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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“In addition, Singapore concluded eight new Air Services Agreements (ASAs) and expanded five existing ones in 2012, bringing our total number of ASAs to over 120. Of note is the expanded ASA with Japan which will enable Singapore carriers to mount more services to Tokyo's Haneda Airport, which business travellers favour for its proximity to the city, and they can do so from 2014. We will continue to pursue air services liberalisation ahead of demand to give our carriers the flexibility to grow or launch new connections once opportunities arise. This will help Changi to build on its superior connectivity. Also, in September, the Budget Terminal closed to make way for the new Terminal 4. Construction of the new terminal will commence later this year and will be completed in 2017. 1.15 pm As Mr Charles Chong has noted, airlines previously based at the Budget Terminal had to move to Terminal 2 during the construction of Terminal 4. The move has benefitted both airlines and passengers. Although passengers now have to pay $10 more in passenger charges, they have access to better facilities such as covered aerobridges as well as a wider range of retail shops and F&B options. Terminal 2 is also better suited to support airlines' transfer operations. For example, the relocation has enabled Tiger Airways to launch new transfer Page: 57 products and services. Both Dr Lily Neo and Mr Charles Chong asked for more details of the design features of the new Terminal 4. I am pleased to share with Members that Terminal 4 will offer a user experience similar to those at the other terminals, with aerobridges, airside passenger and baggage transfer to other terminals, and attractive commercial offerings.”
“Mdm Chair, Mr Charles Chong has highlighted the importance of our air hub, Changi Airport. The air connectivity provided by Changi greatly enhances Singapore's proposition as a global business centre. It provides critical support to our manufacturing, logistics, financial and tourism sectors. Our air transport and airport sectors are important contributors to the economy in their own right, contributing some 7% of GDP and 165,000 jobs. But their impact on the whole economy is much more than that. Let me respond to Members' questions about the performance of Changi Airport and its prospects. The year 2012 was a historic year for Changi as it handled 51.2 million passengers, surpassing the 50-million mark for the first time. This was a 10% Page: 56 increase over 2011, exceeding the 5.2% growth of passenger traffic achieved by Asia-Pacific carriers collectively. However, airfreight volumes declined 3.2% year-on-year, in line with the global slowdown in the air cargo business. But this was less severe than the 5.5% decline in air cargo traffic experienced by airlines in the Asia-Pacific. A new Singapore-based low-cost medium-to-long haul carrier, Scoot, commenced services in June. This new addition to the SIA family reflects changes in the aviation landscape where increasingly, low-cost carriers are driving air traffic growth in regions like Europe and Asia. Low-cost carriers (LCCs) are also increasing the connectivity of air hubs by establishing links with secondary cities that might not be commercially viable for full-service carriers to operate to. Indeed, LCCs accounted for about 28% of total passengers handled at Changi in 2012. Of the 155 direct city links at Changi, 10 are operated solely by LCCs.”
“In fact, very little. Capital gains tax contributes to less than 1% of total revenues for the UK government. Inheritance tax – 0.6%. So, after all these efforts, not a lot to show for it.”
“Madam, there has to be a policy purpose to collecting information or the Government will be inundated with all kinds of information which we would then have to figure out what to do with them. It has to be driven by the policy purpose. The key point, I think, is that the Member's interest in wanting to know more is really to get a sense of whether the taxes are contributed fairly by different segments of our society. And so, in my earlier response, as I have highlighted, the way we look at it is to focus on whether the higher income groups are contributing a good share towards our tax collections. That is the way we look at it. We should not over-estimate how much this additional information collection can yield us. It is quite instructive to look at the experience in other countries. First, as a small country, we have to be practical and we have to consider how easy it is for monies to flow elsewhere. You can have a very elaborate system to try and collect the information, but you cannot prevent the money from flowing to other tax jurisdictions. For example, Hong Kong is another small and open economy. It does not have a capital gains tax. That is one challenge. The second challenge: even for large countries, to mitigate the effects on individuals and businesses, they often end up with very complicated tax codes, with all kinds of exemptions. A good case in point is the UK. In the UK, people sit on their assets without selling and realising the gains from their assets. To Page: 147 avoid paying inheritance tax, they give their assets to their spouses. After a whole tremendous amount of information collection, a lot of reporting and a lot of lawyers getting involved, what is the net effect of these efforts? What, in fact, is added to the coffers of the government?”
“Therefore, instead of focusing on how comprehensively the income and assets of the wealthy are taxed, we look at ensuring that they contribute a good share of the total taxes that we collect. As was highlighted during the Budget debate, the bulk of taxes in Singapore is paid by higher income earners and the wealthy. At the individual level, the top 10% of the employed workforce contribute 90% of personal income tax collections. At the household level, and including GST and all other taxes, the top 20% of households accounted for slightly over 50% of all taxes paid, while the bottom 20% paid 7%. At the same time, we have ensured that the bulk of benefits are received by the lower and middle income earners. Overall, we have a progressive tax and benefits system that is fair, effective and practical. And we have taken steps in this Budget to enhance this progressivity, such as through changes to Workfare, Page: 146 property tax and vehicle taxes, while maintaining a competitive tax regime. In conclusion, Madam, let me once again thank all Members for their comments and suggestions. To sum up, ensuring an effective and accountable Government, enabling quality growth, and supporting an inclusive society, remain very much at the core of MOF's efforts. There are no shortcuts to achieving these objectives. What is important is that we continue to take pragmatic steps to make this a better home for all Singaporeans.”
“In doing so, as emphasised by Deputy Prime Minister Tharman when he rounded up the Budget debate, we must maintain a tax regime that is fair and equitable, as well as be able to sustain our economic dynamism. Turning now to Mr Gerald Giam's question, our approach to collecting information on the income and wealth of Singaporeans takes into account our tax policies, as well as the ease with which accurate capture is achievable. Employment income and property wealth are the basis of our tax regime. Page: 145 Further, they are relatively easy to capture compared to investment income, such as the sale of shares in private businesses, and wealth assets such as art and wine collections. It would take a much more elaborate system to track all possible sources of income and wealth of Singaporeans. For example, in the US, the instructions for individuals filing a federal income tax return run to 108 pages – it is quite a tome. There are other problems. For example , it would be difficult to verify the declared value of certain types of wealth such as properties overseas or art and wine collections. 5.45 pm Even if we can overcome these difficulties, we have to recognise the practical reality that income and wealth holdings can be migrated to other tax jurisdictions. This will also be easiest amongst those who are wealthy, much more so than amongst middle income Singaporeans. To avoid paying high taxes in their home countries, sophisticated taxpayers will often engage in tax planning which is legal and permissible. In other words, as several other countries have found, a more elaborate tax system does not mean much more taxes collected from the very high-income and wealthy as they can park their income and wealth elsewhere. This is particularly so in the case of small countries.”
“" We have to use taxpayers' monies carefully, to make sure our expenditure gets the best value, and our programmes are both effective and efficient. This is why, despite keeping social spending relatively low, our social outcomes are not inferior to many countries by most international reckonings. For instance, our spending per capita on primary school education is about $7,000, which is lower than in many advanced countries like the US which spends about $9,400. Similarly, our spending per capita on secondary school education is also lower than in the US. Yet, most international assessments place our school system as amongst the best, internationally, and well above that of the US, based on outcomes for students of all abilities. Second, while providing broad-based support to give all Singaporeans the chance to achieve their aspirations, social spending is directed at Singaporeans who need the most help. For instance, the Workfare Income Supplement (WIS) scheme is targeted at older low-wage workers, to encourage them to stay in employment. And in healthcare, we aim to support both lower and middle-income Singaporeans. Third, we have to ensure that we have a resilient revenue structure. The changes we made over the last five years, to enhance revenues through changes to the Net Investment Returns (NIR) framework and by raising the GST rate, have given us the fiscal space to make significant investments in infrastructure as well as to expand our social spending. As social spending increases, especially with our population getting significantly older over the next 10 to 15 years, we will, in time, have to consider how best to seek additional revenue sources.”
“This explains why estimates have to be revised from time to time and why any adjustments may not be due to manpower alone. If there is no reduction in manpower usage in these projects, construction costs will, indeed, increase a little as a result of the tightening measures. This is why our approach has to be to provide every support to those firms which make an effort to raise construction productivity and reduce manpower usage. The public sector will also take the lead by setting higher standards with respect to labour-saving designs and more efficient construction methods. These include standardised layouts and greater use of pre-cast materials, without sacrificing quality design. We will focus sharply on improving productivity to contain cost increases in public projects. The Government has also set up systems such as the Gateway Process and Value Management workshops to strengthen the rigour of the approval process for large development projects. These initiatives will become even more important during this period when we aim to transit to a higher level of construction productivity. Ms Tan also raised the question of fiscal sustainability, as social spending rises with the ageing population, while revenues from some sources may weaken as the economy restructures. Several Members raised similar concerns during the Budget debate – Dr Lily Neo, Mr Ong Teng Koon and Mr Edwin Tong. These concerns point to the need to continue our long-standing practice of Page: 144 prudent fiscal planning. Let me outline some of the ways in which we do that. First, we must ensure that we spend wisely. As the Deputy Prime Minister said during the Budget round-up speech, "It is not just about spending more, it is about spending better.”
“In total, over their lifetime, a young low-income couple with two children can expect to receive more than $600,000 in benefits in real terms. But redistribution in itself is not enough. What matters greatly is how we redistribute, not only how much. This is, indeed, the reason we put so much emphasis on sustaining mobility and raising the prospects of success for lower income families. This year, we strengthened interventions early in a child's life, by enhancing our provision of quality and affordable pre-schooling, and extending learning support in primary schools and beyond. Madam, Mr Alex Yam suggested that the Government considers a Singapore 50 Fund to recognise Singaporeans' contributions to nation-building. Twenty fifteen will, indeed, be an important milestone for Singapore as we celebrate our Golden Jubilee year. It will provide us the opportunity to reflect on Page: 143 how Singapore has progressed over the years, and also look ahead to the future as one people. To celebrate this important year, we are planning programmes and activities that will involve all Singaporeans. MCCY will share more details on how the community can play a part in the 2015 celebrations in their COS. We welcome all ideas on how to celebrate this occasion, such as the idea raised by Mr Alex Yam. Madam, I will now address some of the questions raised by Ms Tan Su Shan. Ms Tan asked if the tightened foreign worker policies would lead to higher Government development costs for public infrastructure. Construction costs vary greatly from project to project. Material and equipment costs tend to make up the largest component, as much as 70%, and these costs can fluctuate quite significantly, depending on global demand and supply.”
“Since its inception, the CEF has committed $11 million to support more than 90 projects, such as Dignity Kitchen and Bizlink Centre. Page: 142 More recently, MSF launched the inaugural President's Challenge Social Enterprise Award in 2012 to recognise outstanding social enterprises. MSF also partnered MediaCorp in its programme called "Social Inc" which is currently being aired. All of these initiatives enhance the branding and public awareness of our social enterprises. Of course, beyond Government, social enterprises have the strong support of community partners. For instance, Tote Board provides funding and incubational support to social enterprises through the Social Enterprise Hub (SE Hub), which it established in 2011. One of SE Hub's investments is the chain of "Laksania" cafes, which trains and employs persons with disabilities. These types of support are more significant than additional tax privileges. This is because most of our social enterprises do not have much taxable profits. In fact, in the US where the social enterprise landscape is vibrant and dynamic, social enterprises, too, do not benefit from special tax incentives. Their success lies in having a strong and supportive eco-system, which is also how we should grow local social enterprises to be part and parcel of the inclusive society in Singapore. Let me now move to Mrs Chiam's suggestions on helping the lower income groups, which has always been a priority for the Government. Many of our social policies are means-tested and tilted in their favour. This has the broad support of Members as we saw during the Budget debate. Our progressive system of tax and benefits is designed very much to support the lower income.”
“For one thing, they are better able to harness the creativity and entrepreneurial skills of the private sector. Second, through building viable business models that are responsive to changing market needs, social enterprises can provide meaningful and sustainable ways of supporting their clients. The Government's support must, therefore, help to bring forth these qualities rather than blunt them. Existing grants and incentives available to start-ups and SMEs are applicable to social enterprises as well. These include the three-year tax exemption for start-up companies. As is the case for all businesses, losses can already be carried forward indefinitely to offset future taxable income. Social enterprises will also benefit from the Productivity and Innovation Credit, as well as the Wage Credit Scheme, announced in this year's Budget. These help alone are insufficient as, unlike businesses with financial bottom-lines, a social enterprise also has a social bottom-line. Getting both right is often very challenging. That is why we extend grant-support and, more importantly, help to nurture them through capability-building initiatives. One example of this is the Social Enterprise Capability Development Programme, which provides 80% co-funding for social enterprises to attend management courses. MSF is also exploring a Social Enterprise Mentorship Programme with corporations and chambers of commerce so that social enterprises can pick up relevant business skills. Besides benefiting from the PIC, social enterprises that train or employ the less advantaged can also tap on the ComCare Enterprise Fund (CEF) provided by the MSF to fund their start-up and expansion costs.”
“These are certainly ways in which we can value the gifts, but we also have to look at all the non-standard gifts in totality and find a sensible way to handle all of them. An increasing number of Singaporeans donate to overseas causes. Singapore-based charities have also been involved in overseas philanthropic work. These are by themselves worthy initiatives. Madam, charities are allowed to raise funds publicly in support of overseas disaster relief. In 2007, we also relaxed the 80:20 rule with respect to the use of private donations for other overseas work. We have explained previously why we would prefer not to further relax the 80:20 rule and grant tax deductions with respect to donations for overseas causes made to Singapore-registered charities. Doing so would mean more resources, especially foregone tax revenues, being channelled overseas. We have to consider this carefully, especially when such resources could otherwise have been used to meet the needs of the local charitable sector, which is still developing. Nonetheless, we will study how we can encourage the local IPCs Page: 141 who are already doing charity work in the region. Mr Alvin Yeo also suggested granting more incentives to social enterprises, which are businesses set up to advance social causes. Social enterprises play an important role in empowering the disadvantaged and building an inclusive community. During the Budget debates, Miss Penny Low cited two successful examples overseas – Zipcars and Airbnb – which have done well for themselves while addressing a social need. What makes some social enterprises more effective, compared to the Government or charities, in meeting certain social needs?”
“In this year's Budget, we announced further support for the arts and culture sector by matching private donations through the new Cultural Donation Matching Fund. Both the tax deduction scheme and matching grants have been well received. For example, the Government matched donations of over $200 million Page: 140 with disbursements from the SUT and the CST in 2010 and 2011. Aided by favourable economic conditions, the total amount of tax-deductible donations to local Institutions of a Public Character (IPCs) rose from $896 million in 2011 to a record $1.1 billion in 2012. The 250% tax deduction scheme was extended in 2011 for another five years, to 2015. MOF intends to review the scheme again before it expires. 5.30 pm As Mr Lien has noted, certain gifts-in-kind already qualify for tax deduction. These are shares, computers, land, buildings and works of art. About $3 million in computer donations and $18 million in arts and artefacts received tax deductions from 2005 to 2011. We agree that there is scope to expand the qualifying list of in-kind donations, including services, to support more of such giving. Given the very wide range of possible gifts, we will have to find an appropriate and not overly cumbersome way for the valuation of gifts. This is not to make things difficult or circuitous, as Mr Alvin Yeo described it. This is not to make it circuitous for the potential donors but to ensure a sense of fairness and equitability. MOF and MCCY will study how it is done in other countries and will also be happy to work with the National Volunteer and Philanthropy Centre and other community partners to develop a sensible way to value non-standard gifts. Mr Lien suggested fair market value as well as at cost.”
“These schemes are aimed at increasing opportunities for Singaporean finance professionals to be groomed through structured leadership programmes and to gain international exposure which is critical to be successful in this sector. MAS will also provide scholarships to Singaporeans under the Financial Scholarship Programme so as to build our own pool of specialist talent and help them go further. Concurrently, there are training programmes, such as those offered by the Institute of Banking and Finance based on the Financial Industry Competency Standards, which focus on raising the overall competency and enabling the career mobility of Singaporeans at all levels. So, I would like to assure Mrs Chiam that these measures are very much a priority for the MAS. Madam, Mr Alvin Yeo and Mr Laurence Lien have both raised questions relating to how we shape a more inclusive society, an important facet of which is the culture of giving. I agree with their basic approach of wanting to foster a culture of having the more able help the less fortunate in our society. Our incentives for philanthropy have, in fact, been significantly enhanced. There are also many more examples that show Singaporeans' generosity in supporting charitable causes. Many donors give anonymously, whether or not they receive a benefit in return. Nonetheless, they appreciate that the Government recognises their generosity through various measures, such as the 250% tax deduction introduced in 2009. We have also introduced matching grants for donations to support the Institutes of Higher Learning through the Singapore Universities Trust (SUT) and the long-term care sector through the Community Silver Trust (CST).”
“Over the past five years, the total assets managed by Singapore-based asset managers have grown at an average rate of 11% per annum to reach S$1.34 trillion at end-2011. This is higher than our average GDP growth rate over the same period. Singapore has introduced several incentives, such as grants and concessionary tax rates, to promote the asset management industry. For example, we provide grants for the training of fund managers and offer tax exemption on income derived by fund vehicles managed or advised out of Singapore. They achieve a similar effect as introducing tax rebates and, because they have worked well, we will continue to use them as a way of promoting the industry. Mrs Chiam had a question on commissions. In fact, MAS is best placed to address this, but I would just share very briefly that the commissions of stock Page: 139 brokerages were liberalised. In other words, they are not set by the Government or the Stock Exchange − this was done more than a decade ago. So, the market is competitive and the commissions are lower than before. And if the commissions are still too high, regional and global competition will force them down. Mrs Chiam also asked about whether Singaporeans are able to take up the opportunities that the thriving asset management industry is offering. The Government encourages the employment of Singaporeans through non-tax tools, such as economic grants and manpower development programmes. For example, last year, MAS announced that it would introduce new schemes to boost the Singaporean leadership and talent pipeline in the financial sector.”
“(In Mandarin): [Please refer to Vernacular Speech.] When we were implementing the PIC Scheme, we realised that it would take some time before the businesses could understand and benefit from it. We will apply the lessons Page: 138 learnt from the outreach experience that we have had with the PIC Scheme lessons as we promote and implement the WCS. Since the Budget announcement, MOF has reached out to the business community to raise awareness of the WCS, and help them understand how they can benefit from it. We have engaged over 150 representatives from Trade Associations and Chambers, and over 1,000 representatives from businesses. In the upcoming weeks, we will meet with other stakeholders, including members of the Singapore National Employers Federation, ASME and NTUC. IRAS will be administering the WCS. It will tap on its existing outreach platforms to further engage businesses and explain to them the details of the WCS. Over the next few weeks, MOF and IRAS will be working together to publish more details of the scheme on our website. The public can go to the IRAS website to obtain more details, including answers to the questions that many have asked, and there will be a WCS calculator for businesses to compute their payouts. We have also set up a dedicated hotline and email for enquiries so that businesses can easily obtain the information they need. IRAS will also include information on the WCS in its outreach programme. (In English): Madam, I will continue in English. Mrs Lina Chiam had a suggestion to use tax rebates to help grow the asset management industry. I would just share that Singapore has a vibrant asset management industry with a diverse range of players. This includes large and small fund managers of both traditional and alternative funds.”
“We want to work with them to reach out to as many businesses as possible. Ultimately, however, businesses are in the best position to assess how best they can make use of the various schemes to transform their companies. Indeed, they have the responsibility to do so. Mr Ong Teng Koon has also asked about outreach efforts on the Wage Credit Scheme (WCS). We will apply the lessons learnt from the outreach experience that we have had with the PIC Scheme as we promote and implement the WCS. Since the Budget announcement, MOF has reached out to the business community to raise awareness of the WCS and help them understand how they can benefit from it. We have engaged over 150 representatives from the trade associations and Chambers, and over 1,000 representatives from businesses. In the upcoming weeks, we will meet with other stakeholders, including members of the Singapore National Employers Federation, ASME and NTUC. IRAS will be administering the WCS with the help of the CPF Board. It will tap on its existing outreach platforms to further engage businesses. Over the next few weeks, more details of the scheme will be published on IRAS' website, including detailed answers to the questions that many have asked. A dedicated hotline and email for enquiries have also been set up. And there will be a WCS calculator for businesses to compute their payouts. IRAS will ensure that businesses receive their WCS payments as quickly as possible. By the end of March 2014, businesses will receive their payments for wage increases given in 2013 via cheque or their GIRO account. To make it easier for businesses to benefit, the payment will be automatic and no application will be required. Madam, please allow me to make some comments in Mandarin about the WCS.”
“The vast majority of PIC claimants so far have chosen to receive it in the form of a tax deduction. In other words, it is automatically offset against their taxes. This process is straightforward. Businesses can also apply to IRAS to receive their benefits in cash. This can be done quarterly, or when they file their annual tax returns. IRAS is committed to making all payouts within three months. To date, 80% of the applications for quarterly cash payout are actually paid out within two months. Similarly, for the PIC Bonus that was announced on Budget Day, businesses can automatically get their PIC Bonus when they submit their annual tax return or together with their PIC cash payout every quarter. Over the past week, several Members have spoken about the importance of adequately communicating and explaining Government policies and programmes. I fully agree with them. IRAS has been actively reaching out to businesses to increase their awareness of PIC through PIC seminars, dedicated hotline and email notifications. IRAS also runs PIC clinics that provide one-to-one consultation to help businesses, especially SMEs, claim PIC. To date, we have reached out to more than 850 businesses through the PIC clinics and more than 33,000 business representatives through the PIC seminars. In response to requests by the business community, we have also conducted some of these sessions in Mandarin. Page: 137 Although businesses have found these seminars useful, some remain unsure how they can benefit from the schemes. It will require more work from the businesses themselves, the trade associations, as well as the Government, to encourage more SMEs to come on board. The trade associations, in particular, can play an important multiplier role.”
“To help businesses better understand Government procurement processes and policies, we are currently developing a supplier guide, which will also include useful tips for businesses participating in Government procurement. Madam, I thank Mr Ong Teng Koon for his comments about the PIC scheme and how it needs to better help our businesses. I would like to share with him that based on the tax returns filed to-date for Year of Assessment 2012, 56% of active SMEs with at least one employee, or about 33,000 companies, have taken up the PIC scheme. So, it is 56% of all active SMEs with at least one employee. The take-up rate is quite encouraging although there is more to be done. Last year, in response to industry feedback, we enhanced the PIC Scheme, taking into consideration the needs of small businesses. For example, we increased the PIC cash payout rate from 30% to 60% and removed the requirement for in-house training programmes to be certified by WDA or ITE, if Page: 136 they cost less than $10,000 per year. This year, to help SMEs further, we introduced the PIC Bonus and made it easier for businesses to enjoy PIC benefits for IT and automation equipment. We also extended the list of items that qualify for PIC, to include Intellectual Property in-licensing. Some businesses may still have the impression that it is difficult to make PIC claims. In fact, the process is fairly straightforward − the claims are made as part of the annual tax filing process which all businesses would have to carry out every year. But I agree with Mr Ong that it is important to make timely disbursements from the PIC. Under the PIC Scheme, businesses can receive the benefits in the form of tax deductions, or convert this into a cash payout.”
“This figure has been quite stable over the last five years. An even larger percentage of purchases of lower value are awarded to small companies. As a signatory to the WTO Agreement on Government Procurement and a number of Free Trade Agreements, Singapore is obliged to be non-discriminatory in our Government procurement practices. For procurement that is covered by these agreements, we cannot discriminate in favour of local Page: 135 companies. Hence, to help local SMEs, our focus has been, and continues to be, on strengthening their capabilities and competitiveness. For instance, a significant portion of Budget 2013 goes towards helping our local enterprises to improve their competitiveness and productivity. 5.15 pm To facilitate businesses' access to public sector procurement, the Government publishes upcoming procurement opportunities. For instance, a listing of indicative Government procurement opportunities is published on GeBIZ, which is the Government's electronic procurement portal, and this informs suppliers of potential tenders valued $200,000 or above for the financial year ahead. It gives them a heads-up so that they can plan whether or not to bid for it. The Building and Construction Authority (BCA) briefs the construction industry annually on upcoming public sector construction projects. This enables the contractors, project managers and consultants to prepare themselves to bid for Government projects. Similarly, IDA organises the Infocomm Technology (ICT) Industry Briefings every year to highlight potential upcoming Government ICT projects. Businesses can also sign up for free alerts on Government procurement opportunities via GeBIZ or subscribe to email notifications via SPRING's Enterprise One portal.”
“Penalising contractors and excluding them from future contracts is only a last resort. There is, of course, room for improvement and it need not involve moving functions back in-house. If the Government were to take back all the functions that it has outsourced, we will have a significantly larger Public Service and reduced business opportunities for the private sector. A better approach is to ensure that suppliers of services to Government meet the desired standards, including their adoption of the Progressive Wage Model, and to train the public officers to manage outsourced contracts better. We will also remind agencies that whilst the functions can be outsourced, accountability for service cannot. That said, Mr Baey can be assured that the Public Service does not hesitate to retain various functions within its fold when there are good reasons to do so. For example, the Centre for Public Project Management (CP2M) was set up in January 2011 to retain and strengthen public sector expertise to advise the Government on infrastructure projects. This includes rendering project management services to agencies which may need extra help when dealing with large and complex projects. Madam, several Members spoke about measures to facilitate businesses, in particular SMEs, which play an important part in our pursuit of quality growth. Ms Jessica Tan asked about the proportion and trend of Government tenders awarded to SMEs. All suppliers are given equal opportunities to be awarded Government contracts. In 2012, for larger value purchases for which tenders rather than quotations are required, about 20% were awarded to small companies with less than $250,000 of net tangible assets. Over 60% of tenders valued up to $100,000 were awarded to such companies.”
“Madam, our system handles over 80,000 procurements each year and the vast majority of these are processed by our officers in accordance with well-established guidelines. However, even with the best of efforts, there will be instances of lapses or misconduct. Therefore, there is no substitute for robust audit and enforcement, along with the willingness to acknowledge problems and correct them. We are confident that our efforts will raise standards further. Mr Baey raised concerns about the accountability of agencies when outsourcing. Outsourcing allows the Government agencies to tap on the private sector if the latter is better placed to perform those functions or deliver the services. It is not always a matter of reducing costs. Often, outsourcing can lead to more innovative or efficient solutions that benefit the public. For instance, one outsourced contractor that provides services to clear storm-damaged trees from roads was able to reduce their response time by up to 60%, to within 30 minutes. As an added bonus, two workers are now able to do this job, compared to a team of five to eight persons previously. I would like to assure Mr Baey that whether a Government agency outsources a particular function or performs it in-house, it is expected to maintain high service standards and be fully accountable for its delivery. As a buyer of services, agencies are expected to spell out clearly the required service level standards in their tender specifications and clarify with vendors if there are ambiguities. Page: 134 Contract management after tender award is equally important, and should be done on an on-going basis to ensure that the project remains on schedule and the agreed service standards can be met.”
“There are over 2,000 officers across the Public Service today who perform procurement roles as part of their job responsibilities. However, not all agencies have dedicated procurement teams. In some agencies, procurement could be decentralised to many different officers for whom procurement is a secondary role. It is also likely viewed as an administrative support function, rather than as a profession. As a result, there are uneven standards of procurement capabilities across the Public Service. This is not satisfactory. MOF is therefore working with PSD to develop a Procurement Specialist Track, with professional development opportunities and proper career pathways. The Procurement Specialist Track will help professionalise the practice of procurement by giving officers greater recognition and more opportunities to develop deep skills and knowledge. Page: 133 More importantly, it will help procurement officers to accumulate experience and be discerning when evaluating bids. MOF is working with various agencies to identify opportunities to cluster their procurement functions, where feasible, so that capabilities are more centralised and there are more career options for procurement officers. In tandem with these efforts, we have also put in place additional measures to reinforce the accountability and responsibility of supervisors. Complaints about procurement practices are brought to the attention of the Permanent Secretary or CEO in-charge and investigated. MOF also shares audit findings on procurement lapses and common pitfalls with public sector Directors of Finance and at various management forums. To help officers who are responsible for approving procurements, MOF has developed checklists to guide them on what to look out for before giving approval.”
“Page: 132 As Government contracts cover just about 10% of the cleaning workforce, it is essential to get private sector service buyers to also come on board. MEWR will be announcing at its COS further steps to support this national effort. For the security sector, starting from 1 April 2013, the Government will procure only from security agencies that are well graded by the Police. An important pillar of assessment is their grading of the HR practices, including their wage practices. The Government, working closely with the tripartite partners, will be further enhancing the security grading scheme as part of our efforts to uplift the wages and working conditions of security officers. MOM will be announcing details of these efforts at its Committee of Supply (COS). Madam, Ms Jessica Tan asked about efforts being undertaken to strengthen Government procurement, which is an important part of ensuring an effective and accountable Government. Our procurement system is fundamentally sound. Nevertheless, we have taken significant steps to strengthen its governance. This includes reviewing procurement rules and procedures, training and equipping public officers adequately to perform their roles, as well as ensuring regular audits to provide an independent check. Last year, we tightened our rules on the handling of single bids to ensure they provide value for money and also extended the minimum opening period for submission of quotations to allow more time to potential vendors to respond. We are mindful not to make the rules overly cumbersome as it could end up being a deterrent to businesses. As Ms Tan has rightly suggested, good procurement officers do not merely follow rules and procedures, but add value by finding the most effective solutions.”
“Mdm Chair, I thank the hon Members for their cuts. Their comments and suggestions filed can be organised around three themes: first, ensuring an effective and accountable Government; second, enabling quality growth; and third, supporting an inclusive society. Before I proceed to address each of these themes, let me first give an update on the Government's support for the best sourcing initiative, which Ms Jessica Tan and some others have spoken about. Madam, as part of our efforts to raise the wages of low-wage workers, the National Environment Agency (NEA), the NTUC and the Government agencies that procure cleaning services, have been working closely with cleaning companies to adopt the Progressive Wage Model. MOE, which is the single largest buyer of cleaning services within the Government, has taken the lead. All of its contractors are now on board. Effectively, this means about half of all cleaners employed under Government contracts, or over 3,500 cleaners, now receive basic wages of at least $1,000 per month. Further, with training, improved skills and bigger job scopes, the cleaners can earn more. The Government and NTUC are working closely to reach out to the remaining cleaning contractors. With the support of the cleaning contractors, we expect that by the end of this year, the vast majority of cleaners on Government contracts will be earning progressive wages. In addition, for all new contracts called from 1 April 2013, the Government will engage only cleaning companies accredited under the NEA's Enhanced Clean Mark Accreditation Scheme. Henceforth, local cleaners on Government contracts will be paid according to the Progressive Wage Model.”
“What more can be done to re-rate the pay levels of low-wage workers as well as their employment conditions? Tax Rebates and Redistribution”
“Support Uplifting of Low Wages Mdm Chair, cost of living concerns have been expressed in this House and over the last week as we discussed the Budget. While our median total household incomes have risen in the last five years by 17%, lower end wages have been stagnant and re-rating has taken too long. Low-wage workers form the bottom 20% of the Singaporean workforce and include casual and contract workers. Apart from being paid low wages, these Page: 122 workers usually suffer poor work and employment conditions. As we speak about a better Singapore and a more inclusive society, what measures are being taken to raise the real wages of low-wage workers in Singapore and to ensure that they have fair employment conditions and opportunities to upgrade their skills to enable them to have better job opportunities? MOF announced last year the Government's full support for the Best Sourcing Initiative for cleaning, that is the Government will only procure from accredited companies for cleaning contracts. The Government is an important buyer of cleaning services and has an impact in setting the tone and influencing the wage level of workers in this sector, signalling that lowest cost does not always equate to value. Can the Ministry provide an update on these efforts? How effective have these efforts been in raising the wages of low-wage workers in the cleaning sector? Are there other sectors that the Government is supporting for services it procures? Have these efforts contributed to the enhancement of industry standards and quality of service? How are improvements tracked? If there are improvements in standards and efficiencies, what measures are in place to ensure that increased returns enjoyed by contractors are also shared with their workers?”
“How much have Page: 121 specific measures – like targeted scope so that SMEs can bid for specific deals that match their expertise or smaller contract value, sourcing for innovative solutions and e-procurement practices – have helped to address market gaps in SMEs' access to public-sector procurement? What measures have been taken to level the playing field for SMEs to participate in Government tenders? Are there procurement payment policies that take into account the payment policy for small businesses based on the value of the contract? Are there measures to encourage SMEs to learn and understand the rules of public procurement participation in Government tenders? Are there more targeted industry sector engagement and dialogues to help suitable companies understand better the scope of procurement? This increased understanding of scope and needs would encourage more participation and stronger competition for tenders. The focus would also enable participation from a diverse and specialised supply base for companies. To encourage a level playing field, scope of the tenders should encourage focus on the core competencies of our companies. This will allow companies, especially SMEs, to be more competitive and focused on differentiating their bids. This will also enable the Government to get the best skilled companies to provide product or service regardless of its size and influence. Has GeBIZ, the Government's online procurement portal, been effective in helping SMEs stay up-to-date on the request for quotations and tenders, and has it increased their participation in tenders? What has been done to look across procurement by Government to access the areas where opportunities can be made available for greater SME participation? Madam, let me move to my third cut.”
“To achieve this and balancing the demand for the requirement of transparency is a challenge. As has been pointed out by the Auditor-General's Report on lapses found, rather than a lack of rules, public officers failing to follow existing procurement rules and principles have been the cause. While driving the adherence to principles of procurement and ensuring prudent spending of public funds, what measures are in place to enable officers to make the most effective and not just safe decisions on the utilisation of public funds? With the recent lapses and the greater scrutiny on public sector procurement, how can we ensure that officers do not become so risk-averse that they just take the safe path in making decisions of procurement rather than the right decision? For example, just going for the lowest price bid, as any decision to select a higher cost solution would require justification and scrutiny. Last year, Deputy Prime Minister Tharman mentioned that MOF is looking into having a career track for procurement officers. Can MOF give an update on the status of this and the decision on the matter? Madam, let me move to my second cut. SME Participation in Government Tenders Madam, as we push for more inclusive growth, what is the proportion of the Government tenders awarded to SMEs in terms of value and number of contracts? Has this trend been increasing or decreasing over the years? What were the scope of tenders for products and services that lend themselves more suitable for SMEs to participate? What more can the Government do to provide opportunities for SMEs to participate in Government tenders?”
“Mdm Chair, I beg to move, "That the total sum to be allocated for Head M of the Estimates be reduced by $100". Madam, what efforts has MOF taken to strengthen private sector procurement and contract management? The public sector sets out the key procurement principles of fairness, a level playing field for all would-be suppliers, value for money to ensure effective and efficient use of public revenue and probity to minimise possibility of corruption. Hence, apart from ensuring sound procurement decision, public sector officers in procurement face an additional challenge – that of the requirement for transparency. Effective procurement involves not only getting the best purchase price. All too often, focus is on purchase price which is sometimes only a fraction of total cost. It is also important that procurement focuses on managing total cost. To fully achieve effective and efficient use of public funds, there needs to be a more holistic approach to procurement and cost management. Page: 120 Deep understanding of cost drivers, having a good handle on what actual costs are and what causes them is important in driving and achieving some procurement decisions. Other considerations of leveraging technology to improve procurement, supply management operations and effective deployment of technologies within the supply strategy can achieve good value for an organisation. Mustering supply chain management requires on-going study. I would like to ask what investments MOF is making in continual training to keep officers in charge of procurement up-to-date. Providing quality citizen services is an important consideration for procurement decisions as well. There continues to be increased demand for better quality, faster and cheaper services.”
“The COE system is actually quite complex, with many different dimensions. One of the key things that we are trying to do is to ensure that whatever it is that we do to the COE does not distort the market inappropriately. I understand that there is a sense of urgency. What I can say to the Member is that we are also very mindful of the urgency.”
“Madam, again, I thank Mr Christopher de Souza for raising this concern on behalf of especially small businss owners. I do have a lot of sympathy for this group because they do need it for their livelihood. Yes, we have made the additional registration fee as low as 5% for Category C vehicle owners, as compared to 100% of the Open Market Value for car owners. So, there is already a big price difference between what business owners will have to pay for goods vehicles and what individual owners are currently paying for the privilege of car ownership. But I take his point and it is something that we are very mindful of, and we are looking at some possibilities.”
“Mdm Speaker, I thank Ms Denise Phua for her comments. Indeed, we share the concerns that Members have over the COE prices. As I have shared earlier this week, we are open to reviewing a number of ways in which we could improve the system. For example, we could look at how the categories are defined. I totally agree with the Member that it is an area that we need to reach out more and share with Singaporeans why some of the options that are very well-intentioned do, however, have some serious drawbacks or difficulties in implementation. Madam, what I can share with the Member is that, for a start, in the Ministry's website, there is something that we are preparing that will help to articulate all the different considerations for suggestions that members of the public have put forward, which are really good suggestions to begin with but then they have some implementation difficulties. So, that is something that we are working on. And I would also agree with the Member that if there are opportunities for us to go out and explain the different options that the Ministry has considered, we would be very happy to do so. At the same time, let me reassure her that this is an area that we will try and see if there are ways to refine. Page: 9”
“Madam, yes, indeed. I assure Mr Gan that we do not rule out these possibilities.”
“Mdm Speaker, before Mr Christopher de Souza came into the House, there was an earlier question that was filed by Ms Mary Liew and Dr Intan essentially proposing the same thing – whether we could create, for example, a mechanism that will allow first-time car owners or first car buyers to have access to lower COE prices, and I had explained the difficulties in doing so. In quick summary, Madam, it has to do with two things. The first is that it is hard for us to say, definitively, why a person who is buying a car for a second time is always less deserving than one buying it for the first time. I cited the examples of families which have grown in size because they have had more children or elderly members have moved in. There could also be businesses which are growing very well and they need that additional vehicle to service their expanding customer base. One difficulty is with how we can say, definitively, certain car buyers need a car more than other groups of car buyers. The second difficulty relates to the fact that this is a policy that will be quite easy to circumvent. Today, if a family was forced to register a car in the name of first-time car owner, it would be quite easy for him to ask a relative to stand in and be registered as the first-time car owner. Similarly, a business could set up a subsidiary to own just a car. So, there is a practical difficulty with implementing policy of this nature. That is something we have to bear in mind, whether it can be effectively implemented, otherwise, we would be doing something that gives the impression of helping first-time car buyers when, in fact, it does not really. That is something we have to bear in mind.”
“I thank Mr Ang for his two supplementary questions. His first question relates to the distribution of COEs in the various categories. Precisely for the reasons that he articulated, the number of COEs that are recycled back after they are de-registered has been adjusted. It used to be that for de-registered COEs, 25% of them went to Category E. And precisely for the reasons that was cited by Mr Ang, we have reduced that percentage and now 15% goes into Category E, while the rest goes back to the categories from which the cars were originally registered. So, that is one way in which we are seeking to rebalance this. On his second question of whether COE categories ought to be redefined, not based on engine capacity but perhaps based on OMV or some other measures, indeed, we recognise that these are valid ways in which we could rethink how the COE categorisation can be done, and we are open to reviewing them. So, I would urge the Member to be patient.”
“Madam, indeed, that is a group of car owners that we are concerned about and we are looking at various ways in which they can be helped. Page: 26”
“I thank Dr Lim Wee Kiak for his questions. I think what Dr Lim is referring to is that there was a time when the prices of COEs between Category A and Category B were quite different. So, it was quite different in the past, and I hope that I can explain that a little bit further. But, over time, that gap has closed. So, whether it is Category A or Category B, that gap has closed. One of the reasons why this has happened, as has been pointed out by many observers, is that, increasingly, you will find premium makes also in Category A. For example, in Category A, you might find a Mercedes A Class. So, there is a perception that there is some activity going on that is causing the premium makes to also push out cars. This is something actually very worth studying. One contributing factor is that, worldwide, for environmental reasons, even premium makes are pushing out cars of smaller engine capacity. And this might have contributed to a closing of the gap between the Category A COE prices and the Category B COE prices. Dr Lim mentioned the example of a Lamborghini. I am afraid I really do not know what a Lamborghini costs, but I think the engine capacity of a Lamborghini would not put it in Category A.”
“Madam, I thank the Member, Mr Ong, for his questions. I think it is quite useful to take a look at the profile of car owners in Singapore. I had shared earlier, in response to the first two questions by Ms Mary Liew and Dr Intan Azura Mokhtar, that nearly one in two households today own a car. And if we were to look deeper at the one-in-two households owning a car and ask what sort of dwelling these car owners reside in, and then look at car ownership amongst a population group that we are very familiar with, which is the HDB flat dwellers, the ownership of cars amongst HDB flat dwellers is about one in three. So, if you look at ownership profile, then I would say that, yes, there are some who are able to afford cars to a very large extent but this does not preclude a very sizeable population group that we are very familiar with − what we call the HDB heartlanders − quite a large number of whom also own cars. So, I hope that addresses his concern. We are very mindful of this and that is why there are two different categories of COEs – Category A and Category B – to allow people who are in need of a car but do not need it for status or other reasons. And they really need it for family purposes, and that is what the COE categories are designed to do. Page: 25”
“Madam, given the limited supply of COEs and our bidding system for COEs, prices would be determined largely by demand. Market demand, in turn, is influenced by many factors, such as how well our economy is doing, the interest rate environment, the loan financing options available, and even the introduction of new car models. In short, prices are a reflection of the COE market at work. The Government is mindful that some businesses have a critical need for vehicles and that is why several concessions are in place to help businesses with their transport costs. Businesses bid for COEs for commercial vehicles in a separate Category C, and do not have to compete with private car buyers in Categories A and B. In addition, the Additional Registration Fee (ARF) for most Page: 24 goods vehicles is set at 5% of the vehicle's Open Market Value (OMV), instead of the 100% OMV applicable to cars. Many suggestions have been put forward for tweaks to the COE system. While the suggestions are well-intentioned, it would be important for us to look at them closely, to consider if they can really be effective in promoting lower prices or greater stability in the COE market, without distorting the market inappropriately. I would also add that, left to its own, the market has seen, in the past, instances of COE prices going down, sometimes sharply. This happened in around 2009, likely due to the weak economy. So, in conclusion, buyers do make a conscious decision not to rush in during periods when the market is particularly exuberant. I think it is useful to bear that in mind.”
“Madam, may I have your permission to take Question Nos 11 and 12 together?”
“Madam, Ms Irene Ng asked about the growth trend and the household ownership profile of the car population in Singapore. Over the last five years, the car population increased by an average of 4% per annum, from 514,694 cars at the start of 2008 to 617,556 cars at the end of 2012. The growth rate in the last two years has come down to 1.9% per annum, in line with the lower allowable vehicle growth rate. As of 2012, about 45%, or nearly one in two households, own a car, up from about 40% in 2008. We estimate that between 8% and 9% of households in Singapore have more than one car. In other words, fewer than one out of 10 households own more than one car. Our Vehicle Quota System aims for sustainable growth in our vehicle population. Today, our road infrastructure already takes up close to 12% of our land space. Going forward, given our land constraints, we must endeavour to moderate further road growth. Hence, we decided to reduce the allowable vehicle growth rate from 3% per annum, which was the rate since we introduced the Vehicle Quota System in 1990, to 1.5% per annum in 2009, and we have further reduced it to 1% per annum in 2012 and to 0.5% per annum in February 2013. Ms Ng also asked whether a study on the environmental impact of the growth of our car population has been conducted. This was done for the Page: 10 National Climate Change Strategy 2012, which is a multi-agency plan to reduce greenhouse gas emissions in Singapore, including those from the transport sector. One of the measures introduced to reduce emissions from the car and taxi population is the Carbon Emissions-based Vehicle Scheme (CEVS), which was implemented in January 2013.”
“Madam, we thank Dr Intan for her suggestions and we will certainly look at them.”
“A business can easily set up a new subsidiary to own another vehicle as a first-time buyer. It is not hard to see how a COE allocation system which favours certain groups is likely to induce behaviour to get around the policy and defeat the purpose of the policy. In land scarce Singapore, unfortunately, we do not have the luxury of letting everyone own a car. We also cannot put car ownership in the same category as housing, health or education which are basic necessities. Our current Vehicle Quota System (VQS) is not a perfect system but is still the most appropriate way to allocate a limited and non-basic resource. Let me assure Members that the Government is mindful of the wishes of Singaporeans to enjoy a high degree of mobility. The solution lies not in unrestrained growth of private car ownership but in improving our public transport and taxi systems. Therefore, we will focus our efforts and invest more resources on building up our mass public transport system – more rail lines, more bus routes and more reliable services. We will also continue to encourage premium bus services and improve our taxi system to help bridge the gap between private and mass public transport.”
“Madam, Members have asked my Ministry to consider alternative ways to distribute COEs, to favour selected groups with access to cheaper COEs. We have studied these suggestions, whether they merit support and also if they stand a good chance of being implemented effectively. First, to Ms Mary Liew's question, car ownership has increased significantly. Today, about 45% of all households own a car. That is nearly one in two households. In 2000, around one in three households owned a car. We estimate that between 8% and 9% of households in Singapore have more than one car. In other words, fewer than one out of 10 households own more than one car. While we understand the intent of Dr Intan's suggestion to favour first-time car buyers, the main difficulty is that it is hard to say why a second-time buyer is always less deserving than a first-time buyer. Consider the perspective of a growing household where the grandparents have moved in to stay, or the family has had more children, and are planning to buy a bigger or second car. Page: 8 To this family, a COE system which favours first-time buyers would not be fair. They would argue that their needs are greater than first-time buyers who are singles, or who have no children, or have no elderly members in the household. Consider also the needs of a business at an exciting growth phase, having built up a customer base which needs a second vehicle to service. To such business owners, their purchase of an additional vehicle is no less deserving than for a start-up buying its first vehicle. As a response to such a policy, the example of the family cited above may register the vehicle in the name of another family member who has not yet owned a car or a relative living in a different household.”
“Madam, I would like to thank the Member for his supplementary questions. Since the Gateway process was started in 2010, we have put 26 large-scale projects through this process. These projects are still Page: 42 on-going and we are tracking them closely. We are very interested, ourselves, to make sure that there are cost savings, but the actual cost savings will only be known at project completion. Mr Lien has also raised the other point about capabilities being lost when sometimes departments are corporatised and so on. It is a very important matter, and although these capabilities no longer reside within the Government, it does not necessarily mean that the capabilities do not reside in Singapore. That is also an important factor to bear in mind.”
“The panel is chaired by Mr Yeoh Oon Jin, who is the Executive Chairman of PricewaterhouseCoopers, one of the Big Four accountancy firms. Besides being a respected industry leader, Mr Yeoh is also an ICPAS council member and will certainly have insights into the concerns of existing CPAs. So, the very useful inputs that Mr Sitoh had highlighted pertaining to students and those who are already enrolled in CPA courses are very relevant and will have to be addressed by Mr Yeoh's committee. While the transitional arrangements are still being deliberated, I should share that the preliminary thinking is that existing CPA holders will not have to go through the Singapore QP to be registered as Chartered Accountants of Singapore. This means that their practice in Singapore will be unaffected. However, when it comes to mutual recognition by other jurisdictions, a Singapore QP qualification may well be needed. Existing CPAs may then find it advantageous to achieve the Singapore QP qualification. It is for each of them to decide how valuable the network of MRAs is and whether to invest time and effort to attain the QP qualification. Together with ICPAS, SAC will make every effort to facilitate CPAs in their decision making and to acquire the Singapore QP qualifications if they so desire. Madam, once again, I thank Members for their thoughtful comments and support of the Bill. Page: 98 [(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. (proc text)] [Mdm Speaker in the Chair]”
“In most countries, one of the criteria for registration is that the individual must be a member of the local professional body, which can be achieved if an MRA exists. Although MRAs are normally entered into between professional accountancy bodies, MRAs in the United States are negotiated by the International Qualifications Appraisal Board (IQAB) which represents the National Association of State Boards of Accountancy (NASBA) comprising the 55 state boards of accountancy and the AICPA, the professional accountancy body in the United States. This recognises the important roles played by both the statutory and professional bodies. The Singapore approach, where the SAC and ICPAS will jointly negotiate MRAs, is thus similar to that of the United States, because we envision both the SAC and the ICPAS, both the statutory and professional bodies, to play Page: 97 important and complementary roles. I hope Mr Dhinakaran will contribute to strengthening the partnership between both organisations. Madam, let me turn to Mr Sitoh's comments. He has suggested that there be only one Singapore-branded professional accountancy designation, given our small market and size of profession. I agree with him and confirm the intention to only have the Chartered Accountant of Singapore designation. This will allow us to build a strong and internationally recognised brand and enhance our ability to secure MRAs with other major leading accountancy hubs. Mr Sitoh had asked about the principles behind the transitional provisions. As he has rightly pointed out, existing CPA Singapore holders have contributed much to our economic success. The Pro-Tem SAC has therefore, formed a dedicated Singapore QP Transitional Panel to recommend appropriate transitional arrangements.”
“Although both approaches can work, the benefit of our Government-led effort is that it sends a very clear signal of commitment. This is also a point which Mr Dhinakaran acknowledged in his speech. Madam, at this stage of the Singapore Qualification Programme development, it is probably less important who owns it and more important to ensure that the qualification earns the trust and confidence of the industry, both in and outside of Singapore. In this regard, the Singapore Qualification Programme is off to a good start. Already, more than 40 organisations have expressed interest to become Accredited Training Organisations (ATOs) to provide on-the-job training for their own employees as part of the SQP practical experience requirement. The SAC, as developer and guardian of this SQP, is entrusted to protect and preserve the integrity and reputation of the Chartered Accountant designation. So, although we refer to the SAC as being the owner, I think, in substance, the SAC really thinks of itself more as a developer and guardian of the Singapore QP. This role does not duplicate and indeed complements those of ICPAS which I had reiterated earlier. For the Singapore QP to succeed, both the SAC and ICPAS have to execute their roles well, and I would urge both organisations to focus efforts on the arduous tasks ahead. Mr Dhinakaran said that the SAC should not be initiating Mutual Recognition Agreements or MRA negotiations on its own with international counterparts. For the benefit of Members, let me explain why MRAs are important. An audit professional is able to sign off the audit opinion in a jurisdiction outside of Singapore only if he or she is registered as a public accountant in that country.”
“In these above roles, I see ICPAS having the opportunity to add much more value beyond administration. I certainly hope that ICPAS shares that perspective. I should add that I fully support the ambitions of ICPAS to play a more prominent global role and I am very encouraged by the steps taken by ICPAS recently to strengthen itself. Mr Dhinakaran asked if ICPAS will be the only Designated Entity. We do not have plans to appoint another Designated Entity, although the Bill has been drafted to give the Government this flexibility. The fact that the Government has named ICPAS as the Designated Entity in the SAC Bill reflects our desire and commitment to work with ICPAS on this national initiative. The Government values ICPAS' views as an important stakeholder in the sector. MOF and the Pro-Tem SAC have involved ICPAS in many of the discussions. For example, ICPAS was represented on the CDAS and has been represented on the Pro-Tem SAC and its various key committees and work groups. And this has been the case since the Pro-Tem SAC was formed in 2010. ICPAS also actively participated in the working groups responsible for the design of the SQP, including the academic framework, curriculum and learning materials. Mr Dhinakaran shared that professional bodies in other countries own the professional accounting qualifications and designations. This is indeed the case where the professional bodies had moved ahead of the government to build up their own professional accountancy qualifications. However, in the United States and Hong Kong, the conferment of their respective professional Page: 96 designations is governed by legislative instruments, similar to the proposed regime in Singapore.”