Josephine Teo
Singapore
“The Government's risk-calibrated approach to data security in artificial intelligence (AI) systems was explained in a written reply, given on 9 January 2024, to related questions asked by Dr Tan Wu Meng and Mr Gerald Giam.”
“Access to frontier models is helpful for specific use cases, such as advanced research and cybersecurity. However, these form a small proportion of artificial intelligence (AI) demand. For most industry, Government and research uses, capable models are already available.”
“The Government tracks the development of technical standards for identifying artificial intelligence (AI)-generated content, including watermarking and digital provenance approaches, as part of broader efforts to manage AI-related risks.”
“Upon receiving a valid report of intimate image abuse, the Commissioner of Online Safety is empowered by law to direct Online Service Providers (OSPs) to disable access by Singapore users to the specified harmful online material. This direction may be extended to cover identical copies found on the platform.”
“The Government is committed to keeping children safe online. We have announced plans to extend age assurance requirements to designated social media services, including requiring platforms to keep users under 13 off their services.”
“Under the Online Safety (Relief and Accountability) Act 2025, the Commissioner of Online Safety is empowered to issue directions to platforms to remove specified harmful content, including intimate image abuse.”
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“Mr Lim Biow Chuan also suggested providing bike-sharing services to connect MRT stations and private estates. We are, indeed, keen to test out how bike-sharing can help improve first-and-last-mile connections. We will pilot bike-sharing services in the Jurong Lake District next year, learn from this pilot and see how we can bring it to other residential areas. As Mr Gan Thiam Poh and Miss Cheng Li Hui noted, dedicated cycling paths are really the most ideal and safest option for cyclists and pedestrians. So, I fully share their concerns for pedestrians, especially seniors. But the reality is that we have limited land and much of Singapore which the public regularly accesses is already quite built-up. It is, therefore, not realistic to build dedicated cycling paths everywhere. For cycling and use of PMDs to become viable first-and-last-mile options soon, rather than far into the future, we need an environment and culture where pedestrians and cyclists, as well as users of PMDs, are willing and able to share space. To consult the public on how we can foster such an environment and culture, we set up AMAP in July last year, and the members were drawn from a broad spectrum of society and were led by Parliamentary Secretary Muhammad Faishal Ibrahim, my former MOT colleague, who remains very passionate about active mobility. The Panel submitted its report to the Government last month. Mr Gan reminded us: "请三思". There is another phrase thereafter: "而后行". So, think thrice but, after that, take action. I am pleased to share that the Government will accept the Panel's recommendations in full. I commend and thank the Panel for their detailed work and well-considered recommendations. They have taken in as many views as possible and made some very difficult trade-offs.”
“To encourage more people from private estates to take public transport, Mr Lim Biow Chuan suggested providing peak hour shuttle bus services to connect MRT stations and private estates. We are open to providing public buses, especially if it is assessed that ridership will reach a certain minimum level. There should be reasonable cost recovery; otherwise, the service will not be well used and the resources should be redeployed to areas where more residents can be served. This is a fair approach to assessing the regular requests for bus services and LTA can work with Mr Lim and other advisers to make the necessary assessments. So far, Madam, I have spoken on what we are doing for pedestrians. This is an important priority for us because almost every public transport user would need to walk at some point in their journey. But more and more Singaporeans are making their connections to the public transport Page: 23 network or getting around their neighbourhood in another way – by cycling and using PMDs. This is a small, but rapidly expanding group. Their profile is quite diverse, ranging from neighbourhood "uncles" and "aunties", to students going to school and parents sending their kids to and from childcare. As many Members would be aware, we are building dedicated intra-town cycling networks for every HDB town as quickly as we can. Today, residents in Tampines, Sembawang, Pasir Ris, Changi-Simei and Yishun are already enjoying their completed networks. We will build cycling networks in 11 more towns over the next five years. 12.45 pm In particular, Ang Mo Kio will be a demonstration project as we test out additional infrastructure, such as seamless cycling and walking corridors below the MRT viaduct. If these experiments work well, we can replicate them in other towns.”
“LTA will also build signalised pedestrian crossings, rather than overhead bridges or underpasses, where possible, as the elderly and persons with disabilities do find it physically less taxing to use signalised pedestrian crossings. LTA is looking at different standards for wheelchair users, including Wheelchair Tie-down and Occupant Restraint Systems (WTORS). Where there are overhead bridges, the Government has a programme to install lifts at frequently-used ones, so that the less mobile can still cross the roads with minimal difficulty. LTA is currently installing lifts at 41 overhead bridges, prioritising the bridges near places frequented by the elderly or disabled. This includes transport hubs, healthcare institutions, welfare homes, homes for the aged and schools for special needs children. We will expand this programme to about 50 more bridges. I am sympathetic to Mr Lim Biow Chuan's appeals for a lift to be built at a specific overhead bridge and I commend his diligence as the Member of Parliament. As Mr Lim knows, the overhead bridge is already fitted with a ramp. Given our need to provide barrier-free access to as many bridges as possible, we have to focus on bridges that do not yet have any form of barrier-free access. I seek his understanding as there are residents in every estate who are waiting for such lifts to be installed. We will study the possibility of a signalised pedestrian crossing; the primary consideration being the safety of pedestrians, especially seniors. Moving on to feeder buses. Besides walking, many train commuters use feeder buses to get to the MRT stations. Today, FLMCs via some 64 feeder bus services are generally good. Most residents, including those living in private estates, have a bus stop within a five-minute walk.”
“Similarly, we are trying to connect our expanding transport network to more buildings via underground links, as suggested by Mr Lee Yi Shyan. I must thank Mr Lee for sharing many interesting examples with us and also for reminding Members of the health benefits of walking. In fact, our plans include elevated off-road pedestrian walkways, such as those linking the twin towers of Ng Teng Fong Hospital to the nearby Jurong East station and adjacent shopping malls. I recently took a short but enjoyable walk there. I think it is called "J-Walk" but it is entirely legal. The linkways make very good sense, given our local weather, and we should have more. Minister Lawrence Wong has recently explained the approach which MND and MOT will jointly implement, which most likely involves further legislative change. Page: 22 URA is the lead agency working with LTA and there is already an underground masterplan which includes the central area underground pedestrian network. Let me now move on to talking about an inclusive transport system for the less mobile. They are an important group of commuters that we must take care of, either because they are less mobile by age or disability. Mr Lim Biow Chuan and Mr Leon Perera spoke about their needs, as did Ms Chia Yong Yong during the Budget debate. Today, all MRT stations and bus interchanges offer barrier-free access. Almost all bus stops and buses are barrier-free as well. As part of the Government's Action Plan for Successful Ageing, LTA is putting in more seats at new MRT stations for seniors to rest. And, indeed, we are considering equipping new stations with two sets of lifts each – that is something that Mr Leon Perera asked about.”
“As Members know, under our Walk2Ride framework, LTA gives priority to connecting hospitals within 400 metres of MRT stations. And why 400 metres? Because this is a distance most commuters are willing to cover on foot. The planned walkway from Changi General Hospital to Simei MRT station will be completed by 2017. However, Khoo Teck Puat Hospital is about 700 metres away from Yishun MRT station, and a little bit more, if we consider the actual walking route. At such a distance, commuters tend to prefer a bus transfer. Nonetheless, we will study the feasibility of a sheltered walkway later. Meanwhile, the free shuttle buses, as well as public feeder buses, will continue to serve commuters. There will be more direct routes and options for walking. Both Mr Ang and Mr Sitoh have noted that some walkways can be circuitous and add many minutes to the walk. I agree with them fully that more direct routes will make walking a more attractive option for commuters. Now, sometimes, large plots of privately-owned land and buildings can get in the way of a more direct walking route. But thanks to the support of our colleagues in MND and URA, private developers will be required to submit a Walking and Cycling Plan when they apply for URA's planning approval. Essentially, this plan will require developers to propose how they would design their buildings to provide safe and convenient access and infrastructure for pedestrians, as well as cyclists. LTA and URA will share more details shortly. Mr Ang also asked whether we could encourage building owners to build or link up their covered walkways to those built by the Government. LTA already does so, although it remains the building owners' prerogative to decide.”
“In the next few years, every resident will be able to reap the benefits of the upcoming FLMC improvements in their neighbourhoods. We want everyone, including the less mobile like our seniors and persons with disabilities, to be able to get to their nearby MRT station or bus interchange comfortably, conveniently and safely, whether it is by walking, cycling or using PMD. Walking will become more comfortable. By 2018, every MRT and LRT station will be connected by sheltered walkways to nearby schools, healthcare facilities and public amenities. FLMC considerations are fully integrated into the design and construction of new stations. For example: (a) DTL 2 stations will be served by 13 kilometres of sheltered walkways; and (b) DTL 3 stations will go slightly further; they will be served by 16 kilometres of sheltered walkways. Page: 21 There are 56 kilometres of sheltered walkways today. So, if you add those 56 kilometres to what DTLs 2 and 3 will have – we are talking about 85 kilometres – that is one end of Singapore to the other and back. Existing stations will be fitted out under LTA's Walk2Ride programme. So far, we already have sheltered walkways for about 40% of all MRT stations across Singapore and more will follow. Beyond the immediate vicinity of train stations, LTA will work with other stakeholders to make our towns more walkable. For example, HDB and Town Councils co-share the responsibility of improving the walking experience within towns with LTA. They will follow up on suggestions like those of Mr Ang Wei Neng, for more covered walkways to link HDB blocks to nearby amenities. Mr Ang also suggested that LTA build covered walkways from MRT stations to nearby hospitals, in particular, Changi General Hospital and Khoo Teck Puat Hospital.”
“Mdm Chair, I thank the Members for their comments and suggestions. I will expand on a key theme in MOT's COS debate this year – that of enhancing accessibility for commuters, in particular, our plans to make it hassle-free for commuters to move from their homes to the nearest train station or bus stop. As Minister Khaw described earlier, we crystallise these efforts as First-and-Last-Mile Connectivity (FLMC). Members of the House would already be aware of MOT's plans to double our rail network and add more than 100 new MRT stations across the island in the next 15 years. This will bring our MRT network much closer to where Singaporeans work and live. In around five years, no matter where you are in the city area, a train station will only be five minutes away. By 2030, eight in 10 residents all over Singapore will be within a 10-minute walk of a train station. The expanded rail network will be much more beneficial if we also improve their accessibility to commuters. We share the same belief, as members like Mr Sitoh Yih Pin and Mr Ang Wei Neng, that there has been progress on FLMC and more is achievable. Our goal is for Singapore to make a quantum leap, to be among the best in the world. To get to where we envision Singapore, we must close the gap with cities like Amsterdam and Copenhagen and aim to do better, particularly because we live in the tropics with hotter, wetter, more humid weather. I will outline our approach on FLMC and, within that framework, respond to the recent recommendations of Parliamentary Secretary Muhammad Faishal's AMAP. In the last five years, the Government has committed nearly $1 billion to improve FLMC for commuters.”
“Where the need arises, we will examine whether there are opportunities for us to grow the capabilities of our Foreign Service Officers so that they can take on these multiple hats.”
“Mdm Chair, the conduct of diplomacy is done through every means and channel that is available to us. Besides cultural diplomacy, in the past we have heard of "ping pong" diplomacy, golf diplomacy; every channel that is available to us to make friends, to extend our influence, we will engage in them. One of the most significant ways in which we extend our diplomacy is economic cooperation. Hence, you will find that a lot of our attention and efforts are focused on those areas. So, the work of the Foreign Service Officer is not only to look at political developments but also to look at economic developments that could help to expand Singapore's economic space, to share these developments with our home base, and then to provide ideas on how we can take advantage of the opportunities that are presented. We do not require every one of our Foreign Service Officers and our diplomats to be economists or to have been engaged in business before. We also, for example, link up with other countries and deepen our engagement with them through channels like exchanging understanding and extending our cooperation in science and technology and R&D. So, our Foreign Service Officers have to be a jack of all trades. They have to be good in everything, and that includes cultural diplomacy. They will have to invest time to pick up the relevant skills, to understand the context of both countries and then, when opportunities arise, to try and extend our international space in this manner. The way in which we go about it is to be adaptive and to be cognisant of the unique circumstances in every country and region that we establish diplomatic relations with. There are no plans currently for specifically appointing cultural liaison officers.”
“Madam, I believe this is one of the questions that Assoc Prof Dr Muhammad Faishal is considering as part of his panel's work.”
“I am not sure whether in China they still maintain such registers but, in fact, most countries do not have licensing for bicycles.”
“Madam, I thank the Member for his supplementary question. It is a pertinent question, whether licensing will help. And one can imagine the benefits of doing so. With licensing, you could maintain a register and, in the event there is an accident, presumably we can trace who might have caused it. But it really depends on whether the register is regularly updated and whether the information which it contains is accurate. Years ago, I was living and working in China, and I remember buying a bicycle. It was a pink one. My memory is fading but I can remember having to give my name, address and, of course, I had to pay a fee. And then I was given a small little plate to affix to my pink bike. So, there was a register that said who had purchased this bike. When I finished my posting and was packing to go home, this bicycle just would not fit. So, I gave it away and, if you ask me whom I gave it to, I honestly cannot remember. Quite frankly, whoever was maintaining that register is not any wiser. This is just one of the implementation difficulties. As Members of Parliament on the ground, we have also encountered in void decks sometimes abandoned bicycles, unclaimed bicycles still chained to the bicycle racks. We are at a loss as to what to do because we cannot figure out who owns it and what will happen if we just removed it. Bear in mind also that bicycles are owned by people of a very wide age range. So, you could have children owning bicycles. They use it for a few years and then the family decides to hand it down to someone else. There will be movement of these bikes and we will have to decide where to draw the line. These would be some of the practical difficulties involved in licensing bicycles.”
“Mdm Speaker, the incident to which the Member referred to concerned a three-year-old boy. I believe his name is Kyle. His parents had posted a photograph of him after the incident on social media. Some of us would have seen the photograph. Kyle suffered nasty bruises around his mouth. His lips were swollen. His teeth loosened. As a result of that, he could not eat or sleep very well. It has been about three weeks since the incident. I hope he has fully recovered by now. His parents were very sensible and mature in their handling of the matter. Even though they posted the photograph on social media and it went viral, they made it very clear that their purpose was not to denounce the cyclist but to alert other cyclists of the potential risks when they use shared pathways, such park connectors. Indeed, although such cycling is allowed, cyclists must always remember that they have a duty of care not to endanger others through inconsiderate, reckless or irresponsible behaviour. In this incident, as is the case for other accidents, the Police will investigate and, if the cyclists are found to have been errant, the Police will take appropriate action against them. At the same time, LTA is stepping up enforcement efforts, it is developing a National Cyclist Education Programme with the Singapore Road Safety Council. It is clear that we do not just need enforcement. We need more education in order to further promote safe and considerate cycling. The Active Mobility Advisory Panel led by my colleague, Parliamentary Secretary Assoc Prof Dr Muhammad Faishal, is also reviewing the rules and safety guidelines for cyclists and users of personal mobility devices. The panel is expected to release its report in the second quarter of the year.”
“Until it becomes a programme that is proven, it does not enter into a specific Ministry's funding and you use Reinvestment Fund for that purpose. That is one reason. The second reason is that, given the amount we expect to be needed for Changi Airport's development, it is not possible for the entire amount to be met by the total size of the Reinvestment Fund. There is just not going to be enough of it. The third point the Member raised is whether in a dedicated set-up like the CADF, it becomes possible for the rules of prudence and good governance to be circumvented. The answer is no. The use of the fund is circumscribed. That is why we are coming to Parliament to expressly lay out the uses of the Fund. Even in the disbursements and in terms of the commitments that can be met by the Fund, these will be subject to all the usual rules that we have implemented within the public sector. Bearing in mind that this Fund will be administered by CAAS, which is a Statutory Board, the same rules that apply to all other projects they fund will apply to the projects funded out of the CADF as well. Page: 88 I hope that I have addressed the questions raised by both Mrs Lina Chiam and Assoc Prof Fatimah Lateef. [(proc text) Question put, and agreed to. (proc text)] [(proc text) Bill accordingly read a Second time and committed to a Committee of the whole House. (proc text)] [(proc text) The House immediately resolved itself into a Committee on the Bill. – [Mrs Josephine Teo.] (proc text)] [(proc text) Bill considered in Committee; reported without amendment; read a Third time and passed. (proc text)] Page: 89”
“And it is precisely at this design stage that we will look at the needs of an air hub of the future, in particular, how we can maintain a very high level of service standards and, at the same time, increase the productivity of the manpower that we will need to operate Terminal 5. From what I can understand, Mrs Chiam has expressed the concern as to whether we are rushing into things. From the design stage to the construction stage to the testing stage, to the operation stage of a terminal of the scale of Terminal 5, it would easily take 10 years. So, we are talking about a terminal that could, at the very earliest, be operational in the middle of the next decade. It is not too early at all to start now if we want to have something available to us in the mid-2020s, because that is when we project that the capacity of Changi Airport, even with the enhanced capacity of Terminal 4 and Terminal 1, will be almost fully utilised. We have to get this infrastructure ready, otherwise we will be behind time. So, it is not a hasty decision. This has been thought about for a long time and we have to get down to building up Terminal 5. There is actually no more time to lose, in my view. The second point is: why set up a dedicated fund, the CADF? You already have Reinvestment Fund, why not use it to pay for the airport development? Two things: one is that for something as important and as long term as air hub development, you really need to have the certainty of funds, whereas the nature of the Reinvestment Fund is that it is subject to competition every year. Every cycle, Ministries, Statutory Boards, if they have a good idea, will have to compete for Reinvestment Fund; it is not assured funding.”
“Mdm Speaker, let me thank Assoc Prof Fatimah Lateef and Mrs Lina Chiam for speaking in support of the Bill. Let me attempt to respond to their queries. Firstly, on the points raised by Assoc Prof Fatimah Lateef, she asked whether the CADF can be used to fund ad hoc items, such as capital expenditure needed to address public health threats. The CADF is not intended for such purposes as it is meant to fund the expansion of Changi Airport. Its uses are circumscribed. It has to be related to the expansion of Changi Airport and the related acquisition of capital assets to support the operation of the expanded airport. It is the responsibility of the airport operator to put in place measures to address such emerging threats, as Assoc Prof Fatimah Lateef highlighted, and to bear the costs associated with such measures. Assoc Prof Fatimah Lateef also asked what kind of loans can be made from the CADF and to whom these loans might be made. In addition to funding the expansion of Changi Airport, the CADF can also be used to make loans to the airport operator to allow the airport operator to construct facilities or acquire assets to support the operation of the expanded airport. These loans will be made on terms to be negotiated between CAAS and the airport operator. Turning now to the points raised by Mrs Lina Chiam, there are essentially three. The first is whether it would be prudent for us to conduct more detailed feasibility studies before Page: 87 embarking on the building of Terminal 5. That is exactly what we are doing, whether you term it as feasibility studies or detailed design studies. At this stage, we are doing land preparation works, but we have not started constructing Terminal 5. We are at the design stage.”
“It will generate significant benefits, not just for the aviation industry but also for Singaporeans and our larger economy. And, if I may say so, it will strengthen our air hub for this and future generations of Singaporeans. There is, therefore, a case for the Government to co-invest in the project. Given the magnitude of the project, the outlay required of the Government will be sizeable and it is only prudent that we start to set aside funds for the project now, in the form of the CADF. As a start, the Government has set aside S$3 billion of initial capital to be injected into the CADF. More will be added in the years to come, as the Budget allows. Mdm Speaker, I beg to move. [(proc text) Question proposed. (proc text)] 5.31 pm Page: 85”
“Hence, as the Deputy Prime Minister and Minister for Finance announced at Budget 2015, a Changi Airport Development Fund (CADF) will be established to set aside funds for the expansion while we have the fiscal resources to do so, even as we continue developing and refining the plans Page: 84 before starting construction. This Bill seeks to amend the Civil Aviation Authority of Singapore (CAAS) Act to establish the CADF. Let me highlight the key provisions of the Bill. The new section 25A establishes the CADF as a statutory fund to be administered by CAAS under the direction of the Transport Minister. It also sets out the sources of monies for the Fund. Section 25B lists the permissible uses of the CADF. These include major airport development works as well as construction, upgrading and replacement of air navigation facilities and other facilities and buildings required for airport operations at the expanded airport. The Fund may also be used for the acquisition, improvement and replacement of other capital assets required for the operation of the expanded airport, for the carrying out of surveys and studies for the expansion, and to cover expenses related to the management and administration of the Fund. Mdm Speaker, Singaporeans are proud of Changi Airport. It is a globally recognised symbol of Singapore's connectedness, efficiency and customer service. Most Singaporeans would not disagree with our founding Prime Minister, the late Mr Lee Kuan Yew, who said that the construction of Changi Airport was "the best $1.5 billion investment we ever made". Similarly, the expansion of Changi Airport is a major investment for Singapore's continued economic vibrancy.”
“Mdm Speaker, I beg to move, "That the Bill be now read a Second time." Changi Airport connects Singapore to the world. It also supports a vibrant aviation industry that is itself an important engine of growth and creator of good jobs. Changi Airport has grown rapidly over the years. In the last decade, passenger traffic at Changi grew on average 6% each year, driven by strong growth of air travel to, from and within the Asia Pacific. While growth has slowed recently, our long-term prospects as an air hub remain bright, with air traffic in the Asia Pacific projected to double in the next two decades. Although Singapore is well-positioned to tap this growth, we must have adequate capacity to continue offering the high-quality passenger experience and extensive connectivity that Changi is renowned for. Construction of Terminal 4 and the expansion of Terminal 1 are in progress. These projects will raise Changi Airport's capacity to 85 million passengers per annum when completed. However, even with these developments, Changi's capacity is projected to be fully-utilised by the end of the next decade. This is why we are expanding Changi Airport by building Terminal 5. Terminal 5 will be built in phases. Upon completion of the first phase, Changi's capacity will be doubled from what it is today to about 135 million passengers per annum. When fully completed, Terminal 5 will have a capacity bigger than Terminals 1, 2 and 3 combined. It is our intention for the cost of the expansion to be borne jointly by the airport operator, airport users and the Government, in a way that allows Changi Airport to remain cost-competitive as a global air hub. Given its scale and complexity, the project will inevitably require a sizeable, long-term financial commitment by the Government.”
“Madam, that is an important question. I would encourage the Member to file a Parliamentary Question so that we can address it properly.”
“Madam, I thank the Member for her supplementary question. It is, indeed, challenging to enforce against foreign vehicles, considering the fact that there are about 1.5 million foreign vehicle trips into Singapore every month. So, we also take a look at the severity of the problem. About 5,000 traffic, parking and ERP-related offences are issued a month, on average, or about 0.3% of the total number of visits a month. The vast majority of the foreign vehicles that enter Singapore do observe our traffic rules. Page: 39 Specific to the issues that the Member raised, I do recognise that there are localised problems. My suggestion is that we take this up separately. Enforcement against these vehicles is something that the Land Transport Authority (LTA) continues to do. But if we want to get to the root of the issue, we have to study the local conditions and take a closer look at who these perpetrators are and whether there is a way to trace them. I want to give the Member the assurance that LTA takes its enforcement duties seriously. It is interested to ensure that when foreign vehicles do enter Singapore, they observe our traffic rules and that is why, at all of the land checkpoints, LTA enforcement officers are present. They engage these drivers and make a real effort to ensure that they are aware of their infractions and are issued the necessary summonses. This is an ongoing issue. It does not go away overnight, especially on occasions where we have long weekends and so on, the number of vehicles coming in could increase. LTA would like to follow up with the Member, and I can say that on their behalf, to see what the local situations are like, so that we can also take more specific actions to deal with it at the local level.”
“Mdm Speaker, foreign vehicles that do not meet minimum standards as prescribed in the 1949 United Nations Convention on Road Traffic are liable to be fined or they would not be allowed to enter Singapore, depending on the type and degree of non-compliance. Enforcement is carried out at the checkpoints by the Land Transport Authority (LTA). Drivers of foreign vehicles are notified of outstanding traffic, parking and Electronic Road Pricing (ERP)-related fines when they enter or exit Singapore at the land checkpoints. There are various electronic channels to facilitate payment, such as LTA's Onemotoring website, AXS kiosks and mobile application, iNETS kiosks and SingPost Self-help Automated Machines (SAM).”
“Roughly, half of the total value of public sector procurements each year goes through this Development Planning Committee process. Those of us who have been involved in this know how much rigour and scrutiny are involved. Approval of lower value procurements is typically decentralised for greater efficiency and responsiveness. Even so, the process is governed by a clear set of rules and complemented by regular audits. Page: 121 Singapore is not unique in this. Decentralised procurement is practised in most advanced countries with efficient procurement systems, such as Australia and the United Kingdom. Nonetheless, for common goods and services, some forms of centralised purchasing are, in fact, being practised today. We have over 50 bulk contracts which all Government agencies can tap on, covering items, such as office equipment and professional services. Overall, we aim to strike a judicious balance. As the needs of the public sector agencies have grown more complex and varied over time, excessive centralisation will weigh the procurement system down and create a new set of problems. Our agencies should retain sufficient flexibility and autonomy to perform their roles effectively and be regularly audited, as they are now, to preserve system integrity.”
“Apart from policy reviews and procurement systems, it is equally important to build up the capabilities of our procurement officers. After all, most lapses occur not because there are no rules, but because the rules were not complied with, as required. We have a training framework which was enhanced recently. This is the new procurement competency framework which details the competencies expected of officers in various procurement roles so that they can carry out their work effectively. There is also a training roadmap to help our officers build up their mastery of procurement knowledge and skills. We also launched the procurement specialist track last year to professionalise and provide clear career development pathways. There is a career development forum that gives opportunities to finance and procurement officers to deepen their skills and/or widen their exposure to different job scopes and organisational settings. In addition, there are ongoing efforts to tap the knowledge and experience of officers who have built up valuable expertise over the years in specialist areas, such as construction and information and communications technology (ICT). This allows officers to learn from one another and from established practitioners. Thirdly, with regard to Mrs Chiam's suggestion on more centralised procurement, to provide the context, I should remind Members that our procurement rules are calibrated to the value and risk of the purchases. Therefore, the approval process is highly centralised for high value projects. Projects above $80 million must be approved by the Development Planning Committee comprising three Cabinet Ministers after rigorous scrutiny by the senior officials in the Ministry of Finance and the Ministry concerned before tenders can even be called.”
“Mdm Speaker, Mrs Lina Chiam has raised three points which I would like to address. The first is her concern over repeated lapses. As was noted in the earlier replies by Deputy Prime Minister Tharman and Minister Lim Swee Say, public agencies are subject to annual audits whether by internal auditors as well as external auditors or AG. Lapses are taken seriously and investigated and appropriate actions taken to prevent recurrence. Depending on the problem, the measures include closer monitoring by supervisors, clearer guidelines for officers, enhanced IT systems to enable better tracking and various other measures. As a result, while recurrent lapses can still happen, they are the exception rather than the norm. I should say this again: whilst from time to time, there are recurrent lapses, they are very much the exception rather than the norm. Page: 120 For example, in this year's audit by AGO – and I say this not to trivialise the matter but just to state factually – only one of the findings was a repeat lapse and this was not because the agency did nothing following the first observation, but that AGO thinks their new measure were still not rigorous enough. So, the agency did something after the finding but AGO thinks that it is not good enough. That is the rigour of the system that we have. I should also emphasise what was pointed out before that notwithstanding these findings, AGO has given an unmodified audit opinion this year and in previous years on the Government's financial statements. So, that is on the first point. The second point which Mrs Chiam raised had to do with the adequacy of training and the competency of the officers involved in procurement.”
“Take, for example, the World Bank was set up in 1944; the Asian Development Bank was set up in 1966. We are in 2015. So, the concern that we will suddenly be flooded with all these international organisations in Singapore, all enjoying privileges and immunities, is not a major concern at all. In any case, I should point out that whatever privileges and immunities that we could grant to AIIB would not be more than what other international organisations, like the World Bank or Asian Development Bank, currently enjoy in Singapore. So, I would like to reassure Mrs Chiam on that point. Mdm Speaker, on that note, let me now conclude. AIIB is an important addition to the international financial architecture and it is going to be a key international financial institution in our region. Joining AIIB is both a natural step as well as a critical move for Singapore as an international financial centre and business hub for the region. The AIIB Bill provides for Singapore to ratify the AIIB Articles of Agreement and to become a member of the Bank. Mdm Speaker, I beg to move. [(proc text) Question put, and agreed to. (proc text)] [(proc text) Bill accordingly read a Second time and committed to a Committee of the whole House. (proc text)] Page: 71 [(proc text) The House immediately resolved itself into a Committee on the Bill. – [Mrs Josephine Teo.] (proc text)] [(proc text) Bill considered in Committee; reported without amendment; read a Third time and passed. (proc text)]”
“Let me now move on to the point highlighted by Mr Ong Teng Koon, that despite our relatively small shareholding in AIIB, Singapore should play a constructive role in shaping AIIB to be an open, inclusive and modern institution. Page: 70 I agree with Mr Ong's views and, indeed, that is the stance that Singapore has been taking. From the onset, the Government has taken a proactive approach in shaping the development of AIIB by contributing our ideas and experiences. We have participated actively in the negotiations and worked with other prospective founding members to establish a strong governance structure and high operating standards for AIIB. Discussions on the bank's operational and financial policies are still underway and we will continue our efforts to ensure that AIIB is established as a well-respected institution of high standards that complements existing multilateral development banks. This is also a concern which Mrs Lina Chiam voiced. In fact, AIIB has the advantage of building on the experiences of the Asian Development Bank and the World Bank to establish itself as a strong institution. Let me wrap up by addressing some of the concerns raised by Mrs Lina Chiam regarding immunities and privileges. On this point, I should remind Members and emphasise that while Singapore was one of the first countries to give its support as a founding member, there are, by now, 57 countries that have come on board AIIB. Fifty of these have already signed the articles of agreement. These countries include Australia and the United Kingdom. So, we are in good company and, in fact, in Singapore, we set a rather high bar for international organisations operating here and also it is not every day that a new international organisation like AIIB is set up.”
“For example, we introduced the Partnerships for Capability Transformation initiative which promotes collaborative projects between large organisations and local SMEs to facilitate knowledge-transfer, capability-building and the co-creation of innovative solutions. More importantly, we will continue to support our SMEs' internationalisation efforts to extend their reach and to build scale. To this end, in Budget 2015, the Government made several enhancements to the internationalisation programmes available to Singapore companies. For example, we raised the support level for SMEs under IE Singapore's grant schemes from 50% to 70% for three years. We also set up Clifford Capital to provide financing and catalyse more business opportunities for Singapore-based companies venturing into cross-border infrastructure projects. SMEs can tap on these initiatives as they look for project opportunities in the region and beyond. Related to this, Mr Thomas Chua highlighted the need to improve communications between the Government and the business community on opportunities in the region. We agree with that. The Government currently works with the World Bank and the Asian Development Bank to establish platforms that connect stakeholders involved in Asian infrastructure projects to share experiences and business opportunities in this sector. We will do the same with AIIB. For example, IE Singapore organises the Asia Singapore Infrastructure Round Table for Government officials and businesses to discuss the development and financing of specific infrastructure projects. Since its inauguration in 2013, the Round Table has attracted more than 600 industry practitioners with over US$6,000,000 worth of projects discussed.”
“Mdm Speaker, let me, first, thank Mrs Lina Chiam, Mr Thomas Chua and Mr Ong Teng Koon for their support of the Bill. They have made good points which I agree with. As a small, open economy, Singapore's economic prospects are tied closely to those of the region and the world, and, in particular, infrastructure development plays a critical role in unlocking Asia's economic potential by strengthening the region's facilities and improving regional connectivity, all of which will benefit Singapore as a hub for trade and businesses. International financial institutions like the World Bank, the Asian Development Bank and AIIB, complement the financial and knowledge resources of governments and the private sector. In particular, they bring a high level of expertise in project design and structuring, which individual governments may not have, particularly those that are still dealing with developing economies. By working with governments, these international institutions also help to reduce risks in large-scale infrastructure projects, help to make them Page: 69 bankable and draw in private sector financing. AIIB will better position Asia to meet its infrastructure and connectivity needs, thereby promoting greater regional integration. As Mr Thomas Chua and Mr Ong Teng Koon have pointed out, Singapore-based companies and financial institutions stand to benefit from partnerships with AIIB and its member countries, especially given Singapore's expertise in infrastructure development as well as urban governance and planning. Mr Thomas Chua also made a good point that Singapore companies, both Temasek-linked companies and SMEs, should work together to bid for projects at AIIB and other international financial institutions. The Government supports such partnerships.”
“To date, institutions, such as the World Bank and the Asian Development Bank, have not drawn on their callable capital. The full capital subscription of US$250 million will be set aside from the surpluses built up in this term of Government. Mdm Speaker, it is necessary that appropriate legislation be enacted to enable Singapore to ratify the AIIB Articles of Agreement and become a member of the Bank. To this end, the AIIB Bill enables Singapore to deposit an Instrument of Ratification stating that the Government has accepted the Agreement in accordance with Singapore's laws and that the Government will carry out its obligations under the Agreement. Clause 4 of the Bill authorises the Singapore Government to subscribe to US$250 million of the initial authorised capital of the Bank. It also provides for Singapore to subscribe to future capital increases, provided that our total subscription does not exceed twice the initial subscription amount, except with Parliamentary approval. This is similar to the approach that we took for the ADB Act. Singapore's subscription to the Bank will be charged to the Consolidated Fund, similar to our capital subscriptions to the World Bank and Asian Page: 63 Development Bank. The Bill also gives legal effect to the provisions in the AIIB's Articles of Agreement relating to the status, immunities, privileges and exemptions of AIIB and its officers. These are on par with those that Singapore has accorded to other international financial institutions, such as the International Monetary Fund, the World Bank and the Asian Development Bank. Mdm Speaker, I beg to move. [(proc text) Question proposed. (proc text)]”
“Being a member of AIIB reinforces our ties with countries in Asia and beyond. AIIB enjoys good support around the world. A total of 50 countries have signed the AIIB Articles of Agreement, with another seven countries expected to sign by the end of this year. All ASEAN countries have joined as prospective founding members of AIIB. Other prospective founding members include major economies from Asia, Oceania, the Middle East, Latin Page: 62 America and Europe. We are confident that AIIB will enjoy the legitimacy and credibility of a multilateral institution of high standing. Let me now move on to explain our capital subscription amount to AIIB. AIIB will be established with an initial authorised capital of US$100 billion. Of this, regional members will subscribe to US$75 billion, while non-regional members will subscribe to the other US$25 billion. There are 57 prospective founding members to AIIB, of which 30 are regional countries and 27 are non-regional countries. Singapore plans to subscribe to US$250 million or 0.25% of AIIB's total authorised capital of US$100 billion. This is an appropriate level of contribution to AIIB, taking into account our current subscriptions to the World Bank and the Asian Development Bank. Amongst ASEAN countries, Singapore will be ranked sixth in terms of the size of our capital subscription to AIIB. Singapore's capital subscription of US$250 million will give us 0.48% of the total voting share in AIIB. Of the US$250 million, 20% or US$50 million is to be paid-in, over five equal annual instalments. The remaining 80% or US$200 million of callable capital will not be paid in, except when decided by AIIB members in extraordinary circumstances. This is similar to the practice in other international financial institutions.”
“Mdm Speaker, I beg to move, "That the Bill be now read a Second time." Mdm Speaker, I would, first, like to outline why Singapore has become a signatory to the Articles of Agreement for the establishment of the Asian Infrastructure Investment Bank, or "AIIB". AIIB seeks to drive infrastructure development and regional connectivity in Asia through financing support for its members. Working in partnership with other international financial institutions, such as the World Bank Group and Asian Development Bank, AIIB will play an important role in addressing development challenges. AIIB is a timely initiative, given that the scale of infrastructure needs in Asia is significant. More importantly, the creation of AIIB signifies an additional milestone in, and a strengthening of, the existing international financial architecture. It is critical for Singapore, as an international financial centre, to remain plugged into the network of international financial institutions. We have thus decided to participate early and pro-actively in the negotiations for the AIIB Articles of Agreement, working with other countries to ensure that AIIB will have good governance and high standards. As a member of this region, Singapore welcomes new initiatives that will promote greater infrastructure investment. Better infrastructure and connectivity will facilitate regional economic development and, in turn, provide positive spinoffs for the Singapore economy. It also creates opportunities for Singapore companies seeking to tap Asia's growth. For example, Singapore-based companies will have the opportunity to participate in the AIIB's projects in the transport, water, logistics and urban development sectors, to name a few.”
“There are provisions for the resources available to these Government contracted operators and they can also be brought to bear in an incident of this nature.”
“It is not just in land transport that there are exercises being conducted on a regular basis. In air transport and in sea transport, we do it, too. I think we are not the only agencies which do that. In other Ministries, there are also tests of contingency planning. But there is nothing quite like the real thing, where the commuters' reactions are not entirely predictable and their patterns of travel are also not entirely as you expected before. This tested the strength of our plans and we identified areas that we ourselves think ought to be improved further. So, that is something that we will put our attention on doing. As I had mentioned earlier in my reply, the incident happened about a month ago. We wasted no time in making sure that we looked into how onward travel connections can be made by affected commuters. We thought that one area of opportunity and one area that we can do much better in when it comes to large-scale disruptions are in making sure that the capacity and frequency of the trunk services which can provide alternative connections for the commuters are quickly ramped up. How do you mobilise the resources to do that? We have worked it out with the operators and that plan is in effect.”
“Mdm Speaker, I thank the Member Mr Cedric Foo for raising that point. Indeed, quite apart from focusing on corrective maintenance, preventive maintenance is equally important, if not more so, particularly as the system is no longer the new system that we had years ago. That is an area of work that will continue to occupy the LTA as well as the operators' attention for quite some time to come. At the same time, if and when an incident were to happen, it is reasonable for commuters to expect that the management of it ought to be up to mark. That is also an area Page: 27 that we want to make sure that we improve on. So, both of these have to proceed in parallel.”
“Mdm Speaker, indeed, the operators, together with LTA, do have Rail Incident Management Plans. But I think it is fair to say that for the incident that occurred on 7 July, the scale of it was not something that they planned adequately for. That is why the management of the incident fell short by commuters' standards. What we want to do is to improve on those contingency plans, whether it is in relation to the bus connections or other travel connections that the commuters really want. In terms of the information, those areas are still being looked into as well. Whilst we are continuously looking into those areas, the contingency plans relating to the bus connections have been firmed up and they have been put in place.”
“For a large-scale disruption where bus bridging cannot be effectively implemented at all stations, a special bridging plan will be implemented to serve commuters living in major towns in the northern, western and eastern parts of Singapore. This will allow commuters in the city to travel via alternative MRT lines to key interchange stations, such as Bishan, Paya Lebar and Buona Vista, and subsequently use the special bridging buses for onward travel to towns, such as Ang Mo Kio, Woodlands, Tampines and Choa Chu Kang. This special bridging plan works similarly in the reverse direction. By doing so, commuters affected by a large-scale disruption will have two options to travel between the city and the heartlands through: firstly, trunk services running at increased frequencies and expanded capacity; or secondly, a combination of alternative MRT lines and special bridging services. LTA and the operators have worked out the arrangements and the improved contingency plan was put in place recently, about a month after the incident.”
“Mdm Speaker, the Land Transport Authority (LTA) requires the rail operators to have Rail Incident Management Plans (RIMPs) which set out their responses to train incidents and the measures they will take to mitigate the inconvenience caused to commuters. These measures include regular provision of information to affected commuters, free boarding of public buses and bus bridging services at affected stations. These plans are Page: 25 approved by LTA and are regularly reviewed and enhanced. For a disruption on the scale of the 7 July 2015 incident, which involved the entire North-South and East-West Lines during the evening peak, the operators' Rail Incident Management Plans were not adequate and it is understandable why many affected commuters were unhappy with the management of the incident. The capacity of alternative travel connections between the heartlands and the city needed considerable strengthening and would have required significantly more resources beyond the Singapore Mass Rapid Transit (SMRT)'s to mitigate the impact. Therefore, following the incident, LTA has reviewed the measures and worked with both bus operators to focus on an emergency ramp-up of capacity on bus connections. In the event of a similar rail incident, we will boost the capacity for regular trunk services calling at affected Mass Rapid Transit (MRT) stations connecting the city and the heartlands. Depending on the scale of the rail disruption, a number of buses will be diverted from other bus services with lower demand to enhance these identified services. The operating hours of Government-contracted City Direct Services can also be extended. Let me now turn to bus bridging which stakes commuters at affected stations to the unaffected stations so that they can continue their journey.”
“These acts include, firstly, the hijacking or intentional destruction of a fixed platform; secondly, intentional damage to a fixed platform so as to endanger, or be likely to endanger, the safety of the fixed platform; thirdly, commission on board a fixed platform of an act of violence which is likely to endanger the safety of the fixed platform; and, fourthly, threats to carry out some of these acts. Page: 53 The penalty applicable to these offences, unless otherwise specified in the Maritime Offences Act, is life imprisonment. This takes into account the gravity and dire consequences of the offences, which could jeopardise the safety of persons and property, affect the operation of maritime services and undermine public confidence in the safety of fixed platforms. This penalty is consistent with the practice in other countries, such as the UK. Given that these offences can be transnational, section 11 is amended so that those that commit such offences may also be extradited to another country which is a party to the SUA FPP. Mdm Speaker, being a party to the SUA FPP would demonstrate Singapore's firm commitment to deal with unlawful acts at sea. It also underscores our continuing commitment and contribution to international efforts to enhance maritime security. The proposed Bill ensures that we have the domestic legislation in place to comply with the obligations of the SUA FPP before accession. Mdm Speaker, I beg to move.”
“Mdm Speaker, on behalf of the Minister for Transport, I beg to move, "That the Bill be now read a Second time." The maritime cluster is a key component of the Singapore economy, contributing 7% of Singapore's Gross Domestic Product (GDP) and employing more than 170,000 people. There are now over 130 international shipping groups in Singapore carrying out a full range of activities. We are a major maritime nation and the world's fifth largest flag state. Hence, Singapore has a strong interest to ensure that the maritime sector is able to operate safely and securely. We have and will continue to work together with the international maritime community in this regard. The Government intends to accede to the 1988 Protocol for the Suppression of Unlawful Acts against the Safety of Fixed Platforms located on the Continental Shelf, known as the SUA FPP. As the title suggests, the SUA FPP is intended to deal with unlawful acts against such platforms, such as fixed platform oil rigs. It will allow us to take action against those that seek to hijack or harm fixed platforms and those who work on the platforms. Acceding to the SUA FPP will not only protect Singaporeans on fixed platforms. It will also allow us to help other countries track and take action against those who have harmed their fixed platforms and personnel. The proposed Maritime Offences (Amendment) Bill seeks to amend the Maritime Offences Act to give effect to the provisions of the SUA FPP. Let me highlight the key provisions of the Bill. The new sections 7A to 7D of the Maritime Offences Act identify acts which will be offences under Singapore law, whether or not the acts are committed within Singapore's territorial waters or the offenders are Singapore nationals.”
“– [Mrs Josephine Teo]. (proc text)] [(proc text) Bill considered in Committee; reported without amendment; read a Third time and passed. (proc text)]”
“To ensure that Singaporeans are aware of the features and application process of Savings Bonds, MAS will be conducting a public education campaign through the media and its industry partners. A dedicated website will also be set up for the public to obtain information on Savings Bonds and a public hotline to answer enquiries. The Government intends to make Savings Bonds accessible to all Singaporeans and have linked up with the three local banks to widen the outreach. But I assure Mr Yee we are not only depending on the banks for the outreach. As you heard earlier, we will have our own website and our own public education campaign. As to why there is a cap on individual holdings, it is precisely to allow as many individuals as possible to gain access to the Savings Bonds. Otherwise, they could be concentrated in the hands of a small number of savvy investors. Nonetheless, the Government can review the caps after a period of time when patterns of demand have had the opportunity to stabilise. Page: 73 In conclusion, the Savings Bonds are a new type of Singapore Government Securities designed to offer individuals a long-term, flexible savings option with safe returns. They will provide individuals with more options to save and invest to meet their long-term financial needs. The proposed Government Securities (Amendment) Bill will allow Savings Bonds to be issued as non-tradable securities to protect individuals from capital losses. I thank Members once again for their support of the Bill. Mdm Speaker, I beg to move. [(proc text) Question put, and agreed to. (proc text)] [(proc text) Bill accordingly read a Second time and committed to a Committee of the whole House. (proc text)] [(proc text) The House immediately resolved itself into a Committee on the Bill.”
“Compared to SGS, the Savings Bonds offer attractive returns, considering the additional benefits of capital-guarantee and flexible redemption. Mr Liang has characterised this as a Page: 72 "free lunch". There are very few "free lunches". We expect that the interest rates paid by the Savings Bonds would be higher than that of shorter-term fixed deposits but lower than the longer-term CPF monies. Savings Bonds are thus meant to complement, and not replace, existing instruments, like fixed deposits, bonds and equities. Mr Yee also talked about corporate bonds. But I should add that the other investment options carry varying levels of risk which investors ought to familiarise themselves with before plunging in. Mr Tay has also asked that investors be allowed to use their SRS monies to buy Savings Bonds. Others have pointed out that CPF monies cannot be used. The Government will consider the suggestion of allowing SRS or CPF monies to be used to buy Savings Bonds. It makes sense to start the Savings Bonds with cash purchases as it complements the CPF scheme. There are also ongoing reviews to provide CPF members more investment options. We will consider all these in totality. To address Mr Liang and Mr Yee's query, the Government will allow Savings Bonds to be transferable to beneficiaries in the event of death of a bond-holder. Such transfers can be effected in full, without being constrained by the cap on individual holdings. However, a beneficiary will not be able to apply for new Savings Bonds if his total holdings exceed the cap, until maturity or redemption of the existing bonds brings him below the cap. Mr Tay and Mr Yee have also noted the importance of communicating the details of the Savings Bonds programme to the public.”
“Suppose in the fifth year, the bond-holder could also purchase a new 10-year Savings Bond issued at 3% interest which pays a first year interest of 1%. This is clearly not an attractive option, compared to the 1.9% he is already getting on his existing bond by then. Even if the first-year interest rate of a new issue was attractive in comparison, the bond-holder may prefer to hold on to the existing bond because the interest payment is due shortly and he would like to be able to use the money, or wait for even higher interest rates before switching. Therefore, the choice of whether to redeem existing Savings Bonds and apply for new issues with higher interest rates will be better left to the individual bond-holders than to have the Government automatically roll it over. To reiterate, the design of the Savings Bonds is expected to offer a safe savings option for individuals while also allowing them the flexibility to redeem their bonds in any given month. It may not be an inflation-linked bond, as Mr Liang and Mr Tay have asked the Government to consider, but, in effect, the full-redemption features allow bond-holders to mitigate against risks of soaring inflation and higher interest rates. On a related note, some people have also asked if Savings Bonds offer good returns, compared to existing savings and investment options. Mr Tay will be pleased to know that the interest received on Savings Bonds will be tax-exempt. The returns on Savings Bonds are pegged to the market yields of conventional Singapore Government Securities, commonly known as SGS. The full interest rate schedule for each bond will be announced by MAS when the application period opens each month. Over the past 10 years, the 10-year SGS yield has, generally, been between 2% and 3%.”
“When market interest rates fall, existing bond-holders will, therefore, benefit from receiving higher-than-market interest rates. On the other hand, when interest rates rise, bond-holders can make use of the flexibility of the early redemption feature to redeem their bonds, if they wish to do so. They can then re-invest the proceeds in the new issues of the Savings Bonds. We have also received some feedback from the public on whether the Savings Bonds can be floating-rate bonds, where the interest rates move with the market. Some have also asked if new Savings Bonds can be issued to existing bond-holders automatically when interest rates rise. The Government has carefully considered and decided against including these two features in the design of the Savings Bonds. Let me explain why. Page: 71 First, issuing floating-rate bonds creates more uncertainty for the individuals, as there would be both upward and downward movements over time. And, as I explained earlier, in a rising interest rate environment, the bond-holder can redeem his existing Savings Bonds at the initial purchase price and re-invest the proceeds by applying for new issues of the Savings Bonds. In this way, he can potentially enjoy higher interest rates without having to face the downside risks of floating interest rates. Second, an automatic rollover into new Savings Bonds may not be beneficial for all bond-holders. To illustrate, take a 10-year Savings Bond issued in January 2016 that will earn 2.5% interest per annum if held to the full 10 years. Let us say that in the first year, this bond earns 0.9% and the interest rate will step up to 1.9% by the fifth year.”
“Page: 70 I will now move on to address the questions raised on the features of the Savings Bonds. Mr Tay has asked how the Savings Bonds will reflect market sentiments and remain flexible, safe and protected when there are market interest rate movements and changes in inflation. Like the conventional SGS, the interest rates on Savings Bonds are set to compensate for expected future inflation. But interest rates on such bonds may not offer full protection against unexpected inflation. However, the key difference from conventional bonds is that holders of Savings Bonds enjoy full protection from price depreciation or capital losses. In the case of conventional bonds, which are tradable, prices fluctuate with interest rate changes. During a period of rising inflation expectations, interest rates may adjust upwards and cause the prices of conventional bonds to fall. Savings Bonds, however, can always be redeemed at the initial purchase price. This full-redemption feature of Savings Bonds prevents such rising inflation expectations from eroding the value of the savings. I should add that the redemption and interest on Savings Bonds are guaranteed by the Government, which has received "AAA" credit ratings from international credit rating agencies, such as Standard & Poor's, Fitch, and Moody's, consistently since 2003. It is, therefore, a very safe investment option. Mr Patrick Tay has noted that Savings Bonds have a fixed interest rate schedule, which provides greater certainty to individuals as the interest income will not fluctuate with market movements. It is fixed, it is locked in at the point of issue, the schedule is known to the person buying the Savings Bonds. And even if there are market changes in interest rates, that schedule will be honoured.”
“Mdm Speaker, I thank Mr Liang Eng Hwa, Mr Yee Jenn Jong and Mr Patrick Tay for their comments on the Bill. Let me address the points raised by the Members, together with some of the feedback that we have received from the public, on the Savings Bonds programme. First, I would like to assure Members of the House and the public that the programme will not adversely impact the Government's finances. All proceeds from bond issuances cannot be spent but are instead invested. As a result, the Government's assets will increase by the same amount as its liabilities, leaving the Reserves unchanged. Overall, as a government, we continue to maintain our strong net asset position and expect the returns from investments to cover the interest cost of the bonds. Additionally, the liquidity risk from the programme will be manageable as the total issuance is not expected to add significantly to the size of total Government borrowings. In any case, total Government borrowings will be kept within the limit authorised by Parliament under the Government Securities Act. Mr Liang has asked if Statutory Boards will consider issuing Savings Bonds. The proceeds from bonds issued by Statutory Boards are used primarily to meet payments of development projects on a continuing basis. It may, therefore, be difficult for them to manage the liquidity required by the flexible early redemption feature of the Savings Bonds. Mr Liang has pointed out that the cap on individuals' holdings of Savings Bonds will mitigate the programme's impact on the banking system. In addition, we expect the programme size to be small relative to total bank deposits and the impact on the banking system is, therefore, likely to be limited.”
“The exact launch date will be announced later. Mdm Speaker, I beg to move. [(proc text) Question proposed. (proc text)] 3.38 pm”
“The allocation to each individual will stop when the individual gets the full amount applied for, or when all the available bonds have been allocated, whichever comes first. This means that smaller applications will have a higher chance of receiving the full allotment, and individuals with larger applications may not get the full amount that they have applied for. Madam, let me now go on to explain the amendment in the Bill. The Government Securities Act currently allows Government securities to be transferred and pledged. This means that securities-holders can freely transfer ownership to other parties or trade the securities in the open market. The Bill proposes an amendment to allow the Government to impose restrictions on such transfers and pledges in future new issues. This change will allow Savings Bonds to be issued as non-tradeable securities. The change is necessary to protect individuals from capital losses. When interest rates rise, instead of selling the bonds in the open market at a price that is possibly lower than the purchase price, individuals are assured of getting their full capital back should they decide to redeem the bonds with the Government. On the other hand, when market interest rates fall, while bond-holders will not enjoy possible price appreciation or capital gain, they would benefit from the higher-than-market interest rates of their existing Savings Bonds which had Page: 62 been locked in at the point of purchase. The restrictions on transfers and pledges of Government securities will be set out in the terms of issue for the Savings Bonds. Conventional SGS are not affected and will remain tradeable. MAS is working with the banks to set up the systems and launch the first tranche of the Savings Bonds by the second half of 2015.”
“After five years, the average earned interest per year will match the return of a five-year SGS issued at the point of purchase. By the end of the 10th year, the total interest payments result in an average annual Page: 61 interest equivalent to that of a conventional 10-year SGS issued at the point of purchase. These features mean, in effect, that individuals do not need to commit to the investment period upfront but will still get to enjoy the higher returns of a longer-term investment. The Government will make Savings Bonds easily accessible to individual retail investors: new bonds will be issued every month for at least the next five years. For 2015, the Government could potentially issue between $2 billion to $4 billion of Savings Bonds, depending on demand. The Monetary Authority of Singapore (MAS) will announce each month's issuance size on the first business day of that month. Individuals can apply for the bonds via ATMs of participating banks, at a transaction fee that is charged by the banks. In any month, individuals will be able to apply for the bonds with as little as $500. For a start, each individual can apply for up to $50,000 per issue and can hold up to $100,000 of Savings Bonds at any point in time. The Government will review these caps if there is a need to after the programme has been in place for some time. Madam, it is the Government's intention to enable all individuals to have access to the Savings Bonds. There is, therefore, no need to rush and buy these bonds. If total applications exceed the total issuance size in a particular month, MAS will allocate bonds to all applicants in increasing multiples of $500.”