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.”
The complete record
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“Mr Deputy Speaker, Sir, I thank Dr Tan Wu Meng for his remarks and his many useful suggestions. I fully agree with him that we must adopt a people-centric approach when designing and planning our city. In fact, our city planners are fully aware that the work they do is not just a technical exercise. It has far-reaching consequences. Because we know that even as we build and shape our infrastructure, it is our infrastructure that shapes us. It influences our actions, our behaviours and our mindsets. A well-designed city can inspire us, it can lift our spirits. Conversely, in a poorly-designed city, life can be brutish and miserable. So, the approach that the Government has taken from our early years of nation-building has always been to put people at the centre of urban planning. You can see this from the very First Concept Plan which was formulated in 1971. I have looked at the concept plan then. The centre of our island was preserved as a natural reserve and water catchment. We pushed out the heavy industrial areas from residential areas so that pollution will be kept away from the people and then we had lighter industry and commercial areas planned adjacent to new towns so that people do not have to travel far to get to the Central Business District (CBD) to work. These were some of the features in our First Concept Plan more than 40 years ago. But these essential features are still very much recognisable in the structure of Singapore today. It is not just about the big picture of a concept plan but also focusing on details, as Dr Tan Wu Meng has mentioned. A good example of that is having a clean and green environment for everyone. That is something that we put a lot of attention to, it was not just slogan or window-dressing.”
“Mdm Speaker, existing flat owners who have collected the keys to another BTO or resale flat today will have up to six months, from the time of key collection, to dispose of their existing flat. HDB will assess requests for more time to sell off the existing flat based on the merits of each case. Last year, HDB received 249 such requests for an extension of the six-month period. During this timeframe in 2015, there were some 41,400 households that bought BTO or resale flats. But if we were to only look at those who still owned a flat when they collected the keys to their new flat, then the number is 13,700 – meaning to say those who still owned a flat when they collected keys to their new flat, that number is 13,700. So, if you look at the appeal cases of 249 over the base of 13,700 – that works out to be less than 2%. As the Member had asked, the figure is about less than 2% of the overall base of people who are doing this transaction. Going forward, from 2016 to 2018, about 13,000 existing flat owners are expected to collect the keys to another BTO flat. They will, as per the current rules, have to dispose of their existing flats within six months from the time of key collection. But if there are requests for an extension of time, HDB will be prepared to exercise flexibility on a case-by-case basis.”
“Madam, HDB is generally very flexible in looking at these cases. Last year, it provided a third loan to about 900 households. About 75% of these loans are on a non-concessionary basis – that means, market rate – and 25% are concessionary loans. As I have said, HDB would want to help and assist applicants to buy a home but HDB is also wary of people who over-stretch, families who over-stretch themselves and end up with more debt. I do not think we want that to happen either just for the pursuit of buying a home, over-stretching their finances and ending up with more debt than is prudent. So, that remains the basis for which HDB will do its assessments but, generally, HDB will also be flexible in wanting to assist applicants to buy their own homes.”
“Mdm Speaker, HDB offers all buyers of HDB flats up to two concessionary loans and this is generally sufficient to meet the life-cycle needs of buyers. The limit of two concessionary loans also helps to ensure the stability of the resale market by preventing excessive churning of HDB flats. Nevertheless, HDB does exercise flexibility to assist households with a third HDB housing loan on a case-by-case basis. Typically, these are households that require urgent assistance but are unable to secure mortgage financing from banks. The households that receive these third loans are required to have sufficient savings and steady incomes to service the loan because this credit assessment is needed to ensure that households do not end up taking on more debt than they are able to afford.”
“Parties that wish to conduct research on genetically modified (GM) animals, including fish, must first obtain the approval of the Genetic Modification Advisory Committee (GMAC). The GMAC is a national committee, comprising representatives from Government agencies, research bodies and other supporting organisations overseeing the research and development, production, use, handling and release of Genetically Modified Organisms (GMOs) in Singapore. In deciding whether to allow the proposal to proceed, GMAC will consider whether appropriate measures are in place for the safe containment, handling and transport of the GM animals, in accordance with the Singapore Biosafety Guidelines for Research on GMOs. This is to keep research safe and ensure public and environmental safety. Should any party wish to sell GM fish in Singapore for human consumption, they must first seek approval from the Agri-Food & Veterinary Authority (AVA). AVA will assess the food safety of the fish in consultation with GMAC, and with reference to the food safety guidelines for GM foods, established by United Nations’ Food and Agriculture Organisation and World Health Organization.”
“HDB approved over 200,000 applications for an HDB Loan Eligibility letter between 2012 and 2015. Of these, about one in five (or 40,000) appealed for a larger housing loan. Generally, appellants asked for a larger loan to widen their flat choices, without specifying a loan quantum. Over one in three of such appeals were successful. HDB was unable to accede to the rest of the appeals as the applicants were unable to provide evidence of their ability to service the larger loan. As a flat purchase is a long-term financial commitment, it would not be prudent for potential home-buyers to take on additional financial burdens that they are unable to sustain.”
“There is currently a substantial supply of about 2,300 landed housing units in the pipeline, the bulk of which remains unsold. Hence, we do not have any plans to provide land for new landed housing developments in the near term. As the unsold inventory is cleared, we will consider releasing more land for new landed housing developments, to better meet the needs of Singaporeans who prefer to live in landed homes.”
“The sale of residential land parcels near MRT stations provides new homes which offer residents convenient access to public transport. As there can be high traffic volume around major MRT stations arising from the pick-up and drop-off of passengers by private vehicles and public buses, Government agencies ensure that the road network can support any additional traffic generated by residents of future developments nearby. If there is a series of land parcels located around an MRT station available for development, these land parcels will be progressively released for sale and development so that the increase in traffic volume can be managed over a period of time. In addition, before a land parcel is offered for sale, Government agencies will impose requirements on the future developer to prevent potential traffic problems. For example, a developer may be required to carry out road widening and improvement works. There may also be strict requirements on the location of entrance and exit points to the development to prevent any disruption to traffic circulation along the main roads.”
“There are currently over 2,700 ATMs distributed across Singapore, of which more than 2,300 are operated by the three local banks. This works out to almost four ATMs per square kilometre, which is comparable to the ATM coverage in other major cities, such as Hong Kong and Sydney. Banks take into account factors such as human traffic and the demand for cash in each area when locating their services. Many ATMs are, therefore, sited at high density locations like MRT stations, bus interchanges, neighbourhood town centres and food centres. In addition, banks like DBS/POSB and HSBC have partnered large retailers to provide cash-back services. For example, DBS/POSB customers may withdraw cash from their bank accounts, when making payments at any 7-Eleven, Cold Storage, Giant, Guardian or Sheng Siong store. Customers may also deposit and withdraw cash at SingPost outlets. Customers, therefore, have the convenience of conducting banking transactions when running other errands. In general, based on the availability of bank branches, ATMs, Cash Deposit Machines and non-bank cash withdrawal points across the island, there is adequate access to basic banking services in Singapore. MAS will, however, continue to monitor banks’ provisions of such services, to ensure convenient access to ATM services.”
“Madam, on the first question on tenure, that will vary from shop to shop and by the individual circumstance. So, I cannot give a definite answer but HDB will look at each case on a case-by-case basis. On the mix between sale and lease, HDB does not sell any more shops. There was a certain point in time when these were put out on a "sold" basis to encourage ownership, but this is not the case today. Currently, all the shops are put up on a rental basis. On transfer of business from generation to generation, I presume Miss Chan is referring to sold shops and whether those can be transferred from one generation to the next. If it is within the tenure of the lease, HDB will consider it. So, if it is within the period where it is owned by that person and he wants to pass it on to the children, that could be considered. If it goes beyond that particular tenure, then that is a separate matter which would have to be considered separately.”
“Madam, can I ask the Member to ask the second question again?”
“Madam, similar to other leasehold properties, the shops which had been sold by HDB on 30-year lease will be returned to the lessor, in this case, HDB, upon the expiry of the lease. Where possible and if in line with future planning intentions, HDB can consider allowing lessees to rent the shops after the lease expires. HDB shops are an integral part of public housing estates and are provided to meet residents' needs. The Revitalisation of Shops or ROS scheme has been designed specifically for HDB shops, to help enhance their vibrancy and improve their competitiveness. Under this scheme, the Local Merchants' Associations have the opportunity to lead and drive the revitalisation of their respective shop clusters, with funding support from the Town Council and HDB. To-date, 50% of HDB Town Centres and Neighbourhood Centres have benefited from the ROS scheme. Besides the ROS scheme, HDB has other programmes to rejuvenate older towns and estates, like the Remaking Our Heartland (ROH) programme, which provides enhancements for the entire town. MND and HDB have also been reviewing the ROS scheme with the aim of encouraging more retailers to upgrade their shops and business operations. The outcome of the review will be announced in due course.”
“As of January 2016, there are 613 stateless persons living in Housing and Development Board (HDB) public rental flats. Most live with their Singapore Citizen (SC) family members or another SC single.”
“There are currently about 500 Interim Rental Housing (IRH) scheme flats which provide housing for 1,000 families on a flat-sharing basis. The Housing and Development Board (HDB) reviews its rental flat supply regularly to ensure that there are sufficient flats. This is why HDB has progressively increased the public rental flat supply from 42,000 in 2007 to the present 53,000 units, with the aim of reaching 60,000 by 2017. In addition, HDB evaluates applications carefully to ensure that rental flats are safeguarded for the lower-income and vulnerable households.”
“From 2013 to 2015, the Ministry of Social and Family Development (MSF) provided shelter to about 900 individuals and families. Among them, 400 applied for a public rental flat. Around half of these applications were successful. This includes several who were provided with Interim Rental Housing (IRH), which is offered on a case-by-case basis and is not open for public application. Those who were unsuccessful in their rental flat applications mostly had other housing options when they applied, such as being able to afford a flat or having family support. Some were existing owners, tenants or authorised occupiers of Housing and Development Board (HDB) flats but who were no longer living in their current homes for a variety of reasons, for example, due to family Page: 149 disputes. For those who have no place to stay, MSF will work with the social service agencies to provide temporary shelter while they find alternative accommodation. HDB, MSF and the social service agencies also work together to help individuals and families address the underlying causes of their housing instability. This may include counselling, financial assistance, employment support and advice on their housing options. HDB will continue to exercise flexibility to provide rental flats for deserving cases.”
“The Neighbourhood Renewal Programme (NRP) was launched in 2007 and will benefit about 200,000 eligible flats. In September 2014, the age criteria for NRP was extended to include blocks built up to 1995, increasing the number of eligible flats by another 100,000. Thereafter, the Housing and Development Board had informed all Town Councils of the blocks that are eligible for NRP. The pace of NRP is dependent on the availability of resources to fund these programmes and also the ability of the Town Councils to effectively implement and manage these projects on the ground.”
“The Home Improvement Programme (HIP) was introduced in 2007 with about 300,000 eligible flats. To date, HIP has been announced for slightly over 200,000 flats. The remaining 100,000 or so flats have not been selected or announced. All Town Councils would be aware of the blocks in their constituencies which would meet the HIP nomination and selection criteria. The Housing and Development Board is still working to complete the selection of the remaining HIP-eligible flats by financial year 2018. But as with all publicly-funded programmes, this will be contingent on the Government's fiscal position and budget availability.”
“The property market cooling measures are intended to keep the market stable and sustainable. It is too early to relax the measures now. Doing so could result in a market rebound. The Additional Buyer's Stamp Duty (ABSD) was introduced to moderate the demand for residential property from investors, non-citizens and corporate entities. Singapore Citizens who do Page: 148 not own any residential property do not need to pay ABSD.”
“We recently enhanced LBS in April 2015, and this was well received. Besides LBS, elderly flat owners may take up the Silver Housing Bonus if they right-size to a 3-room or smaller flat. They also have other options of subletting either a bedroom or the entire flat and staying with their family members. Thus, MND has no plans to introduce reverse mortgage for HDB flats for now. MND will continue to regularly review and adjust our various schemes to meet the needs of our elderly.”
“The Ministry of National Development (MND) has completed its study on reverse mortgages for Housing and Development Board (HDB) flats. A reverse mortgage is a loan taken up by a property owner using his property as collateral. However, unlike a conventional mortgage, the borrower does not need to make cash repayment during the loan tenure. He only needs to repay the loan with accumulated interest upon loan termination or death, typically from the sales proceeds of his property. A reverse mortgage thus allows the property owner to unlock some equity while retaining the financial upside from any appreciation in property value. A reverse mortgage is a complex financial product with inherent risks. First, as it does not require periodic cash repayments, the loan balance grows with interest. Second, the flat owner has to bear property risks. If the market value of the property becomes less than the outstanding loan, the owners may have to sell the property prematurely to repay the loan, resulting in them having to look for alternative accommodation at an old age. We note that National Trades Union Congress (NTUC) Income offered reverse mortgage for HDB flats in 2006. As only 24 households signed up, NTUC Income has since stopped offering the product. The take-up overseas is also not high. There are various other monetisation options for HDB flat owners today, such as the Lease Buyback Scheme (LBS). LBS is an equity sale scheme where flat owners sell the tail-end lease of their flat to HDB and retain a shorter lease. This enables elderly households to receive a lifelong stream of income to supplement their retirement income. As compared to reverse mortgage, while LBS owners cannot sell their flat in the open market, they do not face any property equity risks.”
“Based on data published by the Department of Statistics, the change in average monthly household income for each housing type over the past 10 years is shown in Table 1 below. The change in average monthly per capita household income over the same period for each housing type is shown in Table 2 below. Page: 146 The Household Expenditure Survey provides data on the average consumption of water and electricity for each housing type. This does not account for Government rebates on utilities, which would have helped to reduce household expenditures. The consumption data is shown in Table 3 below. Page: 147”
“Town Councils have the statutory responsibility to carry out maintenance of lifts in Housing and Development Board (HDB) estates. Therefore, besides contacting the Essential Maintenance Services Unit appointed by their Town Council, residents may also call their Town Council directly if they encounter lift breakdowns. Under the Building Maintenance and Strata Management Act (Lift and Building Maintenance) Regulations, all lifts must be maintained at least once a month. However, Town Councils can work with their appointed lift servicing contractors to review whether a higher maintenance frequency is needed for specific lifts. This can be done with the help of the Tele-Monitoring System (TMS) installed in all HDB blocks, which provides data on lift performance, including lift breakdown rates. Page: 133”
“Under the Housing and Development Board (HDB) lease, the repair of ceiling leaks is the joint responsibility of the upper- and lower-floor flat owners. From time to time, HDB has received feedback from lower-floor flat owners about having to co-pay the repair costs of ceiling leaks. To lessen the financial burden on flat owners faced with a leaking ceiling situation, HDB introduced the Goodwill Repair Assistance (GRA) scheme. Under this scheme, HDB will pay 50% of the ceiling leak repair cost. The remaining 50% is then shared equally between the upper- and lower-floor flat owners. The GRA scheme not only reduces the financial burden on the lower-floor lessee but also helps expedite such repairs by assisting the upper-floor lessee as well. From 2013 to 2015, HDB assisted with about 22,900 ceiling leak repairs under the GRA scheme. Notwithstanding this, lower-floor lessees who prefer not to use the GRA scheme and wish to approach their upper-floor neighbours to make their own arrangements are free to do so.”
“The Monetary Authority of Singapore (MAS) announced in April 2015 that the limit on the amount of unsecured credit that a borrower can take on across all financial institutions (FIs) would be phased-in over four years. The borrowing limit was set at an initial level of 24 times a borrower’s monthly income from 1 June 2015. This will be lowered progressively to 18 times from 1 June 2017 and 12 times from 1 June 2019. Since the introduction of the borrowing limit, the number of borrowers with unsecured debt exceeding 24 times of monthly income has approximately halved, from around 32,000 in February 2015 to around 17,000 in November 2015. This reduced number represents around 1% of all unsecured credit borrowers. The number of borrowers whose unsecured debt exceeds 12 times their monthly income has also dropped by about 14%, from around 84,000 borrowers in February 2015 to around 72,000 borrowers in November 2015. This reduced number makes up about 4% of all unsecured credit borrowers. The vast majority of borrowers use credit prudently and are not affected by the aggregate borrowing limit. We encourage indebted borrowers to reduce their outstanding unsecured debts over time. They can seek help from their FIs or Credit Counselling Singapore, which can help work out repayment plans and offer various assistance schemes.”
“There are currently 31 public rental tenants who are non-Singapore Citizen (SC) or non-Singapore Permanent Resident (SPR) widows/widowers with Singaporean children. In general, they were allowed to retain the flat upon the demise of their SC spouses who had been the tenants of the flats. Single parents who are widowed or divorced and have an SC child may buy a flat from the Housing and Development Board (HDB), or a resale flat on the open market if they meet the prevailing eligibility criteria, such as the citizenship requirement and income ceiling. Single unmarried parents have the same housing options as singles. If they are SCs aged 35 and above and have not received a housing subsidy before, they may buy a new 2-room flexi flat in a non-mature estate, or a resale flat. They may also be eligible for housing grants. Single parents in hardship who have no other viable housing options or family support could also rent a flat from HDB on a case-by-case basis.”
“(proc text)] [(proc text) Resolved, "That Parliament do now adjourn." (proc text)] Adjourned accordingly at 7.22 pm. Page: 119”
“We want to ensure that there are more Singaporeans taking up leadership positions in our key financial institutions. So, MAS works with our financial institutions. We are supporting programmes for Singaporean professionals to be nurtured, for example, by enabling them to take up cross-functional roles within the bank or to take up international postings for better exposure. These are some of the broad areas that I thought I should highlight and comment on. I am sure the tripartite committee co-chaired by Mr Patrick Tay will be having more detailed deliberations to see how these plans can be enhanced and well implemented on the ground. So, perhaps, next time, Mr Tay can respond to his Adjournment Motion with specific recommendations from the tripartite committee on its plans to improve in many of these areas. In summary, the Government is stepping up its efforts and Singaporean financial sector workers can look forward to many more new programmes through SkillsFuture. But at the end of the day, a lot of this work comes down to individual mindsets. Everyone must be prepared to do his part. As Mr Patrick Tay had highlighted correctly, the next decade will be both disruptive and transformative for financial institutions. This will have a significant bearing on the scale and nature of financial sector jobs around the world, including in Singapore. In this period of volatility and change, we must all embrace the desire to keep learning and improving ourselves. We must all have a greater sense of urgency towards reskilling, upskilling and acquiring new skills. Mr Deputy Speaker, Sir, MAS is committed to working with the industry, NTUC and our unions to build a ready, resilient and relevant workforce in the financial sector. [(proc text) Question put, and agreed to.”
“We can set up new centres of excellence to deepen capabilities and work with employers to develop meaningful career progression for these specialists. At the same time, while we provide for specialist skills in areas of need, I agree with Mr Patrick Tay that we also need to develop professionals with a sufficient breadth of skills to be flexible and resilient in times of change. This means doing several things. We will need to pre-emptively identify the key jobs that are evolving and develop structured training pathways for professionals. We must identify new cross-functional competencies that may be needed for finance professionals, new competencies like data analytics and digital banking; new competencies that will help our professionals to be more resilient in the future. All these will support continual learning pathways under SkillsFuture and facilitate more seamless transitions for professionals across different areas Page: 118 of finance. Third, we will continue to work closely with the key financial institutions to build a strong core of Singaporean finance professionals and uphold fair employment practices. This is something that I have talked about in this House at the last Committee of Supply debate. And I mentioned that MAS has been engaging the top leadership of key financial institutions in this area of strengthening the Singaporean Core in our financial sector workforce and ensuring fair employment practices. The response that we have received from the top leadership of our key financial institutions – many of whom, incidentally, are Singaporeans as well – has been positive. Many of them are taking proactive steps to strengthen their Singaporean talent base.”
“I did a check – banking is covered in the modules and curriculums of polytechnics and universities, but I agree that the curriculum can be improved. That is why MAS is working with the Institutes of Higher Learning (IHLs) to enhance the curriculum of existing banking and finance modules, including having more well-structured internships, at both the polytechnic and university levels. In particular, our polytechnic students can look forward to the first Retail Banking Earn and Learn Programme, which will be implemented next year. Second, we will provide more learning pathways and training opportunities for Singaporean finance professionals at all levels to tap on the SkillsFuture measures and pursue mastery in their respective fields. MAS is already doing this through various schemes under SkillsFuture. For example, we have the Finance Scholarship Programme (FSP) to support early- and mid-career Singaporeans in developing specialist capabilities. We also recently launched Financial Sector SkillsFuture Study Award which is another channel of financial support to enable individuals to upgrade their skills through a range of programmes. Looking ahead, we will collaborate with different stakeholders, including IBF and the unions, to review and develop additional programmes needed to upskill industry competencies. Mr Patrick Tay had suggested that there may be too many of our banking professionals becoming specialists or taking on specialist roles. But, in fact, we need many more Singaporean specialists, in areas like risk management, compliance, wealth management and cybersecurity. We do need more people to go deeper into these specialist areas. We can do various things to nurture them.”
“In the interim, we understand that the changes taking place are a cause for anxiety among affected financial sector workers, especially the mid-career professionals. This is one reason why we have set up FSTC with Mr Patrick Tay as Co-Chairman, to bring together industry associations, the Labour Movement and Government agencies to foster a workforce that can meet the changing needs of the financial industry. MAS is working very closely with this tripartite committee, NTUC and the financial cluster unions to help and support those who are affected. In particular, individuals can approach a new one-stop career advisory facility for guidance relating to skills upgrading, and career opportunities Page: 117 in finance and beyond. We are setting up processes and mechanisms to help those, especially the mid-career professionals, who are affected. This advisory facility, FiCAC, will be set up in April this year, starting with a focus on the banking sector and it will be extended to insurance and asset management sectors in the near future. Beyond immediate assistance to those who are affected, we also need to look ahead to the middle term to chart the future skills that are needed for the financial industry and systematically equip Singaporeans with these skills. Mr Patrick Tay had elaborated at length on this; I just want to comment briefly on three areas. First, as Mr Patrick Tay had suggested, we must get our basics right and make sure that our education system prepares our young people and our potential entrants to the financial sector well for the financial sector. Mr Patrick Tay mentioned that banking is not taught in polytechnics and universities.”
“Mr Deputy Speaker, Sir, I thank Mr Patrick Tay for his suggestions on our financial workforce. As he mentioned, with sluggish growth in the global economy, coupled with ongoing implementation of the international regulatory reform measures, we are, indeed, seeing consolidation pressures in financial sectors all over the world. As I had mentioned just now, Singapore is not spared from these forces and consolidation pressures, but the impact on our financial sector has been relatively contained. Even as we see some retrenchments from certain banks, others continue to expand and hire. That is why, as I said, we are still generating, on a net basis, new jobs in the finance sector. We also see demand for talent in key areas of finance, like asset and wealth management, insurance, compliance and risk management. Looking ahead, we expect to see continued job creation in the financial sector, although at a more moderated pace than before. Over the medium term, we have several plus points in our favour. The strong pace of urbanisation in Asian cities will spur significant demand for infrastructure development and financing, as well as insurance. There will be growing affluence in Asia with the rising middle class, leading to increased demand for financial services. And as a key financial centre for the region, Singapore stands to benefit from these longer-term trends. Financial institutions are also increasingly adopting new financial technology, or fintech. Demand is growing for people with competencies in these areas, like cybersecurity, data analytics, application design and development, as well as network and infrastructure. These are areas which Singaporeans can excel in, and secure potentially good jobs in the financial sector.”
“For our financial system to remain stable and secure and to support economic development, the banking sector must be well-managed and remain resilient to shocks. That is the objective of the Banking Act amendments we have proposed today. [(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)] Page: 107”
“So, P2P lending may not be directly covered within the scope of the Banking Act. This is an area which is new, and it is a new form of financing globally. Within Singapore it is still at a nascent stage. But it is an area which is gaining more interest and attention, and we are certainly paying attention to it. As the Member had noted, while these platforms add to the diversity of the financial landscape, investors participating in P2P platforms should be aware of the risks, and there are considerable risks involved. These include risks that the crowdfunding proposals may be fraudulent or that the promised returns do not materialise. Also, it is because crowdfunding is commonly used by startup businesses to raise funds for the initial stages of a business cycle, lenders would also be exposed to the higher failure rates associated with startups. So, these are the risks involved in P2P lending. The regulatory framework for P2P lending must therefore address both the risks posed by such platforms, and strike a balance between that and allowing for innovation. So, we must strike a balance between investor protection and innovation. And that is why with this balance in mind, MAS had put up a consultation paper that the Member had alluded to. This was done in February last year. It was a consultation paper on securities-based crowdfunding. MAS had proposed to facilitate such securities-based crowdfunding offerings to accredited investors and institutional investors in the first instance, but not to retail investors because they may not fully appreciate the risks involved in P2P lending. Sir, I would like to thank the Members for their comments. I believe I have addressed their questions and I hope that Members will support the amendment Bill that is being tabled.”
“Sir, the new provisions that had been put in place were not so much in response to any particular new trends that had emerged but were really with regard to looking at how MAS can provide better oversight over non-banking businesses conducted by the banks. MAS is looking at how we can do it in a more comprehensive way and to, again, ensure that we maintain our high prudential standards. The Member had suggested that this can be done just through notification. But notification alone may not be sufficient for MAS and will not give MAS the powers to act just on the basis of a notification. Whereas, with this amendment, MAS will now have more powers, more ability, to ensure that prudential standards are in place and to also supervise the conduct of Page: 106 non-banking businesses. These are new and necessary measures that are needed to ensure that our prudential standards are maintained and held to a high standard. I would also add that many of the new measures that are being proposed are not just being done by MAS alone, but they are also measures that are done internationally. These are not done unilaterally by us, but they are measures that have been discussed in international financial forums which MAS has been active in. MAS has also played an active role in shaping these international standards, which are progressively being implemented in other jurisdictions as well. Mr Ong Teng Koon talked about a new area of risk on P2P lending. It is potentially a benefit as well as an opportunity but, as he highlighted, it is also a new area of risk. I should, at the outset, clarify that P2P activities are not directly within the scope of the Banking Act, which focuses on the regulatory framework for banks involved in the business of taking deposits and lending funds.”
“For example, as I mentioned just now, on the related party transaction provisions, we are not just adding more rules but we have, in fact, repealed an existing provision that makes bank directors jointly and severally liable for the bank losses arising from credit facilities or exposures to their directors and their related parties. So, we have repealed an existing provision which we have assessed to be not so effective. Instead, we have put in place other requirements to ensure and safeguard against related party transactions. MAS will, certainly, be mindful of implementing this well and providing sufficient transition time to the banks to make sure that they are able to have sufficient time to transit to meet the new requirements. Mr Leon Perera had suggested having prescribed or detailed guidelines. MAS will consider this, but it is not always possible to prescribe each and every scenario where there are related party transactions, because there could be many circumstances under which they can happen. So, in some instances, it may be based on principles that are set out, and adequate consultation and engagement will be done with the banks to ensure that they are able to implement. That is the same approach we will take with regard to the initiatives or new provisions that Mr Perera had highlighted. He mentioned clause 46 with regard to place of business and the concerns that this may raise the cost of doing business. He also asked whether there were any trends, in particular, that had sparked off such a new provision.”
“Mr Deputy Speaker, I thank the Members for their comments and support of the Bill. I would, first, address Mr Leon Perera's point about finding the right balance. I fully agree with the Member that there is a need to find a balance between ensuring adequate prudential safeguards and ensuring the competitiveness of the financial sector in Singapore. I hope the Member agrees that we have, in fact, been doing so over the past few years, and we have managed it, I think, better than most other financial jurisdictions, if we look at it. After the Global Financial Crisis in 2008, we saw many global financial institutions downsizing their global operations significantly. Singapore has not been spared, but I would say, if we look at the scale of the downsizing at the international level, the impact on Singapore has been relatively contained. In fact, our financial sector continued to post healthy employment gains in recent years. We have − 3,600 new jobs on a net basis over the first three quarters of 2015. This shows that while we have taken a path to find a balance with adequate strong safeguards, we also ensure that our financial sector is competitive and able to retain good jobs and generate good jobs for Singaporeans. On the other points that the Member raised, I will address them specifically. On new requirements, the Member mentioned clauses 17 and 34 on related party transactions and the need for guidelines and the concerns over burden and compliance costs. MAS has been very mindful of ensuring that it does not add unnecessary compliance costs for banks and that is why I am coming up with this set of amendments. MAS consulted the industry extensively and, where appropriate, had, indeed, made adjustments to the requirements.”
“Second, the Bill will empower MAS to inspect the local and overseas subsidiaries of a bank incorporated in Singapore. It will also allow the parent supervisory authority of a foreign bank or merchant bank to inspect all financial activities of the bank or merchant bank in Singapore, upon Page: 101 MAS' approval. So, the parent based overseas can inspect the financial activities of the bank or merchant bank in Singapore, subject to MAS' approval. These changes will facilitate the consolidated supervision of internationally active banks and merchant banks. Finally, amendments have been made to rationalise the penalty provisions for the contravention of the various requirements in the Act. Mr Deputy Speaker, Sir, a sound and progressive financial sector will create a strong foundation for sustainable economic growth. These amendments to the Banking Act will help strengthen the banking industry and align our regulatory regime with international best practices. Sir, I beg to move. [(proc text) Question proposed. (proc text)]”
“This will be done through a few key measures, such as the introduction of a safe harbour provision to protect banks' external auditors from liability where they disclose confidential information to MAS as part of their reporting obligations under the Banking Act. Furthermore, MAS will be empowered to direct a bank to remove its external auditors if they have not discharged their statutory duties satisfactorily. Third, to reinforce banks' risk management controls. This is the third broad area of amendments. These amendments will formalise MAS' expectation that banks establish risk management systems and controls that are commensurate with their business profiles and operations. MAS will be able to impose penalties on banks that fail to do so. The Bill will also require banks to seek MAS' approval to establish new places of business where certain non-banking activities, such as money-changing and remittance business, are conducted. This will allow MAS to exercise better oversight of banks' activities at such locations. For example, MAS will be able to require a bank to institute adequate safeguards against money laundering and terrorism financing, before it can commence money-changing and remittance businesses at new locations. Besides these three broad areas which I have just outlined, there are also several significant amendments to update the banking regulatory framework. First, the Bill will introduce a requirement for banks to immediately inform MAS of adverse developments that may materially affect them. In the case of a bank incorporated in Singapore, this extends to any adverse developments that may materially affect related entities of the bank. This will allow MAS to take the necessary supervisory action in a timely manner.”
“The Bill will vest MAS with the power to direct a bank to remove key appointment holders, including its chief executive officer and deputy chief executive officer, if they are found not to be fit and proper. The grounds of removal will be aligned with the criteria for approving their appointments. To enhance MAS' oversight of these appointments, the Bill will require banks to notify MAS as soon as they become aware of any material information which may negatively affect the fitness or propriety of any director or executive officer whose appointment was approved by MAS. The Bill will also repeal the provision that makes bank directors jointly and severally liable for any bank losses arising from credit facilities or exposures to the directors and their related parties. This provision was intended to emphasise the fiduciary duty that bank directors owed to their bank. However, based on feedback provided by the banks, this provision discourages candidates from taking up bank directorships and more importantly, MAS has also assessed that it does not provide effective oversight over banks' related party transactions (RPTs). Instead, to address the potential conflicts of interest arising from RPTs, MAS will require a bank to conduct all such transactions on an arm's length basis and to obtain board approval before entering into such transactions that pose material risks to the bank. The Bill will also enhance MAS' powers to direct a bank to terminate, prohibit and restrict transactions that the bank enters into with its related parties, if these are deemed detrimental to depositors' interests. The Bill will also enhance corporate governance of banks by reinforcing the complementary role of external auditors in assessing a bank's risks and internal controls.”
“The Bill will empower MAS to require a foreign bank branch to incorporate all or part of its banking business, where it is in the interest of the public, the bank's depositors or the domestic financial system. This new regulatory power forms part of the suite of policy measures for domestic systemically important banks (D-SIBs). This was announced by MAS in April last year. In retail banking, in particular, a bank with significant retail presence – defined as having more than 3% of resident non-bank deposits, and more than 150,000 deposit accounts with balances below S$250,000 – will be designated a D-SIB and be required to subsidiarise its retail operations. The subsidiary will then be subject to MAS' own regulatory requirements, based on its risk profile. The Bill will also empower MAS to impose prudential requirements that cap banks' leverage and ensure that they maintain sufficient liquidity. As I mentioned earlier, MAS has always maintained high standards of prudential regulation and supervision for our banks; in fact, somewhat higher than in most other jurisdictions. Over the years, we have developed a system of regulation that allows well-managed risk-taking and innovation, ensuring the stable and sustainable development of the financial services sector. This Bill will update our rules to reflect new international standards, which MAS has been involved in shaping through its participation in various international financial forums. The second purpose of the Bill is to strengthen the corporate governance of banks. Effective corporate governance plays a critical role in ensuring robust risk management, decision-making Page: 100 and accountability within banks.”
“Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second Time." Over the years, the Monetary Authority of Singapore (MAS) has consistently held our banks to stringent capital and liquidity standards. This approach has served us well, as Singapore's banking system has remained resilient in the face of the Global Financial Crisis of 2008. Following the crisis, MAS has been actively involved in coordinated efforts among international regulators to strengthen capital and liquidity standards for banks, and to create a more robust international banking system. Likewise within Singapore, MAS has been refining the regulatory and supervisory framework to strengthen the resilience of our financial institutions and to enhance the stability of the financial system as a whole. So, this Banking (Amendment) Bill forms part of the overall effort. MAS has consulted extensively with the industry and the public on the policy changes and the draft Bill. It has studied the feedback received and incorporated it into the Bill where appropriate. Mr Deputy Speaker, I will now go through the three broad areas of amendments in the Bill. First, to strengthen prudential safeguards and enhance depositor protection. Currently, a foreign bank can choose to operate in Singapore as a branch or a locally incorporated subsidiary. A bank branch will rely on support from its head office, which is subject to capital and other requirements imposed by its home regulator on a group basis. In contrast, a locally incorporated subsidiary will have its own capital and be subject to MAS' capital and other regulatory requirements.”
“Singaporeans enjoy a housing subsidy when they buy a new flat from HDB or a resale flat in the open market with a Central Provident Fund (CPF) housing grant. Flat owners who have sold their first subsidised flat have to pay a resale levy when they buy another subsidised flat from HDB. The resale levy policy aims to ensure a fair distribution of subsidies between first- and second-timers and prioritise the allocation of subsidies to groups that need them most, such as first-timer citizen families seeking to buy a subsidised new flat to start their families. From 2010 to 2015, about 7,900 second-timer households had paid the required resale levy amount. Over the same period, HDB received about 3,500 requests to waive the resale levy totally and about 4,100 requests to waive the resale levy partially. HDB assesses the appeals based on the merits of each case and advises the buyers accordingly. HDB does not allow for full waiver of the levy. For those applying for partial waiver, HDB has acceded to about one-third of the appeals. These are usually second-timer households who sold their flats some time ago and have accrued high interest amounts and face significant financial hardship. So, HDB will take into account their family situations and circumstances and see how best to help them. In some cases where buyers lack the cash to pay the resale levy, HDB would help by incorporating the resale levy into the purchase price of the second subsidised flat the appellant is buying so that the appellant can subsequently pay the levy by instalments.”
“Madam, I have moved from Boon Lay to Marsiling, Yew Tee but I have not forgotten my old constituency, so I would like to assure the Member that we will follow up on the areas of concern and get the relevant agencies to take enforcement action.”
“Madam, it is the responsibility of the private landowners and lessees to maintain their facilities and surrounding areas on their land. So, we are very clear it is the responsibility of these landowners. For specific cases where public safety is concerned, Government agencies can and will carry out enforcement action against the private owner. For example, SCDF will carry out enforcement action if there is any infringement of fire safety regulations. Building and Construction Authority (BCA) may issue Notices to Maintain under the Building Maintenance and Strata Management Act if commercial buildings and their surrounding structures are not properly maintained in a serviceable condition. Under the Street Works Act, LTA may also require private footpaths and roads that are in a dangerous or defective condition to be rectified.”
“Madam, the Enhancement for Active Seniors (EASE) programme offers a set of standard and cost-effective items to make the flat more elder-friendly. These items include ramps for single-step entrances. For flats with more than a one-step difference, there are technical, space as well as configuration challenges to building a standard ramp. These challenges are not insurmountable, but they require customised solutions to fit the various flat configurations and resident needs. And this is why our approach is to let flat owners identify and choose their preferred solutions from among the wide range of commercially available options in the market. What HDB does then is to work with the relevant agencies and the Voluntary Welfare Organisations (VWOs) to assist those who need help in implementing these solutions. And for those who need help with financial assistance, they can also seek assistance from ComCare, SG Enable, as well as various VWOs.”
“Madam, as I mentioned, the lifts selected under the SLRP apply to the batch of lifts that was procured or put in place from 1987 to 1997. And so, that was the clear criterion that was used for the selection. Perhaps, within an estate, you may have lifts installed at different times. They may also be lifts which do not have vision panels but I think the key criterion is the time in which they were installed and we have selected this particular batch which was the Page: 24 batch during the period of 1987 to 1997. The oldest batch of these and we are selecting them for the SLRP.”
“Madam, we have, in total, in our HDB estates about 23,500 lifts. More than 55% of them are already covered under the LUP. So, for the remaining lifts that are not covered under LUP, which are about 10,000, the oldest batch is the ones covered under the SLRP. So, this is the batch of lifts that were introduced in 1987 to 1997. They are the oldest batch of lifts that are not covered under LUP. These lifts are about 750 in number. They are located all over Singapore and we are specifically identifying them as that batch of lifts to be replaced because, as I said earlier, these are the lifts which are very old. They do not have the features that the newer lifts have, which include energy-efficient motors, vision panels and infra-red motion sensors. That is why they were identified for replacement under SLRP.”
“Mdm Speaker, Town Councils (TCs) have the statutory responsibility to carry out the maintenance and cyclical replacement of lifts in HDB estates and are already doing so. So, the duty of the TCs includes the replacement of lifts when they are due, as well as the monitoring and cyclical maintenance to ensure serviceability and to prevent frequent lift breakdowns. Nevertheless, since 2001, the Government has spent $5 billion under the Lift Upgrading Programme (LUP) to improve lift accessibility for 5,000 HDB blocks without direct lift access. So, all the blocks which are eligible for LUP have already been selected. HDB also rolled out a programme in March 2012 to install lifts at all HDB multi-storey car parks without barrier-free accessibility, where it is technically feasible. In September 2014, HDB introduced the Selective Lift Replacement Programme (SLRP). This was to replace about 750 old lifts with modern lifts that come with better safety and security features. These new lift features, which will benefit some 33,000 households, include energy-efficient motors, vision panels and doors with infra-red motion sensors. HDB is working closely with the TCs to implement the SLRP on a cost-sharing basis and we will monitor the outcomes of this programme before deciding on our next steps.”
“Mdm Speaker, between 2011 and 2013, HDB ramped up the Build-to-Order (BTO) flat supply and launched about 26,000 flats per year to address the temporary demand-supply imbalance. This helped to clear the demand backlog for first-timers. As a result, from 2013 to 2015, about nine in 10 first-timer families and seven in 10 second-timer families were successful in their applications for BTO flats in the non-mature estates. Most flat applicants with multiple unsuccessful applications had applied for flats which are limited in supply but in high demand and these are largely BTO flats in the mature estates as well as balance flats. With the demand-supply balance restored, HDB has been tapering the BTO supply – this came down from 22,400 flats in 2014, to 15,100 flats in 2015. Despite the tapering of flat supply, the application rate of first-timer families applying for 3-room or larger BTO flats in the non-mature estates has remained stable at about 1.6 times last year. And that is comparable to the rate in 2014. This means that most of the families would have been able to book a flat on their first attempt. HDB plans to offer about 18,000 flats this year in 2016 to meet new demand from recent policy changes, which include the higher income ceilings and enhanced Special CPF Housing Grant. We will continue to monitor the market closely and adjust the supply when necessary, in line with our broader plan to keep supply at a sustainable level over the long term.”
“The Agriculture Productivity Fund (APF) was launched in end-2014 to help our farmers boost their yields and raise productivity. The APF co-funds initiatives such as farm capability development to support productivity improvements, and research and development (R&D) in innovative production technologies. About $0.69 million was disbursed from APF in 2015. As the scheme is still new, we can expect higher take-up and greater disbursement of funds over the coming years. Before the introduction of the APF, there was a Food Fund scheme, which served a similar purpose, and which had disbursed about $18 million from 2009 to 2014. Thus far, the projects receiving the highest APF funding have been those that involve the purchase of advanced, high-technology production systems. The size of the grants depends on the nature and scale of the project. Generally, farms can receive up to 50% co-funding for basic capability upgrading, up to 70% co-funding for productivity enhancements, and up to 90% co-funding for R&D projects, with varying quantums for the different farm types. The Agri-food and Veterinary Authority of Singapore (AVA) works closely with recipients to ensure successful project outcomes at key milestones during the project timeline. AVA also conducts Post-Implementation Reviews together with APF recipients upon project completion to ensure that productivity deliverables are met before final funding amounts are disbursed.”