration is therefore not tenable. Another argument may be that the higher income will benefit more. To this, I say, "So what?" We know that the higher-income spending public spends more and therefore will benefit more from the GST exemption.”
“Expanding this definition is a positive move as it will allow the allocation of more resources from our reserves to make strategic injections into the economy. We have already modified the amount that the current Government can use from the income from our reserves two times. This means that we have been too conservative on allowing spending of our reserves up to now. I am waiting to hear what the new definition of NII is, but what I think we really need is a formula which gives certainty to the Government as to how much it can spend each year. One suggestion I have is how the USA university endowment funds utilise their reserves. Many USA universities have spending rules which peg the spending to a certain percentage of the current value of their endowment fund. In other words, spending is not limited only to the returns made but also to the total value of the fund. It is quite typical for them to spend between 4% and 6% of their fund value. Whether or not the actual income from their funds for the year is lower or higher, the spending is not affected. I hope that the Government will consider this approach and not just depend on returns for the year, which we now practise. This way, the Government will have better visibility and will be able to forecast what is available to spend each year. This will also give a constant flow of income for the Government, thus not having to rely on significant GST increases in the future. GST exemption for certain items Next, on GST. Whenever GST increases, people will feel the impact by way of increased expenditure and therefore the increased financial burden on families. This is the reason why the Government has given out GST offset measures when introducing and then increasing GST.”
“Role of GST as the other source of revenue Sir, indirect taxation, such as the GST, will go, in part at least, towards helping the Government to pay for its investments in the economy and the workforce. Huge infrastructure investments are planned to help accommodate the 6.5 million population that we plan to have here in Singapore in the near term. While we understand that GST increases will help fund such expenditures, should we just depend on GST to fund these? If so, I can see the GST going up to 15% in the next 10 years and this will render Singapore uncompetitive. Equally important, is it fair then to shift, and to continue to shift, the burden of paying for these investments onto the man-in-the-street who pays GST? Is that too much of a burden to put on the ordinary Singaporean? Should not the revenue equation be rebalanced to depend more on our reserves than taxing Singaporeans? Sir, utilising more of the reserves for funding growth is not a wrong thing to do. After all, such spending is not money spent for yesterday or today, it is for the future. And I still remember very clearly the scolding Dr Wang Kai Yuen got in this House from Minister Mentor when he suggested a few years ago that we dug into the reserves to help the plight of senior citizens as a result of the recession that Singapore faced. In his speech in this House, he said that the "reserves are not for yesterday, they are also not for today, but they are for the future". With the redefinition of the Net Investment Income (NII), to include capital gains, we have now recognised that the reserves play and indeed must play a key part in facilitating investments made now into the economy to safeguard its future.”
“Sir, my GPC met with a group of industry experts to get the feedback on the Budget that was announced on 15th February and I am glad to say that most of the responses have been very favourable. In fact, many were not expecting the Government to be so generous this year. In my speech today, I will reflect some of the reactions from these industry experts, and therefore my speech will be a long one. Revenue structure for the future and related issues The revenue restructuring measures Sir, we are no doubt seeing a trend of shifting from direct to indirect taxes but are we moving too quickly? In the Budget, there were several measures announced which affect the revenue for the Government. These are the reduction of corporate tax to 18%; the increase of the Partial Tax Exemption from $100,000 to $300,000 for companies; amendment of the Constitution to allow capital gains to be used as part of the Net Investment Income; and also raising of GST to 7% with effect from 1st July. Sir, the first two measures are geared towards improving Singapore's attractiveness as a corporate destination and the industry feedback is that these measures should stimulate growth in the economy. It should also provide the SMEs with a shot in the arm. This should also help keep our corporate tax structure abreast or ahead of leading competing economies, such as Hong Kong and some strong challenges from Eastern Europe. Sir, the Government expects a hole in revenue of about $1 billion, I calculated, from the cut of all the taxes announced. To plug this hole, the Government plans to raise income or revenue by two measures - first, by increasing the GST, and, second, by expanding the definition of Net Investment Income (NII) to allow the inclusion of capital gains.”
“Mr Speaker, Sir, in response to the Prime Minister's speech during the debate on the President's Address to this House in November last year, the Second Minister for Finance, Mr Tharman Shanmugaratnam, announced a watershed budget that will position Singapore for the future in the midst of a globalised world to create "a competitive economy and an inclusive society". Sir, as the Minister mentioned, the Budget positions Singapore for the future by investing in the future, focusing on growing the economy, investing in Singaporeans as well as to help Singaporeans to help themselves. This, I believe, is the key for a bright future for the future of Singapore. Sir, many good words have been used to describe the Budget - a "wow budget", a "generous budget", a "surprising budget". For me, this is also one of the best - maybe the best - Budgets I have seen since I entered this House in 1997. In one go, we addressed five main areas: (a) We implemented a social security net, which is a fundamental shift from our earlier operating philosophy - a permanent Workfare which is essentially a wage supplement system; (b) We increased the GST, coupled with a set of offset measures that will help most lower income Singaporeans and also older Singaporeans, and, of course, now we have also opened the gates for future GST increases; (c) We lowered the income tax rates, leaving the gates open for future rate reductions to compete as the world changes around us; (d) We restored the CPF contributions by employers after a very long time; and (e) We finally also showed that we became very serious about supporting entrepreneurship and small and medium enterprises with one of the best sets of budget measures for start-ups and SMEs.”
“My question is: do we have a solution for such people who do not make any gain from the sale of the flat?”
“Mr Speaker, Sir, the Parliamentary Secretary mentioned quite generally just now that many of these residents facing this situation were those who sold their flats and then used the proceeds not responsibly. Does the Parliamentary Secretary realise that there are also many cases of residents who are in negative equity and, as a result of that, the banks are forcing sale? Therefore, they actually do not have excess cash to help them rent or buy a flat. These cases are increasing because of the policy change of allowing banks to handle HDB mortgages. In fact, I have a resident - now this is the fifth week - who has been staying at the void deck and has not been able to find an alternative accommodation.”
“There is potential impact on third parties that has to be addressed. Can this section, therefore, be revoked to take this situation into account? What is the Government's policy on mass-providers of credit to lower income groups that are usually targeted with credit cards (ie, those earning income below $30,000)? For example, we have seen extensive advertising over the last year of lending of smaller amounts by a commercial credit provider that is not subject to the Banking Act. Advertisements for such credit are plastered all over MRT stations, taxis, among other places. Will this likely affect the market estimates on the credit and default and indebtedness problems arising from over-borrowing? Do we want the Banking Act to be the only legislation governing mass-providers of credit? If so, what other changes would be necessary to other legislation, for example, the Moneylenders Act (Cap. 188)? Can we bring both of these Acts, or at least the institutions licensed under them, under the same monitoring agency to provide for better control of their activities? So, credit card debt is, therefore, not the only problem. It is the other type of debt that may exist. Sir, in conclusion, this being a very technical Bill which is difficult to understand, but I managed to understand most of it, I hope that the Minister can clarify the points I have raised. But, overall, I think this is a good Bill and I support the amendments. 3.46 pm”
“In extreme cases, people borrow from one credit card company using one facility to service debt taken from another facility at a very punishing interest rate. They quickly run out of options and face a mountain of debt and also bankruptcy. I therefore welcome the tightening of the rules that control credit card issuance and the extension of credit. Sir, I have a few questions for the Minister. First of all, the proposed section 57(3) would catch advertisers, especially since section 57(8)(c) (not knowing that advertisement would breach the law) is difficult to apply, in my opinion. Can this be revoked to provide effective protection for advertising agencies when they have to apply this? In section 57D(1), this gives the power to issue directions but subsection 4 provides for high fines for violations. Subsection (2) also provides that the directions are not subsidiary legislation. The combined effect of sections 57D(2) and (4) blurs the line between subsidiary legislation and directions. For subsidiary legislation, there is an obligation to publish it in the Gazette, so we cannot say that ignorance of the law is no excuse. Is it not more appropriate to have the directions instead published as subsidiary legislation? As regards section 57E, there is no provision for informing the public upon revocation of a licence. There is also no requirement for a licensee whose licence is revoked to notify at least their ex-customers. Further, subsection (2), requiring the licensee to prevent the use of cards after the licence is revoked, is likely to be practically unworkable and may be difficult to comply with. Subsection 3, while preserving transactions that took place before revocation, says nothing about transactions that took place after revocation.”
“Sir, in section 40, which covers the asset maintenance requirements and the related sections 49 to 55, which concern certain powers of MAS, could the Minister please enlighten the House on how other major financial centres handle such asset maintenance? Sir, even the best of regulations cannot totally rule out flight risk of capital when banks are in stress. What is the experience of other jurisdictions in reducing flight risk of capital on impending insolvency and how can the chances be minimised in Singapore? What are the lessons learnt from other areas? As regards the powers of MAS to step in and manage the affairs of banks in or approaching insolvency, what is the role of MAS when it moves in to control a bank as provided for in this Act? What are its objectives when it takes over the running of the operations of such an insolvent bank? Will the current insolvency procedures, applicable for all companies, not be sufficient? Why the need for these additional changes? Sir, my fifth comment is on section 62, which concerns the priority ranking of depositors. The proposal to put non-bank depositors ahead of bank depositors is a welcome move as it will provide protection to the less sophisticated depositors. Could the Minister clarify whether it is expected that there may be a move by some banks to concentrate their deposits in other banks that do not accept significant deposits from non-bank depositors? This is so that they can avoid being pushed back in the queue. The sixth comment is on sections 57 to 57G which are on credit cards and credit. This is a welcome move and we have seen many of our residents, who have been in this downward spiral of debt.”
“I would like to seek some clarifications from the Minister. Sir, on the proposed amendment to section 38 which concerns minimum liquid assets, the Bill contains new powers for MAS to deal with banks in relation to a minimum liquidity required, especially for liquidity stress situations. This is, of course, good for the consumers. The Bill, however, also changes the period for altering the minimum liquidity to three days, instead of the previous one month, under section 38(3). MAS has clarified that, in practice, it will continue to act in consultation with industry, and the three-day period for altering the minimum liquidity will only be used exceptionally. If this is the case, why is there a need to reduce the statutory period for compliance to three days? Why not instead stick with a longer limit, while providing for a shorter limit to be no less than three days? Sir, the three-day limit in the provision could seem very onerous for financial institutions. Hence, it may work against the long-term aim of making Singapore a financial hub. I therefore suggest that a ministerial check be written in as a safeguard for invoking this minimum period which means that we should not do it at the very first instance. Can this check be introduced in the Act? In section 39 as proposed, and this concerns minimum cash balances, this provides flexibility to MAS to deal with different banks differently. In my opinion, this is also a good idea. Also, the financial penalty provided for in section 39(7) should be provided for in the Act itself instead of being left to subsidiary legislation. Is there a good reason why it is removed from this Act?”
“Specifically, could the Minister enlighten us as to whether Temasek, which is a core part of Singapore's investment strategy, will face any significant challenges because of the proposed amendments since many of its related entities bank with DBS and Temasek also owns DBS? Sir, MAS' ability to exempt certain banks or categories of banks from operation of these limits in its prudential safeguards, which is in section 29(3), is potentially sensitive, especially if it works in favour of local banks. I suggest that this be taken into consideration before any exemptions are made, which must be well-considered and judiciously made. As regards the disclosure requirement itself in section 27(1) of the Act as proposed, it would require a statement on exposure by banks in Singapore. Checking on this looks like a difficult task for MAS. In the case of foreign banks, their exposure may be spread wider geographically than local banks. Has the feasibility of checking on compliance been considered by the Minister and MAS? Further, some of this disclosure may involve clearance from regulatory authorities overseas due to their banking secrecy Act, for example, in the case of disclosures that involve exposure to banks or customers of banks overseas. Finally, local banks are required to include their Asian Currency Units (ACUs) exposure in their calculations while foreign banks operating ACUs are presently exempted from this by reason of the transitional provision in clause 67(9) of the Bill. There may be a disproportionate impact on the numbers reported by local banks because of this. I hope that we are not unwittingly imposing more difficult conditions on local banks that would favour foreign banks. The fourth comment is on sections 38 to 40, which are on the asset maintenance regime.”
“I would like to ask the Minister how the reserve fund is presently maintained and whether the repeal of the requirement is expected to lead to an outflow of capital from Singapore. If so, will this not lead to excess supply of Singapore dollars on the market and lead to a risk of fluctuation in the currency value? Especially at a time when the US dollar is in a trough, it may not be wise to risk any fluctuation that we can avoid. Sir, the third comment is on the prudential safeguards on the proposed amendments to sections 27 to 29 of the Act, I note that these amendments will likely involve some dislocation of certain parties, but that it will make for a stronger industry as a whole where the risks are acceptably spread out by the banks. This will also benefit consumers by giving them greater assurance of the stability of the banks where they entrust their money to. I welcome, in particular, the shift to an exposure-based regime of disclosure. What this change means is that banks that have large exposure to groups of related entities will have to scale back on this exposure. Further, in the case of DBS Bank, which has large exposure to Government-linked companies (GLCs) in terms of supporting their financing requirements, I think that the proposed amendments will provide an impetus for a few things: First of all, DBS will have to source elsewhere for business that it may have to forgo as a result of the Bill. This is a good opportunity for them to exploit other markets. Hopefully, it will also make DBS (and other such banks) more open to innovative funding arrangements, especially funding more SMEs. GLCs will also have to source funding on market-driven principles, having to satisfy lenders not linked to the Government that they are viable credit risks.”
“Mr Speaker, Sir, I support the proposed amendments in the Bill. The Bill is definitely a step in the right direction when we consider Singapore's efforts to become a major world financial centre. I have comments on six areas of the proposed amendments to the Banking Act, as follows: The first comment is on section 4B. The Bill proposes widening the possible definition of "deposit" in section 4B. This is a positive development and I welcome it. Sir, there is a trend of capital movement from the west to the east, particularly from the Middle East. We need to be ready for this expected surge in capital, including that from the Arab world, where many are owners of the capital. I hope that the banks will take up the challenge to devise new, Syariah -compliant financial instruments, including deposits, that will give these owners options to invest their capital here. Additionally, Islamic banking instruments may also appeal to a wider population, as has been experienced elsewhere. I would say that we may even need to go further because now is the right time for Singapore to position itself as the key centre outside the Arab world for Islamic banking. I was hoping to see more done to make Islamic banking a reality in Singapore. MAS therefore should form a focus Committee or workgroup to seriously develop Islamic banking options in Singapore. Sir, however, the widening definition of "deposit" may catch some consumers unaware as they may view some products as principal-guaranteed when they may involve hidden risks or costs. What restrictions exist or are proposed to prevent the introduction and marketing of such products and, in particular, of them being labelled as straightforward "deposits"? The second comment is on section 22 which is the abolishment of the reserve fund.”
“But if Dr Vasoo was still in this House, perhaps he may have been the one that could have delivered in all four languages. Sir, I did ask a number of my grassroots leaders, some friends and also a few residents that I met, and every one of them told me that they actually liked the flexibility that they saw during the debate on the President's Address. Many of them told me that it added colour to the debate. As I said, I myself studied Malay as my second language. I enjoyed the speeches that were made in both languages. Sir, I therefore feel that the motion is a move in the right direction and I support it.”
“Sir, I support the motion moved by the Deputy Leader of the House to allow Members to use all four official languages in their speeches. Mr Low Thia Khiang was asking me whether I was supporting the use of Punjabi. It is not an official language, but I understand Malay quite well. I studied it until my A-levels. Sir, I notice in the past that Members, in making their speeches, some of them felt quite constrained when they were forced to use just one language to deliver their speeches. Some Members were effectively Mandarin-speaking, and when they deliver their English speeches because they had to deliver speeches in English, they felt a bit uncomfortable. Similarly, those who were English-speaking and wanted to deliver Mandarin or Malay speeches, I could also sense an uneasiness when they delivered their speeches. Hence, if we had that flexibility in the past, I am sure Members would have delivered certain portions of their speeches in English and certain portions in their mother tongue and, therefore, making their delivery a bit neater and more interesting to listen to. Today, more Members are bilingual and equally comfortable in both English and their mother tongue. So, I think we should not restrict them if they feel comfortable in making their speeches in any of the official languages that they choose to. We have a very efficient translation service in Parliament. So I do not foresee any reduction in understanding when Members switch their speeches from one language to another. Therefore, Members of this House should not feel that we will not be able to follow the speeches if the switch is made. Of course, I do not see any Member in this House speaking in all the four official languages.”
“Sir, what is still not obvious is whether Temasek went into the Shin Corporation deal knowing that it was going to cross the general offer limit. My question is: in the process, did Temasek plan to do this or was it accidental, because there are some reports about Temasek acting in concert with other parties which kind of worked around the rules and regulations on acquisitions in Thailand? This is market talk. Perhaps the Minister might want to clarify. Sir, I have read some reports that the Thai government may revoke some of the licences, particularly the telco licence that Shin Corporation owns, in which case, Shin Corp may become a lot less valuable. In that case, in making this acquisition, did Temasek safeguard itself by having a process of being able to recover its investment from the selling shareholders?”
“While I agree that we should make investments in Asia because there are tremendous opportunities for us to gain from such investments, does the Minister not agree that if you have $2 billion to invest, instead of investing $2 billion of that in 96% in one asset, should we not have invested in four assets of 25% each, diversifying the risks in one country versus $2 billion in one asset in one country and therefore increasing the risks tremendously for Temasek?”
“Sir, would the Minister not agree that in making such acquisition, if Temasek or its companies being Government-linked, and making such strategic investments in countries, particularly in ASEAN neighbours, should they have been more careful and conscious about acquiring more than a certain percentage that will result in a general offer? At the end of the whole exercise with Temasek owning 96% of the strategic asset of Thailand, this seems to have created a lot of sensitivity in Thailand about Singapore Government trying to take control of the strategic asset. Should the Government or Ministry of Finance not give Temasek some guidelines so that in making acquisition, they do not cross the 25%, or any general offer limit, in any country that they make acquisition in?”
“Sir, the grassroots leaders are not grassroots leaders of the MPs. They are grassroots leaders of the CCC of the constituency and they are grassroots leaders that support the advisers in those areas and not supporting the MPs, whether they are PAP or otherwise. But I thought we have clarified this many times. On the $80 million, I hope that the Prime Minister would still reserve it for Ang Mo Kio, because the voters rejected the $80 million carrot that we have given to them, but they did not reject it in Ang Mo Kio.”
“Sir, in conclusion, I would say that I fully support the President's call for a vibrant economy and an inclusive society. If we can let Singaporeans fish more effectively and create the right support structures, and if the Government is willing to spend more money, then I think we can succeed and we will achieve the vision that we want for Singapore.”
“I hope that the Government will be willing to utilise some of these funds, the reserves and returns from the reserves, from Temasek and GIC to fund all the activities that we have spoken about. We must be willing to creatively utilise more returns of the Government funds, including the reserves, so that we can have a more predictable set of measures to help Singaporeans and companies, and not develop measures depending on whether or not we have surpluses for the year. If we all agree on a certain trajectory of help measures that we want to take over the years, then we just have to be prepared to dig into the reserves---”
“We have the quota system and labour divided between traditional and non-traditional sources. The pool of workers comes from around the world these days. I suggest we be less prescriptive and give companies the responsibility and accountability for their hires. Let the companies do the business and let us not try to impose too many restrictions. If they feel that they can bring the labour from any part of the world and still succeed here in Singapore, I think we should let them do it without problem. Our challenges, therefore, are quite clear, and I am sure that we will be able to address these economic challenges and develop the economic confidence that I talked about. We have done it before and I think we can do it again. Sir, in my speech and those by most Members in this House, we have asked the Government to do more and more. We need more spending to help Singaporeans who are in need of help because of financial difficulty, which is the root cause of all the anxieties that Singaporeans face today, and therefore all the speeches that the Members made about what we need to do for Singaporeans. On the other hand, the Government cannot shy away from spending money to create the right infrastructure and support for further development of local enterprises. I also know that the Government has had its hands tied because of the almost deficit or deficit budgets that we have had year after year. What I am going to ask might not be something that the leaders would like to hear, but I am going to ask for it anyway. While we cannot suddenly create a surplus budget year after year without major impact on the economy, I believe that the Government does have reserves and funds in Temasek and GIC and also funds sitting in the statutory boards that we could tap.”
“Clearly, the heartware issues which I talked about will be a great help in attracting people who want to come to Singapore. Sir, in securing skilled and semi-skilled labour, Singapore companies compete with companies in the major commercial and financial hubs around the world. Even China and India are competing for talent from around the world. So our policies to attract foreign talent are not off the mark. We must all support this effort so that we do not lose the global battle for talent that we are facing. In this respect, I cannot agree with Mr Chiam's point of restricting the import of foreign talent to help companies continue their activities in Singapore. What he is trying to say is that we stop foreign talent or for that matter foreign workers, and the end result will be that companies will relocate themselves to countries where they can get the type of workers that they want. The net impact is going to be a loss for all of us. We will lose the companies and we will lose the other many more jobs that Singaporeans could have done. Neither can we win by trying to protect salaries for Singaporeans. A minimum wage system is a losing proposition because, today, the economy is global in nature. I can put a factory in Singapore, in the Philippines, in China or in India, and without any problems I would be able to operate these factories in a global manner. If we want to raise salaries, it would be very natural for our companies to just relocate to places where they can find the labour that fits the activity that they want to do. So I think that is a losing proposition too and we should not adopt that suggestion. Sir, greater flexibility is needed in the number and type of foreign workers that companies can hire.”
“I am not asking the Government to steal from EDB and give a bigger pie to agencies supporting local enterprise development, but rather the Government to give additional resources from its own funds. I am glad that the Government has confirmed its seriousness about local enterprise development by creating a full-time Chairman for SPRING. I think this is a move in the right direction. And, more significantly, by appointing Mr Philip Yeo as the Chairman. Therefore, it gives me confidence that we are serious about this. And I am quite confident that we will do a lot more for local enterprises with this new change. Of course, I hope that Mr Philip Yeo believes that it can be done, as many of us believe in it. Second, riding the China and India wave. First, was local enterprise development; the second challenge for us is the emergence of China and India. This has made it necessary for companies to accelerate regionalisation. China and India can be viewed as opportunities or threats for us. The second mindset is a useless one and will not lead us anywhere that we want to go. Our local enterprises must therefore lead the charge. We must quickly develop them into successful companies that can tap these new opportunities in these markets. These markets are very challenging. Companies can no longer wait to become big locally before launching overseas. They need to think global right from day one. And I believe that the Government can play a useful supporting role here by shortening their learning curve and facilitating their jump overseas. Sir, the third challenge for us is going to be the tight labour and talent market. This is a huge challenge for Singapore, and the sooner we become a magnet for talented people the better we will fare in our economic development.”
“Our local companies must quickly start looking like the multi-nationals that we know of. They need to better adopt innovation and R&D. Second, we need to catalyse the start up of a new breed of innovative and technology-based companies here in Singapore. We need the right ecosystem for this to happen, so that the Googles and the Nokias of the future will emerge from Singapore. Third, local enterprises must benefit more from Government procurement. The Government must be an early adopter of developmental work, as in the case of US, even until today with the much developed economy than us, the Government continues to remain an important customer for small and emerging companies. In this regard, I applaud the Yellow Pages rule set out in the Economic Review Committee's Report, and it is a move in the right direction, but I think the Government needs to be bold enough to do a lot more and not be afraid to support local enterprises, because this is done in most other countries. Fourth, local businesses must also expand into overseas markets, especially into China and India more successfully. We have had some success but we need to see a lot more than what we have seen. So, to prevent the hollowing of our economy, we need therefore to level up the playing field and create an environment for local enterprises to develop into multi-nationals of the future. We are already late in doing so. The Government has always allocated a lion's share of the budget for economic development for the support and attraction of foreign direct investments. The EDB has always gotten a very big budget but agencies supporting local enterprises have been getting a very small fraction of what EDB gets.”
“If our local enterprises do not catch up, they will become the weak third pillar of the economy behind the multi-nationals and the GLCs. Ideally, all three pillars need to be equally strong for a successful economy, as is the case in most developed nations around the world. The experience of GLCs in their overseas business acquisitions has been a mixed bag. The recent Shin Corp fall-out is a worrying one. I have raised a Question on this in this House and I hope it will be discussed on Tuesday and on what went wrong. Therefore, notwithstanding the obvious strengths of the GLCs, we cannot afford to continue in the mindset that the bulk of the responsibility for growing the external wing of the economy lies with the GLCs. Local entrepreneurship and local enterprise potential for this also must be pushed. So, what must we do to achieve this state of balance among the three pillars of our economy? The answer lies in entrepreneurship and local enterprise development. This must now go on a very high key. The Action Community for Entrepreneurship (ACE), which is mainly a private sector driven movement, has achieved a lot in a short period of time, in both trying to promote entrepreneurship and also helping local enterprises, especially in areas of financing. But it is time that the Government needed to give ACE better tools and resources to do even more. We are all private-sector volunteers and we need a lot more support from the Government to do a better job. I will briefly touch on how we can improve the support for local enterprises, and these are the type of issues that the GPC for Finance and Trade and Industry will be focusing on in the years to come. First, for existing companies, we need them to move up the value chain of activities.”
“Being the Chairman of the GPC for Finance and Trade and Industry, I thought it is my responsibility to address these issues. On hardware, globalisation is the order of the day. No country is immune to it. Reinventing our economy will remain a constant occupation for the Government as we face these new challenges. The Government has instilled confidence in its ability to keep Singapore's economy relevant. And the latest exercise of the Economic Committee headed by the Prime Minister was a very successful exercise that showed us that we know how to handle the changes in this coming environment. We now need to move from dependence on the Government to all stakeholders - the private, public and the people sectors - taking the initiative to push the economy. Sir, I see the following changes for Singapore in the years ahead. First, the potential hollowing out of the economy. If multi-nationals accelerate their move to countries like China, Vietnam and India, and if our local enterprises cannot move fast enough to fill the vacuum and create the jobs, the problem of employment will remain. I dread the day that Singapore becomes a net exporter of labour because of our inability to provide jobs here. Many question whether the hollowing of the economy is a real threat. It is not today, but it is a potential problem. Let us consider this. Today, we are already seeing a two-speed economy. One consists of the larger multi-nationals and mostly Government-linked companies which are mainly export-based and are doing very well. The other group of companies are local smaller enterprises contributing mainly locally, but lagging behind in moving up the value chain and in embracing technology and innovation.”
“Lee Kin Mun, the blogger, swiftly found himself axed as a columnist of the paper that he wrote for. Was his sacking because of a perception that the Government required this blood-letting? This perception must be broken now, because I know that the Government does not require that. If we do not change this perception, it will be much more difficult to develop confidence among our young generation of Singaporeans, that they will have the emotional space which they know they can get in other developed countries, and they are mobile enough to go wherever they want. Sir, increasingly, the mobile and vibrant Singaporean or foreigner who is based here will want the space to express his or her views more freely. We must be ready to accept such a society to be a vibrant home we want for all. Sir, I believe that had we successfully followed through the S21 and the Remaking of Singapore initiatives and sustained the momentum of engaging the public, we would have addressed many of these issues. But, sadly, this emotional confidence part has not been successful for us. I hope that we are not thinking of forming another committee to address these issues, because we know what we need to do. Now, we just need to go and do it. We have had greater success in building economic confidence among Singaporeans. Let me now move to the economic or hardware part of my speech. Frankly, I wanted to end my speech here and join in the chorus about emotional confidence and people issues. But I feel that what has been greatly lacking and that Members have not addressed is the economic or hardware portion of the President's Speech. He said two things - a vibrant economy and an inclusive society.”
“Future healthcare cost, while affordable, they see this going up. Our old may have an HDB flat as an asset, but they may have no cash to enjoy a better quality of life. Without doubt, this is going to be a major preoccupation for the Government in the coming years. Sir, third, heartware and the new generation. There is a global demand for both our highly mobile Singaporeans, especially the younger and more educated and those that are well travelled, and also the cream of talents that we have successfully attracted into Singapore. We must therefore make Singapore a more interesting place to live, work and play, as the President mentioned. This is, of course, easier said than done. We have done well in addressing the "work" part with economic incentives and opportunities and global connectivity. For the "play" part, we have made Singapore a hub for arts, culture, sports and entertainment. I believe a few days ago, there was a report that says that we are the second best for night-life type of entertainment, and that is good news. A major mindset shift was also taken with our decision to develop the two integrated resorts. But we still need to work on the "live" part, which is perhaps more difficult because it is harder to pin down. Making this a better place to live is more than just about the physical environment, which is no doubt one of the best in the world here in Singapore. But it also has to do with giving Singaporeans greater emotional space. Sir, considering the recent incident of the blogger known as "mrbrown", he made comments about the Government withholding information from the people. The Government saw the need to respond firmly, and it had to do so, because it had to respond to this kind of allegations. But what happened next worries me.”
“I am not asking for a welfare system like what we see in the western countries, but still the Government must be prepared to spend more money and make it a norm more than an exception when it comes to helping Singaporeans in need. We have yet to find that balance of support, and this is reflected in the fear and anxiety among Singaporeans, especially over the foreign talent issue. Second, the heartware of older Singaporeans. Like any developed nation, we have an ageing population with new needs, and we must face this issue head on. Can Singaporeans grow old confidently? If each one of us feels that we can eventually retire comfortably here, with enough savings to have a reasonably good quality of life and that healthcare remains affordable, then we can develop that confidence. We do not want to hear any elderly Singaporeans saying that it is better to die than to be hospitalised because of their fear that they may not be able to afford the medical treatment or the fear that it will be a big burden on the family because of the cost of medical treatment. Of course, the move by the Government to keep healthcare affordable and accessible to the elderly, and to make our living environment more elderly-friendly, should continue. Our elderly population must know that they will have enough support from the Government and society. Then, even those who are young now will confidently look forward to old age. But I believe, today, we have yet to convince Singaporeans that growing old will be a comfortable experience for them. Issues we have yet to address include enough savings for retirement. Some Members have pointed out that CPF is no longer sufficient to cater for their retirement. Actually, we have a very big gap here which needs to be urgently addressed.”
“This confidence will alleviate their fear that non-Singaporeans are taking away their jobs and show them that foreigners are not merely replacements for Singaporeans but complementary and are necessary to keep driving our economy. Without departing from our basic principle of everyone helping himself first and the role of the family to support members in need, the new social compact must also include some of the economic gain from attracting the best into Singapore to help this vulnerable group to fit into the new economy. If we strike the right balance of support without undermining the will to work, it will make us a more compassionate, giving and inclusive society that all of us want Singapore to become, knowing that in times of need, they will get the necessary help, understanding that such help will be a short-term help for them until they can get back on their feet. They will develop a greater sense of confidence that life will be bearable, and that they can survive the most difficult of times, and this will not necessarily make us a welfare state. While the Government has helped on an ad hoc basis from time to time with things like the Progress Package, which many Singaporeans are thankful to the Prime Minister, it helped them during that difficult period, or through the New Singapore Shares, Utilities Save, and many of these programmes that we have done over the years, as I mentioned, are ad hoc measures. They are not permanent and systematic set of help measures that will give comfort to Singaporeans that help is not far away or difficult to get when they really need it.”
“For the group that I am talking about, which many of us may also call the sandwich group, they are already living hand-to-mouth and any such increase of expenditure becomes a huge burden for their family. This is not a small group and we should worry about their predicament. Taking the last five years' experience and then projecting into the future, this group of Singaporeans will see little hope and are losing confidence about their future at home, because they see their income and expenditure gap becoming unbalanced. Then, we have another group of Singaporeans who have been forced to sell their HDB flats because of their inability to service their mortgage. I am sure many Members in this House see this group every week. I saw a few yesterday at my MPS. Sadly, many of them were in negative equity position in the first place and lost money when their flats were forcibly sold. For them, projecting into the future, what confidence can we give them about owning another HDB flat, which has been one of the important principles of being Singaporeans that we are trying to promote? What is the best role for Government then? Sir, we must, as we all agreed to, teach Singaporeans to fish so that they can feed themselves for life, and not just keep giving them fish. But more than teaching them to fish, we need to teach them to fish effectively, maybe to catch crabs, prawns and even sharks, so that they will know that they have attractive options here to make their life better and still confident about their future. They must feel that they can be adequately re-equipped to face the coming challenges and to get through tough times ahead. We have seen some success stories - thanks to the WDA and NTUC. We now need to effectively reach out to everyone who needs help.”
“Sir, far from it, it shows a lack of self-confidence and confidence in our future amongst Singaporeans. We attempted but have not yet succeeded in instilling this sense of confidence when we tried doing so through the S21 in 1997 and then through the Remaking of Singapore initiative in 2001. We have yet to build a strong heartware amongst Singaporeans. Sir, heartware, as I have mentioned, is essentially about the confidence in society. Once we can build a stronger sense of confidence amongst Singaporeans, many of our rootedness and emotional issues amongst Singaporeans will be resolved. We must all feel confident of our future in Singapore. And I would like to deal with the need to develop confidence amongst three groups of Singaporeans: the first group facing the widening income gap and the skills deficit to deal with loss of employment; the second group, the older Singaporeans and addressing their new concerns; and the third group, inspiring the new generation. Sir, first, the widening gap and the skills deficit to deal with loss of employment which many Singaporeans face today. It is, of course, difficult to maintain confidence in the face of financial hardship. The group that is most vulnerable to loss of confidence in our society is the group most affected by the widening income gap and economic dislocation. Sir, we saw a chart yesterday in the House - I believe Mr Lee Yi Shyan provided that chart - that shows that in the last five years, there has been either a decline or a flat level of income earned among the lower half of Singaporean income earners. But yet, in the last five years, we have seen many increases in expenditures like transport charges, utility charges, university fees and quite a few more charges.”
“And these are, first of all, the goal of making this a thriving, vibrant business and lifestyle hub that attracts top businesses and creative talent from around the world where Singaporeans can also choose to start businesses. Second, the goal of making this place that Singaporeans choose to identify with and a place where Singaporeans feel at home and where everyone feels that they are important, including the new Singaporeans that we are attracting to Singapore. In other words, the visions are focused on both economic and social vibrance. Increasingly, the issues are more people-centred than economic-centred. So how can we achieve the vision that the President had spelt out for us? In one word, we should aim for confidence. First, confidence in our economy and, second, confidence of our people and of those that we attract to our shores. Our greatest challenge will be how to continue to inspire and develop a sense of confidence in Singapore and among Singaporeans. Sir, to succeed, we must develop in Singapore both emotional confidence or the heartware of Singapore, and, secondly the economic confidence, which is the hardware or the nuts and bolts. Sir, in the last few years, I feel that we have done well to re-model the economy, and that is the hardware portion. But we have lagged behind in the social and emotional aspect, that is, the heartware portion, and many Members in this House have already very passionately pointed out to this House. So, let me now also join the chorus then about the heartware portion that almost every Member has spoken about in the last two days. Sir, the on-going debate about foreign talents surfaced the fear in the minds of some Singaporeans, that the immigrants will deprive them of opportunities at home.”
“Sir, I am honoured to begin my third term as a Member for Ang Mo Kio GRC. First of all, I would like to just take up the two issues that Mr Chiam raised. First of all, he said that PAP grassroots leaders are invited to national functions like dinners at the Istana. I think he is confused, as always he has been, between grassroots leaders and activists. I actually do not know of any of my PAP activists who have been invited to Istana functions like National Day dinners. But I know that the grassroots leaders who are appointed by PA get invited. I hope he is not asking that we change this and I hope he is not expecting his Potong Pasir activists from his Party to be invited by the Prime Minister or that the Cabinet starts inviting PAP activists. I think we should be the first to be invited if ever this policy is changed. He also asked for $80 million to upgrade Potong Pasir. I hope that the Prime Minister will not give him that money for Potong Pasir because I need that money in Ang Mo Kio. We have so many more flats in Ang Mo Kio that deserve upgrading and if there is $80 million extra, I ask the Minister for National Development to please give it to Ang Mo Kio first before Potong Pasir. Sir, like every Member in this House, including Mr Chiam and Mr Low Thia Khiang, I also would like to echo the closing part of the President's speech last Thursday. He said, "Let us build a competitive economy and an inclusive society." And this therefore must be the vision and direction for this House for the next five years. Sir, in his speech, in summary, he hit the same touchstones as the Prime Minister's National Day Rally address in August this year and outlined the vision and way forward for Singapore.”
“I have one particular example of a school who had 13 Indian children all placed in one class, in a cohort of about eight classes. When someone made noise and questioned this, the principal then decided to redistribute these Indian children into other classes so that the Chinese and the Indian students had a chance to mix. I think we have some way to go, and we have to make policy choices that will help us strengthen our racial integration.”
“Sir, initially, I was not planning on speaking. But when I saw Mr Low Thia Khiang, I was triggered and I thought I need to say something about racial harmony. In the manifesto that the Workers Party released, they seem to give the signal that all is well and good in Singapore. But as a member of a minority community, I feel that all is still not well and we have to be very careful about how we handle racial and religious issues, particularly at the policy level. As I was growing up, I did see racial integration happening at quite a good rate. But in the 80s, when we implemented a few policies like the Speak Mandarin Campaign, SAP schools, or the ethnic self-help groups, we tended to highlight the differences that we have among races, and I think the process has slowed down since then. Therefore, we really need to focus more on what we want to do in trying to strengthen the racial bonding of our communities. I understand there are always all policy tradeoffs that we have to contend with when we implement policies like the Speak Mandarin Campaign. There is a good reason for it, but then the tradeoff is that it affects the feelings of the other communities. When I go out and have a conversation with a group of people, and when someone breaks out and starts speaking in Mandarin so that I did not understand what they are saying, these are the effects of the tradeoffs that we have to contend with. Another policy example, our children in SAP schools may not have the privilege of mixing with children of other races. In fact, not only in SAP schools, I can give examples of schools where the principals actually segregate children according to the type of languages that they do.”
“But, as in most cases, caution seems to be the order of the day when it comes to support for local SMEs and local entrepreneurs. Sir, risk capital is risk capital, and the Government should be contented if it does not make too much returns, not as much as what typical VCs make. And this has been the example that was brought up by some Members, the model that Korea and perhaps in the US where the government spends more money to do a developmental type of role. When it comes to putting money into GLCs and VCs, the Government has been more gung-ho than putting it into local companies. And we seem to have also made some spectacular losses in investment in VCs as well as some GLCs. Whereas in the area of LEFS, which is the loan scheme that the Minister mentioned, I think the Government has made good returns when they should have been contented with just breakeven type of returns since, again, it is a developmental type of role that the Government plays. Finally, in the area of economic planning, I feel that it has been too much of a one-way process where we have the Government thinking and deciding the type of industries to develop. Of course, EDB and the planning agencies in the Government have done a good job over the years. But I think we could have a greater involvement of the private sector in planning the future of our economy. And perhaps a two-way process, instead of deciding what the Government wants to focus on and communicating it to the private sector, we have greater involvement earlier on in the whole process. I think if we can do this, we will have a greater chance of creating an even stronger economy for the country.”
“Sir, the Government has had a significant impact on the economic landscape of the country, and in the promotion of entrepreneurship, when the Government decided that creating local companies was as important as attracting foreign MNCs. Our effort has resulted in the creation of ACE, and we have seen very good successes in a number of areas. I have a few questions in this regard. One is very specific and it is on the issue of the 60-plus Government incentive schemes. I had taken on the task, together with my committee, to review them, and we have made proposals to MTI. Perhaps the Minister can give us an update on whether some of the recommendations made are useful and will be adopted. The issue of financing has also been widely discussed. Many Members have always brought this up in any discussion that we have during feedback sessions. This comes out as a big issue. As the Minister has mentioned, I also believe, from my latest feedback, that we have a tremendous progress in this area, the latest being the approval of the OTC and also the Business Angel Fund that the Minister mentioned a while ago. But I believe that one area that the Government could do better is the way that risk capital is looked at and utilised. We spent about US$1 billion some years ago to attract foreign VCs into Singapore. I am not too sure if we have achieved the desired outcome. The reason I say this is because the anecdotal evidence seems to indicate that many of the VCs that we attracted into Singapore seem to be more actively investing in companies outside Singapore, and they have made very few investments in Singapore. Could we, therefore, have designed things a bit differently to achieve better results in creating and supporting more local enterprises?”