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PARLIAMENT OF SINGAPORE · FORMER

Josephine Teo

Singapore

IN THEIR OWN WORDS

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.

STRENGTHEN RULES GOVERNING USE OF CLASSIFIED AND UNCLASSIFIED GOVERNMENT DATA GIVEN RAPID DEVELOPMENT OF AI TECHNOLOGIES - 2026-07-07 · READ THE OFFICIAL RECORD

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.

CONTINUED FRONTIER AI ACCESS FOR SINGAPORE GIVEN US ORDER TO BAR FOREIGN ACCESS TO ANTHROPIC'S FABLE AND MYTHOS MODELS - 2026-07-07 · READ THE OFFICIAL RECORD

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.

WATERMARKING AND DIGITAL PROVENANCE STANDARDS FOR AI-GENERATED MEDIA, METADATA PRESERVATION AND DISCLOSURE OF ORIGINAL UPLOADERS AND CROSS-PLATFORM COORDINATION MEASURES - 2026-07-07 · READ THE OFFICIAL RECORD

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.

IMPLEMENTATION OF STAY-DOWN MEASURES FOR NON-CONSENSUAL INTIMATE IMAGES AND SEXUALISED DEEPFAKES UNDER ONLINE SAFETY COMMISSION AND PREVENTING GLOBAL ACCESSIBILITY - 2026-07-07 · READ THE OFFICIAL RECORD

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.

ADDRESSING BROADER ISSUE OF UNDER-16S' SOCIAL MEDIA ADDICTION - 2026-07-07 · READ THE OFFICIAL RECORD

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.

COMPLIANCE TIMEFRAMES FOR PLATFORMS TO REMOVE NON-CONSENSUAL INTIMATE IMAGES UNDER DIRECTION OF ONLINE SAFETY COMMISSION - 2026-07-07 · READ THE OFFICIAL RECORD

The complete record

Every one of 2,900 lines we hold for Josephine Teo, in date order, each linked to its source. Free to read, in full, without an account. Page 47 of 58.

  1. Mdm Speaker, I beg to move, "That the Bill be now read a Second time." The Government announced in March 2015 the introduction of Singapore Savings Bonds, a new type of Government security. The Bill before the House amends the Government Securities Act to allow the Government to issue the Savings Bonds as non-tradeable securities, which is a key design of the Savings Bonds to protect individuals from capital loss. The Government is introducing the Savings Bonds programme to provide individual investors with a long-term savings option that offers safe returns. Unlike in other countries, we do not issue bonds to fund Government expenditure. Where bonds are issued, they are for the purpose of helping to develop the local bond market. The proceeds of these issuances cannot be spent but must be invested instead. Madam, I will now go through the key features of the Savings Bonds. Savings Bonds are safe investments, as both the principal and interest payments are guaranteed by the Government. In addition, individuals have the flexibility to redeem their bonds at par from the Government in any given month, which means that they will get back in full the initial purchase price with no risk of capital loss. And, unlike fixed deposits for which early withdrawals means forgone interest payments, holders of the Singapore Savings Bonds get to keep the interest paid out at six-monthly intervals even if they redeem the bond before the full bond tenor. The interest payments are also designed to "step-up" every year, with each year's interest payment being larger than the one before. In the first year, the total interest payments result in an annual interest equivalent to that of a conventional one-year Singapore Government Security, commonly known as SGS.

    GOVERNMENT SECURITIES (AMENDMENT) BILL - 2015-05-11 · READ THE OFFICIAL RECORD

  2. Mdm Speaker, parking spill-overs from places of worship that occur during worship hours or religious festivals can cause significant inconvenience to surrounding Page: 25 neighbourhoods. We, therefore, require places of worship to provide, within their premises, a certain number of parking places. However, we do grant concessions in car parking standards for various categories of places of worship. Those located within the city centre can provide up to 20% less parking than the prescribed standards. Places of worship that are accorded monument status by the National Heritage Board or conservation status by the Urban Redevelopment Authority are exempt from providing any parking. We will study the Member's suggestion to reduce parking requirements for places of worship close to MRT stations.

    CARPARK PROVISIONS FOR RELIGIOUS INSTITUTIONS - 2015-04-13 · READ THE OFFICIAL RECORD

  3. Mdm Speaker, as I have indicated in my earlier reply, this is a requirement that our Singapore airlines, on their own, have decided to implement. To the Member's question as to how long this rule has been in effect, it differs from country to country. In the US, for example, the rule was instituted post 9-11; in Canada, Australia and Germany, the rule was introduced in response to the Germanwings incident. In our case, to the best of our knowledge, the airlines introduced it quite recently.

    ACCESS TO AIRCRAFT COCKPITS - 2015-04-13 · READ THE OFFICIAL RECORD

  4. Mdm Speaker, all Singapore-based airlines have implemented measures to ensure that there are at least two persons in the cockpit at all times. All pilots on Singapore-based airlines must annually undergo a medical assessment which includes an evaluation of the pilot's mental health. For pilots 60 years and older, the medical assessment is conducted every six months. These requirements are consistent with International Civil Aviation Organization (ICAO) standards. In addition, CAAS regulations require pilots to declare any ill health at any time. Our airlines are also required to have procedures to enable a pilot to report on a fellow pilot who, in the former's opinion, is not fit to fly. Pilots may submit confidential reports to the authorities or through their airlines' in-house reporting systems.

    ACCESS TO AIRCRAFT COCKPITS - 2015-04-13 · READ THE OFFICIAL RECORD

  5. Mdm Chair, actually this was discussed at the most recent Sitting, so I shall not overly repeat, but simply to say that to help small businesses, there are several measures. For one, businesses pay lower ARF and road taxes. They are also allowed to renew their commercial goods vehicles on a five-year basis and as long as the vehicle still has statutory life. There is also the ETS scheme which has been enhanced and which Minister Vivian Balakrishnan will say more about.

    COMMITTEE OF SUPPLY – HEAD W (MINISTRY OF TRANSPORT) - 2015-03-11 · READ THE OFFICIAL RECORD

  6. Madam, the speed along Orchard Road, even on Saturdays, at best, will go to maybe between 20 km/h and 30 km/h – it is not very fast. You cannot speed through Orchard Road on a weekend. The standards have been set and it is not a new piece of information. We will continue to review this. At the present moment, we think it is still not good enough and so the ERP remains. The Member's other suggestion to shift the ERP gantry, I am quite mindful of the fact that if you shift it to another location, another group of residents will be a little bit unhappy. So, I do not know which Member is going to be affected by the Member's proposed shift. But I will be very careful not to annoy people unnecessarily. Page: 111

    COMMITTEE OF SUPPLY – HEAD W (MINISTRY OF TRANSPORT) - 2015-03-11 · READ THE OFFICIAL RECORD

  7. My guess is that it will not stop at seven if we are prepared to go down the path of further splitting. The broader question we have to address is whether this is the right approach to address concerns by various groups when it comes to their need for vehicle purchase and ownership. Page: 110 I would say there are two opportunities that I can see that perhaps are worthwhile pursuing. One is in relation to goods vehicles and Category C. Today, the business model in that sector is changing. More and more, we are seeing third-party specialised logistics companies offering the service and, therefore, taking the burden off small businesses who used to rely on their own vehicles to do goods deliveries. New business models will come up to meet the need. So, that is one. The other is more specific to couriers. I would say that employers have to do a better job and really look at whether it is more feasible for them as the employer to be owning and maintaining the vehicles that their couriers need to use, instead of expecting the couriers to own and maintain their own vehicles.

    COMMITTEE OF SUPPLY – HEAD W (MINISTRY OF TRANSPORT) - 2015-03-11 · READ THE OFFICIAL RECORD

  8. Madam, as far as I know, when a person purchases a vehicle, he can approach the financial institution for motor loans. And, if it is a new vehicle, then usually, the loan amount will also cover the COE that is payable. Whether the loan terms ought to be five or seven years, does not come within the purview of MOT. Whatever rules that have been put in place, it is within the purview of the Monetary Authority of Singapore (MAS). So, if the Member has a specific suggestion on that, I could refer it to MAS. But I understand where the Member is coming from, and also Mr Mohd Ismail Hussein, who had earlier brought up his point on the livelihoods of couriers who need to rely on motorcycles. Madam, with your indulgence, if I could take the opportunity to clarify. Earlier, I had said in response to Ms Lee's cut that one concern about splitting Category D COEs is that this could result in smaller numbers in the sub-categories, and that could increase volatility. Ms Lee had said that even if we split it, it would be the same numbers as Category C. One thing I want to point out is that, if you look at Category C COEs that are available for bidding now, it is probably fewer than before due to ETS. So, you must correct for that. That is the first point. Secondly, what is worth highlighting is that, today, for COE bidding, we already have five categories. And Category D was set aside for motorcycles; Category A for social equity reasons, to split the mass market models from the others. Apart from requests for Category D to be split further, there have also been requests for Category C to be split further for light goods vehicles and heavy goods vehicles. So, potentially, what we are looking at is really not five categories. It is potentially seven categories.

    COMMITTEE OF SUPPLY – HEAD W (MINISTRY OF TRANSPORT) - 2015-03-11 · READ THE OFFICIAL RECORD

  9. Madam, may I seek a clarification whether the Member was talking about the instalment plan for the loan or for COE per se?

    COMMITTEE OF SUPPLY – HEAD W (MINISTRY OF TRANSPORT) - 2015-03-11 · READ THE OFFICIAL RECORD

  10. Mdm Chair, the ERP rates are reviewed regularly. And if, indeed, the speeds on the roads on which ERP is levied improve to a significant extent, then the rates will be adjusted. So, my response to the Member is, in good time. Page: 109

    COMMITTEE OF SUPPLY – HEAD W (MINISTRY OF TRANSPORT) - 2015-03-11 · READ THE OFFICIAL RECORD

  11. Mdm Chairman, the Carbon Emissions-based Vehicle Scheme has exceeded our expectations. So, the Government actually incurred more by way of rebates Page: 108 than what it collected in terms of the surcharges. The amount, if I remember correctly, is in the order of about $100 million. But we are refining this scheme and our expectation is that, going forward, it ought to be revenue neutral.

    COMMITTEE OF SUPPLY – HEAD W (MINISTRY OF TRANSPORT) - 2015-03-11 · READ THE OFFICIAL RECORD

  12. As long as incomes continue to grow, it is unlikely for private car ownership to be a low-cost transport option. With the emergence of the sharing economy, many people, especially the younger generation, see the wisdom of renting or purchasing services when needed, rather than tying down funds for things they do not use all the time. They think it is smarter to be free of a car loan and rely instead on a mix of transport options, including buses, trains, walking, cycling, taxis or car-sharing services. I must qualify that while not everyone may share this view now, a good number do, and this is a growing number. Page: 85 This shift is taking place even in the United States (US), which is as car-loving a society as one can find it. This shift will not take place overnight, and will take time to adjust to. I seek the support of Members and Singaporeans alike, to take this journey together, so that we can keep Singapore a green, liveable and car-lite home for all. 3.30 pm Walk2Ride Accessibility

    COMMITTEE OF SUPPLY – HEAD W (MINISTRY OF TRANSPORT) - 2015-03-11 · READ THE OFFICIAL RECORD

  13. More vehicles will be eligible for benefits under the expanded scheme, which could be beneficial for businesses, including small and medium enterprises. Minister Vivian Balakrishnan will share more details later. With more vehicles eligible for ETS, there would likely be more Category C vehicles which will be replaced directly, without needing to bid for a new COE. Both the demand for, and the supply of, Category C COEs are thus likely to decrease correspondingly. In short, ETS is unlikely to impact Category C COE prices. Finally, Madam, I would like to update Members that LTA has been monitoring the progress of EV technology, which offers some clear benefits in terms of environmental impact. But it is not entirely clear that current EV technologies are well-suited for widespread adoption. For example, much research still needs to be done on battery technology. Cost is another issue, as noted by Mr Hri Kumar, though it should come down as the technologies mature and when production is sufficiently scaled up. We will continue to watch developments closely. In the meantime, we are supporting the test-bedding of fleet-based operations, such as through the EV car-sharing scheme to be piloted in collaboration with the Economic Development Board. To conclude, let me reiterate our goal of moving towards a car-lite society, where private car usage complements a public transport-centric transportation system. In land-scarce Singapore, this is the only sustainable way and the key challenge for our transport policy for the foreseeable future. We have lowered the vehicle population growth rate from 0.5% per annum to 0.25% per annum and will likely need to lower this to 0% in the future.

    COMMITTEE OF SUPPLY – HEAD W (MINISTRY OF TRANSPORT) - 2015-03-11 · READ THE OFFICIAL RECORD

  14. The Government has introduced schemes to lower emissions from our vehicle fleet and encourage the replacement of older, more pollutive vehicles. The Carbon Emissions-based Vehicle Scheme (CEVS) was introduced in January 2013 to encourage the purchase of vehicles with low carbon emissions through its "feebate" structure. The take-up rate has been very encouraging, with 68% of cars registered in 2014 qualifying for rebates, up from 55% in 2013. The percentage of cars falling within surcharge bands has also dropped from 11% to 6%. We have seen an even larger improvement for taxis, with the percentage of taxis in rebate bands reaching 98%. In other words, virtually every single taxi registered last year qualified for a rebate. This means that there has been a significant shift in vehicle registrations from higher-emission to lower-emission ones. As announced by Deputy Prime Minister Tharman during the Budget 2015 debate, the CEVS will be revised from July 2015. The rebate and surcharge quantum for the lowest and highest emissions bands will be increased from $20,000 to $30,000 for cars and from $30,000 to $45,000 for taxis. At the same time, the bandings will be tightened to account for improvements in vehicle technology in the market. Let me also touch on the Early Turnover Scheme (ETS) which was implemented in April 2013 to encourage the early replacement of older and more pollutive Pre-Euro and Euro I vehicles. Page: 84 We will expand the ETS to include Euro II and Euro III vehicles from August 2015. There will be additional incentives if the replacement vehicle is a Euro VI-compliant vehicle, instead of the Euro V diesel standard and Euro IV petrol standard currently mandated by the National Environment Agency (NEA).

    COMMITTEE OF SUPPLY – HEAD W (MINISTRY OF TRANSPORT) - 2015-03-11 · READ THE OFFICIAL RECORD

  15. The other components of taxi fares, namely, surcharges, unit fares and booking fees, do not vary much as it is. We will see whether the Government should step in to mandate standardisation of their structure. For instance, we can look into whether each taxi company should be allowed to have only one set of unit fares for its own standard taxis – which Mr Seng suggested – rather than allow them to vary over time like the flag-down fares. A standardised structure will enable commuters to compare rates across taxi companies more easily. It will also prevent a situation in the future where there is a variation of other Page: 83 components of taxi fares even within the same taxi company, like what has happened for flag-down fares today. LTA plans to announce the details in due course. Taking a step back on this issue, the fare landscape is part and parcel of a competitive industry landscape. We liberalised the taxi industry in 2003, which resulted in new players on the scene and fleet expansion. With six taxi companies around today, there is considerable competition for drivers. Coupled with a tight labour market offering alternative employment to drivers, that keeps the companies on their toes. The rental rates, fare structures and other terms of lease may differ, but it is in each company's interest to ensure they are attractive to drivers overall and continue to draw sufficient passengers. While the fare structures may not be as simple as some may like, taxi fares are generally competitive. They are comparable to Hong Kong and lower than other leading cities. This should be what matters most. Madam, as we move towards a car-lite environment, we should also strive to make the car population greener than it is today.

    COMMITTEE OF SUPPLY – HEAD W (MINISTRY OF TRANSPORT) - 2015-03-11 · READ THE OFFICIAL RECORD

  16. The taxi fare structure today has four broad components: the flag-down fare; unit fares, which is how much more one pays for additional distance travelled and time taken; surcharges; and booking fees. Today, most of the variability in fares occurs in the flag-down component, which ranges from $3.20 to $5.00. However, looking at just standard taxis which comprise 95% of the taxi population, the range is much narrower, from $3.20 to $3.90. Moreover, about six in 10 standard taxis have the lowest flag-down fare of $3.20. As Mr Seng Han Thong and Dr Lily Neo noted, there are two sides to this issue: commuter interests and taxi drivers' income. These came up clearly in the focus group discussions LTA held with commuters, drivers and taxi companies. The commuters did not want, in any fare harmonisation, for fares to be levelled upwards. Drivers, on the other hand, wanted them levelled up, and taxi companies, too, have informed us that if we were to mandate fare harmonisation, flag-down fares across their own fleet would be harmonised upwards. It is not possible to resolve such competing dynamics to the satisfaction of all. Therefore, we may have to take a balanced approach, which focuses instead on preventing the fare situation from getting even more complicated for commuters in the future. Given the conflicting interests over flag-down fares, we may let them be, for now. Taxi companies may harmonise them naturally over time within their own fleet, for example, when their costs of buying and hiring out taxis stabilise, or in response to changing market conditions. But that is their decision to make, given that taxi fares in Singapore have been deregulated since 1998.

    COMMITTEE OF SUPPLY – HEAD W (MINISTRY OF TRANSPORT) - 2015-03-11 · READ THE OFFICIAL RECORD

  17. The Government is also working closely with the National Taxi Association and taxi companies to enhance the welfare of taxi drivers. For instance, the Health Promotion Board provides convenient health screenings for taxi drivers when they are waiting for their vehicles to be serviced. Sport Singapore is giving free admission to taxi drivers to all ActiveSG gyms and swimming pools. The National Taxi Association has introduced the Drive and Save Scheme, where taxi drivers who contribute at least $15 a month to their Medisave accounts receive a co-contribution of $15 from their companies. Specifically on safety, LTA has worked with other agencies to include taxi drivers in the Protection from Harassment Act enacted last year, which provides civil and criminal recourse when they face indecent, threatening, abusive or insulting behaviour. Taxi companies have also installed distress buttons and GPS tracking systems in their taxis. As for disputes with taxi companies, LTA has been piloting a mediation scheme since June 2014 to provide a channel for taxi drivers to settle their disputes amicably with their taxi companies. In addition, the Police works closely with taxi companies and the National Taxi Association to issue regular updates on crimes targeting taxi drivers, as well as advisories on crime prevention measures. More recently, the Employment and Employability Institute (e2i) Page: 82 and the National Taxi Association announced a $2.5 million training fund to equip taxi drivers with service skills and safe driving habits. Madam, besides taxi availability, the other issue that concerns commuters is the complexity of the taxi fare structure.

    COMMITTEE OF SUPPLY – HEAD W (MINISTRY OF TRANSPORT) - 2015-03-11 · READ THE OFFICIAL RECORD

  18. This will include how third-party services should clearly differentiate between taxi-booking services and chauffeured services, so that commuters can make informed choices. This is the request of Mr Seng Han Thong – which we agree with. We will have the opportunity to discuss these issues further when the Bill is tabled in Parliament in the coming months. Page: 81 3.15 pm I can well understand the concerns shared by Assoc Prof Randolph Tan and other Members, whether the improvements in taxi services and utilisation have come at the expense of drivers' health, which also impacts safety. A large part of the improvements has actually been due to the increase in two-shift operations. In fact, the steady decline of two-shift operations began to reverse not long after the TA standards took effect. In other words, if you look back at the proportion of two-shift taxis over the years, there was a period at which this was declining. It was really only when the TA standards were introduced that the decline was arrested and, in fact, the proportion of two-shift taxis is now above the levels in the mid-2000s. Today, about two in three taxis run on two shifts. Two-shift taxis help us to meet rising commuter expectations in a safer and more sustainable way. The number of taxi drivers registered with taxi companies is twice the taxi population today – that is, two drivers who could potentially be tapped for every taxi in the fleet. There is, therefore, scope to further increase the share of two-shift operations, which is how cities like New York are able to meet taxi demand with a relatively small fleet. If you recall, in the earlier slide, I indicated that, in New York, for every 1,000 persons, there are only 1.6 taxis – which is actually less than one-third of what we have.

    COMMITTEE OF SUPPLY – HEAD W (MINISTRY OF TRANSPORT) - 2015-03-11 · READ THE OFFICIAL RECORD

  19. It is twice that of Hong Kong, whose taxi services have been found to be quite good by many visiting Singaporeans. In fact, from 2003 to 2012, since the taxi industry was liberalised, Singapore's taxi population was growing twice as quickly as taxi ridership. So, we liberalised the taxi industry in 2003 and, from then until 2012, the taxi population grew twice as quickly as ridership. To put it another way, a fair bit of capacity had been building up in the taxi fleet over several years. Rather than expanding the fleet much more, the focus should be on improving the efficiency of our existing taxi fleet. This is achieved through the TA measures. Despite initial scepticism, the measures have had some effect. For instance, there are now more taxis plying the roads – 87% of all taxis during peak hours, a five percentage-point increase over just two years. This means over 1,500 more taxis available to commuters during these hours. As Dr Lily Neo pointed out, the daily taxi utilisation rate, which is the proportion of total taxi mileage hired by passengers, is now 68%. This is, in fact, a three percentage-point increase in just one year and means that there is less empty cruising than before, even though there are more taxis on the road. In other words, the TA standards have led to each taxi being driven more and drivers are also earning more. In 2014, the average income of drivers went up by about 6% from a year ago. This has been helped by the growth of third-party taxi booking applications, which have facilitated more efficient matching of taxis with commuters. We will be proposing a basic regulatory framework to safeguard commuter interests.

    COMMITTEE OF SUPPLY – HEAD W (MINISTRY OF TRANSPORT) - 2015-03-11 · READ THE OFFICIAL RECORD

  20. Last year, at COS, I shared the results of our first-ever Taxi Customer Satisfaction Survey. The survey covers eight areas, including safety of taxi services, customer service provided by taxi drivers, ease of taxi booking and waiting time. This year's survey found that 96.2% of respondents were satisfied with their most recent taxi journey, which is a slight improvement from 2013. All eight attributes registered higher satisfaction levels in 2014. The attributes that saw the largest improvements were ease of taxi booking, information on taxi services, and taxi stand accessibility. The area with which commuters were least satisfied was waiting time. But as Members can see, even for this attribute, the satisfaction level is quite high at 86.2%. Mr Seng Han Thong asked if we will review the 2% per annum growth cap on taxi companies. Members may recall that taxis were taken out of the COE bidding process from August 2012, as there was strong suspicion about the influence of taxi companies' bidding on COE prices. Our sense is that this suspicion has largely proven to be unfounded. But rather than reintroduce taxis into COE bidding, we will continue to allow taxi companies to pay the Page: 80 prevailing quota premium (PQP) of Category A when they renew or procure new COEs. This is a concession to recognise taxis' public transport role, as many taxis would otherwise have required Categories B or E COEs. Taxi companies can, therefore, expand their fleet up to the growth cap, provided they meet the TA standards. This cap was implemented only two years ago and, as Members know, our taxi-to-population ratio is already one of the highest in the world at 5.3 taxis per 1,000 people.

    COMMITTEE OF SUPPLY – HEAD W (MINISTRY OF TRANSPORT) - 2015-03-11 · READ THE OFFICIAL RECORD

  21. This is, firstly, a structural concession that we have made. In other words, motorcycles are not treated the same way as cars for COE bidding. Page: 79 Some commentators have suggested that we split Category D further for smaller and larger motorcycles, similar to what we do for cars. We have considered this and must caution that it would result in much smaller category sizes, which, in turn, would lead to more volatility in quotas and prices. The reduction in Category E contribution rates has mitigated the supply situation somewhat in Category D, but, as observers will remind us, the price movements also tell us something about demand. We are, therefore, continuing to keep a close watch. Let me now respond briefly to Mr Lim Biow Chuan's question on the relevance of ERP on Saturdays. Firstly, there are actually no ERP charges for the Shenton Way-Chinatown cordon on Saturdays. Secondly, we had updated Parliament at last year's COS debate that the Nicoll Highway gantry is part of the Bugis-Marina Centre cordon to manage traffic on key routes within this area. Relocating this gantry or removing charges on Saturdays will cause traffic to gravitate towards Nicoll Highway and generate more localised congestion, which we should avoid. For Orchard Road, ERP remains necessary as traffic speeds are still at the lower end of the optimal speed range of between 20 kilometres to 30 kilometres per hour, even on Saturdays. Mdm Chairperson, I will move on to taxis. May I have your permission to display some slides on the screen?

    COMMITTEE OF SUPPLY – HEAD W (MINISTRY OF TRANSPORT) - 2015-03-11 · READ THE OFFICIAL RECORD

  22. The proposal sounds fair enough, but the outcome must be that some existing car owners will find it easier to continue owning cars, since the rebates could be used to offset the cost of their COE renewal. Fewer vehicles will be deregistered and there will correspondingly be fewer new COEs for new car buyers, many of whom are first-time buyers with equally compelling reasons for owning a car. Dr Lim Wee Kiak's suggestion to provide COE rebates to families with children and the elderly is a well-intentioned one. However, other groups would soon ask for rebates, too, and where would this leave us? Mr Low Thia Khiang also spoke about the possibility of reserving some COEs today for release in the future, in order to make the COE supply less variable. We have been studying the idea over the last year. Implementation will not be straightforward. Given that the overall vehicle population growth is constrained, a surge in COE supply comes mainly from increased deregistrations. But this will also be accompanied by a corresponding increase in the number of car owners looking to replace their cars. The big unknown is how many will want to replace and how long can they wait. If we reserve too few COEs, there will be no meaningful impact on supply smoothening; too many, and we risk having a shortfall of COEs to meet replacement demand and may, inadvertently, introduce even more volatility into premiums. The upshot is that this is not a straightforward exercise and we have no immediate plans to implement it. I thank Mr Mohd Ismail and Ms Lee Li Lian for sharing their views on COEs for motorcycles. The current COE system sets aside Category D as a separate category for motorcycle buyers so that they need not compete with other vehicle buyers when bidding for a COE.

    COMMITTEE OF SUPPLY – HEAD W (MINISTRY OF TRANSPORT) - 2015-03-11 · READ THE OFFICIAL RECORD

  23. The objective was not to moderate COE prices or to widen the price gap between the two categories. In fact, the aim of the recategorisation was to keep Category A more for mass-market car buyers. Indeed, as Mr Hri Kumar noted, Category A was created for social equity reasons. In this regard, the recategorisation has been a useful exercise. As LTA updated last week, the median Open Market Value (OMV) of Category A cars has fallen by 30%. Cars with OMVs at or below $20,000 now form 70% of Category A registrations, compared to about 25% before recategorisation. The more affordable, mass-market cars now dominate Category A, unlike before recategorisation. Dr Lim Wee Kiak suggested categorising COEs according to carbon emissions – he brought this up during the Budget debate. Unfortunately, carbon emissions are not a very good proxy for the value of a car and this could disadvantage mass-market models. We, therefore, prefer to promote green private transport through the Carbon Emissions Vehicle Page: 78 Scheme (CEVS), which I will speak about later. Mr Hri Kumar also pointed out the imbalance in the use of Category E and whether it should be removed altogether. Members may recall that the purpose of Category E is to provide a degree of responsiveness to changes in buyers' preferences, without which the COE system could face another problem of being overly rigid. In any case, to address the imbalance, we have lowered the Category E contribution rate from 25% to 15% in February 2013, and further to 10% in February 2015. We will continue to review this from time to time. Ms Sylvia Lim suggested giving rebates on COE renewals to car owners who have used their cars less.

    COMMITTEE OF SUPPLY – HEAD W (MINISTRY OF TRANSPORT) - 2015-03-11 · READ THE OFFICIAL RECORD

  24. Mdm Chairperson, I thank Members for their questions on car ownership and taxis. Land scarcity is very much a factor shaping the overall vision of transport for Singapore. There is a role for private transport as a complement to public transport, which must remain the main mode of transport for the daily commute. Our policies on car ownership and taxis are shaped by these Page: 77 considerations. 3.00 pm Unlike countries that are far less land-constrained, there is a real limit to how many cars we can accommodate on our roads. Even then, Singapore is not alone in having to manage traffic congestion caused by heavy car usage, a point which Mr Cedric Foo also highlighted. Where we are different is that we introduced car ownership and usage controls before the problems became severe, through the COE and ERP systems. Over time, the car population has grown, and so has usage. Some observers may feel that road congestion happens more often these days, but it has largely been kept in check. The COE system must, therefore, continue to be about controlling the size of the vehicle population and complementing the ERP system, which regulates usage. It is not about targeting any COE price level or price gap, as Mr Low Thia Khiang and Mr Hri Kumar seem to suggest. The market mechanism determines COE prices, as the system was designed to function. Having determined the vehicle population, tinkering with the COE allocation framework is, unfortunately, a zero-sum game. If we adjust the system to benefit some categories of buyers, it will inevitably compromise the interests of some other group. There will always be trade-offs. With that in mind, let me take each Member's suggestions in turn. Last year, we recategorised Categories A and B by adding a new engine power criterion.

    COMMITTEE OF SUPPLY – HEAD W (MINISTRY OF TRANSPORT) - 2015-03-11 · READ THE OFFICIAL RECORD

  25. Mr Chairman, on Miss Low's first question regarding the use of Medisave for payments of MediShield premiums for family members. Rightfully, the answer should be given by MOH. I do not purport to speak on their behalf. Based on what I know, there is a limit in the amounts that can be withdrawn for various uses of Medisave balances. If I understand correctly, in fact, the withdrawal limits for the payment of premiums are sized for the individual. I would suggest that we could take this offline and provide an answer to you. As for the question regarding smaller non-profit organisations (NPOs), I want to reassure Miss Low that it is very much in line with the Government's objectives to seek philanthropic activity. What it means is that you need a diversity of causes that people want to support. We fully recognise that for the smaller non-profit organisations, the ability to raise funds is sometimes difficult to build up. It is not just a matter of there being tax incentives. When people give, they want to know that money is being put to good use and that there is proper governance for the donation amounts that they are contributing. We take note of her offer and we will be happy to follow up with her on where some of the gaps are and what could be done to meaningful address them.

    COMMITTEE OF SUPPLY – HEAD M (MINISTRY OF FINANCE) - 2015-03-09 · READ THE OFFICIAL RECORD

  26. This is why there is no separate tax incentive to encourage top-ups to family members' Medisave Accounts. Miss Low also suggested granting tax incentives to a larger group of non-profit organisations beyond Institutions of a Public Character (IPCs). Mr Chairman, the Government supports non-profit organisations in different ways. All charities and IPCs enjoy income tax exemptions and can tap on the Voluntary Welfare Organisation Charities Capability Fund to enhance their governance and management capabilities. As donors to IPCs also enjoy enhanced tax deductions, it is necessary for IPCs to be held to higher regulatory and governance standards under the Charities Regulations to ensure public accountability. Social enterprises, too, enjoy support in other ways. Besides having access to the same grants and incentives as businesses, social enterprises can tap on additional funding support through the ComCare Enterprise Fund and Tote Board's Social Enterprise Hub if they meet the requirements. A forthcoming one-stop centre for social enterprises will also seek to deliver a wider range of support for social enterprises. The Minister for Social and Family Development will elaborate on this in his Committee of Supply speech. Mr Chairman, I thank all Members again for their comments and suggestions.

    COMMITTEE OF SUPPLY – HEAD M (MINISTRY OF FINANCE) - 2015-03-09 · READ THE OFFICIAL RECORD

  27. Employers can further supplement the retirement savings of their Singaporean employees above the mandatory CPF contributions via the CPF Minimum Sum Top-Up Scheme and the Supplementary Retirement Scheme (SRS). These schemes have two significant advantages over corporate retirement plans and I would like to share them with Members. First, for the employee, additional contributions to the CPF and SRS are fully portable unlike corporate retirement plans. Second, for the employer, tapping on the CPF and SRS would save them the costs of hiring extra manpower or appointing agents to manage their own corporate retirement plans. We therefore have no immediate plans to do more to promote corporate retirement plans. Miss Penny Low asked if the Government would increase tax incentives for top-ups to CPF Medisave or Special Accounts. Mr Chairman, under the existing Minimum Sum Topping-up Scheme, the Government already provides tax reliefs of up to $7,000 for individuals topping up their parents', grandparents', spouses' and siblings' Special and Retirement Page: 152 Accounts. This also includes the parents and grandparents of their spouses. We review the tax reliefs from time to time. In fact, more Singaporeans have been making cash top-ups over the years. Given the new Extra Interest for the first $30,000 of CPF balances for members aged 55 and above, there is added incentive for families to top-up the Retirement Accounts of their loved ones with lower balances. As for Medisave, CPF members can already enjoy tax reliefs for voluntary top-ups to their own accounts. This scheme benefits one's family members, as CPF members can use their MediSave Accounts to pay for their family members' medical bills and insurance needs.

    COMMITTEE OF SUPPLY – HEAD M (MINISTRY OF FINANCE) - 2015-03-09 · READ THE OFFICIAL RECORD

  28. They constitute a significant capital grant from the Government, that has also given the less well-off the opportunity to build wealth through a Page: 151 housing asset whose value appreciates as the nation progresses. What this amounts to is a system where both income inequality and wealth inequality are mitigated. Mr Gerald Giam mentioned the Credit Suisse Global Wealth Report. In fact, the 2014 Credit Suisse report places Singapore's wealth inequality in the "medium" band. It indicates that Singapore has lower wealth inequality than even the Nordic countries like Denmark, Norway and Sweden, let alone Hong Kong, the US and Switzerland. Nevertheless, we should be mindful that such wealth studies are subject to significant data limitations. As the majority of countries do not collect wealth distribution data, the Credit Suisse report relies on estimates and imputations rather than observed data. Hence, it is difficult to draw firm conclusions about wealth inequality across countries from the report. Mr Chairman, let me now turn to tax incentives and reliefs. Mr Yee Jenn Jong suggested enhancing incentives to encourage more MNCs to introduce corporate retirement plans. As I shared with the House in response to his Parliamentary Question in January, corporate retirement plans are more relevant for foreigners working here for whom the CPF is not applicable. Compared to many countries, including Australia and Hong Kong, employers in Singapore are already contributing substantially to their local employees' retirement savings through the CPF. Their contributions will increase when the CPF changes announced in Budget 2015 take effect.

    COMMITTEE OF SUPPLY – HEAD M (MINISTRY OF FINANCE) - 2015-03-09 · READ THE OFFICIAL RECORD

  29. The Minister for Finance has reiterated in successive Budgets that wealth taxes, especially our property taxes, will remain important. Property tax is an efficient tax. It cannot be tax-planned away easily. Further, it does not reduce incentives to work or engage in entrepreneurial activity, and has less impact on economic dynamism and competitiveness compared to income taxes. Hence, we enhanced the property tax regime. In Budget 2010, we introduced a progressive property tax structure, so that those with more property wealth pay higher rates and a larger share of property tax. In Budget 2013, we further increased the progressivity of property taxes and introduced higher rates on investment properties compared to owner-occupied properties. As a result of these changes, the vast majority of homeowners in HDB flats pay less property tax than before, or no tax. More importantly, the combination of our system of property taxes and housing grants forms a highly progressive system of wealth taxes and transfers. Let me elaborate briefly. Singapore is quite unique in the way we help our citizens achieve home ownership. Besides the substantial subsidies built into the purchase price of new HDB flats, those who are less well-off have, since 2006, been provided with more housing grants. There is no parallel internationally for this situation, where the vast majority, even amongst lower income families in Singapore, are able to own a home and a valuable asset. Put another way, just as the Workfare Income Supplement and the Silver Support Scheme amount to negative income taxes for the less well-off, the HDB housing grants are in effect a "negative wealth tax".

    COMMITTEE OF SUPPLY – HEAD M (MINISTRY OF FINANCE) - 2015-03-09 · READ THE OFFICIAL RECORD

  30. In cases where companies are being set up mainly to avoid personal income taxes, IRAS' approach is to disregard the corporate structure and assess the income on the individuals. With the impending personal income tax rate changes, IRAS will be monitoring for corporatisation trends and will step up its audit programmes to detect and deter tax avoidance and evasion. Turning now to the question Mr Gerald Giam has asked about wealth inequality – whether the Government monitors it and has policies to address it. Mr Chairman, the Minister for Trade and Industry explained how we monitor wealth information in response to a similar Parliamentary Question in August 2014 and so, I will not go through the points again for brevity. As Deputy Prime Minister Tharman had outlined when rounding up the Budget debate, we have made major moves to mitigate inequality since 2007 with enhanced support for education, housing, healthcare and retirement adequacy. Page: 150 Furthermore, our system of taxes and benefits is a progressive one where the higher income households contribute the bulk of taxes and the lower income households receive the majority of benefits. We have, in fact, improved the progressivity of our entire system over the years. In Budget 2011, we reduced personal income taxes significantly for the middle-income. In this year's Budget, we raised the personal income tax rates of our top-income earners. Wealth taxes, in particular, remain an important part of our tax system. And Members may remember that when we abolished Estate Duty in 2008, we made it very clear that we were not doing away with wealth taxes. Estate Duty was abolished as it was impacting the middle and upper-middle income groups disproportionately compared to the wealthy who could tax plan in a variety of ways.

    COMMITTEE OF SUPPLY – HEAD M (MINISTRY OF FINANCE) - 2015-03-09 · READ THE OFFICIAL RECORD

  31. For example, the Infocomm Development Authority (IDA) recently started a programme to accredit promising Singapore-based technology companies to give them better chances at securing Government projects. Page: 149 Government agencies will consider these accredited firms before sourcing for bids publicly. IDA will accredit as many firms as are qualified and are keen to take this up, and expects around 20 companies to be accredited in the first year. The Government has also introduced more avenues for companies with innovative solutions to secure Government contracts. When calling for tenders, public agencies can specify their desired outcomes rather than prescribe the solution and shortlist promising vendors to develop prototypes. The vendor providing the best proposal may also be awarded the contract without having to go through another tender. So, this is quite a significant move. Mr Chairman, Assoc Prof Randolph Tan asked about the risk that the increase in Personal Income Tax rates will result in lower receipts and what can be done to further mitigate such risks. The main risk is that our economy loses its entrepreneurial dynamism. If that happens, it will be difficult to grow incomes not just for the top-end but also the broad majority of our population. That is why our income tax regime must remain competitive overall to reward work and encourage entrepreneurship. Another risk is that high-income earners may set up companies essentially to avoid higher personal income taxes and pay corporate income tax instead. This is another risk. I should say this and make it very clear – that we take the evasion of tax seriously, and IRAS will closely monitor corporatisation behaviour.

    COMMITTEE OF SUPPLY – HEAD M (MINISTRY OF FINANCE) - 2015-03-09 · READ THE OFFICIAL RECORD

  32. Building on their reach, we will equip them further through continual training in areas of interest to our Pioneers, such as the MediShield Life scheme. We hope that their many heart-warming stories of precious moments with Singapore's Pioneering Generation will inspire more passionate volunteers to come forward. Mr Chairman, given the constraint of slower workforce growth, the Government will face significant challenges as it strives to serve the public effectively and efficiently. It will not be possible for the Government to fulfil every demand for services and we will have to look at new ways to deliver services well. We may also need to shed services which are no longer critical and carefully evaluate proposals for service expansions that are well intentioned but manpower intensive. 6.45 pm Let me turn now to Ms Jessica Tan's question, on whether Government procurement allows for risk-taking to enable innovative SMEs and start-ups to win Government tenders. SMEs have been reasonably successful in securing Government projects under our open procurement system. Over the past two years, about 80% of all Government tenders were awarded to SMEs, accounting for around 55% of total tender contract value awarded. This is significantly higher than in other countries such as the UK. For more sizeable contracts, such as construction contracts valued between $50 million and $100 million, SMEs clinched about 60% of the tenders last year. If we look at just the smaller SMEs – and by that I am referring to SMEs with annual turnover of less than $10 million – more than one-third of all Government tenders have been awarded to them. We will give more opportunities to SMEs to help them build track record, while tapping on them for innovative ideas that can benefit the public.

    COMMITTEE OF SUPPLY – HEAD M (MINISTRY OF FINANCE) - 2015-03-09 · READ THE OFFICIAL RECORD

  33. Starting with e-services such as applications for HDB flats and the Baby Bonus Scheme, Singaporeans who choose to use the feature need not fill in personal information which the Government already has, such as date of birth, registered address and marital status. "Myinfo" will be ready in early 2016. In the next phase, our Smart Nation initiatives will also open up new opportunities for further breakthroughs in Public Service delivery. Mr Chairman, besides the approaches I have outlined, there is potential for improved service delivery through partnership with the community. An example is the Pioneer Generation Ambassadors programme, which Mr Seng Han Thong has asked about. When the Pioneer Generation Package was introduced last year, there were many calls on the Government to tailor its engagement approach given the profile of our Pioneers and their preference for more personalised, face-to-face interactions. The Government has piloted the Pioneer Generation (PG) Ambassadors programme, in which volunteers, rather than public officers, are the main touchpoints for the Pioneers. The Page: 148 programme is now at varying stages of implementation in all constituencies. Around 1,500 volunteers have come forward to be trained as PG Ambassadors. And together, they have already reached out to more than 20,000 Pioneers. Unlike public officers, the PG Ambassadors tend to be members of the community where the Pioneers live and many are familiar faces. Beyond sharing on the Pioneer benefits, the Ambassadors often strengthen relationships in the community and have helped build a network of support for the Pioneers and their families. The Government fully appreciates the contributions of the PG Ambassadors.

    COMMITTEE OF SUPPLY – HEAD M (MINISTRY OF FINANCE) - 2015-03-09 · READ THE OFFICIAL RECORD

  34. Page: 147 Third, we are leveraging technology to improve service delivery and increase public sector productivity. Both Mr Liang Eng Hwa and Mr Ong Teng Koon asked about the use of electronic services to transact with citizens, which have resulted in greater convenience to citizens and manpower savings for the public sector. Through electronic tax-filing, for example, IRAS has saved thousands of man-hours each year. They have taken this one step further and piloted the use of online virtual assistants, which provide a human-like interface to answer simpler tax queries, saving tax-payers the need to search through several web-pages just to get the answers. This will also free up manpower to handle more complex questions. As we improve the effectiveness of such online virtual assistants, we will progressively introduce them for more e-services. Mr Ong also asked about how the Government will help senior citizens access e-services. Based on an IDA survey, the number of senior citizens using e-services has in fact doubled in the past three years. We will do more to help Singaporeans access e-services. For example, there is a network of 26 Citizen Connect Centres (CCCs) island-wide, including one at IRAS, where trained staff help citizens access our e-services, giving them guidance on the spot. In 2014, this network helped some 120,000 citizens, many of them elderly, to access our e-services. These 120,000 citizens would otherwise have had to either call or turn up at the counters to get help. To make e-services easier to use, we will introduce a new feature on our eCitizen portal called "MyInfo", where citizens will only need to provide their personal data once to the Government, instead of doing so repeatedly for every electronic transaction.

    COMMITTEE OF SUPPLY – HEAD M (MINISTRY OF FINANCE) - 2015-03-09 · READ THE OFFICIAL RECORD

  35. In addition, we must ensure that the public sector can be productive and impactful in serving the public and Singapore's interests, even with our manpower constraints. Let me elaborate. First, we have to seek synergies and better coordination between agencies wherever possible and avoid duplication of resources and tasks. Organisational streamlining or restructuring must always be part of the range of options explored. For example, the Ministry of Social and Family Development (MSF) had previously been in charge of social care for the elderly, and the Ministry of Health (MOH) for their medical care. As the need for coordination and more holistic planning of services grew, we transferred social aged care policy functions from MSF to MOH in 2013, so that MOH now oversees the full spectrum of aged care. However, in other instances such as complex and large scale programmes, a robust inter-agency framework may work better. Take the Changi East airport development project. MOT and CAAS are the lead agencies, but they have to coordinate very closely with LTA, URA, and PUB. Second, we invest in training and capability-building, so that even with manpower constraints, we can make the most of the potential of our officers. For instance, one in 10 teachers today has been trained in Special Needs, including dyslexia, attention-deficit/hyperactivity disorder and autism. This has enabled schools to tailor their learning approaches by making the most of the skills and interests of their teachers, enabling better educational outcomes. In line with SkillsFuture, we will deepen professional development for public officers throughout their careers and encourage them to take charge of gaining mastery in their work.

    COMMITTEE OF SUPPLY – HEAD M (MINISTRY OF FINANCE) - 2015-03-09 · READ THE OFFICIAL RECORD

  36. Mr Chairman, I thank Members for their thoughtful comments and questions for MOF. Let me start by addressing the questions on public sector manpower. Mr Liang Eng Hwa and Dr Lim Wee Kiak were astute in pointing out the need for public sector manpower growth to be disciplined and sustainable. I should first emphasise that Singapore has a leaner public sector than most other countries. It has grown bigger in recent years as new programmes were introduced, but growth has been broadly in line with that of our resident labour force. Going forward, we face a serious and increasing challenge. First, our resident labour force is expected to grow at a slower rate, considerably slower, in the coming years. The public sector needs to grow at a slower rate, considerably slower in the coming years. The public sector needs to grow, but it cannot grow very much faster than our resident labour force growth without making things difficult for the private and the community sectors. In any case, as a matter of good practice, the public sector should not grow in an unrestrained Page: 146 way. Second, however, almost every new programme or service that the public welcomes also requires additional manpower, no matter how efficiently we operate. As Mr Liang mentioned, the Home Team requires 2,000 more officers over the next five years to meet emerging security challenges, even with greater use of technology. Nor is there any substitute to having case officers at our Social Service Offices with the human touch to help Singaporeans in need. We have already started adjusting to the changing demographics of our population. The Government has taken the lead to offer re-employment beyond 65, so that older officers who are able to contribute can choose to continue working.

    COMMITTEE OF SUPPLY – HEAD M (MINISTRY OF FINANCE) - 2015-03-09 · READ THE OFFICIAL RECORD

  37. Mdm Speaker, the alignment of the Cross Island Line (CRL) has not yet been decided. We are still considering various options, either going under the Central Catchment Page: 11 Nature Reserve (CCNR) or around it. Given the importance of the CCNR and its value to our nature heritage, the Land Transport Authority (LTA) undertook the Environmental Impact Assessment (EIA) even before starting the soil investigations that precede any decision on the alignment. The EIA was scoped with the help of nature groups and conservation practitioners and is on track to be completed by 2016. The findings will help us determine the environmental impact on the CCNR and identify measures to mitigate or avoid it. Besides the EIA findings, the Government's eventual decision on the CRL alignment will also take into account other considerations like engineering feasibility, travel time, cost and the impact of land acquisition on Singaporeans whose homes may be affected if we decide on the alignment which skirts around the CCNR.

    ENVIRONMENTAL IMPACT ASSESSMENT FOR CROSS-ISLAND MRT LINE - 2015-03-05 · READ THE OFFICIAL RECORD

  38. So far, it appears that this $500 million threshold works reasonably well for us. But we take the Member's suggestion into consideration. If there is a need to revise the threshold, we would consider doing so. The Member's other question relates to Value-for-Money or VFM Review Office reports. I should say that while the VFM reports are not publicly published, it does not mean that the findings and learning points are not shared within the Government. In fact, there is a very deliberate effort to share the findings and learnings through forums such as Cabinet meetings, Committee of Permanent Secretaries meetings, Director of Finance meetings and agencies' own internal forums. The Centre for Public Project Management also collates best practices in managing infrastructure projects and shares those across the public service through various physical and online platforms. So, in response to the Member's question, there is a very deliberate effort to make sure that the learnings are shared. We will continue to do so to make sure that best practices continue to be adopted across the public sector. Page: 16

    BUDGET OVERRUN AND GATEWAY PROCESS FOR HUGE PUBLIC PROJECTS - 2015-02-23 · READ THE OFFICIAL RECORD

  39. Madam, I thank the Member for his supplementary questions. I should add that although there are occasions where the project costs are higher than originally estimated, there are equally projects with cost savings. In other words, the utilised budget is actually less than what was originally estimated. One that I can think of immediately is LTA's own provision of barrier-free accessibility to current MRT and LRT lines. The utilised budget was almost $30 million lower than the original approved budget of $116 million. It turned out that it was only $87 million when the original approved budget was $116 million. The point that I am trying to make is that it is not always the case that actual project costs are higher than the budgeted estimate. When we think about the process that we would subject major project proposals to, we have also got to weigh the time as well as the significant administrative resources that will have to be put in, in order to fulfil the review requirements appropriately and to make sure that the reviews are thorough. So, if you want to do a proper job of the reviews, you have got to set aside the proper resources. As a result, the approach that we adopt is to look at project proposals based on value and also the risk that could be involved. As I had mentioned in the reply earlier, the Gateway Process is mandatory for projects that have an estimated budget of $500 million or more, but if there are projects of smaller value, we do not hesitate to put them through the Gateway Process if we assess that the risk involved is significant as well. As to what the appropriate threshold would be, I think we have to look at our own situations and also look back at projects for which tenders have been called and compare them against our estimates.

    BUDGET OVERRUN AND GATEWAY PROCESS FOR HUGE PUBLIC PROJECTS - 2015-02-23 · READ THE OFFICIAL RECORD

  40. In other words, they had to go back Page: 14 to the Development Planning Committee, explain the process of verifying the items that led to the cost increases that had already been scrutinised by MOF, and then proceeded, only if the DPC had granted re-approval. In addition to the introduction of the Gateway Process in 2010, the Centre for Public Project Management was also set up in 2011 to improve cost management for major projects. In recent years, we have seen fewer cases of tender prices being significantly higher than their original budget estimates. Mr Yee has also asked if there are plans to make public the reports of completed public sector projects by the Value-for-Money Review Office. These reports are part of the public sector's internal processes to help identify learning points and best practices. They include sensitive information such as internal tender deliberations and cost norms that could result in less competitive bidding from tenderers if revealed. Nonetheless, like other internal documents, such as internal audit reports or project approval papers, these are made available to the Auditor-General's Office, or AGO, for their regular review. Where there are concerns in relation to irregularities or extravagance or waste in the expenditure of Government agencies, AGO has the authority to conduct audits and will report the matter publicly and table their reports to Parliament if warranted.

    BUDGET OVERRUN AND GATEWAY PROCESS FOR HUGE PUBLIC PROJECTS - 2015-02-23 · READ THE OFFICIAL RECORD

  41. To put this amount in context, this is out of over $100 billion in expenditure for public infrastructure over the same period. One key reason was the sharp increase in construction costs as a result of global demand and supply factors which drove prices of materials and resources significantly above cost norms used in the original budget estimates. This factor alone contributed to almost half of the cost increases. As was fully explained by the Minister for Transport in Parliament in 2012, market prices for key materials such as steel bars and concrete spiraled upwards by 60% and 14% respectively from late 2007 to mid 2008, leading to higher costs for the Downtown MRT Line. The project budget for the Downtown Line was also increased to accommodate one more station as well as to provide for more entrances and underground links to improve connectivity and access for commuters. Unforeseeable findings are another key driver of cost increases. When conducting detailed soil investigations for the Marina Coastal Expressway, for example, LTA discovered that certain stretches of the proposed Expressway would have to be built in soil conditions that were weaker than originally thought. To ensure safety during construction, LTA had to put in more robust and deeper temporary structures and perform additional works to improve the soil. In all of the above projects, MOF independently scrutinised the cost increases and verified them against the prevailing industry data. The relevant agencies then sought re-approval from the Development Planning Committee.

    BUDGET OVERRUN AND GATEWAY PROCESS FOR HUGE PUBLIC PROJECTS - 2015-02-23 · READ THE OFFICIAL RECORD

  42. This helps to ensure that the tender process is a fair and transparent way for true price discovery. Given the complex nature of major projects, there can be material changes to the project scope or design between the time budget approval is obtained and when tenders are called. The tender prices may also exceed the original budget estimates by more than the acceptable thresholds specified during the approval process. Further, for major construction projects, there may be price fluctuation clauses for key materials, so that contractors do not have to bear the financial risks when those prices change in response to market forces. This means that it is quite possible that the budget needs adjustment after approval if there are Page: 13 sharp increases in material prices during the construction phase. For higher value projects, any cost increase exceeding 10% or $100 million, whichever is lower, will be scrutinised again by MOF to ensure that there are valid reasons for the budget revisions. For proper accountability, the agency must also seek re-approval from the three Ministers in the Development Planning Committee. Taken together, there is a well-functioning system of checks and balances to ensure prudent use of public funds. Cost increases from the original budget must also be justified and documented before projects are allowed to continue. In the past 10 years, there had been 12 public sector projects with original budgeted cost of $100 million or more which experienced more than 50% increases in project costs, with a majority of these occurring between 2007 and 2010. The total value of cost increases was $13 billion, of which nearly 80% was attributable to the Downtown Line and Marina Coastal Expressway.

    BUDGET OVERRUN AND GATEWAY PROCESS FOR HUGE PUBLIC PROJECTS - 2015-02-23 · READ THE OFFICIAL RECORD

  43. This process helps to ensure that projects draw on the relevant expertise and best practices within and outside the public sector. The Gateway Process described above is mandatory for all projects with estimated budgets exceeding $500 million. Complex major projects of smaller values may also be subject to the same process before they are allowed to proceed. One example is the Goh Keng Swee Centre of Excellence. We have found the Gateway Process to be highly relevant in providing a useful second opinion to agencies' project plans. For example, the Gateway review of the Singapore University of Technology and Design campus project helped to reduce the footprint of the campus, thus freeing up land for other purposes. This was achieved through the re-routing of a service driveway and the relocation of the tennis courts to the roof of the indoor sports hall instead of on the adjacent ground. The process I have outlined above ensures that project proposals submitted to the DPC for approvals have been carefully assessed. Therefore, the budgets approved by the DPC are best estimates, which, for projects such as the construction of hospitals or MRT lines, are generally determined by broad cost norms of projects with comparable scope and design. When a tender is eventually called by the Ministry or Statutory Board in charge of the project, there is also independent assessment before an award decision is made. To ensure impartiality and transparency, the tender approving authority comprises individuals who are neither involved in project proposal or implementation and officers handling procurement must declare and excuse themselves if there is conflict of interest, for instance, if they are related to any of the bidders.

    BUDGET OVERRUN AND GATEWAY PROCESS FOR HUGE PUBLIC PROJECTS - 2015-02-23 · READ THE OFFICIAL RECORD

  44. Mr Yee Jenn Jong asked for data regarding major public projects. Let me first outline the approval framework for major projects funded by the Government. A system is in place and has been strengthened over the years, with emphasis on fiscal prudence, transparency and accountability. It involves rigorous assessment of proposals by the Ministry in charge of the project as well as MOF. The system also subjects projects of higher value and risk to greater scrutiny; proposals must pass several rounds of reviews by specialists before tenders are called and works allowed to begin. Examples of projects exceeding $100 million which Mr Yee asked about include the construction of hospitals, waterworks and MRT projects like the Downtown and Thomson Lines. After a major project proposal by a Ministry or Statutory Board passes its review by MOF, budget approval must be obtained from the Development Planning Committee or DPC which comprises three Ministers before it is allowed to proceed. The three Ministers are the Minister for Finance, Minister for Trade and Industry, and the Minister overseeing the Ministry which submitted the project proposal. If a project is estimated to cost above $500 million, it is put through the Gateway Process where it is subject to a series of further reviews before it is submitted to the DPC for budget approval. These projects are reviewed by the Development Projects Advisory Panel, Page: 12 which comprises senior public officers and industry practitioners with deep technical expertise and experience in major infrastructure development. The reviews seek to optimise the overall design, space take-up and cost-effectiveness of the project, and include the Value Management workshops which bring key project stakeholders together to refine the project design.

    BUDGET OVERRUN AND GATEWAY PROCESS FOR HUGE PUBLIC PROJECTS - 2015-02-23 · READ THE OFFICIAL RECORD

  45. Mdm Speaker, may I have your permission to take Question Nos 2 and 3 together?

    BUDGET OVERRUN AND GATEWAY PROCESS FOR HUGE PUBLIC PROJECTS - 2015-02-23 · READ THE OFFICIAL RECORD

  46. Mdm Speaker, the Government subsidises public transportation through its funding of the infrastructure and start-up costs of the rail and bus network. These include the rail tracks and systems such as signalling and power systems, MRT and LRT stations, bus depots, ticketing systems and the first set of trains for new MRT lines. We have also been buying new trains to expand capacity and subsidising higher service levels for commuters under the Bus Service Enhancement Programme which would otherwise have required fares to increase by more than 15 cents per journey. In addition, the Government has started providing direct fare subsidy to lower wage workers and persons with disabilities since last year. In total, about $14 billion has been deployed to the public transport system over the past five years. Another $26 billion has been committed for the next five. This works out to close to $4 billion per year over 10 years. It is not appropriate to compare the amount of subsidies between countries as there may be vast differences in ridership, income, service levels, coverage and operating costs. To the Singapore commuter, what is most pertinent is that our fares are affordable. The Government has committed to ensuring that this will remain so. As Mr Gan rightly pointed out, while keeping fares affordable, it is also important to ensure that the burden on taxpayers does not become excessive. Thus, we will still need to review fares regularly and keep to a public transport system that we can sustain financially. Page: 11

    SUBSIDIES FOR PUBLIC TRANSPORT - 2015-02-23 · READ THE OFFICIAL RECORD

  47. Mdm Speaker, unless I am completely mistaken, sitting right opposite Mr Png when he was speaking, he said something to the effect that in any other report made by the AGO, it would not attract the same level of scrutiny. That is the effect of what he was saying. So, I seek this very specific clarification. I think it is an important clarification because the audits that the AGO conducts of Ministries and Statutory Boards are something that is done every single year. The report is tabled to Parliament. And every Ministry or Statutory Board that has findings has to account for it. When, in the past, as a Member of the backbench, I had been seated in the Public Accounts Committee (PAC), I can share with Members very honestly and very certainly that Ministries and Statutory Boards, when they respond to queries, they take a very different Page: 37 attitude and replies to the PAC take on a very different tone than the tone that is reflected in the AHPETC's comments to the AGO. So, I wanted to seek this clarification because Mr Png, it seems to me, has suggested that Ministries and Statutory Boards have the same problems. But the conclusion drawn by the AGO is a very specific one. It says that unless the weaknesses are addressed, there can be no assurance that AHPETC's financial statements are accurate and reliable and that public funds are properly spent, accounted for and managed. So, I would like to know whether Mr Png is aware of any other occasion that the AGO has drawn the same conclusion for a Government Ministry or Statutory Board. That is a very important point. Since the Member has raised this point, I hope you will clarify it.

    AUDITOR-GENERAL'S REPORT ON THE AUDIT OF ALJUNIED-HOUGANG-PUNGGOL EAST TOWN COUNCIL (AHPETC) - 2015-02-13 · READ THE OFFICIAL RECORD

  48. Mdm Speaker, I would like to seek a clarification from the Member, Mr Png. Mr Png had compared AGO's report of its audit on AHPETC to the findings that the AGO makes during its annual audit of Government agencies. But I would like to ask, in relation to the conclusion that it drew from its audit of AHPETC, and I quote from its report, "The AGO concluded that unless the weaknesses are addressed, there can be no assurance that AHPETC's financial statements are accurate and reliable and that public funds are properly spent, accounted for and managed." I would like to seek a clarification from the Member whether he is aware of any other audit conducted by AGO of a Government Ministry, Statutory Board or agency that has drawn a similar conclusion.

    AUDITOR-GENERAL'S REPORT ON THE AUDIT OF ALJUNIED-HOUGANG-PUNGGOL EAST TOWN COUNCIL (AHPETC) - 2015-02-13 · READ THE OFFICIAL RECORD

  49. Mdm Speaker, the free pre-peak travel trial was extended until 23 June 2015. The ratio of morning peak commuters to pre-peak commuters heading to the city has been sustained at around 2.1, compared to 2.7 prior to the trial. This translates to a 7%-8% shift since the trial started. A survey by the Land Transport Authority (LTA) showed that the lack Page: 23 of flexible work arrangements may be a reason why the shift has not been more pronounced. To address this, we have been working with employers in the city through the Travel Smart programme since July last year. Forty-three companies have joined the programme so far. We will continue to evaluate the free pre-peak trial, along with the Travel Smart programme, before deciding if the scheme should be extended or made permanent. 2.13 pm

    EXTENSION OF FREE PRE-PEAK TRAVEL SCHEME - 2015-02-13 · READ THE OFFICIAL RECORD

  50. Madam, I think it is probably best that we get the Building Construction Authority to follow up with the Member specifically to see how this element can be incorporated.

    STREAMLINING GOVERNMENT PROCESSES TO INCREASE PRODUCTIVITY - 2015-02-12 · READ THE OFFICIAL RECORD