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, a clarification. The Minister in his response mentioned that the Singapore Stock Exchange does not require profit forecast as a requirement for approval. But I have come across two examples of this being a prerequisite for approval. So I am quite confused when the Minister is saying that it is not. In any case, perhaps, I would bring it up to his attention about the two cases and then we could get the answer to this question of how approvals are made.”
“There is a very good example that we can follow and we do not really have to reinvent the wheel here, and this is called the Small Business Investment Company (SBIC) programme that is administered by the Small Business Administration (SBA). This SBA is actually a government statutory board in the US that looks after small businesses. With their own capital and funds borrowed at very favourable rates from the federal government, SBICs are able to provide venture capital, either in the form of debt or equity, to small independent businesses, both new companies as well as established companies that are in the growth phase. The Government provides leverage of up to three times, which means that, for every dollar that the SBIC provides, the Government provides $3 of funding. I think it is about time that we looked into this area in addition to VC financing. Sir, finally, the area of equity financing. Lately, we have seen a few cases of Singapore companies that have failed to get approval to list on the Singapore Stock Exchange. But these same companies get approval to list in other reputable exchanges, like NASDAQ in USA, ASX in Australia, and the Hong Kong Stock Exchange. I suspect that MAS has certain restrictions on SGX that cause this to happen. I hope that the Government will look into refining the requirements so that these companies can tap the local stock exchange instead of going to other exchanges. At the same time, I am encouraged that the OTC is about to be formed because of legislative changes. I hope that we will not lose momentum on this.”
“Sir, in every discussion I have with entrepreneurs, small businesses and industry associations, the question of access to financing always comes out without fail. As I mentioned during my Budget speech, I am happy with the progress that we have made in the last two years or so, and we have seen many new financing instruments available for businesses and for entrepreneurs to apply. I would like to thank the Government for the support that it has given for these initiatives that we have tried to put in place. I hope that we will not lose momentum, as I said, and I look forward to the same type of support and enthusiasm from the Government as we continue our work. But of particular concern lately has been the difficulty faced by companies that are in the rapid growth phase of their life cycle. The main source of financing for them still remains the debt type of financing. They are, therefore, limited in their growth because of the availability of financing that is available to them, and I would like to suggest three areas. Debt financing. First of all, the same subject that Dr Ahmad Magad brought up. Let us be more liberal about our banking licensing. While we want big banks, we can also have small banks in Singapore. In that respect, I think we have some finance companies that could transform themselves into banks, and I hope that the Minister will look into this. Sir, second is the emergence of mezzanine funds that I think is lacking in Singapore. This is quite common in many markets around the world, particularly in places like the US, Europe and Taiwan. Just as we spurred the emergence of a venture capital market with incentives and by providing Government funds, I suggest that we do the same for mezzanine-type funds.”
“I would not go into the details of what these tools are but perhaps during the Committee of Supply debate. So, in conclusion, Sir, developing localenterprises as the stabilising base of our economy will take at least 20years. Taiwan has a headstart of about 20 years. The trick now is to accelerate the process and not take 20 years like Taiwan did. We should commit the same billions of dollars to developing local enterprises as we did to build GLCs and multinational companies here in Singapore. Sir, building on the qualities that have transformed it in the past, Singapore must move ahead with the necessary structural changes to its economy. The lessons learned forced us to pursue self-renewal as we did andwe are starting to do. We must not abandon our objectives set out at the beginning of this millennium. I urge the Minister tolook upon local enterprises as an emergent force and develop this element of our economy to its fullest potential. If, like Taiwan, our local enterprises will employ around 75-80% of the workforce one day, we should be alarmed that we are not sufficiently structured for it. We need to learn fast, to restructure the economy, and I am confident that we will get there if we keep the momentum. Sir, with this, I support the motion.”
“Having immense resources at its disposal is important, but what is a more important element of EDB's success, I believe, is people. We could gauge how much importance the Government attaches to EDB's job by looking at who they puton the job - Philip Yeo, Teo Ming Kian, Lim Swee Say, Tan Chin Nam, and many more. These are all exceptional people who have the ears ofthe Ministers and also the Prime Minister. For each, duringhis tenure asthe Chairman or Managing Directorof EDB, it washis full time or primary job responsibility. Sir, just as the development of successful multinationals needed an EDB, the success of a vibrant local enterprise sector needs a similar agency. Leading an agency should be an Executive Chairman withthe stature and calibre of Philip Yeo or Teo Ming Kian. Sir, the third ingredient is access to financing, and this is my favourite topic. I talk about it every year. While a lot has been achieved in the area of financing, there must be no let up in introducing even more financing tools. I believe that there is an abundance of financial tools. This would eventually help the development of our local enterprises even faster. There are still gaps in the access to financing. We are improving ourselves and we should continue to explore some of the financing tools that are used in the US, Taiwan and Israel. There are many good examples to follow. I am personally involved in driving this financing effort here and I am optimistic that very soon we, in Singapore, could call Singapore a land of opportunities as far as financing is concerned. But I ask the Government not to slow down or dilute its support that is given to the Committeefor the work it has done in this area of financing for entrepreneurs and local companies.”
“SPRING could fulfil this role, if it were its only role, but then the Governmentwill haveto create new agencies to take over productivity promotion, standards and other distractions that SPRING may have right now. The Resource Allocation Question Sir, let me move on to this second ingredient of resource allocation. Assuming we now have an agency whose sole mission is the development of local enterprises, such an agency must also have access to adequate resources. Presently, resource allocation is highly uneven and biased towards the promotion ofmultinationals. A quick glance at the Budget book and the budget allocationover the last four years for EDB, SPRING and IE Singapore will illustrate the disparity infunding. EDB continues to receive twice the amount allocated for SPRING and three-and-a-half times the amount for IE Singapore. But comparing operating budget is a red-herring. If weexamine the sizes of the funds that are assigned to EDB to administer, as compared to those assigned to IE Singapore or SPRING, we again find that there is a large disparity. I got some information again by reviewing the Budget book and a few other resources. There are many funds established by the Government to spur economic development. Among these, I found that SPRING has abouthalf abilliondollars under the Enterprise DevelopmentFund, but EDB has around $2 billionunder the Economic Development Assistance Scheme, $2 billiondeployed under the Technology Investment Fund and another $6 billion under the Cluster Development Fund. There are also other venture funds managed by EDB's investment units. So compared to EDB, the other agencies look like very poor cousins, I would say, when fund allocation is concerned.”
“So, there must not be any let up in cutting red tape. I think that the movesin the pastwere excellent and we should keep this momentum going. However, now thatGovernment officers have begun to warm up to the idea of cutting red tape,Isuggest we introduce another campaign to change thefirmly held beliefsamongst civil servants, which are still biased against local enterprises, except, of course, for those enterprises that are already clear winners.Another area of how the support structure and culture could change isthe wayGovernment measures the success of its economic development policies. SMEs are usually shunnedby civil servants because the latter find it is better to engage larger companies to carry out new initiatives and to achieve their targets, for example, in retraining incentives or the R&D grantsthat were given out to companies. It is a lot more easier for Government officers to deal with a few big companiesand dish out bigamounts of money,to say that they had already spent $100 million on R&D, than to go after many small companies who may apply for half a million dollars each.I think thisattitudestill remains and we really need to change this so that everyone is really motivated to support local enterprises. Andone way to do it is to change the way the performances are measured. So, instead of measuring the amount of dollars dished out, we may want to talk about the number of companies supported. So, therefore, our solution lies in creating a new Local Enterprise Development Board, as I call it or any other name that we are going to call it, which focuses on one task - developing our local enterprises to be the key economic contributors for Singapore.”
“But this multi-agency approach, in my opinion, has proved to be more useful to the agencies than it has to the local enterprises. I now believe that what local enterprises need is one agency that is dedicated solely to the promotion of local enterprises,in the same way that the EDB is dedicated to the promotion of MNCs. EDB, as an organisation, is very focused, very single-minded in its pursuit of FDIs and in supporting of, and speaking up for MNCs. We do have an equivalent organisation for supporting local enterprises. When SPRING was formed, it was hoped that it could fulfil the role for SMEs the way that EDB fulfilled the role for MNCs. But, SPRING could notfulfil this single-minded role because SPRING continued to be a workforce developer, a standards organisation, a technology developer, and it continued to market its slew of SQA, QCC and other programmes. Championing SMEs was then an incidental activity. SPRING's reluctance was understandable. From their perspective, why champion something that many in Government thought was a losing cause? It is better to hedge one's bets. It is now time that we created a single agency to support our local enterprises. In fact, I heard from a former Government officer that at one time, the Government was thinking of creating the supportfor SMEs in EDB. But the policy makersin EDB were not very supportiveof this and wanted to get out of it and, therefore, it moved from there to PSB or SPRING right now. Sir, the best way to create a conducive environment for enterprises is to remove road blocks. So, it is heartening to learn that more than 9,000 unfriendly rules have been removed or modified, as the Prime Minister has announced. Yet, we still regularly come across rules that get in the way.”
“As we all know, supporting local enterprises and attracting more MNCs are not necessarily a zero-sum game. Here isanother reason why we should develop local enterprises. Local enterprises already todayhire more than 50% of our workforce. And, over time, like Taiwan, they may hire even abigger proportion. With structural unemployment, we will increasingly have to rely on local enterprises to absorb more workers. So, there must be a mindset shift amongst all of us that we need these local enterprises and therefore must clear the way for these companies to perform their useful roles. If we take a closer look at how we finally established a firm foothold for a MNC-type-of economy, we willfind that we took the better part of 10 years and billions of dollars before we were successful. And likewise with the GLC economy. Many years of effort, dollars and iterations to our initial plan before we finally reaped the benefits. So, what should be the recipe for developing local enterprises? I think there should be three key ingredients. First, we need the right organisation structure and culture to support local enterprises; second, we need to allocate the right resources; and, third, we must continue to improve access to funding. A new Local Enterprise Development Board A new Local Enterprise Development Board for Singapore is what I am asking for.First, the way we organise ourselves to support local enterprises. We need to re-examine how the Government is organised to support the start-up and growth of these enterprises all along. In the Government, we haveadopted this multi-agency approach.EDB, SPRING and IE Singapore, in addition to IDA, were all trying to play a useful role.”
“We have to undo the neglect of the last 20 years which has created the problems that we are in right now. The Budget could have made a big difference had it further addressed these structural problems and it could have painted the picture that the Government's commitment to local enterprises is not losing momentum and that the Government did not abandon the process at the first sign of some recovery. We must strengthen our commitment to develop our local enterprises. Make structural changes to support local enterprises Sir,let me address the question of whydo we want to develop local enterprises. Some policy makers may even ask, "Why put any bet on the laggards?" But they forget that SMEs are laggards because we define them as such. As SMEs succeed and grow, they fall outsidethe definition of SMEs and their performance no longer gets captured in our measurement of SMEs. Our current way of calculating SME performance is therefore a circular calculation, doomed to give us the answer that we have defined at the outset. I wonder if our policy makers include the performance of Venture Manufacturing, Creative Technology, and Hong Leong when they examine the performance of SMEs. I think they did not. But these were allSMEsat one time. This is why I phrasemy originalquestion, "Why do we want to develop localenterprises?", and not SMEs. I think it istime that westopped generalising and labelling our local companies as SMEs. Why do we want to develop local enterprises? I am strongly advocating developing the local enterprises because they represent another engine for our growth - in Taiwan, a huge engine - and itcould be a huge engine for usone day. They will not replacethe contribution of MNCs to our economy. But they can nevertheless become another major contributor.”
“Realising that they needed a base for stronger local enterprise for sustainable future growth, as multinationals were exiting Taiwan at that time in point, Taiwan restructured by focusing its resources and support on their local enterprises, and today they are at least 20 years ahead of us in terms of a robust economy. Many SMEs have grown to become big companies and some have achieved MNC status. Taiwan, like Israel, has survived (economically) the past decades in large part because both have emerged with an entrepreneurial business culture. As the joke in Taiwan goes, if you throw a stone on the streets of Taipei, youwould most likelyhit an entrepreneur. SMEs make up 98.5% of Taiwan's companies. They employ about75-80% of the workforce and also form about47% of the economy. It is no wonder that corporate Taiwan is referred to as an 'army of ants' and Taiwan as a Nimble Tiger right now. Sir, many tell me that they findlittle evidence in this Budget that we place a great emphasis on the development of local enterprises. In fact, this Budget gives the impression that structural changes are no longer necessary or that these changes have already been addressed in previous years. Perhaps our policy makers think that the EDB has done another fantastic job to renew the confidence of MNCs in Singapore and that things are back toold again. But how long will this last - another five years perhaps? It is this Budget's non-treatment of structural issues andpolicy signals that are things that we should be concerned about. Encouraging local enterprise is far more complicated than creating a base for selected MNCs who are already successful and we just transplant them to our shores.But we cannot shy away from this challenge.”
“Whilst I do not doubt the correctness of the type of industries we have selected forthe economy, I think we could have done it better. The approach we have taken all this time till today is to give priority to bring in MNCs as opposed to at least balancing the support we give toforeign and local companies. This is the crux of our structural problem. So if you look at what we are trying to do for the service industry, most of the incentives and the developmentefforts are in trying to develop the big multinational companies to set up their bases here so that our small enterprises in Singapore can support them. So it has not changed. We know that each MNC will one day have to uproot and move to more cost-effective places like China, Vietnam and India. This is a known phenomenon. The question is, can we have an economic model thatlengthens these 30 years to a longer period? Can we create a much more robust economy for our nation? My opinion is, yes,and this is possible if we place greater focus on developing local enterprises into stronger companies which could one day become Singapore's multinationals. While it appears that the vision to achieve this form of economic growth has been understood by the Government in the lastfive years, there are many indications to suggest otherwise. I urge the Government to stay the course in its resolve to build an economy where local enterprises are considered asvaluable contributors. Sir, Taiwan is an example of an economy that has made these bold moves. She was in a similar predicament as we were approximately 20 years ago when we were both the Asian Tiger economies.”
“We think we are restructuring when we select new sectors to replace those that are declining,but we are really realigning. The real solution for Singapore is to get to the essence and fix this structural problem. In my opinion, this 30-year cycle is a result of our economic planning model. Let me explain. Some 30 years ago, we planned our economy based on foreign direct investments. It was not wrong because at thattime, we attracted electronics and semiconductor MNCs to set up base in Singapore asour primary growth sectors for that industry. Our economy then grew linearly and steadily for about 25 years, driven by the many companies setting up manufacturing bases in Singapore and also by the growth of the supporting small and medium enterprises that support these multinationals. Today, we havereached a saturation point for such industries. In fact, thereis some degree of decline. Later, 20 years ago, in another economic plan, we went for the disk drives industry which started successfully and saw staggering growth. It has since become a mature industry and growth has tapered off. Again, with yet another plan, 10 years ago, we started focusing on the infocomm industry- so far this is still growing and will hopefully show modest growthfor another 20 years. The most recent addition to our economy which we started aboutfiveyears ago, is the life sciences industry. Each one of these sectors actually allowsgreat potential for growth for our economy. ButI am not sure that these sectors will grow for a longer period than what we desire. Why is Singapore plagued by this 30-year cycle where we reach structural distortions at the end of each period? I believe the answer lies in how we selected and developed the industries.”
“So instead of announcing a contractionary budget for 2005, we should have continued with an expansionary budget. Why would it have been prudent to keep the fiscal impetus positive? Sir, this year, the external demands, in my opinion,will be worse than last year.Japan has slowed down and is technically in a recession. Europe and the UScannot possibly sustain their levels of growth that they had last year. China's slowdown will also impact the region. This is hardly the time to take our shoulders off the wheel. As it is, our unemployment is still relatively high compared to what we are used to. Surely, all these factors would justify an expansionary budget that stimulates the growth of local enterprises. So when economists describe this year's budget asa 'typical Singapore signature of prudence and conservatism', the Government should not celebrate but rather despair that it has not invigorated everyone and thatit has failed to introduce the much needed boost which our economy so desperately needs to bring us tothe next sustainable level. Mr Speaker, Sir, I would like to spend some time to talk about why we need tomakethis fundamental change of mindset in order to develop the futureeconomy and how this can be accomplished. The structural problem of our economy Let me first address the question of why do we have a structural problem with the economy. To answer this question, we mustrealise that what has worked in the past maynot necessarily workin the future or today. 30-year cycles Sir, I have categorised our economy into 30-year cycles. In my opinion, we are caught inthis 30-yearcycle of our own creation. And if we continue the practice of pump priming a few sectors of growth, we will perpetuate thecycle.”
“Once again, we are running with the pack, as we did in the 1960s. We,like everyone else, are chasing the same foreign direct investments (FDIs). If there is any difference between now and the 1960s, it is that the economic cycles today are much shorter and the swings are much larger, perhaps worse than the pioneering years of Singapore. Sir, I had hoped that theBudget would have actuallyrepresented a robust response to the changing times. But what I am seeing is an indifference to this reality. The 2005 Budget givesan impression that the decision-makers have reverted to the habits of the era of the dizzy 10% growth when budget prudence was the norm. Our policy makers require a fundamental shift in their mindset. Sir, for our role model,I recommend Mr Allan Greenspan. He has a habit of reacting early and keeping the momentum going for longer than what economists expect. He knows how important it is to keep the boosters firingin an economy in order to keep the momentum going. Positive fiscal impetus and slowdown Mr Speaker, Sir, even though a few sectors of the economy seem to be gathering speed, we cannot mistake this as a sustained recovery. Instead, we must continue to push until all cylinders are firing. Let me make an analogy.Whena car stalls, a manual one, and we want to restart it, we all put our shoulders together and pushthe car. But we do not stop once the car has gained momentum. We only stop when the engine starts firing and the car is able to continue on its own momentum and then we let go and watch it go. Similarly, I feel that the Government has been too hasty in withdrawing its stimulation support for businesses at the first sign of an economic recovery.”
“So, although the Budget has been touted as being wide-reaching and heartfelt, it is really a conservative Budget. The Prime Minister should understand, therefore, why the businesses feel that they have been forgotten - three for businesses, 11 for the people. Budget History Sir, let me talk a bit about the Budget history. I would like to focus on just two areas: (1)taking a deeper look at the structural problem of our economy; and (2) exploring how we can develop local enterprises. Sir, instead of spending time on the three incentives - I think Dr Ahmad Magad has covered them more thoroughly than I could - let me just put things in perspective. During the early years of our nationhood, the budgets then were radical in nature, resulting in significant spending, with many direct incentives and innovative ideas for the continuousboosting of theeconomy. The Government introduced many bold measures every year.Then, in the late 80s and the 1990s,when we were in a relatively stable period, the budget became prudent and conservative at that point of time, so we had few of these booster measures. They were designed to maintain our double digitgrowth. During this period, there was little need to institute aggressive budgets, as our economic growth momentum was already positive and regional economies were laggards and ourearlier strategies were really bearing fruit. Today, we are in a different era. The Asian currency crisis hit us at about the same time when we were beginning to embrace the arrival of the knowledge-based economy. It was also theera of globalisation. Today's conditions,in many ways, aresimilar to the ones that werefaced by our pioneering Cabinet in the mid-1960s.Today, we are no longer sufficiently differentiated from other economies in the region.”
“Sir, I rise in support of the motion. First of all, I would like to say that this year's Budget is really a budget for the man-in-the-street, and I am glad that we had so many initiatives to help those who need it most, particularly the senior citizens and older Singaporeans. This group of citizens was starting to feel a bit left out since Prime Minister Lee took office. But in this Budget, he has set the balance right. Sir, businesses, especially small and medium enterprises, had high hopes for the Budget, as Dr Ahmad Magad mentioned just now. But now they are calling it a non-event. Businesses felt that they have been forgotten in this Budget. Some are even saying that this is not a very helpful Budget for them, particularly local companies. However, they are glad that it is not ahurtful Budget, except for the regrettable increase in the foreign worker levy. But I personally can understand why our Government seems to have left out the businesses inthis Budget. For the past three years, the Government has implemented many of the recommendations made by the Economic Restructuring Committee. Perhaps the Government feels that all that itneeds to do now is to do some fine-tuning. However, my sentiment, predictably, is this: why not do more? We cannot possibly do much harm in developing our SMEs further, but the gains for the economy can be tremendous. Why slow down the momentum? In fact, there are risks in slowing down at the first signs of recovery, the same comment I made atlast year's Budget debate. I was afraid that this would happen, and it did. Sir, I counted the list of initiatives the Prime Minister announced, ie, three for local businesses and 11 for the people.”
“This has got to do with new section 272A where there is a limit of $5 million to the amount that can be raised or traded for a period of 12 months for such an offering to be considered not a public offering. While this limit is fine for companies that are raising the funds, and it may also be fine for the investors who may have invested in the companies during such an offering, it is not workable for a market maker that is trying to make the OTC work simply because in the model that we think that it can work for an OTC, the market maker will have to create a very vibrant secondary market for such an OTC to be successful in any market. For that reason, a $5 million limit for the market maker will not work. So I hope that the Minister will consider making an exemption for market makers and exempt them from this $5 million limit for a period of 12 months in this Bill. If we can do this, I believe that the OTC market will work. And I feel that it is about time that we had such a market in place so that we can further improve the financing environment for our companies in Singapore. It will make Singapore a lot more attractive for companies, not just local companies but also small companies from around the world, to come down here, set up base and to raise funds, either through private placements, through banking loans, through public listing and now, perhaps, through an OTC type of market. So I urge the Minister to consider revising this $5 million limit if he wants to see a successful OTC market developing. Sir, I support the Bill.”
“Mr Deputy Speaker, Sir, I rise in support of the Bill. First of all, let me declare my interest, as I am working in a Committee that is trying to implement an alternative platform for listing of shares either through a private equity exchange or the over-the-counter (OTC) market. Sir, OTC is one of the major initiatives that the Action Crucibles for Finance of ACE has been trying to implement for the last one year. We have heard so many times of local and small and medium companies who have problems raising funds at their growth stage, after they have completed their beginning stages of start-ups. The options available to them are limited to either getting banking loans or raising private equity. In some cases, companies end up seeking public listing or through an IPO. But because of their size and the stage of their development, they end up raising very little cash. And also at the end, because of the cost of maintaining a listing, it actually appears to them that they may have made a mistake because they are not actually able to handle a listing for long, being a small company with very little cash flow or capabilities. But because of the pressing needs of these companies, they are forced to take the route of a public listing. With the amendments in the Bill, together with the combination of the private placements and also the small offering exemptions, companies will now be able to seek an alternative route and that is if it can implement a private equity exchange or OTC type of market. There is only one issue with the Bill that I have which, I believe, will make it unattractive for an OTC type of market to be put in place.”
“Sir, in general, the atmosphere of change has definitely made an impact on critics like me and Mr Tan Soo Khoon to sit up and notice and agree that the new Prime Minister has indeed done so many good things that it will not be fair if we did not acknowledge this. But we must continue to shake up the whole Government machinery if we want to achieve the vision of the Singapore that we so dearly want. Sir, in conclusion, the President ended his speech by saying: "For the next generation, Singapore should continue to be a land of opportunity - opportunity for all Singaporeans to be the best that they can be, to lead fulfilling lives, and to contribute as citizens to a better Singapore. Let us build such a nation together." Further, he said: "The people are entitled to demand the best from their leaders. They also aspire to play a part, and expect to do so. Everyone who makes Singapore home will have opportunities to make a difference. Every contribution is valued and important." I believe that the Prime Minister and his team do believe in this. Therefore, it is up to us to take the opportunity to make a difference. As I have tried to relate my experiences in my speech, we have to be persistent if we truly believe in something. And if we do, finally, the results will be achieved. I look forward to the exciting times ahead for every one of us having a role to play in shaping the Singapore that we want for ourselves, our children and our grandchildren. Sir, I support the motion. ADJOURNMENT OF DEBATE”
“The frustration level among Singaporeans and the civil service does run high because road blocks are created by some of these officers who prefer to stick to their old ways. Let me quote an example. When a Singapore small and medium enterprise approaches a Government agency for help for a certain Government grant, a middle level officer who was probably annoyed at the many requests that he was getting from SMEs, turned the table and told the businessman asking for the help, and I quote, "Why do you always ask for help? Why don't you ask what you can do for the country rather than always ask what the country can do for you?" This was what the civil servant told the businessman. This, in my opinion, is a very unfair question. Sir, it is not up to the SME to answer this question. It should be up to the Government officer and the Government to ask and answer this question. This issue should be settled by the Government - that the SME sector is an important sector for the Government and for the country. If I were the businessman, I would have said that the SME's job is to make money, to be profitable and to grow. And if the SME can do all of these things successfully, then the Government officer who asked this question would have got his answer, and the answer is really a no-brainer. What the SME can do for the country is economic growth and create jobs for Singaporeans. And so just let that company focus on making profits and grow, and do not ask a question like, "What can you do for the country?" Actually, he is already doing a service for the country. I bring this example up because I want to send the message that the civil service cannot rest on their laurels and think that they have already arrived. More work still needs to be done.”
“Taking off from where PM Goh left, we now have a Prime Minister and a leadership that is willing to listen to ideas from outside the Government, and seriously so. It is not just lip-service, in my opinion, and I am a critic. This has allowed Singapore to evolve into the model of greater participation. What is humbling for me to notice is the realisation that the Government could not possibly know everything and, therefore, is willing to seriously listen to new ideas from outside and then to seriously try to implement these ideas through policy changes and even policy reversals or U-turns. In the past, when MPs raised non-typical ideas that looked controversial or were not aligned to the Government's policy, we have got to hear all the reasons why it could not be done, instead of how it could be done and how we should work on it to make it work. A significant change is upon us, with the leadership willing to give a listening ear and seriously wanting to make our ideas work. Why do I believe this is so? Because it starts with the Prime Minister's own initiative to everyone, a directive to everyone, that he is serious about this change, and I hope that he is assessing his Ministers by how much they are willing to change, instead of how well they could defend existing policies, as I sense the approach taken in the past. While I am comfortable that the top leadership is enlightened about the need to change, it would be some time before it trickles down to all levels within the Government. I still sense some reluctance to change at certain levels in the civil service, again, an issue that was brought up earlier by Dr Amy Khor.”
“In some of the meetings, they tried to convince my committee why things could not be done the way we intended to and that some Government agencies are already doing what we were trying to do and they discouraged us from treading in the same area. But we did not let this deter us and we continued and pressed on to develop the financing blueprint for Singapore. As we were completing our work, some Government Ministers found out about what we were doing and we were asked to present to them our findings and the work we were doing. We had support from Minister Raymond Lim and Minister Tharman. We made a presentation to Minister Tharman about our findings, and to our surprise he was actually happy with all the recommendations that we made. He went on to speak to Minister George Yeo, as well as to the then Deputy Prime Minister, and guess what, 100% of all the recommendations that we made, and these were extensive recommendations, were accepted. Not a single one was rejected. But, in the same breath, Minister Tharman had asked me to continue to work on it in the Implementation Committee because he felt that if he had left it to the civil servants to implement, a lot of it would get lost. I agreed to do this and we continued to work under Minister Raymond Lim's ACE Committee. Sir, to me, this was a breakthrough, that the Government was willing to adopt a list of proposals they did not initiate and had no control over. I believe when the Ministers looked at what we had developed, they did realise that others too had genuine concerns for the development of Singapore, and they too, the people outside Government, could come up with sensible solutions, without the Government calling the shots.”
“With the help of SPRING, I gathered about 15 people, all of them from the private sector, to study this problem with the goal of finding solutions, and once and for all, try to change the financing landscape in Singapore to allow Singapore to catch up with the rest of the entrepreneurial economies in the world. Sir, this was a completely private initiative, not prompted by the Government or any Minister or civil servant, and it was an exercise to lead a crusade to fix the financing environment, the one that was very unhealthy in the past. There were many sceptics, in fact, including myself. We really doubted that the Government would ever support such an initiative, where the Government was not involved and was not a party or initiated the idea, again the "Not-Invented-Here" or NIH attitude. But, undeterred, the 15 of us, with the support of very enlightened officers from SPRING Singapore, we were willing to play our part. We started by lowering our expectations that all the good work that we do, the recommendations that we come up with, would be rejected outright and none of them would be accepted by the Government but, nonetheless, we would have derived the document that we all believed in and were happy with. So we went on and did our work, even though the feeling was that it may get rejected. In fact, as we started our work, a couple of Government agencies who heard about what our committee was doing got concerned and they manoeuvred to get themselves invited into my committee so that they could keep an eye on what was happening. I had no problems with that. I actually wrote them a letter and invited them to join us.”
“However, if we want to engage people from outside Government and we want to have successes in the area of entrepreneurship, in engaging the young, and the greater involvement of many more Singaporeans, the way I believe the Prime Minister intends, then we have to realise that perfection would be a hindrance. Willingness to accept imperfection, some untidiness and allowing some rules to be broken at the fringes, would make us stronger, not weaker. Sir, greater flexibility to do business for businesses, civil servants to make a judgement call, when there are grey areas, and for Ministers to be seen to be helping the private sector to be successful, are all not necessarily bad things. In fact, these may be the necessary things we have to do to achieve the desired outcome of a more entrepreneurial economy - an adventurous citizenry and a responsive and fast-changing civil service - all the necessary ingredients for a robust and successful country. So while we have seen many policy U-turns and reversals, let me also relate an example to illustrate the change in style. Sir, in my effort to help contribute to the development of entrepreneurship in Singapore, immediately after the ERC exercise was over, I felt that we did not have enough concrete implementable action items to really make a significant change to achieve the desired results in the area of entrepreneurship. So I decided to address the perennial problem or issue of lack of financing options for entrepreneurs in Singapore.”
“In the past, the Government seems to do lip-service to feedback because many a time they seem to have already decided on what the outcome would be before consulting the public. This change stems from the belief, and I believe that, in this complex and fast-changing world, the Government could not possibly have all the resources to do a good job if it wants to. Third, there is greater self-scrutiny within the Government, and the best example I could quote is the work done by the Pro-Enterprise Panel, headed by the Chief of Civil Service, Mr Lim Siong Guan. The members include top civil servants and some people from the private sector. This Panel has resulted in so many changes and so much self-scrutiny in all Government agencies that today, when an issue gets raised in any of the Government agencies, the question most civil servants would ask is, why not; instead of, why should we change a good policy to a suggestion made by the private sector? This change happened because the Permanent Secretary would ask the same "why not" question, forcing the junior civil servants to come prepared. If the Permanent Secretary failed to ask this question, then the Chief of Civil Service would ask him the same question. On the other hand, I believe it is because the Prime Minister himself has clearly said that civil servants need to learn to be civil and to be servants and not masters in his speech at the 50th PAP anniversary rally. This is a reversal of the mindset which has been very useful in effecting the many changes that we are seeing these days. Fourth, there is a realisation among the new leadership that greater involvement of the people outside Government would mean more hindrance. In the past, ours was a Government obsessed with perfection and on a system based on zero-error.”
“As we reflect on the changes which have happened in the past few years, I am sure we probably have seen a record number of reversals and changes in the past years compared to the many years that we have seen changes happened in this House. So, what is this new style? First, the Government has changed its attitude from one of distrust of the private and people sectors when it comes to policy formulation and changes, to one of letting the best people help the Government shape the policies - from the position of "the Government knowing everything" to one of "the Government cannot possibly know everything and, therefore, engaging the experts who are outside the Government to help in the policy change process". It has changed from a mindset of "each group having vested interest" to one of "everyone having a common interest for the good of Singapore". So we have seen lately the Government forming committees and taskforces which comprise mainly people from outside the Government, but with a partnership between all sectors, in studying issues and then recommending policy changes. A very good example is the way the Economic Review Committee was constituted and the way it did its work, which eventually resulted in so many radical changes for the economy - many stones got turned and sacred cows got slaughtered. This approach is now entrenched in the Government and, if you look at any new policy or policy changes being planned, the Ministers engage people of all sectors, bringing in people, who know better than the Ministers and the civil servants, to help them shape these policies. Second, if you look around again, these days, there is greater public consultation before any major Bill gets proposed in Parliament.”
“Now, I actually have no problem with this approach - of credit going to the Minister or the civil servant for making the change that was proposed by many Members all along - so long as we got the things implemented and the changes done the way we wanted to. So we have got streaming changed, the competition law implemented and JTC reversing its policy of temporary rebates to permanent cuts. The education system is now starting to look good, and there are many, many more happy stories like that, that we have seen lately. As a simple cause and effect association, I encourage the Ministers to acknowledge the reasons and sources of policy changes, when possible, to complete the entire feedback process as the public would like to be acknowledged for the changes that they have proposed. However, if we want to achieve what the President mentioned, the old approach could not work any more and, I am glad to note that Prime Minister Lee Hsien Loong has realised this and has set the direction of change. The changes in attitude in the mindset of the leadership, key civil servants and in the style of the new leadership are so significant that it is worth talking about here, because it is the reason why I feel that Singaporeans could be confident that they would continue to find the opportunities here, or through Singapore, as they look for opportunities around the region. Sir, in the last few years we have seen many positive policy U-turns, breakthroughs in policies and rules which many wanted to get changed for many years but could not succeed in the past. I believe this did not happen by chance but by design because of the direction of the new leadership.”
“When an MP made a suggestion in Parliament, sometimes radical in nature, the reaction from the relevant Minister, in the past, has been to reject outright the idea and, sometimes, to ridicule the MP making the suggestion. I have personally encountered many of such debates, particularly about the education system, the cost of doing business and about our land prices in this House. Fortunately, MPs, as I know them and as I know for myself, have thick skins and we continued to persist and fight for what we believe in. The aggressive approach taken by the Ministers in responding to the suggestions is counter-productive, with undesirable effects. It gives the appearance of the Government unwilling to listen and reinforces the "Not-Invented-Here" or NIH attitude. If the Minister did not initiate it, then it could not be good. Sir, at this point, I would like to say that the style has changed. With the backdrop that I have given, it is, therefore, not surprising why at times there seems to be a confrontational approach taken by all stakeholders in the country. Their lack of confidence and trust, because of their past experiences, resulted in such an approach when we discussed issues. The process in achieving the desired outcome leaves many deflated and dejected. Through our persistence and doggedness, MPs and Ministers understood the situation better these days and Ministries started to listen seriously. Many people would not realise this, but after our parliamentary debates, a lot of work actually gets done behind the scene, where MPs and Ministers eventually converged on points proposed. When the policy changes finally get formulated, this eventually gets presented, sometimes as a bright spark from the Minister or civil servant.”
“Again, I sense the same NIH attitude and this is because this was a life sciences company not initiated by the Government and, therefore, it was not worth supporting. The founders faced tremendous problems in trying to navigate, but I would like to say that that company is successful and is making money today - not supported by the Government. Sir, my feeling in the past was this: if, as an MP, I faced so many problems, then there was little hope for the man-in-the-street to ever get anything through the strong machinery of the Government. This is wrong, as everyone has an important role to play. The Government and civil servants are not the owners of the land. They have forgotten that they are the caretakers for the people of Singapore. The roles they have been used to need to be reversed. The Government needs to start listening and, instead of becoming obstacles, now become agents to facilitate the changes which all stakeholders want to try to achieve, especially if it is for the overall good of the country. The "Government knows best" attitude could no longer work. Singaporeans, especially the younger Singaporeans, would get disenchanted and feel alienated if the old approach continues. And, I would like to say at this point, that the old approach is not continuing and it has changed. Now, let me talk about the many suggestions that Members of Parliament have made in this House during parliamentary debates. If we look at the old approach, many a time, the Minister, in replying, as a matter of practice, tried to destroy any argument an MP might have made about certain policies that needed changing.”
“But looking back with an objective lens, at the beginning stages, the problems I faced came from Government agencies and civil servants who did not believe in what we were doing. We faced many obstacles, including general Government bias for multinationals that made it a nightmare when I tried to hire some senior managers from my previous company, ie, the company I left. I will not go through the details because it is water under the bridge and, fortunately, the environment has since changed. Today, we are seeing greater help and also less obstacles from the Government. From another dimension, I discovered that there was dissatisfaction within certain statutory boards. Because this company brought in about US$138 million of investment on a purely private sector initiative, the unhappiness or disappointment arose because it was not initiated by any Government agency. This is what I call the "Not Invented Here" or "Not Initiated Here" or NIH attitude, for short. If the Government did not invent or initiate it, it must be bad and, if the initiative was not the idea of the Government, or the Government was not the key driving body, then it could not work and is not worth supporting - a form of institutionalised discrimination against Singapore companies - except when the Government picks the winner, an issue that Dr Amy Khor brought up earlier. I have not jumped to the above conclusions as an excuse but generally feel that discussing them at this debate would forge a greater and clearer way forward. Another example was my investment in a life sciences company and I could then confirm this feeling. The company faced many problems when it tried to get grants which were simply disbursed to multinational companies.”
“We went on then to put in place a most extensive effort, involving many Singaporeans, and the outcome of this exercise was an excellent blueprint to make Singapore a land of opportunities. Unfortunately, it fizzled out at the end of the exercise. While we had a great final document, the attitude taken by our leadership in the implementation left much to be desired. In short, the final outcome was disappointing. S21 had limited success in energising the MPs, the civil servants and the people of Singapore. I felt personally disappointed because I was convinced at the beginning of the exercise that this time, we were really going to change. After the S21 experience, the Remaking of Singapore exercise, which was headed by Minister Vivian Balakrishnan, failed to ignite any sparks in many people. To be frank, as a Member of Parliament, after being bitten once, I felt twice shy. I was negative because of the S21 experience. Because of my role as an MP, I tried very hard to show some amount of excitement so that I could propagate these feelings to my constituents and the people I come into contact with. I am sad to admit that nothing of that sort happened. We may have succeeded in energising a small group of people who participated in the process, but not the majority of Singaporeans who have a pessimistic outlook. I have a couple of other experiences which I would like to share and the first of this is when I started my first company as an entrepreneur, United Test and Assembly Centre. Today, it is a successful company listed in the Singapore Stock Exchange and it is a success story for me. But it was not without the obstacles, problems and hiccups at the start-up phases.”
“And once they stepped out, it becomes increasingly difficult to attract them back into Singapore. Sir, I can go on with many more examples but I do not intend to do so. I believe that the issue should be addressed head-on and should not be ignored. Let me go through some of my own personal experiences and the approach I have taken which further reinforced my attitude that if we truly believe in something, we should pursue it no matter how others try to ridicule or discourage you. I have always taken a constructive approach in criticising policies and I believe that we should not destroy the good that we have achieved, but try to improve further, and we can always improve from wherever we are. Let me start by talking about my first major experience as a Member of Parliament when I was co-opted by the then Prime Minister to the Singapore 21 Committee. Needless to say, I was very enthusiastic because of the opportunity to be involved in a process which was going to reshape how Singapore was going to be governed and would operate in the 21st century. I headed one of the many sub-committees and co-opted many good Singaporeans of all backgrounds for this two-year exercise of redrawing the rules of the game. There were many sceptics who were veterans of previous efforts and they felt that the Government was really not ready to change. On my part, I told many of the critics that it was different this time and that I have seen the true desire of the leadership to change the ways they have managed Singapore and it was a wonderful bottom-up opportunity for all of us as stakeholders to play our part.”
“All of them unanimously felt that there were very few opportunities, Singapore is too small, there is a stressful education system, their children will never have a chance, given that they themselves felt that they had dwindling opportunities. They also cited the lack of the Government's will power to help promote local enterprises. For them, the USA, especially the Bay area, was truly a land of opportunities of all types, compared to Singapore, and having tasted the USA, they thought that it would be a mistake for them to come back home. I tried my best to explain to them why they were wrong and why they should come back and try and see it for themselves. And I related my own personal experiences that, no matter how difficult it may be, I could at least get some businesses off the ground here in Singapore. Another feedback I have is from the business community. These days, when I speak to the Singapore businessmen, they tell me that there are no more opportunities to do business in Singapore. They argue that companies can no longer easily make money here. They say that things are too expensive, the cost of business is way above the other cities around us and the big players, especially the Government-owned companies, were making it difficult for the smaller companies to succeed in Singapore. The perception is that one cannot easily succeed in business in Singapore and our days of abundant opportunities are gone. Third, Singaporeans generally speak about how tough our education system is and why their children are better off in places like Australia, New Zealand and Canada. The education system was definitely of concern for many Singaporeans in the past and resulted in people thinking of leaving Singapore.”
“We had general discussions about the state of entrepreneurship and their experiences. I then took the opportunity to get a feel of what these young capable Singaporeans, who I hope will return to Singapore one day, felt about their own country, Singapore. There were, as I have said, 10 of them, including a very young staff member of Contact Singapore. As I went round the dinner table, I was saddened to listen to each one of them, of our bright Singaporeans, relate to me why they do not plan to return to Singapore and why after leaving Singapore and having experienced the USA, especially the Silicon Valley, they realise that Singapore cannot possibly provide them with the type of opportunities that they can get from the USA. It was unanimous until it came to the turn of a young employee of Contact Singapore. He painted a positive picture of Singapore and why he felt confident of coming back, although not very convincing. After spending some time in getting to know him, he felt comfortable enough to let his hair down. "Now I will tell you how I really feel about Singapore, not as an employee of the Government of Singapore", he started, after taking off the badge of Contact Singapore that he was wearing and put it on the table. Now feeling more comfortable, he then went on to tell me why he felt that Singapore would not be an attractive place for him to come back to for the opportunities that we are talking about. I was, needless to say, disappointed that we hit a perfect score of 10 out of 10 young Singaporeans telling me why they felt that there was little hope in Singapore.”
“Mr Deputy Speaker, Sir, I rise in support of the motion in the name of Mr Gan Kim Yong. The President, in his speech, spoke about the way forward for Singapore. I quote from his Opening Address, "A key ingredient of our success has been our faith in Singapore. Here we can pursue our dreams." He went on to say that our way forward is to continue making Singapore a land of opportunity for our people. I would like to begin by adding that, in moving forward, we need to essentially take a step back and examine what we may have done wrong and how we can improve the existing system. The question is: do the people of Singapore, especially the young, truly believe that there are really opportunities for all of us and for them? I want to address this issue and I will begin by relating the many issues that many Singaporeans have raised which question this issue of opportunities. I will go through some experiences that I had as well as some feedback I got and why there is this perception among our youth that there is little chance for them to be successful in Singapore. I then hope to share with everyone why I am finally convinced that things have indeed changed and why the new Prime Minister and his leadership have made a difference and will continue to make a difference for Singapore and for Singaporeans in the coming years. Why is it that people feel that there is no hope for them in Singapore? I would like to begin by relating an experience I had about two years also when I was in the Bay area in San Francisco. Since I was visiting the area for my business, I volunteered to do some work for Contact Singapore to meet up with some young Singaporeans. Almost all of these young Singaporeans I met, among 10 of them, were at one time or another entrepreneurs but based in the US.”
“EXEMPTED BUSINESS (Motion) Resolved, That the proceedings on the business set down on the Order Paper for today be exempted at this day's sitting from the provisions of Standing Order No. 1. - [Mr Wong Kan Seng]. COMPETITION BILL Debate resumed.”
“Sir, in conclusion, let me once again say that the real intent of a competition law should be to create a level playing field, to eliminate, if possible, or, at least, to drastically reduce practices which stifle competition in Singapore. While historically the Government favoured certain companies, making them dominant players in our economy, this historical reality should not result in these big Government-owned companies or even private-owned companies abusing their position of dominance. The Government has already done enough for them in the past and now they should no longer be in a position to unfairly benefit from the old favours that they may have got. What we would like to see accomplished is a healthy environment where there is a true form of competition, and where a large number of our enterprises and industries are highly competitive. If it is an important part of our overall plan to make SMEs a dominant force of our economic growth and, indeed, to turn our economy from being one where we attract only large companies to one of an entrepreneurial one, a decision needs to be made to soften the perception. We should not be half-hearted about this. As our large companies will only benefit and not lose from this new landscape of less protection and more competition as they try to compete globally, they would also welcome this new law. And with this prevailing chasm on the restructuring efforts, it must be noted that, depending on the approach that we take on this competition law, we have the potential of this being a keystone in Singapore's economic restructuring initiative. Sir, I am very happy to support the Bill. It is something that we have been waiting for a very long time.”
“In other words, if a firm does not have a market power in Singapore or in a geographic market that includes Singapore, it is not clear how it could use that market power to harm its competition in the Singapore market. I would like to recommend that this section be revised to make it clear that the Bill covers foreign firms with a dominant position in Singapore but not firms with a dominant position in overseas market, but not in the Singapore market. I also note that in clause 33 of the Bill, it provides that as long as an "agreement, abuse of dominant position ... or merger infringes or has infringed [or likely to infringe] any prohibitions in this Part [III]", it does not matter whether the agreement has been entered into outside Singapore or the abuse of dominant position is outside Singapore. This means that agreements made entirely between foreign undertakings and decisions by associations of foreign undertakings or concerted parties will be caught by the Act as long as it can be shown that its effect is to prevent, restrict or distort competition within our shores. Sir, the UK Competition Act, in contrast, provides that the Chapter I prohibition against agreements applies only if the agreement, decision or practice is implemented in the United Kingdom. Such broad extra-territorial application will put unnecessary strain, in my opinion, on the Competition Commission, as it would have to help to assess the impact of this abuse or violation in the various economies that may not necessarily be in Singapore. I think this is not a necessary thing.”
“MTI has a number of statutory boards, some of whose senior executives sit on the Boards of Directors of corporate entities, particularly the Government-linked companies. Additionally, some of these statutory boards also have ownership and interest in GLCs that would be subject to the Competition Act. I hope that the Minister would help keep the integrity of the Commission clean by not having too many civil servants, whether directly or indirectly, who have connections with the GLCs being regulated under this law to sit in this Commission. Otherwise, it will defeat the purpose and it will make implementation of the law ineffective and people will lose confidence. Strict independence and clear goals of encouraging competition without vested interests to protect certain Government-owned companies should be the order of the day with this law and with the Commission. Sir, the third issue is on the scope of the Bill. In general, an effective competition regulatory regime will aim for a consistent and broad application. The application of competition law to all business entities, regardless of ownership, industry or function, is important in establishing a culture of competition within any economy. But it is noted that the Bill has wide extra-territorial applications. For example, clause 47(3) defines a dominant position to include a dominant position within Singapore and also elsewhere. However, it is not clear why the Bill should be concerned about a firm's dominant position in some market outside Singapore if it does not also have a dominant position within Singapore.”
“An added benefit of this would be to have an avenue for companies within their respective sectors to have a higher avenue of appeal in cases of dispute with their regulatory authorities. A case in point is our FTA with the USA, which provides for judicial review of regulatory decisions. Article 9.11(3) of the USSFTA provides for the right of judicial review of a regulatory decision. It clearly sets forth that any aggrieved party in the telecommunications industry in particular must have the opportunity to have this review of a decision by a regulatory body. As it stands, the Code of Practice for Competition in the Provision of Telecommunications Services by the IDA does not allow this to happen. So, therefore, we do not fully meet the obligations of this bilateral agreement. I also note that in its submissions to the Ministry of Trade and Industry, Temasek Holdings encourages these sectors to be also included without any excessive protection, stating that "Companies should be allowed to grow and thrive on sound commercial principles, unfettered by bureaucratic impositions or non-commercial Government directions." If Temasek, which has a vested interest in and owns most of the companies in the excluded sectors, feels that these companies should compete unfettered by any protection, there is, in my opinion, no need for the Government to provide these companies any further protection. Sir, the second issue is one of establishment of the Competition Commission of Singapore. It is important that the competition law must operate in a fair and transparent manner. Concern should arise from parties involved in commercial disputes about the objectivity and independence of this Commission.”
“Sir, I have a few specific points on this Bill to discuss. First, the exclusions, and many Members have raised these. By virtue of the Third Schedule and the many clauses in the Bill which exempt certain sectors from inclusion in the competition law, we have in fact excluded many of the sectors of our economy which were originally intended to be governed by a competition law. It is a pity that so many sectors have been protected under the law. I see no reason to, for example, protect the telecommunication, postal, media and transport industries and specified parts of the banking industry. In fact, we could also have been more aggressive in including even certain parts of the energy industry in this competition law. An argument made by the Ministry is that there are already laws regulating these industries. I feel that the competition law should have been a senior law, ahead of all other sectoral regulations. Presently, the Bill enables many sectors that already have these regulatory commissions to oversee competition within their relevant sectors. In effect, this law becomes a secondary law for these sectors, only to be enacted if the industry players cross over into a non-regulated sector. This has the potential to cause a bit of confusion, in my opinion. With this, each commission will have to have its own definition of dominant position, predatory pricing, undertakings and what constitutes anti-competitive behaviour. By making the competition law a higher authority in Singapore, it will help unify and streamline definitions and guidelines. The different regulatory commissions will fall under this law, but provisions can be accorded to provide the relevant authorities to exercise flexibility to regulate and allow sectors to be more competitive.”
“Some other issues that we wanted the competition law to address include: (1) There must be a serious attempt to prohibit exclusive deals between the Government or its agencies and any of the GLCs; (2) We did realise that certain exemptions might have to be included, especially in sensitive areas of the economy, but the number of exclusions needed to be limited; (3) All companies will have equal access to the national infrastructures, and these should not be given on a silver platter to any Government-linked companies; (4) Whatever law is enacted should not add to the costs and, hence, compliance costs should be minimised for these companies; and (5) An independent competition authority should be set up to formulate the policies and rules and to rule on cases violating the law. So, how has the Ministry fared against the expectations of the committee on this competition law? I would like to say that they have scored seven out of 10, and I am very happy with the outcome. Seven out of 10, coming from me, is actually a big compliment! Let me say that in targetting large companies, especially GLCs, the intent was not to dismantle the dominant positions that these companies have, but to restrict them from using their dominant position to stifle competition. So, we were mindful that we should not destroy the value of big and well-run companies, but to prevent them from allowing other companies from also competing successfully with them. As an example, if a large company uses predatory pricing to eliminate smaller players, this should not be allowed. Similarly, should a large company set rules of business together with the Government by giving feedback where only they will benefit and smaller companies find it difficult to comply, this is also an uncompetitive behaviour.”
“Mr Speaker, Sir, I would like to express my appreciation to the Ministry of Trade and Industry for finally presenting this Competition Bill for passage through Parliament. I have a personal interest in this Bill, because it was first proposed by the sub-committee which I chaired, ie, the Government in Business Sub-Committee, which was part of Minister Raymond Lim's Committee on Entrepreneurship and Internationalisation. When my committee studied the role of Government and its companies in encouraging or stifling entrepreneurship, it was obvious that what Singapore lacked was a generic competition law which would, in an indirect way, encourage the emergence of entrepreneurial companies in Singapore. When the committee looked at this, our vision of the competition law envisioned these few things. (1) We needed to create a level-playing field so that no one company has an undue advantage, particularly the Government-owned companies; (2) Anti-competitive business practices needed to be eliminated or banned, and these include practices like collusion, bid-rigging, price fixing, which involved coordinated action by direct competitors; (3) The abuse of dominance needs to be eliminated. Abuse of dominance includes action by any single dominant player. Monopolies will not be banned, but abuse of market dominance should be. For example, the use of predatory pricing to exclude new entrants; and (4) Companies intending to do mergers and acquisitions should pre-notify the competition authorities for transactions above a certain market value, eg, one-quarter for each company or one-third for a merged entity, with certain turnover thresholds. The competition authorities may approve the M&A deal with certain conditions attached.”
“I would like to ask the Minister whether this merger was a directive from the Government to the media companies to merge or it was their initiative. The impression I have is that the Government had told them to just merge and not continue competing.”
“Sir, I would like to bring to the attention of the Parliamentary Secretary that in the computer system for admission to Secondary 1, as long as a student is a non-Chinese, the computer rejects his application. So he does not even have a chance to put in his application. Sir, I do not understand how the SAP schools are actually accepting non-Chinese students.”
“Sir, the Parliamentary Secretary has not answered my question on allowing non-Chinese students to enter into SAP schools.”
“The learning of each other's culture and way of life and acceptance of greater diversity will go a long way for students in the SAP schools and for Singapore's future in promoting greater racial bonding. Sir, in this respect, I had also talked about the possibility of twinning the SAP schools with our neighbourhood schools, not just for interaction once in a while, but very regular interaction, particularly in activities in the co-curricular areas. So, I would like to ask the Minister what has been done in this respect or is there anything else being done to expose the children studying in SAP schools to children of other races, so that we could again promote greater racial bonding? I am appalled to hear many cases of Chinese children who stereotyped the non-Chinese children of their age groups. Recently, I came across a case in National Service, where a boy doing National Service told me that the Chinese platoon members do not want to mix around with a particular racial group for reasons of their perception of who they are, and I think this has to be eliminated as early as possible as this can happen in schools. Because by the time they go for their National Service, it is too late and it becomes a lot more difficult to change their minds at that age. Social Cohesion”
“Sir, I have a couple of issues to raise about the SAP schools, and both are directly related to the promotion of racial bonding, and one is also related to the limited choices non-Chinese students have, ie, those who do well in their PSLE examinations but have difficulty getting into good schools, because many of our good schools these days are the SAP schools. I notice that SAP schools, as a default, will reject any application for entry into Secondary 1, when such applications are made by a non-Chinese student, despite that student having met all the aggregate requirements to enter the school. This seems a little unfair, since non-Chinese students have very little choices of highly sought after secondary schools to choose from, especially since we now have an extensive network of SAP schools. When we had a few SAP schools, I guess it was all right. But now there are so many SAP schools in Singapore and they have all the resources and they have turned out to be among the best schools in Singapore. Sir, I do not think the number of non-Chinese students who will apply for SAP schools will be large, because they may not choose to go into a school that focuses largely on the Chinese culture. Therefore, I do not see a few of non-Chinese students getting into such schools changing the character of the SAP schools. The positive result will be a wider choice of schools for the non-Chinese students to choose from. The added advantage is that the Chinese students studying in the SAP schools will have a greater opportunity to interact with non-Chinese students, something greatly lacking today.”
“Sir, my issue is on SAP schools. But before I talk about it, I wish we could give three cheers to the Minister for taking the bold move of changing the streaming system. Many of us have brought this issue up many times and we have been bruised by the aggressive rebuttals that we got from the Minister. But I think all those bruises have been all worth our while because, finally, we have made a very significant change in the education system that will serve us very well in the future and I would like to thank the Minister.”