Lawrence Wong
Singapore
“Sir, we will provide more information. I see the value of getting Ministries to put out more information, to share more about how their resources are being used and what outcomes they have achieved.”
“Sir, I agree fully with Mr Azhar that human capacity, human capital is critical. In fact, I would say the long-term potential of Singapore, how far we go really depends on us being able to maximise our human potential. That is key and that is why we have long invested in education. And it is not just about the investments.”
“Sir, we have been maintaining that commitment of 1% for some time now. I do not think it is about saying that we just have to do more and spend more. As many have highlighted, we want to ensure good outcomes from our R&D spending as well. So, we will continue if the outcomes are good.”
“This has never been the case. Temasek, when it started, was always very clear about its mandate from the very beginning – commercial, not doing national service, focused on commercial outcomes.”
“Sir, the MOF economists when they look at fiscal projections use Government's forecast of the economy, which is also published. We would typically use the mid-point of the range and then, of course, because these are in nominal terms, you have to factor for that. And the projections are done on those basis.”
“Sir, I was relieved that Mr Loh said he only has one question, but he asked the most difficult question. To answer the question, we will continue to monitor cost of living across all segments of society.”
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“Mr Speaker, I thank the Member for these supplementary questions. We have not seen a spike in the numbers. Every year, there will be a few who come to HDB to cancel for the reasons that I have cited. There are some second-timers who would like to give up because, as the Member Mr Ang Wei Neng has cited, they find it difficult to sell their present flat and choose not to proceed with the purchase. But these are not that many because, very often, when they have these difficulties, our first recourse is to give them more time to sell the flat. And, very often, with more time, they are able to sell the flat and then move on to their next flat that they have purchased. So, we continue to analyse each of these cases and, as I said earlier, we are flexible. If there are genuine reasons, if there are financial difficulties, we will have different ways of helping them.”
“Mr Speaker, can I ask the Member to repeat the third question? I did not quite get the question.”
“Mr Speaker, in 2018, about 900 Housing and Development Board (HDB) flat buyers cancelled their Build-To-Order (BTO) flat bookings, of which 25% were 2-room flexi or similar flats, 15% were 3-room flats, 38% were 4-room flats and 22% were 5-room flats. The main reasons cited for cancelling the BTO flat bookings were either a change in housing plans, for instance, they wished to remain in their existing flat, or buy a resale flat, or a change in financial circumstances which affected the flat purchase. Flat buyers who cancel their flat booking before signing the Agreement for Lease forfeit the booking fee, which ranges from $500 to $2,000, depending on flat type. If they cancel the flat booking after signing the Agreement for Lease, the forfeiture is 5% of the flat price. They would also need to wait a year before they may apply for another subsidised flat. These measures are in place to ensure that buyers are serious when they apply for a flat, and do not deprive others who are in urgent need of buying a flat. Nevertheless, where there are valid grounds, HDB has waived the forfeiture on a case-by-case basis.”
“Housing and Development Board (HDB) flats are meant for owner-occupation. To reinforce this principle, buyers of HDB resale flats are not allowed to retain ownership of local or overseas private properties. Since the policy was introduced in August 2010, slightly over 5,000 households have disposed of their private properties when they purchased flats from the resale market. In the last three years, about 1,200 households appealed to retain their private property. Of these, HDB acceded to about 300 appeals after considering the specific facts of each case, taking into account factors, such as the owner's share in the private property and the reasons why the private property cannot be recovered for his or her own use.”
“Many FI borrowers have switched to fixed-rate loan packages, which has reduced their vulnerability to market interest rate increases. The Government has also put in place measures to encourage financial prudence among borrowers that could help to mitigate the impact of rising market interest rates. For instance, loans for the purchase of HDB flats granted by FIs are subject to a maximum loan amount based on the flat's value and a Mortgage Servicing Ratio (MSR) of 30%, with the latter computed using a medium-term interest rate (currently 3.5%). FIs are also required to provide a Residential Property Loan Fact Sheet when marketing property loans, to help borrowers understand how they will be impacted by higher interest rates. In addition, the Monetary Authority of Singapore regularly conducts stress tests on households' mortgage exposures. Most HDB owners' mortgage payments to FIs are expected to remain manageable under a "severe stress" scenario of both higher interest rates and lower household incomes.”
“As at 31 December 2018, 490,440 Housing and Development Board (HDB) flat owners were servicing mortgages, of which 320,526 (65%) took their loan from HDB. Of these households, 68,715 (~22% of 320,526) owned a 3-room or smaller flat, 147,310 (46%) owned a 4-room flat, 84,281 (26%) owned a 5-room flat and the remaining 20,220 (6%) owned an Executive or bigger flat. The average monthly instalment for flat owners of 3-room and smaller, 4-room, 5-room and Executive/bigger flats servicing HDB loans was $567, $853, $1,058 and $1,253 respectively. Amongst these flat owners, 224,836 (70% of 320,526) households paid their monthly instalment fully using Central Provident Fund (CPF) monies, 44,693 (14%) households paid fully in cash, and 50,997 (16%) households used a combination of cash and CPF monies. Of the flat owners who took a loan from HDB, the large majority (292,664 or 91%) took a concessionary loan. The interest rate of concessionary HDB loans is pegged at 0.1% above the CPF Ordinary Account interest rate, which is currently at 2.5% and does not change frequently. This has helped to provide certainty to HDB borrowers on their monthly mortgage repayments. At the same time, there were about 169,914 (35% of 490,440) households servicing loans from financial institutions (FIs) for their HDB flats. Of these households, 36,875 (22% of 169,914) owned a 3-room or smaller flat, 73,397 (43%) owned a 4-room flat, 45,381 (27%) owned a 5-room flat, and the remaining 14,261 (8%) owned an Executive or bigger flat. However, as of September 2018, less than one-third of all outstanding housing loans extended by FIs were pegged to floating market interest rates, down from about 60% in 2016.”
“Manhole covers within Housing and Development Board (HDB) precincts are generally for water, sewerage and telecommunications purposes, and are, hence, built in accordance with guidelines by the Public Utilities Board and the Infocomm Media Development Authority. As for manhole covers on public roads, these are built by the Utility Providers in accordance with guidelines by the Land Transport Authority. The various guidelines ensure that manhole covers are structurally sound and fit for purpose. Covers are intended to fit properly with the manhole and should emit minimal noise as a result. HDB receives minimal feedback related to noise from manhole covers on vehicular driveways with interlocking pavers. In the few instances where there have been noise complaints, they were generally due to poor fit of the cover with the manhole. This can usually be addressed by clearing the manhole of debris, replacing covers which have become warped due to long-term exposure to the elements, or grinding the cover to achieve a better fit with the manhole. Where such situations arise in HDB precincts, HDB will work with the Town Councils to rectify them.”
“The Lift Upgrading Programme (LUP) is offered to Housing and Development Board (HDB) blocks without direct lift access and where the cost cap per benefiting unit can be met. For blocks that have failed the polling once previously, HDB will evaluate appeals for a second poll, provided that Advisers can demonstrate that circumstances have changed since the earlier failed poll. This can be through an informal survey and Advisers should receive at least 75% support from residents before appealing for LUP to be re-offered. To ensure that LUP polls are taken seriously, blocks that are offered LUP a second time will be informed that it will be the final round of LUP polling. We should respect the residents' final decision. Reopening the polls for the third time is likely to lead to negative feedback from residents who had earlier objected to LUP. Nonetheless, we are open to considering requests for a third poll on a case-by-case basis, if there are good reasons. This includes strong resident support of at least 75%.”
“We recently announced the setting up of a new Statutory Board called the Singapore Food Agency which will take over the food-related work currently being done by AVA, the National Environment Agency and the Health Sciences Authority. Tomorrow, we will be tabling the Singapore Food Agency Bill and the NParks (Amendment) Bill in Parliament to effect this organisational restructuring. As part of the legislative changes, we will also introduce requirements for importers of key food items to adopt plans, including preventive strategies, to mitigate the impact of food supply disruptions. If and when there are external disruptions in supply, there will be some fluctuations in food prices and we have to be prepared for this. But on the whole, our strategies have strengthened food security and ensured that Singaporeans have access to affordable and safe food options. This is why the Economist Intelligence Unit has ranked Singapore as the most food secure country in the world.”
“The Government adopts a multi-pronged approach to safeguard Singapore’s food security. First, diversification of our food import sources mitigates the impact of supply disruption from any one source. As part of our diversification efforts, the Agri-Food and Veterinary Authority (AVA) regularly organises and facilitates food sourcing activities, to help our industry players find alternative import sources. We bring in food from around 180 countries, and we are continuing to strengthen our diversification efforts. For instance, we accredited some farms in Thailand to supply hen shell eggs in 2017 and we are in the process of accrediting more this year. Second, we are transforming our agriculture sector to raise local production. In 2017, we launched the Farm Transformation Map to guide the long-term development of the sector. Since then, we have tendered out new agriculture land plots, mostly at fixed land prices, to enable tenderers to compete on productivity. We have already seen new innovative technologies and processes proposed by winning tenderers. We also enhanced the Agriculture Productivity Fund last year such that our farmers can get more funding support to purchase advanced technology and systems to optimise their production. Third, we are encouraging our local farms to internationalise and set up overseas presence. Apollo Aquaculture is an example of a local food fish farm that has expanded its operations to Brunei. Such farms can export their produce back to Singapore to enhance our food security. Finally, Government agencies are being reorganised to enable greater focus on food safety and security.”
“Trees in parks are inspected every 12 to 24 months, depending on their proximity to event spaces and car parks. Since 2016, the National Parks Board (NParks) also does an additional, more in-depth annual inspection for trees of more than four metres in girth, to check for internal decay or cavities in these trees. NParks has also implemented other measures in light of changing climatic conditions. First, NParks replaces storm-vulnerable species with hardier trees. Second, NParks regularly prunes its trees to improve their structure and balance. In particular, since 2016, NParks has been conducting crown reduction and pruning prior to periods of more severe weather conditions. Third, NParks uses technology to analyse risks and improve inspection processes. For instance, NParks recently developed a Tree Structural Model to understand the impact of strong winds on the stability of trees. The data helps NParks determine the pruning required to improve tree stability. With this adaptive tree management programme in place, the annual number of tree failure incidents has fallen by about 85% from 3,000 in 2001 to about 400 in 2018, despite more severe weather. NParks will continue to review its tree management programme to ensure that it remains robust and comprehensive.”
“This was adapted from a system developed by the Australian National University, where the roosting mynas are trapped while in the trees, and then euthanised in a controlled and humane manner. AVA is finetuning the method before considering wider deployment. In tandem, NParks is working with the Jalan Besar Town Council to undertake habitat modification measures to reduce the number of mynas roosting in the estate. First, trees in the estate will be pruned to make them less attractive as roost sites. This will be completed in January 2019. We expect the mynas to disperse to non-residential areas once the tree crowns are pruned. Second, to sustain this effect over the long-term, the current roost trees will be replaced with tree types that are less preferred by the mynas. These are trees with crowns that are less dense but will still provide greenery and shade. Agencies will continue to work closely with the Jalan Besar Town Council to manage the myna situation at Potong Pasir. The public must also play its part by maintaining the overall cleanliness of the environment and not feeding wild birds.”
“A sustainable myna management strategy requires a holistic suite of measures, such as the removal of food sources made available by humans, habitat modification, and population control strategies. To this end, the Agri-Food and Veterinary Authority (AVA) and National Parks Board (NParks) have been working with the Jalan Besar Town Council to address the noise disturbance issue at Potong Pasir caused by Javan Mynas. NParks has regularly pruned trees in Potong Pasir to discourage the mynas from roosting in the affected areas. AVA has also worked with the Town Council to ensure proper food waste management, as the presence of improperly disposed food waste exacerbates the situation. AVA has also tried to move the birds away from trees near residential areas. For instance, in September 2017, AVA trialled the use of lasers to disperse the birds at Potong Pasir, but assessed that this is not a sustainable solution as the birds returned once the lasers were switched off. AVA has also conducted trials in other parts of Singapore, such as using natural bird repellent and passing low electrical currents through roost trees. However, these trials had limited long-term effects. AVA will continue to refine and assess other possible methods. The Javan Myna is not native to Singapore. It is an invasive bird species. If the mynas continue to roost in large numbers, they will pose a threat to native bird species as they compete for nesting and food resources, as well as cause hygiene and noise issues. Thus, there is a need to remove some birds in order for longer-term management measures to be effective. In this regard, AVA conducted a trial in Potong Pasir in December 2018 using roost nets to trap the mynas.”
“Similar to home ownership flats, rental blocks are considered for the Home Improvement Programme (HIP) and Lift Upgrading Programme (LUP). There are also upgrading programmes specific to rental flats, such as the Ad-Hoc Upgrading Programme. Rental tenants benefit from all upgrading programmes free of charge. There are five rental blocks in Boon Lay. Three of them are let under the Public Rental Scheme, and underwent improvement works in 2010, ahead of HIP for their neighbours in home ownership flats. The scope of works was as almost identical to HIP. The lifts in these three blocks have been upgraded such that at least one lift in each block serves every floor. The other two rental blocks in Boon Lay have been let under the Parenthood Provisional Housing Scheme (PPHS) since 2013. They underwent improvement works in 2013, also with a scope of works similar to HIP. The lifts there have not undergone LUP, as the blocks are designated for interim use, and PPHS tenants generally stay there for a relatively short time. The Housing and Development Board (HDB) informs prospective PPHS tenants upfront that the lifts there only stop at certain floors. HDB will study the option of upgrading the lifts in these blocks, taking into account the longer-term plans for their usage. The Enhancement for Active Seniors (EASE) programme enhances the safety and comfort of seniors living in HDB flats. Seniors under the Public Rental Scheme can benefit from EASE free of charge.”
“The Ministry of National Development (MND) will continue to study ways to ensure the safe installation and maintenance of windows in our residential blocks. Presently, all windows have to be designed and installed according to specified standards and meet performance requirements under the Building Control Regulations. Window installations have to be carried out by an Approved Window Contractor (AWC) registered with the Building and Construction Authority (BCA). If there are flats found with non-compliant windows, such as being fitted with aluminum instead of stainless steel rivets, BCA will direct the owners to engage an AWC to carry out the necessary rectifications. BCA also works with Town Councils, grassroots organisations and other partners to raise awareness about window safety, as flat owners are responsible for maintaining their windows. Owners can carry out three simple steps. First, check that the window fasteners, safety stoppers and angle strips are properly in place. Second, clean the joints and other moving parts. And third, engage an AWC to change any rivets from aluminum to stainless steel as well as replace any worn-out parts. BCA reminds the public of these steps with illustrations through half-yearly Window Safety Day outreach campaigns on 6/6 and 12/12 each year.”
“Under the Selective En-Bloc Redevelopment Scheme (SERS), households whose existing flat is a subsidised flat do not need to pay a resale levy when they buy a new replacement flat from the Housing and Development Board (HDB). This waiver of resale levy is a concession under SERS. The resale levy is payable only for SERS households who had previously sold a subsidised flat elsewhere and are liable to pay a resale levy should they buy another subsidised flat from HDB. The resale levy is capped at $30,000, as a concession under SERS. SERS households need not take up the replacement flat from HDB. They can instead opt for an ex-gratia payment and buy a resale flat on the open market, without the need to pay any resale levy.”
“Over the last three years, there has been an average of about 650 fire incidents reported per year in Housing and Development Board (HDB) flats. Fires in HDB flats are mainly due to unattended cooking, of electrical origin, or involve naked flames, such as candles.”
“Mr Speaker, the Housing and Development Board (HDB) assesses all requests for a public rental flat on a needs basis. For households that do not meet the eligibility criteria, such as grandparents requesting to rent with their grandchildren, HDB will look into their individual circumstances and assist them with rental housing if they are unable to buy a flat and have no other housing options or family support.”
“First-timer households purchasing a new flat from the Housing and Development Board (HDB) enjoy a subsidised flat price, and may receive up to $80,000 in housing grants, comprising the Special Central Provident Fund (CPF) Housing Grant and Additional CPF Housing Grant (AHG). They may also receive up to $120,000 when purchasing a resale flat, comprising the CPF Housing Grant, AHG and Proximity Housing Grant. Between July 2015 to June 2018, about 47,700 first-timer households received CPF housing grants for their flat purchase, as detailed in Table 1 below. Housing grants are generally tiered by income so that more assistance is provided to lower-income households. Refer to Tabel 2 below for the number of first-timer households receiving CPF housing grants, by grant quantum. After factoring in housing grants, close to 80% of first-timer households paid $400,000 or less when purchasing a HDB flat, whether from HDB or the resale market (see Table 3 below).”
“The lift lobbies and common corridors at Housing and Development Board (HDB) projects are designed to be naturally lit and ventilated. This open concept design is eco-friendly and lowers maintenance costs. During a heavy downpour, especially during the monsoon season, some rainwater splashing along the more open areas like lift lobbies and common corridors is inevitable. For weather protection, common corridors are, therefore, provided with an extended overhang, that is, a canopy. While this is generally adequate to minimise rainwater splashing during normal rainy days, it may not be able to fully prevent the corridor from getting wet during heavy downpours accompanied by strong winds. When HDB receives feedback from residents, it will assess the extent of the rainwater splashing. If the splashing is severe and likely to damage the main entrance door of the unit, HDB will provide a rain screen, subject to the Singapore Civil Defence Force's (SCDF's) fire safety requirements to ensure that there is adequate open space and cross ventilation at the common corridor to facilitate the quick dispersal of smoke during emergencies, such as fire outbreaks. The provision of rain screen is a cost-effective solution, and residents can submit their feedback to HDB whenever they identify the issue, regardless of whether their units have undergone the Home Improvement Programme (HIP). Members who have feedback on issues related to specific blocks can approach HDB so that we can look into the details.”
“In the last three years, there were 117 incidents of fallen windows, affecting about 0.01% of Housing and Development Board (HDB) residential units. The average age of HDB flats involved in such incidents is about 33 years. Windows come in many sizes and designs and would have to be custom-made to suit the preferences of residents. Flat owners also have the responsibility to ensure that the windows in their flat are well maintained so that they do not fall off and endanger the public. They are, therefore, in a better position to decide when and how to replace their windows. There are also existing programmes in the Community Development Councils for residents who need financial assistance with small scale home renovation and maintenance works.”
“Parents with shared care and control have equal right to list their children in their flat application. Hence, the requirement for one parent to obtain agreement from the other is in place because we respect the right of each parent to purchase a Housing and Development Board (HDB) flat with their children. While we encourage parents to resolve matters in the best interest of their children, we understand the concern that reaching mutual agreement might be difficult in some divorces. In such situations, HDB adopts a needs-based approach and exercises flexibility on a case-by-case basis. In particular, if the ex-spouse has purchased another property, we will, indeed, take that into consideration in our assessment of the case.”
“As Housing and Development Board (HDB) flats primarily serve to meet the housing needs of flat owners and their family members, there is no limit imposed on the number of family members who can live together in an HDB flat. HDB only imposes an occupancy cap on flat owners who rent out their flat or bedrooms to unrelated persons. The occupancy cap minimises disamenities caused by overcrowding in our public estates and maintains a conducive living environment for all residents. From 1 May 2018, the occupancy cap for 4-room and larger flats, including jumbo flats, was revised to six persons. This is aligned to the occupancy cap for private residential properties of all sizes. Nevertheless, should flat owners need to exceed the occupancy cap when renting out their flat or bedrooms, HDB may exercise flexibility based on the circumstances of each case.”
“About 20% of Housing and Development Board (HDB) flat buyers in 2017 who took a mortgage loan used cash to service their loans. Among them, four in 10 did not voluntarily take up the Home Protection Scheme (HPS). Effectively this means that around 92% of recent HDB flat buyers with outstanding loans are covered under the HPS policy or have voluntarily taken up HPS. Besides HPS, some home buyers may have purchased mortgage-reducing products from the private sector. We do not have detailed records of such purchases, but many commercial banks offer such mortgage-reducing insurance products as part of their loan financing package to home buyers. So, the overall insurance coverage may well be higher. HDB will continue to work with CPF Board to further encourage take-up of HPS. We will continue to monitor the situation and assess whether to implement further measures if the need arises.”
“This Bill is just one of the many changes we are making to our laws to help Singapore be a responsible member of the international community, and to uphold our reputation as a conducive and reputable place to do business. Failure to impose these AML/CTF requirements across our entire real estate value chain comes at a reputational cost to Singapore. And I believe that legislative backing will be necessary to ensure effective enforcement and compliance to these requirements. Mr Deputy Speaker, Sir, I beg to move. [(proc text) Question put, and agreed to. (proc text)] [(proc text) Bill accordingly read a Second time and committed to a Committee of the whole House. (proc text)] [(proc text) The House immediately resolved itself into a Committee on the Bill. – [Mr Lawrence Wong.] (proc text)] [(proc text) Bill considered in Committee; reported without amendment; read a Third time and passed. (proc text)]”
“Mr Gan Thiam Poh also asked if we can deny or revoke a housing developer's licence to persons or entities that have been convicted of ML/TF offences in other jurisdictions. We will mainly rely on local convictions as a basis to refuse, suspend or revoke a Housing Developer's Licence. But the Controller may refuse to grant a Licence to a person or entity with an overseas conviction, or revoke the licence if it has been earlier granted, if the overseas conviction, together with other circumstances, indicates that it is carrying on its business in Singapore in a manner that is detrimental to the interests of purchasers or to the public. So, we have the ability to do so, to revoke, suspend or refuse a Licence if the convictions are happening elsewhere. Finally, Mr Louis Ng suggested for the Government to consider adopting unexplained wealth legislation to bolster our AML/CTF regime. This is, in fact, a point raised by Mr Murali Pillai yesterday during the debate on the Serious Crimes and Counter Terrorism (Miscellaneous Amendments) Bill. So, it is, in fact, not quite so relevant to this Bill, because, as mentioned by Minister Josephine Teo yesterday, the Government will certainly monitor overseas developments in the area of anti-corruption measures to see if these can be adapted here on another occasion. Unexplained wealth order legislation has been introduced overseas as an investigation tool to enable enforcement agencies to investigate the source of money. But it is a tool which can and should be capable of being directed at anyone, and not just developers. So, it is really a separate matter outside of the scope of this Bill. Mr Deputy Speaker, Sir, I believe I have addressed the points raised by Members.”
“So, the Urban Redevelopment Authority (URA) will engage the developers. They will do industry outreach and provide all the necessary guidance to developers in the initial implementation stage. Subsequently, URA will provide ongoing support to improve the industry's understanding of what constitutes risky transactions, as well as their risk mitigation capabilities that are needed, in order to foster a good understanding of the new requirements. Then, when the industry's capabilities are levelled up, when everything is in motion, the COH under URA will carry out regular audit checks to ensure that, indeed, developers are implementing their measures properly. And if developers are found to not have adhered to the requirements, there will be penalties, not only potential fines, but, in more serious cases, they could also be disqualified from obtaining licences in the future. Let me now move on to some transboundary issues which Members have raised. Mr Gan Thiam Poh asked whether other countries have implemented similar regulations, how many, and if there was a level playing field. Indeed, the whole point of developing international standards under FATF is to ensure that there is a comprehensive global system to fight against ML/TF. To date, about 190 jurisdictions have committed to the FATF Recommendations. The specific provisions may differ from country to country because even the regulation of the sale of properties varies from country to country. Some countries even prohibit sale of properties off-plan. So, specific provisions may vary. But 190 jurisdictions have committed to the FATF recommendations precisely because this is an important international issue and it can make progress through a global effort.”
“This is also the position taken today under section 27 of the Housing and Developers (Control and Licensing) Act and section 9 of the Sale of Commercial Properties Act. Er Dr Lee also asked about the role of the compliance officer that developers must appoint. This compliance officer can be any appointee at the management level and will be responsible for reviewing the developer's AML/CTF policies. So, it need not result in additional expense. But the developer must designate a compliance officer and appoint with clear responsibilities for this officer. Ms Foo Mee Har asked how developers can mitigate the risk brought on by the use of shell companies and other corporate entities to purchase property. Indeed, the Government is aware of such concerns and we have made legislative amendments to address this issue. For example, the Companies Act was amended last year to make the ownership and control of business entities more transparent and thereby reduce opportunities for the misuse of corporate entities for illicit purposes. The FATF recommendations also include requirements for regulated entities to obtain information of beneficial ownership. So, in elaborating and crafting the rules, we will make clear the duties of developers in this particular requirement of checking for beneficial ownership as well. Some Members expressed concern that developers would fail to effectively comply with the new rules due to a lack of understanding of how to implement them or merely go through the motions. Indeed, we do not want this to be a paper exercise or a tick-in-the-box exercise, as some Members have mentioned just now. So, we will be adopting a two-pronged approach to address this. First, we want to help developers level up.”
“Ms Foo Mee Har also asked if developers could rely on third parties, such as estate agents, lawyers or banks, to conduct the necessary checks on their behalf. The answer is yes. Developers will have the flexibility to determine how best to do their checks, including through third parties. As mentioned, the Bill does adopt a risk-based approach to compliance and we will not rule out the use of such third parties. But ultimately, the developer bears full responsibility for adhering to the requirements under his new Bill. So, the developer should ensure that the third party it hires has the appropriate capabilities and the resources to comply with these measures and are able to provide the relevant information to the developers without delay, upon request, should they decide to use a third party. Er Dr Lee and Mr Louis Ng asked who specifically would be held responsible if the due diligence measures were found to be inadequate or not complied with. Ms Foo Mee Har also spoke about the need for the burden of compliance to fall on senior management and throughout the organisation for accountability. Indeed, the developer will be primarily responsible for failing to perform any due diligence measures as required by law. However, where the offence was committed with the consent or connivance of an officer of the company, or the commission of the offence was attributable to the officer's negligence, then that officer may also be held liable for the offence. So, it will really depend on a case-by-case basis, depending on the circumstances. That officer could be any director, member of the management team, chief executive officer, manager, secretary or other persons acting in such capacity in the developer company.”
“The prescribed period will be set out in the rules and will be at least five years after the completion of the transaction. And this is consistent with what is prescribed in the FATF recommendations and also in other sectors’ legislations, such as for financial institutions and for pawnbrokers. Some Members asked about the extent of the developer's responsibilities in adhering to the requirements of the new Bill. Specifically, Mr Gan Thiam Poh asked about the point at which the developer's duty to monitor their buyers ends, given that the profile of buyers can change after the signing of the sale and purchase agreement. Under the new section 12B of the Housing Developers (Control and Licensing) Act and the new section 5A(2) of the Sale of Commercial Properties Act, a developer is required to perform such CDD measures as may be prescribed, at such times as may be prescribed. So, the provisions are broad. But I want to assure Members that we will not be requiring developers to monitor their buyers perpetually. Instead, the rules will make it clear that the requirements on developers will only apply until the project is completed, which is also the point at which the developer is no longer regulated under the two Acts. Developers should ensure that the information obtained with respect to the purchasers and its beneficial owners is kept updated. At any point during the monitoring, if the developer comes to know about property which represents proceeds of or is used or intended to be used in connection with, any act which may constitute drug dealing or criminal conduct, the developer will then have to report such suspicious activity to an STRO. But the point is that the rules will not be imposed on the developer perpetually.”
“So, in tabling this Bill, we would like to strike a balance between complying with the requirements recommended by FATF and ensuring that the burden on developers is not excessive. That is why, as I mentioned earlier, the Bill adopts a risk-based approach under which the broad principal obligations are set out. Perhaps, that is why Mr Louis Ng noted that there are these terminologies which are set out in broad language. But it is deliberately done, so that then businesses have the flexibility to develop procedures according to their business size, customer profile and nationality, and different levels of ML/TF risks which they can identify using their own AML/CTF programmes. Er Dr Lee Bee Wah, for example, talked about the 12-month deadline when due diligence checks are to be conducted. These are not hardcoded in the Bill. These are more detailed regulations that would be set out in subsidiary legislation and we have not decided on them yet. So, we will take the time to engage the industry and review these specific requirements before we set them out in subsidiary legislation. That said, I would like to highlight that developers today already collect most of the "Know Your Customer" (KYC) information that we have in mind for the rules. Developers today already do so. Any developer that accepts a transaction without doing basic KYC checks will be problematic, even today. So, I would expect developers today to already collect most of the KYC information that we have in mind for the rules, such as identity documentation, so that incremental compliance costs should not be excessive and should not adversely affect purchasers, especially genuine purchasers. Er Dr Lee also asked how long developers would have to keep records of their diligence checks.”
“These are the sale of properties typically sold off-plan and they are exposed to more risks. And our main objective of the Bill is to get developers who are involved in the sale of such uncompleted properties involved in our AML/CFT efforts and to bring them up to the same level as the other players that are involved in real estate transactions, namely, the bankers and the lawyers. For the sale of completed properties, these typically do not involve developers directly and so we rely on the other players in the real estate chain, such as bankers and lawyers, who already have similarly robust obligations under the respective legislation to conduct CDD checks and to report suspicious transactions. So, this is really about levelling up and making sure that we cover comprehensively the same requirements, not just on bankers, not just on lawyers, but also now, on real estate developers. And that is why the Bill covers the two Acts that regulate the sale of uncompleted properties. For real estate agents, in particular, the Council for Estate Agencies (CEA) already has guidelines to require estate agents to perform due diligence checks for suspicious transactions. These are guidelines by the regulator. However, we do intend to make amendments next year to the Estate Agents Act so as to impose similar AML/CFT requirements for estate agents. I understand and I hear the feedback from Members who have spoken and all of you have highlighted and asked if the proposed legislation will be overly onerous on developers, and whether it will impact their business operations. We share the concerns and that is why, in drafting the provisions and in implementing these requirements, we have been careful to implement a calibrated risk-based approach.”
“Mr Deputy Speaker, I thank the Members of the House who have risen in support of the Bill, as well as the Members who have shared their comments and feedback. I will now address some of the points raised in the course of this debate. I believe Members who have spoken generally agree that as a responsible member of the international community, there is a need for Singapore to do our part to strengthen our levers to effectively detect, deter and prevent ML/TF. However, several Members, including Er Dr Lee Bee Wah and Ms Foo Mee Har, asked why there was a need to impose these requirements on developers, in particular, since the funds they receive would eventually have to pass through financial institutions and banks which already have to carry out checks anyway. Er Dr Lee Bee Wah is right in that, in general, most ML/TF activities are concentrated in the financial sectors. But as Ms Foo Mee Har and Mr Louis Ng said, real estate is also an established method of money laundering worldwide. So, such activities can occur in real estate and real estate can be exposed to questionable practices and be used as a vehicle for ML/TF activities. For the real estate sector, in particular, besides your bankers and lawyers, developers are a key party that deals with property buyers. So, they do play an important role in the detection and prevention of such activities. And this is why we are introducing these requirements by amending the two Acts that regulate developers to better facilitate our AML/CTF activities. And this is also the reason why this Bill does not cover transactions involving completed properties because the Bill pertains to the two Acts that regulate the sale of uncompleted housing and commercial properties by developers.”
“With that, Mr Deputy Speaker, Sir, I beg to move. [(proc text) Question proposed. (proc text)]”
“Under the amendments in clauses 6 and 11 of the Bill, these include powers to require developers to produce relevant information, retain documents and make copies, and disclose information for purposes of investigation and any subsequent criminal proceedings. The penalty for not complying with the above provisions will be a fine not exceeding $100,000. This is in line with penalties introduced in more recent Acts like the Pawnbrokers Act. Mr Deputy Speaker, Sir, this Bill is important as it allows Singapore to more effectively combat money laundering and terrorism financing. It ensures our compliance with the FATF Recommendations and signals our commitment to be a responsible member of the international community. Failure of businesses to meet international standards puts at risk our international business relationships, as well as the reputation of individual companies and the Singapore financial market in general. We have consulted the Real Estate Developers Association (REDAS), the Law Society of Singapore and members of the public in general. They appreciate the reputational risks of non-compliance with international standards and are supportive of the proposed anti-money laundering and terrorism financing requirements. The industry has shared concerns on the additional compliance burden that may be generated and how they can effectively carry out their new duties. We understand these concerns and, in drafting the Bill, we have sought to strike a balance between the additional regulatory burden imposed on the industry as well as the need to meet international standards and the FATF Recommendations. In addition, the legislative backing will make clear what is necessary and help to ensure more effective enforcement and efficient compliance to these requirements.”
“Developers should also not open or maintain any account for, or hold and receive monies from, an anonymous source or a buyer with an obviously fictitious name. The Bill adopts a risk-based approach to anti-money laundering and terrorism financing compliance. Principal obligations are set out, but businesses will have the flexibility to develop procedures according to the different risks they identify using their own programmes. Today, persons who are looking to develop a housing project are required to obtain a housing developer’s licence, and clause 4 of the Bill proposes amendments to give the Controller of Housing power under section 7(1) of the Housing Developers (Control and Licensing) Act, to bar a person who has been convicted of money laundering and terrorism financing offences in Singapore, or has, as a substantial shareholder, or a holder of a responsible position, like partner or director, a person who has been convicted, from being licensed housing developers. This will add to the powers the Controller of Housing already has today to refuse, revoke or suspend a housing developer's licence, for cases, such as when the housing developer has been convicted of an offence involving fraud or dishonesty, or when it is carrying on its business in a manner that is detrimental to the interests of its purchasers or to the public. In addition, amendments in clauses 8 and 10 will disqualify persons convicted of money laundering or terrorism financing offences, from holding responsible positions in developers. Lastly, the Controller of Housing will also be given commensurate enforcement powers to ensure compliance with the new provisions.”
“The FATF Recommendations include measures to be taken under each country's criminal justice and regulatory systems, preventive measures for financial institutions and certain other businesses and professions, and measures to facilitate international cooperation. Singapore joined FATF in 1992, and since then we have put in place a very strong legal and regulatory framework to detect, deter and take action against money laundering and terrorism financing. This is further complemented by the effective monitoring of implemented initiatives and decisive law enforcement actions. As a responsible member of the international community, Singapore has committed to periodic peer assessments to ensure compliance with the FATF Recommendations, including through changes to legislation. So, this Bill continues this ongoing effort and will help to strengthen our levers against money laundering and terrorism financing in the real estate sector in line with FATF's direction to strengthen the supervision of non-financial sectors. Let me now go through the key provisions of the Bill. First, clauses 5 and 10 of the Bill introduce new requirements for developers to facilitate the detection of money laundering and terrorism financing activities. In particular, developers will need to carry out customer due diligence checks on purchasers, keep proper records relating to these checks, and report any suspicious transactions to the Suspicious Transaction Reporting Officers (STROs). Developers will need to implement programmes to train their employees and develop internal policies and controls to manage and mitigate money laundering and terrorism financing risks.”
“Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time". Money laundering and terrorism financing activities are transboundary in nature. Illicit funds are the lifeline for international crime and terrorism which impact all countries. Today, the Housing Developers (Control and Licensing) Act and the Sale of Commercial Properties Act regulate the sale of housing and commercial properties before completion by developers. Both Acts are administered by the Controller of Housing. Real estate is a category of the non-financial sector that may encounter persons engaging in money laundering and terrorism financing activities. So, this Bill amends both Acts to, firstly, put in place new requirements for developers to facilitate the detection of money laundering and terrorism financing and, secondly, bar persons from being involved in developer activities if they have been convicted for money laundering and terrorism financing offences. These are among the series of amendments that Members of this House have made in the last four years to bring Singapore’s anti-money laundering and terrorism financing regime in line with the international standards set out by the Financial Action Task Force (FATF). FATF, an intergovernmental body, was established in 1989 to set out national and international standards and promote the effective implementation of measures to combat money laundering and terrorism financing. The FATF Recommendations form part of the broader international financial sector standards and are recognised and used by the International Monetary Fund (IMF) and the World Bank when they conduct assessments of a country’s financial sector.”
“With regard to the situation in Eastwood estate, we understand that affected residents have contacted the Public Utilities Board and the Land Transport Authority, and that the agencies have followed up and responded accordingly. For cases where structural safety concerns were raised, a Professional Engineer has inspected the buildings and found them to be structurally safe. Where there are potential building structural safety issues, members of the public and building owners can contact the Building and Construction Authority (BCA). BCA will investigate the feedback, consult relevant agencies, and respond accordingly. BCA can also help to facilitate discussions between the owners and project parties to resolve issues, as needed.”
“From 2015 to 2017, the proportion of applicants who were invited to book a 2-room flexi flat increased from 52% to 84%. For singles, their application rate has come down steadily from 8.5 in 2015 to 4.4 for the Build-To-Order (BTO) launches in 2018 so far. This improvement was made possible through the Housing and Development Board's (HDB's) efforts to increase the supply of 2-room flexi flats in non-mature estates, from 320 in 2012 to an average of about 4,000 per year from 2014. HDB will continue to offer this same level of flat supply in 2018. Beyond that, HDB will continue to finetune its 2-room flexi flat supply to meet the demand from singles. Besides buying a flat from HDB, singles can consider the option of buying a resale flat on the open market. The wide range of resale flats available, and housing grants totalling up to $60,000 for eligible buyers, will help singles to find a suitable flat within their budget.”
“About 80% of Housing and Development Board (HDB) flat buyers in 2017 used Central Provident Fund (CPF) monies to service their loans. These buyers are covered under CPF Board’s policy which mandates compulsory take-up of the Home Protection Scheme (HPS) for those who use CPF monies to repay any instalment of a housing loan taken to buy an HDB flat. An additional 12% of recent flat buyers used cash to service their loans and took up HPS voluntarily. Effectively, this means that around 92% of recent HDB flat buyers with outstanding loans are covered under the HPS policy or have voluntarily taken up HPS. Besides HPS, some home buyers may have purchased mortgage-reducing insurance (MRI) products from the private sector. We do not have detailed records of such purchases, but many commercial banks offer such MRI products as part of their loan financing package to home buyers. So, the overall insurance coverage may well be higher. HDB will continue to work with CPF Board to further encourage voluntary take-up of HPS. For example, besides conducting regular informational talks and distributing HPS booklets to home buyers, HDB will also explain to all flat buyers the benefits and coverage of HPS at the point of flat purchase. We will continue to monitor the situation and assess whether to implement further measures if the need arises.”
“Since the Seller's Stamp Duty (SSD) was implemented in 2010, only about 5% of all transactions in the secondary market, or approximately 5,000 transactions, were liable for SSD. Out of these, approximately 40%, or 2,000 transactions, involved sale by Singaporeans owning only one residential property. SSD is intended to discourage short-term holding of residential properties and is part of the Government's measures to ensure a stable and sustainable property market. This principle applies to all sellers of property, regardless of the number of properties they own at the point of sale.”
“Housing grants are means-tested and pegged to the monthly household income of all working members of the household. In particular, the grant quantum for the Additional Central Provident Fund (CPF) Housing Grant and Special CPF Housing Grant is tiered based on monthly household income, while the quantum for the CPF Housing Grant is tiered by flat type. With regard to housing loan, the Housing and Development (HDB) determines the loan quantum based on the flat owners' income as they are the ones who are borrowing and need to service the mortgage. Nevertheless, HDB exercises flexibility and considers appeals to use the occupiers' income for the computation of the loan amount on a case-by-case basis.”
“Water heaters should be connected to a 20-ampere socket switch instead of a normal 3-pin socket, which can only support currents of 13 amperes. The installation of water heaters must be done by an electrical worker licensed by the Energy Market Authority (EMA). The Government will do its part to educate residents on the proper installation of water heaters. Currently, the Housing and Development Board's (HDB's) Home Improvement Programme (HIP) contractors who find water heaters incorrectly installed during the course of their work will advise the residents to address the issue. HDB will also work with EMA on a public awareness campaign to remind all residents of the importance of the safe installation of water heaters.”
“Housing and Development Board (HDB) blocks are designed to insulate individual flats from noise generated by mechanical services, such as pumps and lifts. For example, in situations where the lift shaft is next to the living room or bedroom of a flat, HDB provides a cavity wall buffer, or a wall with an air gap in between. As mechanical services are managed and maintained by Town Councils, residents who provide feedback on noise from these systems typically approach the Town Councils directly, and not HDB. The Town Councils will then work with the maintenance contractors of the systems to address the feedback. For cases where HDB is made aware of the feedback either through the Town Council or from the resident directly, HDB will work with the relevant Town Council to implement measures to mitigate the noise, where necessary.”
“About 24,000, or close to half of all public rental households, have previously owned HDB flats. Entry into public rental is on a needs-basis. Rental applicants are assessed based on factors, such as household income, whether they have family support, and their ability to afford other housing options. For applicants who have previously owned a property, the proceeds from the sale of their last property will be taken into account when assessing their housing budget.”
“The Housing and Development Board (HDB) is committed to providing affordable public housing for Singaporeans. Helping families live with or near one another for mutual care and support has also been a longstanding priority for the Government. To ensure new flats are affordable for first-timer families, we provide the Additional Central Provident Fund (CPF) Housing Grant (AHG) and Special CPF Housing Grant (SHG), on top of subsidised flat prices. All first-timer families earning up to $5,000 a month can receive an AHG of up to $40,000, regardless of whether they are buying a new flat in a mature or non-mature estate. The SHG of up to $40,000 is also extended to eligible first-timer families when they purchase 4-room and smaller flats in non-mature estates, to encourage prudence in home purchases. For those buying new flats in HDB's Build-To-Order and Sale of Balance Flats exercises, we have various schemes that give priority to families who wish to stay with or near one another: the Married Child Priority Scheme, Multi-Generation Priority Scheme and Senior Priority Scheme. For multi-generation families that wish to stay together, we have also introduced purpose-built Three-Generation (3Gen) flats for a more comfortable living environment. First-timer families buying resale flats are also given significant Government support. They can enjoy housing grants of up to $120,000, comprising a CPF Housing Grant of up to $50,000, an AHG of up to $40,000 and a Proximity Housing Grant of up to $30,000. This is regardless of whether the resale flat is in a mature or non-mature estate. We will continue to review our housing policies to ensure that public housing remains affordable.”
“The management of pigeon-related issues requires a multi-stakeholder approach. This includes Government agencies, such as the Agri-Food and Veterinary Authority (AVA) and the National Environment Agency (NEA), Town Councils, and members of the public. Restricting the availability of food is one of the most effective ways to reduce pigeon populations. AVA issues advisories to inform residents about the environmental health and hygiene issues caused by feeding pigeons and also takes enforcement action against pigeon feeders. In tandem, NEA ensures good food waste management in food centres and coffee shops in Housing and Development Board (HDB) estates and enforces against littering offences. Finally, Town Councils maintain the cleanliness of estates. Where appropriate, they also deploy localised bird-deterrent measures, such as spikes or nets on the external facades of buildings, to discourage pigeons from roosting. AVA will continue to test other solutions to manage the pigeon population. For example, AVA has conducted trials at selected locations to study the efficacy of contraceptives to manage the pigeon population. These trials saw some success but also revealed that the use of contraceptives should still be coupled with other measures, such as enforcement and education, to ensure a sustained reduction in the pigeon population. AVA will continue to trial the contraceptives at other suitable locations to further assess the effectiveness of this solution.”
“To clarify, our guidelines do not stipulate a minimum built-up area for private properties. Instead, we impose a limit on the maximum number of units that developers can build in a development, to manage potential strains on local infrastructure and safeguard the liveability of residential estates. Within these limits, developers still have the flexibility to provide a range of unit sizes to meet the diverse needs of home buyers. To calculate the maximum number of units that developers can build in each development, the maximum permissible gross floor area of the development is divided by an average unit size. In the recently announced changes to the guidelines, this average unit size was increased from 70 square metres (sqm) to 85 sqm for all private properties outside the Central Area, and to 100 sqm for selected locations. As the guideline changes were only announced last month and will only take effect in January next year, it would be premature to conclude whether the changes have had any impact on market prices. Moreover, property prices depend on many factors beyond the guidelines. These include developers' bidding behaviour for land, home buyers' evolving demand for units of various sizes, as well as how developers adjust the mix of unit sizes for upcoming projects to cater to demand, just to name a few. We will continue to monitor the distribution of unit sizes in residential developments and review the guidelines periodically, taking into account factors, such as infrastructure load, as well as changes in lifestyle and housing needs.”
“The Home Improvement Programme II (HIP II) is a second round of upgrading for our Housing and Development Board (HDB) flats at the 60th to 70th year mark to keep the flats safe and liveable to the end of their lease. It will be launched in about 10 years' time and focus on common maintenance issues which occur in ageing flats. At present, single-lever taps for wash basins are provided under the HIP, as part of toilet upgrading. We will study the specific scope of works for HIP II, including the Member's suggestions, closer to the launch of the programme, taking into consideration user needs, long-term maintenance issues and fiscal sustainability.”