Lee Hsien Loong
Singapore
“Yes, of course, every time I sell the land, I put money into the Reserves, but I am not putting the money into the Reserves all today. I am putting it in a stream of payments, 30 years apart.”
“Speaker, Sir, I do not think it was a very difficult question to figure out, that when I spoke to MTI, I spoke to the Minister, because Mr Gan Kim Yong is the Minister for Trade and Industry.”
“" I think that would have been unjust because he has not been charged. If there is a case, the case has not been heard, he has not been found guilty or acquitted or whatever. I cannot prejudge a case based on an incomplete investigation – started recently, or a partial investigation, just entered into the formal phase.”
“Mr Speaker, Sir, first, Mr Leong is quibbling over words. In February, Mr Tan Chuan-Jin told me, "I offer to resign". I said, "Yes, sort out your constituency first". In other words, decision taken. The moment to execute it, I will decide. So, it is quite clear. Legally, he has not resigned.”
“Sorry, Mr Speaker, to respond to Ms Poa on why not no pay leave. It is my judgement to make. The Civil Service works in one way; their basis is if you have been convicted, then you are on zero pay and other consequences will follow.”
“I am very happy to note that Assoc Prof Jamus Lim appreciates the second key and is seeking a third. And I hope that it portends a change in your attitude towards the Elected President and his custodial powers. But I think the Brazil example is a very interesting one.”
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“We already practise it in the step-down care sector. In community hospitals, nursing homes and home nursing, patients' incomes are assessed to determine the subsidies they receive. Means testing is also used for primary care services for the elderly who seek treatment in private clinics, through the Primary Care Partnership Scheme. Eligible patients pay the same fees as they would if they had visited the polyclinics. These schemes have been well received and accepted. MOH is studying how to extend means testing to general hospitals. MOH will proceed cautiously, so as to gain more experience with means testing and give patients time to adjust. It will need to determine where best to start, because hospital services span a wide range, from inpatient care to day surgery to specialist outpatient care. Even with means testing, a high-income patient can opt for B2 or C class treatment, and pay less than for A or B1 class treatment. But when he does so, he will be subsidised less than a poorer patient getting B2 or C class treatment. And I think that is fair. Medisave and Medifund Top-ups Even with means testing and enhanced medical insurance, some older Singaporeans will face difficulties in coping with increased medical expenditure and paying their MediShield and Eldershield premiums. Older Singaporeans were midway through their working lives when the Medisave Scheme started in 1984. As a result, they have lower Medisave balances than younger workers. Furthermore, workers aged 50 to 55 will face deeper CPF employer contribution rate cuts in the next two years. I have therefore decided to top up the Medisave accounts of Singaporeans aged 50 and above.”
“We should therefore supplement Medisave with health insurance schemes which are properly designed to avoid the "buffet-lunch abuses" so common in other countries. This will help us to realise portable employer-provided medical benefits. MOH is also examining how we can enhance the coverage of MediShield, to give Singaporeans better protection against large bills from catastrophic illnesses. Means Testing Besides relying more on medical insurance, we also need to target our healthcare subsidies more precisely, to reach those who need them most. Nationally, one-third of the total healthcare expenditure is financed by the Government. In hospitals, many services are subsidised even more. For example, all patients in Class C wards are subsidised 80% of the cost of their stay. Currently, we link the level of subsidies to the class of ward. We do not take into account the patient's ability to pay. A poor patient in a Class C ward enjoys the same 80% subsidy as a high-income patient, even though he needs the subsidy much more. If we continue subsidising healthcare this way, one of two things will happen. Either the Government will have to spend a lot more on healthcare - which means raising taxes, or it must lower the quality of healthcare provided to all Singaporeans. Neither is desirable. The Feedback Group has proposed pegging the amount of subsidy to the financial status of the patient rather than the class of ward, in other words, means testing. It will be more difficult to implement, as we will have to assess the financial means of each patient. But means testing is ultimately more efficient and equitable as it will enable us to focus subsidies on those who need them, and so make the most of our healthcare budget. Means testing is not new.”
“Ultimately, Singaporeans have to be responsible for themselves and not rely on the Government to provide for every need. Our healthcare financing framework, based on the 3Ms - Medisave, MediShield and Medifund - has fostered an ethic of self-reliance, kept healthcare spending down, and served us well. Medisave for Self-Employed Originally the self-employed did not fall within this 3M framework, because they did not contribute to Medisave. But in 1992 the Government amended the CPF Act to require self-employed individuals who earn above a certain salary - currently $6,000 a year - to make compulsory contributions to their Medisave accounts. We wanted to make sure that the self-employed regularly put aside savings for their health needs and not expose themselves to unnecessary financial risk when they or their families fall ill. However, compliance has been patchy. Only 47% of self-employed CPF members have paid their full Medisave contributions. Another 36% have made partial payments, while 17% have not contributed at all, which means that about half of the self-employed are storing up bigger problems for themselves in future by not contributing fully to their Medisave. Henceforth, the CPF Board will enforce Medisave contributions more strictly for self-employed Singaporeans, just as it does with other employers and employees, to ensure that self-employed Singaporeans set aside enough for their health needs. Health Insurance and MediShield With medical costs increasing, so will the risk that large healthcare expenses will exhaust one's own savings. Health insurance schemes can help stretch our Medisave dollars through better pooling of risks.”
“We will make sure of this through generous scholarships to outstanding undergraduates, bursaries for those from low-income homes, and student loans readily available to all who need them. That we can promise. Our current formula is for undergraduates to pay 25% of the operating costs of university education. The Government pays for the remaining 75%, and also bears in full the infrastructure costs of our universities, which is substantial. Going forward, we need to establish a more sustainable and equitable cost-sharing formula between the state and university students. There will be no university fee increases this academic year. However, MOE and the universities are reviewing the basis for setting university fees in future, and expect to reach some conclusions this year. Keeping Healthcare Affordable Our publicly funded hospitals provide quality care to all Singaporeans, at an affordable cost. But advances in medical technology, while enhancing healthcare, continue to push up its cost. For example, in 1990, the standard treatment for blocked heart arteries was angioplasty. By 2000, it had progressed to angioplasty with stents. This has lowered the recurrence of blood vessel blockage but has tripled the cost of treatment from $1,300 to $3,500. Our ageing population will put further pressure on the healthcare system and on our ability to finance good healthcare for all Singaporeans. MOH will do its best to contain medical inflation. This requires cooperation and understanding from all stakeholders in the healthcare system. Providers have to cut out inefficiencies and frills. Patients have to be realistic in their expectations. And all Singaporeans should adopt healthy lifestyles.”
“Furthermore, only the top 25% of the cohort will make it to university, unlike schools, polytechnics or institutes of technical education. The argument for funding university education heavily from general taxation is therefore much weaker. From the universities' perspective, it is better for them to be less reliant on the Government for funding. The more universities raise their own funds from fees and donations, the more autonomous they will be, the more flexibly they can respond to student needs and market demands, and the better placed they are to achieve academic excellence. This has been the experience all over the world. In the UK and Europe, universities are funded mainly through Government grants, and the result has been mediocrity and declining standards. In contrast, US universities have to compete actively for both state and private funding, on the basis of quality. American students pay higher fees, and take student loans to a much larger extent than European students. The US universities have produced peaks of excellence unmatched in any other country, and higher standards overall. The US is a large country and its multi-tiered model of state and private universities cannot be replicated here. But we should move in the direction of greater competition and self-reliance to allow our universities to achieve excellence. It is therefore fair to ask undergraduates to pay for a larger part of their university education themselves. They do not necessarily have to pay while studying, but can do so later when they are working and earning stable incomes. With this approach, no student should miss a university education because he cannot afford it.”
“35% of our working adult population now have either a university degree or a polytechnic diploma, triple the 12% just 10 years ago. Today, 60% of each cohort graduate from a local polytechnic or university. As our schools improve, more students will qualify for university admission. The proportion of each cohort entering local universities will increase from 21% today to 25% by 2010. However, good university education is not cheap. One-quarter (24%) of our education budget goes to the university sector. More students entering university, more good professors, and more overseas attachments for students can only mean more spending on university education. The Government's total spending (operating and development expenditure) on universities has already grown from $1.11 billion in 1998 to $1.56 billion in 2002, a 41% increase in five years, mainly because of larger student enrolments. If this trend continues, we will be forced to squeeze resources from primary and secondary education in order to fund university education. This is not desirable. From the economic point of view, universal primary and secondary education benefits society much more than it benefits individuals. Society as a whole is better off when everyone is literate, equipped with basic skills, and able to become a good citizen. He can be a good colleague, good neighbour, good fellow national serviceman. The whole society gains. Hence it is sound public policy to subsidise primary and secondary education heavily. In contrast, the benefit of a university education accrues mostly to the individual. A rigorous and relevant university degree will make the graduate more employable, and enable him to earn much more during his working life.”
“Mr Speaker, Sir, after effective government, the next important fundamental for Singapore's survival and success is a strong society. Stable families, social cohesion, racial and religious harmony, secure homes and streets - these make Singapore a strong society and an attractive place in which to live, work, and play. A strong society is marked by a high degree of self-reliance, resilience and social responsibility. The migrants from China, India, and the Malay archipelago who built modern Singapore relied on themselves, their families, and their communities to make a living against great odds. These values of self-reliance and social responsibility will become even more relevant in future. Local communities and the people sector must launch more self-help initiatives, and take on a larger role in society. Government will provide a safety net for those who cannot help themselves and cannot find help elsewhere. We walk a fine line here. If we offer too much protection to citizens, it weakens their resilience and saps their spirit to survive on their own. Our social safety nets must therefore be carefully targeted, and must not undermine our will to work and to improve ourselves. Subsidies should focus on those who need them most, and in areas which yield the most public good. Means testing will therefore become an important feature in providing public services and social assistance. Let me elaborate on our social policies in four areas: ˜ Achieving excellence in higher education; ˜ Keeping healthcare affordable; ˜ Building the next generation; and ˜ Ensuring adequate finances for retirement. Achieving Excellence in Higher Education Our education system has enabled a growing number of our citizens to benefit from higher education.”
“It will divest those that are no longer relevant to its mission, at the right time, at a fair price, without unsettling the market, and after installing a competent team to manage the companies after divestment. *Cols. 525-6 Enabling Initiative and EnterpriseAs much as the Government strives to be lean and effective, we must recognise that the state by itself cannot create wealth or jobs. Neither can it force citizens to adopt an enterprising mindset. But the Government can and will create the environment for private enterprise to flourish, for investments to take place, and for individuals to realise their dreams. This in turn will create jobs and wealth. Ultimately, our success will depend on the flexibility, nimbleness and fortitude of all Singaporeans. The Government will put in place policies and measures to equip and prepare us for the challenges that will come our way. But each of us must seize the initiative to pursue and realise our aspirations. The last few years have shown how uncertain and volatile a world we live in, but also how much difference resolute leadership and cohesive response makes. Despite the severe storm, we avoided any social or political unrest. Instead we pulled together, restructured our economy and prepared for the next wave of growth. The next crisis, and there will bound to be one, will be very different from the last. But I am confident that when it happens, we will again muster the resolve, cohesion and the ingenuity to overcome it.”
“We have established an online consultation portal where public agencies post consultation papers to seek feedback and ideas. From there the public can see, at a glance, all the on-going discussions. Divesting Non-core and Non-strategic Activities Keeping Government lean and trim also means divesting activities that are no longer core or strategic to the public sector. I announced last year that the ministries would conduct a review of their companies every three years, so as to determine which should be retained, and which can be divested. The ministries have completed the first review. A number of statutory board companies, for example HDBay and Cleantech Services, have been identified as no longer relevant to the ministries and have been divested. More will be divested within the next few years. The Temasek Charter spells out the raison d'ªtre of Temasek Holdings and its companies. The role of Temasek is to grow companies with international or regional potential, provide stewardship for companies that the Government needs to own for strategic reasons, and divest those which have no international growth potential or are no longer strategic. In 2003, Temasek fully or partially divested its stakes in 12 companies. SingTel has divested 69% of its wholly-owned subsidiary, SingPost, through an Initial Public Offering (IPO). Other divestments include the sale of CPG Corp (formerly PWD Corp) in April 2003, and Temasek's remaining 10% stake in 98 Holdings in October 2003. In January this year, Temasek completed a $2.1 billion placement of SingTel related securities, thus reducing its shareholding in SingTel by up to 5%. Annex A* lists the divestments by Temasek over the last year. Temasek will continue to consolidate and rationalise its stable of companies.”
“Hence, we will review public programmes and expenditure more critically than before, and scale back or remove those which are less useful or not cost-effective. Excellence in Service Delivery A cost efficient way of delivering many public services is through electronic means, or e-Government. The $1.3 billion 2nd E-Government Action Plan (EGAP-II) from 2003 to 2005 will build on the success of the first plan. Practically all 1,600 public services that can be delivered electronically have become e-services. EGAP-II will provide the public even better and faster online public services by integrating different agencies' processes. For example, a common bill payment website will be implemented, where the public can pay both Government and private sector bills online. For those who have difficulty using online services, there is an e-Citizen Helper Service available in 22 e-Clubs found at community centres, community clubs and void decks. The Government will extend this Helper Service to ensure access for all Singaporeans. Other e-Citizen outlets already in operation include 8 NTUC Income premises and 2 Office1 Cybermarts. For businesses, the Government has also developed an online portal - Business eTown (www.business.gov.sg). This is a comprehensive repository of G2B content and e-services that will be especially helpful to SMEs that lack administrative resources. The portal will provide links to Government services such as licence applications, and information on tax incentives, assistance schemes, and business opportunities with the Government and abroad. The Government will also make greater use of e-Government as a channel for public consultation.”
“The Department has responded to this suggestion by developing a more efficient tracking method to ensure that once a late payment is settled, reminders are no longer sent out. This has saved $187,000 a year. The Cut Waste Panel is an on-going effort and we look forward to more suggestions from the public. Economy Drive The Cut Waste exercise and Best Sourcing programme are but parts of a wider Economy Drive for the whole public sector, launched in May last year. Public officers at all levels have contributed ideas. The aim is not to cut expenditure arbitrarily but to inculcate a stronger 'value for money' mindset in the public sector. The Economy Drive is critical in this new era of fiscal constraints. The only way to meet future challenges and afford new programmes is to get more out of every dollar we spend. The Economy Drive has produced some encouraging results. For FY03 up till December 03, it had achieved savings of about $475 million. Let me give you some examples. MOE saved about $30 million in FY03 by revising the norms and standards (such as space requirements and design features) for school buildings. MINDEF saved about $24 million in FY03 by revamping the training system for NSmen to achieve a reduction in In-Camp Training days without compromising the operational readiness of the SAF. MOF and its statutory boards have saved about $19 million by re-configuring IT infrastructures, freezing headcount, and restraining rise in wage costs. The Economy Drive will not compromise the effectiveness of public service. Agencies will continue to deliver quality public services. However, excessively high standards inevitably lead to unnecessary costs. Every dollar saved is a dollar that can be released to meet new and pressing demands.”
“The services that are being market-tested include facilities management, IT services, business investigation, enforcement, and procurement functions. Agencies which have started Best Sourcing include MOH, URA and HDB. The functions that they have "best sourced" and subsequently contracted out in FY03 resulted in $17 million worth of contracts for the private sector. The annual cost savings from outsourcing these functions are estimated to be $1.8 million per year. The numbers are still small, but it is an encouraging start. In FY04, we will extend the Best Sourcing programme to non-core functions. An overall target of 5% of the value of non-core functions will be market-tested this year by ministries, Organs of State and statutory boards. Public sector agencies are understandably cautious, but MOF will encourage them to be bolder and move faster, so as to benefit earlier from Best Sourcing, without affecting the smooth delivery of services to the public. Cut Waste Panel The Cut Waste Panel was established last year to seek feedback from the public on how the public sector can reduce wasteful practices, remove frills and reap savings in the delivery of public services. The response has been overwhelming. So far we have received more than 2,200 suggestions. I am not sure how many are from the MPs. The Panel, chaired by the Head of Civil Service, agreed with almost 85% of the suggestions and feedback. Many suggestions had already been implemented earlier though the public may not have been aware of them. But we also received valuable new suggestions. For example, one writer pointed out that even after late payments for foreign worker levy had been cleared, the Work Permit Department was still sending reminders via registered mail, which was a waste of money.”
“The total supported expenditure is $30.4 billion or 17.9% of GDP. This is an increase of $1.6 billion or 5.6% from the FY03 revised expenditure. Larger budgets for MINDEF and MOT account for two-thirds of this increase. MINDEF has to incur additional expenditure for new functions that need to be undertaken due to the current security situation. MOT requires additional funds to finance the construction of the Circle Line and the Kallang-Paya Lebar Expressway. The sectoral distribution of the budget* remains largely unchanged, with the largest share of the budget still going to Social Development (44.0%), followed by Security and External Relations (37.0%), Economic Development (13.4%) and Government Administration (5.6%). *Cols. 521-2 After Special Transfers of $900 million, mainly for the third tranche of ERS, and NII Contribution of $2.3 billion, we expect a Budget Deficit of $700 million or 0.45% of GDP.Ensuring Value for Money in Public Spending It is not enough that we restrain our overall expenditures to live within our means. We must also extract maximum value for money in what we spend. We do this through three initiatives: Best Sourcing, the Cut Waste Panel, and Economy Drive. Best Sourcing Last year, I announced that MOF would introduce Best Sourcing for new services. Best Sourcing requires public sector agencies to undertake "market-testing" so as to compare the cost of providing their services in-house against the cost of having private sector vendors provide the services. If the private sector vendor can deliver the services more economically, it will be engaged to do so. The public sector agency will then discontinue the function, and either redeploy or release the affected staff.”
“More importantly, it will instill financial discipline by encouraging ministries to reprioritise their projects and cut non-essential expenditures. I am treating MINDEF differently from the other ministries because defence provides the peace and security that Singapore needs for economic progress. Government has therefore for many years been prepared to spend up to 6% of GDP on defence. In practice, in recent years defence spending has been 4.5% to 5% of GDP. I will maintain this policy. The 2% expenditure cut will trim the projected FY04 budget deficit to $700 million, smaller than the $1.8 billion deficit in FY03. This is not inappropriate, as the economic recovery is still in its early stages. But I intend to balance the budget by FY05, assuming the recovery continues on track. It would therefore be prudent for all ministries to assume that their budgets will continue to be tight, and that they will need to find more economies and do more with less. Barring exceptional conditions, next year (FY05) I intend to apply a further across-the-board cut of 2% on average in the budget cap of each ministry, except MINDEF. I am confident that ministries will make full use of this early notice to adjust their plans and work within the resources available. Let me now present the FY04 Budget, which is summarised in the last column of the table. Projected operating revenue is $28.3 billion or 16.6% of GDP. Receipts from GST are estimated to increase by $700 million as a result of the increase in the GST rate from 4% to 5%. Collection from property taxes is also projected to increase by $400 million because the concession period for rebates ended in December 2003, while statutory boards' contributions in lieu of tax are projected to increase by $776 million.”
“With Special Transfers of $600 million to provide for the ERS and Net Investment Income (NII) Contribution of $3 billion, the projected deficit was $900 million. As the third column of the table shows, the revised operating revenue and total expenditure both turned out about $1 billion less than budgeted. There was also a $1 billion shortfall in NII Contribution. The revised Budget Deficit is $1.8 billion or 1.1% of GDP. The revised FY03 expenditure is $1.1 billion or 0.7% of GDP lower than the budgeted amount, mainly reflecting lower expenditure on development projects across-the-board. This was due to lower contract costs and construction delays, as well as cancellation or deferment of projects. The more significant items of under or deferred expenditure are MND's SERS programme ($59 million), the Singapore Management University campus (about $60 million) and the new Supreme Court building ($58 million). While about $600 million worth of construction projects were brought forward in the September 2003 off-budget package, most will start only in FY04 and have thus not led to an increase in spending in FY03. The revised FY03 budget estimates also include supplementary estimates of about $125 million for six Heads of Expenditure, the bulk of which goes to MTI ($61 million) for the Utilities Save scheme, which was extended in the September package. Projected FY 2004 Fiscal Position The Government faces a very tight fiscal position in FY04. Operating revenues should rise, but so will spending needs. Despite the improved economy, we still project a budget deficit. To reduce the revenue shortfall, I am permanently cutting by 2% the budget caps of all ministries except MINDEF, from this financial year. This will save about $450 million a year.”
“Living Within Our Means In order to live within our means, we must keep Government expenses in check. This means confining the Government to essential functions and preventing the bureaucracy from bloating up. This will also free up talent and resources for the private sector, and create space for private initiative and enterprise. The Ministry of Finance (MOF) controls the budgets of Ministries by capping their spending as a percentage of GDP. To provide some stability in spending from year to year, the budgets are pegged to a six-year average of GDP growth. And to provide flexibility, MOF allows ministries to take advances from future years' budgets, and accumulate and carry forward unused funds to subsequent years. This way, ministries can plan on a multi-year basis instead of being limited by yearly expenditure limits. MOF will also extract 'productivity dividends' from the operating budgets of all ministries, with effect from FY04. Instead of allowing ministry budgets to grow at the same rate as GDP, MOF will reduce the ministry budgets by a percentage equal to the productivity growth rate, and collect the sums into a central pool. The aim is to encourage ministries to improve their productivity by at least as much as the private sector, and to free up resources to fund new priority projects. For example, MOE will receive additional funds for preschool education and special needs education, while MITA will receive funds to develop the creative industries. Revised FY 2003 Budget Estimates I will now review the FY03 Budget. I refer Members to the second column of the budget statistics table on the screens and in your handout*. *Cols. 519-20 When I presented the budget last year, I estimated operating revenue at $26.6 billion and total expenditure at $29.9 billion.”
“A Government that delivers sound public finances, responsive fiscal policies that help to stabilise the economy, and good financial practices that ensure value for money in public spending. ii A Strong Society. A resilient and cohesive population, and a strong social compact between Government and the people that helps see us through good and bad times together. iii A Land of Opportunity. A place where every individual has the chance to be the best he can be, a home where people want to raise their families, an economy which attracts talent and investments, and a centre for businesses to pursue new and exciting opportunities. The Government's financial and budget policies will bolster these three fundamentals. PART II - EFFECTIVE GOVERNMENTImportance of Sound Public Finance One of the most important contributions any government can make to economic growth and resilience is to put public finances on a sound footing. A balanced budget and a trim and efficient public sector will make for stable macroeconomic conditions and a pro-business climate. Only then can the private sector grow and create wealth for the people. Fiscal prudence has been a hallmark of Singapore's economic management. Some people accuse us of being too prudent, but we must continue to maintain fiscal prudence, despite stronger spending pressures and tighter budgets. We will spend more in a downturn if we need to, even if it means going into temporary deficit, as we have done in the past two years. But we must never fall into the trap of structural budget deficits, with a permanent shortfall of revenue. On average, over the course of the business cycle, we aim to accumulate a modest surplus, putting aside something in good years so that we have some savings to draw upon in bad years.”
“However, MPA has not granted PSA a monopoly on container operations in Singapore, nor will it do so. The port industry is dynamic. If and when industry conditions make greater local competition necessary, and new operators judge it viable to enter the business, the Government will not stand in the way. This year, MTI will be proposing to Parliament a competition law covering most sectors of the economy. To complement the liberalisation and deregulation of our economy, we need a means to stop companies from engaging in anti-competitive behaviour and undoing the benefits of efficient and innovative markets. The competition law will adopt a pragmatic approach. It will take into account differences in the various sectors, in terms of their industry structure and stage of market development. It will not burden businesses with unnecessary regulatory costs. Such an important initiative will need inputs from businesses and the public. A draft version of the law will be released soon for public consultation. Building on Our Fundamentals We face formidable challenges in restructuring and upgrading our economy, and coping with shocks and uncertainties in our external environment. But our capacity to overcome these challenges is much greater than ever before. Our financial resources are larger. Our infrastructure and physical assets are better developed. Over the years, our workforce has become better educated and more highly skilled. As we develop new capabilities and strategies, we must continue to build on and make the most of our strengths. Three fundamentals have been the pillars of Singapore's success and will allow us to sustain our growth and prosperity. These pillars are: i. Effective Government.”
“The process has taken eight years, and is still not quite complete. Our small domestic market is an important practical constraint to promoting competition in industries where scale is important. So we have only three local banks, two media groups and two public transport operators. Our market simply cannot support more players. We cannot manage such industries in the same way as we would the retail trade with thousands of players. We have to accept that in these circumstances, limited competition or even sometimes a single operator is the best arrangement, and find other ways to prevent the companies from exploiting their position or becoming inefficient and uncompetitive. The container port business is such an industry. In this case, the relevant market extends beyond Singapore. Today, transhipment is an international business. Within our neighbourhood alone, Tanjong Pelapas, Port Klang and Laem Chabang, are all vying to replace PSA as the hub port for Southeast Asia. Competition in the port industry is not really domestic but takes place on a regional or even global stage. The Government is determined to consolidate Singapore's status as a hub port. The Maritime and Port Authority (MPA) has approved PSA's application for land to build five new berths at Pasir Panjang Terminal to support its growth in container traffic. This will allow PSA to strengthen its competitive position in the international arena. Jurong Port will continue to operate at its existing facilities in Jurong, where it can handle one million containers a year. Given the intense regional competition, Jurong Port will not for now expand its container capacity by building additional berths at Pasir Panjang, but will review this decision when conditions change.”
“Sometimes, we need to intervene to structure the industry to allow competition. Otherwise, instead of healthy competition, we may end up with one or two players wielding monopoly power to the detriment of consumers. Take the telecommunications industry as an example, which is now fully liberalised. Competition in that market has increased significantly, especially in mobile and wholesale international call services. But IDA still needs to act as a referee, because several segments of the telecommunications market are not or cannot be effectively competitive, as in the case of "last mile" access infrastructure. IDA's role is to guard against abuses of market power, and to set rules which help smaller players connect to infrastructure provided by larger players. IDA's regulations seek to keep the market contestable, and ensure that competition produces benefits for consumers over the long-run. Or take the power industry. Singapore Power was an integrated monopoly operator, generating, distributing and selling electricity and gas to every home and factory. To introduce competition, we first had to split up Singapore Power into several different companies, create the right regulatory framework and set up the Energy Market Authority (EMA) to oversee the industry. We made each power plant a separate generating company (genco), competing against other plants. We created a sophisticated mechanism for the gencos to bid to sell electricity into the grid, called the pooling and settlement system. As for the power grid, which is a natural monopoly, we made it a separate, tightly regulated company. Only then were we ready to have different suppliers compete to sell electricity to consumers, starting with the large consumers.”
“Ultimately, entrepreneurs need to take their own risks and develop their own ideas, in order to create and seize new opportunities in overseas markets. Entrepreneurship is, ultimately, a challenge for our whole society. Enhancing Competition A fourth major strategy is to promote competition and free markets in all sectors of the economy. Competition spurs firms to be more efficient and innovative, and more responsive to customer needs. It prepares our firms to be internationally competitive and to hold their own in the region. Consumers enjoy wider choice and better products and services, and often lower prices. The economy as a whole gains from higher productivity and more efficient allocation of resources and, in the longer term, also from more innovation and job creation. This is why our basic economic stance is pro-competition. Right from the start, Singapore was a free port. For trade in goods, when we first began industrialising in the 1960s, we did impose entry barriers and import tariffs to protect domestic industries, but we soon abandoned this infant industry argument and shifted to an open competitive regime. For services, we pursued the same policy of open competition in wholesale and retail trade, IT and business services. In other industries like telecommunications and power generation, we used to operate vertically integrated state-owned monopolies, like many other countries. But in the last 10 years, we have moved a long way from that model. We privatised statutory boards, deregulated the industries and opened them up to competition. In the financial sector too, we have liberalised and freed up, causing a major transformation of the industry. However, fostering competition is not always the same as taking a passive, hands-off approach.”
“Our businessmen can now tender for projects contracted out by the governments of our FTA partners, on an equal footing with their local companies. IE Singapore actively promotes the development of Singapore's external wing. It helps local enterprises take advantage of government-to-government agreements, such as air services agreements, investment guarantee agreements, and avoidance of double taxation agreements. IE Singapore also recently launched the iPartners Programme to encourage companies to band together when venturing overseas. Already, this programme has helped three consortia of Singapore companies to venture into East Asia, Africa and the Middle East. To bring in entrepreneurial talent, MOM launched the EntrePass Scheme. Entrepreneurs can set up operations in Singapore on the basis of their business plans, rather than academic qualifications or salary. The Government is also reviewing its rules and licensing requirements to ensure that bureaucracy does not stifle enterprise in Singapore. To date, the Pro-Enterprise Panel has reviewed 1,080 suggestions, of which it has accepted 57%. The Rules Review Panel is also making headway. In the past year, the Panel reviewed 2,913 rules, 23% of the total. It removed 373 rules, updated 772, and re-affirmed the remaining 1,818. By 2005, public agencies will have reviewed all their existing rules, to remove outdated ones and streamline the rest. It does not mean that the job is then done. Thereafter, it will be time to start reviewing all the rules again. Our plan is to review all rules regularly, on a rolling five-year cycle. However, the Government can only do so much to create a Best for Business environment.”
“MOM will supplement these two criteria with a system of points, to take into account experience, skills and job type when assessing eligibility. The 'S' pass will be subject to a quota, to begin with 5%, as well as a levy, initially set at $50. The scheme will be implemented from 1st July 2004. Encouraging Entrepreneurship A third major strategy is to boost entrepreneurship. This process takes time, because we are not just changing Government rules, but seeking to shift mindsets. The Government is doing its utmost to foster a conducive environ ment for entrepreneurship. The Action Community for Entrepreneurship (ACE), chaired by Minister of State Mr Raymond Lim, is nurturing entrepreneurship, pursuing entrepreneurship promotion programmes, and acting as the interface between the private sector and Government. A key hurdle facing start-ups is financing. The Government is helping start-ups gain access to financing. EDB's Start-up EnterprisE Development Scheme (SEEDS) helps early-stage start-ups with equity financing. Every dollar raised by a start-up from third-party investors will be matched by EDB up to a maximum of $300,000. In two years SEEDS has raised nearly $59 million - $27.3 million from Government and $31.6 million from the private sector - to support 103 innovative start-ups. We also recently established Deal Flow Connection, an online portal that helps link up entrepreneurs with financial institutions, venture capitalists and angel investors. The Government is also helping our entrepreneurs to venture beyond our shores. We have negotiated many FTAs, including those with key economic partners like the US and Japan, to improve access to these markets.”
“Foreign Workers When the Asian Crisis struck, the Government reduced foreign worker levy rates temporarily, to save costs for employers. As the economy recovers, the Government needs to progressively adjust levy rates to reflect the prevailing market conditions. The levy for skilled Work Permit holders is currently $30, reduced from $100 previously. As part of the changes to the foreign worker scheme for the construction sector, MOM increased the construction skilled worker levy to $50 with effect from 1st July 2004. In line with this, MOM will also raise the skilled worker levy rate to $50 in all other sectors, with effect from 1st July 2004. The levy rates for unskilled workers will remain unchanged. For our economy to grow, companies must be able to recruit skilled workers. The higher value and skill-based industries we are attracting all depend heavily on skilled workers, technicians and professionals. A particular concern is manpower at the diploma and post-secondary level. If we lack these middle-tier skilled workers - whether local or foreign - we will choke off the growth of these industries or drive them elsewhere. The shortfalls are already evident in healthcare where there is an acute shortage of nurses, in the IT industry where we lack computer programmers and IT technicians, and in aerospace and pharmaceuticals. MOM will modify the current work pass system to meet this demand for middle-level skilled manpower. We will introduce a new category of work passes, called 'S' passes, to replace the current 'Q2' passes. The main criteria for an 'S' pass will be a minimum salary of $1,800 and an acceptable tertiary qualification.”
“Finally, workers must recognise that in a more volatile and competitive environment, flexible wage structures offer the best chance of job security. We must make a concerted effort to achieve our wage reform targets. Training and Upgrading Even as the economy recovers, we must not let up on retraining and upgrading our workers. This will enable our workers to seize new opportunities and adapt to the changing needs of the economy. The Singapore Workforce Development Agency (WDA) will strive to upgrade the skills of workers, especially those with secondary education or less, so that they can stay employable and take on new, higher-skilled jobs. WDA will launch new training programmes, and make it easier for workers to enrol in them. There will also be programmes for professionals, managers and executives, so that they can support the upgrading of their industries. These programmes are partly financed by the Skills Development Fund (SDF), which employers contribute to through the Skills Development Levy (SDL). The 1% levy applies to all workers with a gross monthly salary of $1,500 or less. The current levy rate and salary ceiling are not enough for the SDF to cover its annual commitments. Had the Government not injected $500 million into the SDF in 2001, the fund might have been exhausted by now. Over the next five years, WDA estimates that the SDF's annual commitment will rise from $120 million for 600,000 training places in FY03 to $176 million for 766,000 places in FY08. MOM will therefore raise the SDL salary ceiling from $1,500 to $1,800 with effect from 1st July 2004. The levy rate will stay at 1%. This will increase SDF's income by $22 million per year.”
“Employer contribution rates were reduced, and the CPF salary ceiling will be brought down in steps. This has lightened the burden on employers and made Singapore workers more competitive. At the same time, we are raising the CPF Minimum Sum and tightening withdrawal rules at age 55, so that Singaporeans will be better prepared for their retirement needs. Wage Flexibility The CPF changes are long term structural adjustments, not tactical responses to transient conditions. They will strengthen our competitiveness, but we still cannot be sure that our wage levels will never become too high again one day. Should this happen, we should not bank on another large cut in CPF rates to restore our competitiveness, as we did in 1985 and 1998. The CPF is a blunt tool for cost reduction. And now that we have reduced the rate to 33%, there is less room for further reduction. This makes it more important to have flexible wage structures, so that companies can respond quickly to changes in the business environment. This will help companies stay viable and preserve jobs in a severe downturn, while giving them the confidence to reward workers and increase employment in good times. I am happy that the tripartite Taskforce on Wage Restructuring has given strong backing to wage reform. Its report explains clearly how companies can implement wage restructuring for greater flexibility and competitiveness. Achieving wage flexibility will require strong commitment from employers, unions and workers. Employers must put in place schemes that link remuneration to individual and company performances. Unions must take a broad long-term view of workers' interests, and persuade them of the benefits of these changes.”
“Outside the financial sector, we attracted over 30 shared services and BPO projects last year. For example, Europe's largest software company SAP chose Singapore as the launch market for its Shared Services Centre in the Asia Pacific. Polaris and IBM have set up disaster recovery operations here. Toyota Tsusho, ExxonMobil and DFS are all using Singapore as a centre for shared services and business continuity activities. In healthcare, EDB has launched the Singapore Medicine initiative to develop Singapore into a leading destination for healthcare services. Singapore Medicine will bring together the efforts of many public sector agencies, including MOH and STB. One pre-condition to make Singapore a regional medical hub is to have enough doctors, particularly specialists, who can practise in Singapore. To ensure this, MOH has expanded the list of recognised foreign universities and medical schools from 24 to 71. To alleviate the shortage of nurses, MOH will continue to recruit nurses from diverse sources, and streamline the recognition of nursing qualifications from the Philippines, Myanmar, China and Indonesia. In addition, MOH will relax many current restrictions on advertising by healthcare institutions so that they can promote themselves in the region. A new set of Publicity Rules will be gazetted within the next few months. Labour Market Reforms The second strategy we are pursuing is to reform our labour market so that companies and workers can respond to fast-changing business conditions. The CPF changes and the ongoing push for wage reform are important parts of this effort. They will help to preserve existing jobs and create new ones for Singaporeans. CPF Changes We made major changes to our CPF scheme last year to maintain our cost competitiveness.”
“Since the beginning of this year, we have proliferated the visa application points for PRC travellers, from 67 branch offices operated by 3 appointed travel agents, to 322 branch offices operated by 43 appointed travel agents across China. ICA is exploring other innovative measures, such as on-line visa applications, to facilitate the entry of bona fide visitors to Singapore. The easier visa rules will attract more tourists here. Visitor arrivals have already recovered to pre-SARS levels. This year, STB expects 7.6 million visitors, up from 6.1 million last year. STB is stepping up marketing efforts to regional countries such as China, India, and ASEAN. Last year saw the largest foreign direct investment in a visitor attraction in Singapore - the $200 million "Singapore Flyer". Sentosa Development Corporation has also drawn up a 10-year, $8 billion plan to revamp and refresh Sentosa. It has been aggressively drawing in projects and has already attracted about $500 million of new investments, half of them from the private sector. We have also done well promoting other service industries. Globally, many MNCs are centralising and outsourcing their corporate functions. To save costs and ensure business continuity, banks are relocating many functions, traditionally performed in New York, London and Tokyo, elsewhere in the world. India is attracting many call centres and business process outsourcing (BPO) operations. Singapore is not a competitive location for call centres, but we are an attractive site for support centres hosting higher-end activities, particularly for financial institutions. Over the past year, 10 banks, including Credit Suisse First Boston and Barclays Capital, have centralised their regional and even global processing operations here.”
“MNCs are shifting to higher value-added, less labour-intensive activities, and will increase output per worker rather than hire more workers. So to create jobs for Singaporeans, we also need to put strong emphasis on the services sector. We are developing established services such as trading and logistics, info-communications technology, financial services and tourism; while fostering emerging services such as education, healthcare and the creative sector. More so than manufacturing, a vibrant services sector depends on people - including foreign professionals, executives, businessmen, technicians, tourists and consumers - being able to travel in and out of Singapore with minimum hassle. In particular, we must facilitate travel for visitors from ASEAN, as well as from China and India. Singapore does not require entry visas for visitors from most countries. The Immigration and Checkpoints Authority (ICA) has reviewed our remaining visa requirements. As a result, we lifted visa requirements for visitors from Cambodia, Laos and Vietnam last year. We have also made it easier for businessmen to obtain long-term Multiple Journey Visas (MJVs), valid for up to five years. We will allow reputable Chinese and Indian companies to recommend their own staff for MJVs. Social visitors from the PRC are now granted visas valid for up to five weeks compared to three weeks before, while the period of stay granted is now up to 30 days, double the previous 14 days. Similar facilities are also granted for visitors from India, Myanmar and the Commonwealth of Independent States.”
“That will depend on our ability to carry through our economic restructuring, upgrade our industries, and create new and better jobs to replace the old jobs that are being phased out. Our commitment to restructuring is a key reason why analysts and investors are confident about Singapore's long-term prospects, and why MNCs still want to put their projects in Singapore. The Economic Review Committee's recommendations, the CPF changes, the cut in direct taxes, and wage reform lay the foundations for a globalised, diversified, and entrepreneurial economy. These fundamental changes reflect our resolve to stay relevant in an increasingly competitive world. Let me review our progress in restructuring, and what more needs to be done. Growing Manufacturing and Services First, we continue to grow the manufacturing and services sectors. We are strengthening our position as a global business hub and one of the most attractive places in Asia for investments and talent. Singapore remains competitive as a manufacturing location, especially for high-tech, high value-added activities. In the past year, many MNCs have either committed to expand their existing activities, or to establish regional headquarters in Singapore. For example, Hewlett-Packard recently decided to invest another US$1 billion in the next five years to expand its operations. ST Microelectronics has announced $425 million of new investment commitments; Seagate Technologies announced a $200 million investment in recording media and $300 million in high-end hard disk drives; and Agilent Technologies has committed to another $156 million of investments. However, overall the manufacturing sector is not likely to generate many more jobs.”
“9 billion of annual business spending in the services sector. These investments will generate $8.6 billion in value-added each year for the economy. Employment also improved. More jobs opened up as companies regained the confidence to start hiring again. About 12,000 jobs were created in the second half of 2003, partially making up for the 30,000 jobs lost in the first half. The seasonally adjusted unemployment rate dropped from the peak of 5.5% in September to 4.5% in December 2003. Macroeconomic policies helped support the economy. MAS maintained a neutral policy stance for the trade-weighted exchange rate of the Singapore dollar, after re-centering the policy band at a lower level. The Government introduced two off-budget fiscal packages to support the economy, and help households and businesses tide through a difficult period. We had a SARS relief package in May, and another package to accompany the CPF changes in September. These prompt measures helped to maintain confidence, buffer the shocks, and boost economic activity. In the absence of support from monetary and fiscal policies, GDP growth last year might have been flat instead of 1.1%. 2004 - Gathering Momentum Our recovery is picking up. There is a palpable optimism among Singaporeans and businesses. The December Straits Times Consumer Confidence Index surged 82 points to 294, bringing it close to its levels in 2000, when the economy was growing strongly. Retail sales in December rose by 21% month-on-month and 10% year-on-year. We have revised our growth forecast for this year upwards to 3.5-5.5%. But we have to look beyond the cyclical pickup in our growth rate, and achieve sustained long-term growth by transforming our economy.”
“Mr Speaker, Sir, I beg to move, That Parliament approves the financial policy of the Government for the financial year 1st April, 2004 to 31st March, 2005. PART I - OUTLOOK AND CHALLENGES 2003 - Ending on a Positive Note In the last six years, the Singapore economy experienced more volatility and uncertainty than it had encountered over the previous 30 years. Beginning with the Asian Financial Crisis in 1997, a series of external shocks buffeted our economy and ended a decade of uninterrupted growth. We were all hoping for a quick turnaround last year, as our economy had bounced back quickly from previous downturns. But SARS and the war in Iraq dashed our hopes. We had a very difficult first half. But the economy showed clear signs of turning around towards the end of the year. In the fourth quarter, GDP expanded by 4.9% compared to the previous year. On an annualised quarter-on-quarter basis, GDP grew by 11%, with the manufacturing sector expanding by 17% and the services sector by 11%. This brought growth for the whole year to 1.1%. The recovery was reflected in increased exports, investments and employment. Both manufacturing and services benefited from an increasingly favourable external environment. As the recoveries in the US, Europe and Japan gained momentum, their appetite for imports increased. Our non-oil domestic exports grew by 15% in 2003, driven by pharmaceuticals, chemicals and semiconductors. Strong external demand also caused the wholesale and retail sector to grow by 6.7%. Foreign direct investments (FDIs) began to return to the region as the fears and uncertainties from SARS and the Iraq war subsided. Last year, Singapore attracted $7.5 billion of fixed asset investments in the manufacturing sector and $1.”
“The number of female officers on the respective medical benefits scheme as at 31st December 2003 is as follows: Medisave-cum-Subsidised Outpatient (MSO) Scheme : 20,274 Comprehensive Co-payment Scheme (CCS) : 12,602 Co-Payment on Ward (CPW) : 1,345 PERMANENT RESIDENCE FOR FOREIGN SPOUSES 2. Ms Braema Mathiaparanam asked the Minister for Home Affairs in the last three years (2001, 2002 and 2003), (i) how many Singaporeans have applied for permanent residence or citizenship for their foreign spouses; (ii) how many were successful; and (iii) what are their educational and gender profiles.”
“In principle, it can be done. In practice, we have to look at it. It is quite intrusive and burdensome. We have not yet decided that we need to intervene to this extent. I think if the problem gets worse, we would revisit that question. ILLEGAL IMMIGRANTS 11. Ms Braema Mathiaparanam asked the Minister for Home Affairs in view of the reports that Singapore has seen a 120 per cent increase in the number of illegal immigrants apprehended while trying to enter Singapore by sea, (a) what measures will his Ministry put in place to prevent such entries besides placing physical barriers at the Northeast and Northwest coasts of Singapore; and (b) what is the update in the effort to apprehend the traffickers bringing in these illegal immigrants.”
“MPs will know from their meet- the-people sessions that people who have gotten into trouble because they borrow imprudently are a real problem, and many of them will benefit from our policy.”
“Mr Speaker, Sir, there are two parts to the question. One for Internet e-commerce, you can do the business without a credit card because you can do it with a debit card. It functions in the same way, except that your account is debited straightaway and there is no credit extended by your bank. And the second question on whether we should not allow lower income individuals to have credit cards and that this is a lower risk than having a $30,000 income individual having many many credit cards, the practical answer is this. We would like to prevent a person from being imprudent with his own money because it gets him into trouble and he has a lot of difficulties, and if we can have him avoid going into debt, I think we save him some trouble for himself. But it is not easy for us to restrict the amount of total borrowing which a person can have because he can borrow from one bank and another bank, one credit card, another credit card source, and even an overseas credit card source. So, what we have said is if you have $30,000 of income, you have one credit. Then, when you borrow on each credit, the credit limit is two months of income. But, we have not been able to find a way to say you are not allowed to get credit from more than one bank. So, effectively, what we have said is if you have $30,000 of income, we try to make it more difficult for you to be imprudent, but the onus is on you really to look after yourself. If you have below $30,000 of income, then we do not think that the credit card is a wise avenue to open up for this group of people. And that is where we are. It is not an entirely ideal arrangement but it is the best way we have.”
“Mr Speaker, Sir, there is no relaxation in the availability of credit to individuals. The recently released regulations on credit and charge cards preserve the fundamental objective of discouraging Singaporeans from spending beyond their means by curbing the easy availability of consumer credit. We have removed the limit of two supplementary cards per principal card account. Feedback from card issuers showed that, in practice, the limit has had an unintended effect. Because of the limit, a cardholder who wishes to have more than two supplementary cards tied to his account will need to apply for an additional card from another issuer. As a result, the overall credit available to the cardholder is raised. Therefore, lifting the limit will remove this unintended outcome, while keeping the overall credit limit available to the cardholder unchanged. In any event, a cardholder should exercise discretion when applying for supplementary cards tied to his account, since he is liable for charges incurred by the supplementary cardholders. We have also allowed a credit or charge card issuer to issue additional cards to its existing principal cardholders without first having received an application. However, there should be no increase in the credit limit granted to the cardholder. For the cardholders' protection, the cardholder must first notify the issuer that he accepts the use of the additional card and its accompanying terms and conditions. Otherwise, the cardholder will not be liable for any amount charged to the card.”
“Listed companies have generally been able to comply with these requirements, except in isolated incidents where the company is reporting quarterly results for the first time, or the company is under judicial management. In those cases, the companies have requested an extension of time beyond the 60-day period, and most of these requests were accommodated accordingly. As I told this House last April, my Ministry will be reviewing the quarterly reporting requirement for smaller listed companies in mid-2005.”
“Mr Speaker, Sir, in today's globalised economy with large and growing cross-border capital movements, it is important that companies provide investors with timely and adequate financial information. Developed economies such as the European Union, Canada, US and Japan, as well as developing Asian economies such as China, India, Malaysia and Thailand, have all implemented quarterly reporting for their listed companies. As a major capital market, Singapore should keep up with international best practices which would enhance Singapore's transparency and standing as a world-class business and financial centre. However, in the implementation of quarterly reporting, the Government is cognisant of our local conditions and concerns. In August 2002, the Council on Corporate Disclosure and Governance (CCDG) reviewed the original recommendation of mandatory quarterly reporting for all listed companies in Singapore made by the Disclosure and Accounting Standards Committee. The CCDG recommended a one-year deferment for listed companies with market capitalisation of $20 million or less. In April 2003, the Government decided to raise this market capitalisation threshold from $20 million to $75 million and to further defer the implementation date of quarterly reporting for these smaller companies, in view of the difficult business conditions. Quarterly reporting has generally been beneficial for investors as they are able to track the performance of listed companies more easily. Investors receive, on a more timely basis, information on the financial performance of the companies they invest in.”
“Mr Speaker, Sir, we have been taking soundings in the industry very extensively. We have consulted the practitioners, lawyers, as well as private wealth managers, private bankers, and we are taking inputs from the public too. So, it is a balance to make sure that the rules are fair and, at the same time, the instruments are attractive and viable and will be able to take off. I think with REITs, we have struck a good balance. We have had quite a number of successful REITs listed in Singapore and we will try to do the same for the other changes. PUBLIC LISTED COMPANIES (Reporting of quarterly results) 7. Mr Ng Ser Miang asked the Deputy Prime Minister and Minister for Finance what has been the experience with the requirement for public listed companies to report quarterly results and whether his Ministry will consider reviewing this requirement.”
“Mr Speaker, Sir, as part of our effort to develop Singapore into an attractive international trust domicile, various legislative and administrative refinements are in the works. The Trustees Act is currently being reviewed and the updated legislation is expected to be passed in mid-2004. The Trustees Act was enacted in 1967. It was based on the UK Trustees Act of 1925, but unlike the UK, US and Canada, which have made significant changes to their trust laws, we have not made any major changes to modernise our Act. MAS and the Ministry of Finance are currently reviewing the Trust Companies Act, and the updated legislation is scheduled to come into force in the second half of 2004. MAS will also take over the administration of the Trust Companies Act from the Registry of Companies and Businesses. As part of our efforts to improve the business environment for the trust industry, we had, in Budget 2003, extended the income tax exemption for foreign trusts administered by Approved Trustee Companies to include foreign trusts administered by any trust company in Singapore.”
“Mrs Fang Ai Lian asked the Deputy Prime Minister and Minister for Finance what has been the progress in (a) implementing the Economic Review Committee's proposals to promote the business of trust funds management in Singapore and (b) updating the relevant statutes governing trust and tax regulations in Singapore.”
“Mr Speaker, Sir, the Monetary Authority of Singapore (MAS) recognises the importance of property funds in creating liquid, transparent investment alternative for real estate investors and broadening the choice of tradeable securities in Singapore. Through the securitisation of their assets, property developers, both in Singapore and overseas, have an additional avenue for fund raising via a REIT listing here. This is why we have sought to improve the environment for REIT offerings. The Government has selectively granted tax transparency status to the REITs, which means that income is taxed at the investors' level and not at the trust level. This measure had allowed REITs to obtain certain operational cost benefits. MAS had also raised the gearing level for property funds to 35% (from 25% previously) of the fund's deposited property in March 2003. Furthermore, a Singapore REIT's borrowings may exceed 35% of its deposited property if the credit rating of the fund or all of its borrowings is rated at least "A" by Fitch, Moody's or Standard & Poor's. These changes give REITs more flexibility to manage their capital structures. Hence, Singapore is still well-positioned as a competitive REIT centre. In addition, Singapore's capital markets track record, strong presence of global fund managers and developed financial industry infrastructure make us an attractive location for REIT listings. We believe these are important value propositions for the development of Singapore as an international REIT centre. TRUST FUNDS 5.”
“Mr Speaker, Sir, I will look into this problem. I was not aware that there was a difficulty. Usually, the families are there. The families can do it on their behalf. But if there are specific problems, I will look into it and see whether something more is necessary. REAL ESTATE INVESTMENT TRUSTS 5. Mrs Fang Ai Lian asked the Deputy Prime Minister and Minister for Finance in view of recent changes in the Hong Kong and Malaysian budgets to improve their competitiveness in Real Estate Investment Trusts (REIT), what steps are being considered to maintain Singapore's lead in this industry and will the abolishing or reducing of the stamp duty on REIT properties be considered.”
“Mr Speaker, Sir, for those who have passed away, I do not think there will be a last minute rush! For the rest, we will see what we can do.”
“There is no death certificate here, and no report was made. The reason they did not report is that their partner, wife or housemate is still living and it is convenient for HDB to have two names on its record. So, I think it is good to ask for a signature. Then we know the person is still there.”
“Mr Speaker, Sir, our basic philosophy is that you ought to do something to deserve something. Nevertheless, we have, this time, made some adjustments to the top-up requirement to make it easier, particularly for the older folks for whom it might be a burden. So, for Singaporeans aged 62 and above, they can qualify for the ERS simply by signing on a form and returning to the CPF Board. They do not even have to put any money in. And this form will authorise the Board to change $100 of their second lot of ERS into cash on the day the cash is issued and put it into their CPF account. When you cash in your second lot of ERS, you put some amount of money in, qualify for the second lot as well as for the third lot. So, if you are above 62, effectively, all you have to do is to sign on the dotted line and you can get your shares, and you do not have to come up with any cash upfront. I think it is not unreasonable to ask people to sign on the dotted line. For other Singaporeans, what we have offered them is that when they exchange their second lot of ERS and take the cash out, which I think about 300,000 have already applied to do, then they can ask to put $50 of their ERS back in and that will count as their contribution for the third tranche. I think we have made it as easy as we can make it, short of giving it to you even without you doing anything. If we gave it to people even without their doing anything, then we would be in danger of giving it to more people, like Dr Amy Khor pointed out, who may be 106 years old on paper but, in fact, passed away some years ago. When the grassroots leaders went around last year, they found a lot of people who had passed away and we did not know, because they may have passed away overseas.”
“Mr Speaker, Sir, we try very hard to make sure that everybody knows that they have to top up $50 before 31st December 2003. We have worked with the grassroots. We have sent out lists of the people who have not contributed to all the Advisers, so that they can do something about it. We have put out information, posters at public places, newspaper advertisements, publicity on radio and TV, individual reminder letters. Grassroots have visited homes. It is quite hard to give money away in Singapore! Despite that, 87,000 have not topped up. It is slightly less than last year. I do not know whether the profile is the same or not. I would imagine that it is about the same profile. Last year, after we gave a 3-month extension for the 1- and 2-roomers and welfare homes, the Advisers made a tremendous effort with the grassroots leaders. They went around to a lot of the homes. They found that many of the people had actually moved without telling us that they had moved. You know it yourself. I think if people have moved house and we do not know where they are, it is not really our business to look for them to give them the money. It is their business to let us know where they are so that we can help them. This year, I do not think we should extend the deadline. But if anybody has any case with a plausible reason, we will look at it very sympathetically.”
“Mr Speaker, Sir, 84,867 Singaporeans have not qualified for the second lot of ERS. This compares with 97,970 Singaporeans who did not qualify for the first lot of ERS last year. The CPF Board and the Ministry of Finance will consider appeal cases from Singaporeans who have missed the deadline for the top up on a case-by-case basis, taking into account the reasons why they missed the top up.”
“Mr Speaker, Sir, I have just explained that we are not confiscating the shares. But taxpaying is the duty of every citizen. In fact, it should be one of our Civics lessons in school. And if you are owing taxes for three years and repeated reminders, then I think before we hand out any hong baos, you should pay your taxes. CENTRAL PROVIDENT FUND (Topping up for ERS) 4. Dr Amy Khor Lean Suan asked the Deputy Prime Minister and Minister for Finance (a) how many Singaporeans have not topped up their CPF for the ERS as at 31st December 2003 and (b) whether his Ministry will consider making some concessions for those who have missed the deadline for the top up, if they have good reasons.”