Lee Yi Shyan
Singapore
“When Prime Minister Lee Hsien Loong opened the Heartbeat@Bedok on 4 February 2018, we unveiled a locally-installed art work named “Pulses”. Singapore is no Florence but we could still envision our version of renaissance. Given this context, would the Minister enlighten us how MCCY views arts and culture development in the community?”
“Sir, I would like to ask the Minister if the Government has a framework to review and reduce outdated and obsolete regulations on a regular basis to keep the regulatory burden light. Would the Ministry consider applying expiry dates or sunset clauses to newly introduced regulations?”
“How would the Ministry encourage Singapore entities to capture the intellectual property created, so that we can monetise them and invest in our future? Does MOT see the need to champion research and development (R&D) activities in intelligent transport technology?”
“How would a wide range of solutions be coordinated amongst different agencies responsible for service delivery? Mr Chairman, just as the Government rolls out the 23 Industry Transformation Maps (ITMs) to transform our industries, is there a similar masterplan to transform our Public Service to be a smarter Government?”
“Now that the region has caught up, China has risen, we need to make continual and further adjustments to our strategy to sharpen our competitiveness. Being multilingual and deeply connected to the regional hinterlands must be our strategic priority. I support the Budget.”
“It is not just physical connectivity that we need to build, but the psychological bridge to understand the world, to reach out to complex issues and to deal with them tenaciously. There is no silver bullet but hard work aplenty. Mr Deputy Speaker, there is great urgency. I support the Budget.”
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“I am encouraged by our youths' enthusiasm and their readiness to learn. This augurs well for our companies seeking local talent to chart their overseas growth. Mr Chairman, the most fundamental way to secure our social and economic well-being is through productivity improvement. Productivity improvement itself is hard work. There is no short cut. It is a long-term endeavour and requires commitment. With imagination and determination, and our companies in the driver's seat, we can, together, restructure our economy and transform our companies. Engraved on every X-mini speaker is the company's motto: "Sound beyond size". Is this not the spirit of enterprise and the spirit of the SMEs?”
“In addition, we will expand our support for market attachments to include companies sending their staff overseas to acquire new business capabilities or technologies. Companies can tap on this to develop their manpower resources and at the same time gain new strengths. We will extend up to 50% funding support. 6.15 pm For startups which are looking to broaden their overseas connections, we will introduce the Market Access Incubation Programme (MAIP) to provide up to 70% funding support for participation in overseas missions and fairs organised by approved incubators. Together, I am confident that these enhancements will help more companies expand into new markets. Lastly, we are helping companies to tap on local talent for their overseas operations, as this is pivotal to the success of their internationalisation plans. In my travels, I often meet globally-oriented Singaporeans. Consider our two intrepid youngsters: Esther Yap, 28, and Denise Lim, 27, for example. I met Esther in Ghana last year and learnt that she is working as a Marketing Manager of a beverage distributor and has been living there for three years since she graduated from NTU. As for Denise, she quit her job as a management consultant to set up a restaurant in Guatemala and was recently featured in Channel NewsAsia's Business Warriors. Denise and Esther show that our Page: 148 youths are bold and dare to step out of their comfort zones. Our youths have the potential to spearhead the overseas expansion of our companies. IE Singapore's Young Talent Programme (YTP) will support our local schools and companies to identify and groom a pipeline of talent. Since its launch last year, 11 undergraduate scholarships have been awarded and about 500 undergraduates have received support for overseas immersion.”
“This is complemented by 41 Investment Guarantee Agreements (IGAs) that provide companies with greater confidence and legal certainty when investing overseas. MTI will continue to pursue more of such agreements. In terms of in-market assistance, companies can leverage IE Singapore's network of 38 overseas centres globally, from Africa to the Americas, Middle East to East Asia. These overseas centres, together with the network of Singapore companies overseas, form a natural and powerful source of market insights for our companies seeking opportunities and partnerships. Even in newer markets like Myanmar and Ghana, the two latest countries where IE Singapore opened up new overseas centres, IE Singapore has engaged about 100 companies last year alone. Second, we will continue to partner our companies in their growth. In 2013, IE Singapore assisted over 26,000 companies, of which 85% are SMEs. There is scope to do even more. Going forward, we will set aside $25 million to enhance Page: 147 IE Singapore's programmes to better cater to companies at different stages of growth. The enhancements are expected to benefit 200 companies over the next two years. For companies which are rapidly expanding, securing financing is often a challenge. We will, therefore, double the maximum loan quantum under the Internationalisation Finance Scheme (IFS) from S$15 million to S$30 million to support companies. For companies which are looking to enter new markets and learn from overseas partners, we will enhance our Global Company Partnership (GCP). We will increase our support for pilot and test-bedding projects from 50% to up to 70%. Companies can tap on this to test out the viability of their products and solutions in new markets.”
“Started seven years ago by two brothers, Ryan and Reuben Lee, then 29 and 32, the company makes pocket-size X-mini Capsule Speakers to go with Page: 146 today's many smart devices. In fact, I have one sample here. This must be a third or fourth generation now. So, you open up, it looks like this. If you close it, it is very small. You can link it with a 3.5 mm cable, and it doubles up as a speaker as well as microphone for teleconferencing. It also has blue-tooth connection for remote music enjoyment. From day one, X-mini recognised that the company's fortune lies in the global market. This was why they launched their first product in Western Europe. X-mini sells a range of X-mini speakers to over 80 countries. Such sales make up 95% of their revenue of S$32 million – it is not bad for a very young startup by 30-year-olds. X-mini overcame stiff competition by differentiating itself. It promised quality through its "made-in-Singapore" branding, invested in R&D to grow its product line and also, of course, launched a very slick and targeted marketing campaign in the various markets. As Mr Liang Eng Hwa and Ms Foo Mee Har have pointed out, a company's internationalisation journey is not without challenges. And this, we agree. In fact, our agencies offer a comprehensive suite of support programmes by focusing on three areas: (a) expanding our overseas networks or connectivity; (b) partnering our companies in their growth; and (c) grooming a pipeline of global-ready talent. First, to help companies gain market access and knowledge, we are increasing our overseas and global connectivity. We have a network of 20 FTAs that have helped to open new markets for our companies.”
“RedMart's success lies in its ability to meet the needs of this target market and consistently fulfil delivery orders. Its integrated supply chain allows it to do so. From inventory management to delivery, it maximises productivity. Being online also means it avoids the common challenges its competitors face, such as high commercial rentals and manpower constraints. Being wholly online, RedMart can understand its customers better than its competitors. Because every order is tracked, analysed and compiled, it can establish patterns and preferences of its consumers' purchases. RedMart's business model is based on knowledge and intelligence, and data analytics is a new competitive tool for the company. Assoc Prof Eugene Tan suggested that companies could leverage Corporate Social Responsibility (CSR) as a business and branding strategy. In my opinion, we welcome and encourage companies to undertake meaningful CSRs in the areas they have passion for. I would not, though, hard-wire a company's CSR programme with its business or branding strategy and expect business benefits from such linkages. But having said that, we believe branding of our firms' products and services is important. To help companies define their branding strategy, SPRING's Capability Development Grant is a well-established programme that offers funding support for companies to develop their brands. We have also discussed earlier how raising sales is a sure way to raise productivity. For ready Singapore companies, developing overseas markets is a logical and integral part of their productivity strategy. For some, designing products for the global market has actually been their growth strategy since day one.”
“Our companies must, therefore, find new and imaginative ways to compete. Technology adoption clearly offers us a way forward. One challenge SMEs face is their small-scale operation and this has been pointed out by many Members. To help SMEs reduce upfront capital investments and save on ongoing operating costs, JTC will custom-build a new generation of industrial space with shared facilities as a key feature. Ms Foo Mee Har will be pleased to learn that companies operating in JTC's new Food Hub, for instance, can utilise a shared integrated cold room warehouse while tenants in JTC's new Surface Engineering Hub can benefit from a centralised wastewater treatment plant. Such shared services will help companies save up to half a million dollars collectively on upfront capital expenditure and enjoy 10%-20% off their long-term operating costs. Some shared services take a non-physical form. For logistics companies operating out of JTC's upcoming Integrated Logistics Hub, the shared IT management system will enable companies to schedule and monitor the flow of container movements within the depot, cutting down drivers' waiting time. This year, JTC will be rolling out more than 10 such customised industrial facilities. Other sectors that will benefit from such facilities include general manufacturing, electronics and medical technology. Page: 145 Competition is often cited in surveys as one of SMEs' key challenges in the face of growth. For some, competition brings out the best in them. If I tell you that a start-up in Singapore was growing at 20%-30% month-on-month, would you have guessed that all they did was to sell everyday products, such as toothbrushes, shampoos and detergents? This company is RedMart, a wholly online grocer.”
“The example of RedRing Wanton Mee shows that even traditional business can upgrade. RedRing Wanton Mee invested in a Japanese noodle cooker to ensure noodles are consistently cooked at the right temperature and duration. Like their counterparts in the food sector, other SMEs have also adopted technology to achieve higher productivity. Let me illustrate with some examples associated with smart devices. More and more intelligence is now built into personal items, such as mobile phones, backpacks and even clothing. Increasingly, the things we use will be able to communicate and talk to each other. For instance, pest management companies are installing smart pest traps. Workers are deployed to collect and dispose of pests only after the pests have been caught. Likewise, smart sensors installed at construction worksites send Page: 144 site vibration and other safety data to control rooms. For FOSTA, this eliminated 90% of the manpower previously required to manually inspect sites on schedule. A*STAR also developed the smart fence system. Advanced optical fibre sensors are planted at regular intervals on fences. They detect intrusions far more accurately than other similar systems around the world. Today, these smart fences protect our airports, SBS Transit's bus depots, as well as the North-East Line (NEL) train depot. Smart fence reduces the need for security patrols. Existing security officers can be deployed in control room to monitor more fences with far greater accuracy. To support companies in adopting technological solutions like this, A*STAR launched the $51 million Technology Adoption Programme (TAP). Mrs Lina Chiam may be pleased to learn that TAP benefits many sectors, including Construction, Food Services, Retail, Precision Engineering and Logistics.”
“They are now exploring Page: 143 the possibilities of supplying to airlines, catering companies, chain restaurants, hotels as well as local and overseas supermarkets. If their expansion plans come to fruition, they expect to achieve 30% sales growth in three years. To expand their ability to do so, they have purchased new machineries to produce consistently delicious pastries. Over the past few days, many Members had raised the issue of high rental cost. Polar is a good example of how a company has changed with the times and adopted a different business model enabling it to move past the reliance on shop front and staff to increase its top line. Competition is stiff in the F&B industry. So, the operators have to be innovative, and there are many examples of successful innovations in the sector. We all are familiar with vending machines. Everywhere in the world, especially in places with high human traffic, vending machines are readily available, selling 24 hours a day potato chips, hamburgers and fresh vegetables. In Singapore, we notice that there are more and more vending machines. This is a picture of my colleague buying a packet of steaming hot fried beehoon from the vending machine at 2 o'clock in the morning. She said it tasted delicious. More importantly, with vending machines, people working at the airport, hospitals, hotels, factories and students staying at the University hostels have another way of purchasing food as and when they wish. On the other hand, companies providing this 24/7 service need not worry about the high rental cost and the difficulty in employing night shift staff. (In English): Mdm Chairperson, businesses can adopt technology to improve their existing processes in a number of ways.”
“As a result, their productivity is higher than their peers. And this is what they call the high price, high profit and high productivity – the three high "Ps" – in the traditional food industry. Apart from these examples, there are others that have embraced productivity. Many local companies have started out as food retailers but later moved into food manufacturing. For instance, Bengawan Solo, which has come a long way from the days of making traditional ang ku kueh by hand to automating the process; BreadTalk used to make bread by hand and now has a central kitchen; Tee Yih Jia, no longer makes roti prata by hand and has instead gone the automation route. These companies' foresight and ability to seek out and analyse opportunities have brought them much success and enabled them to enjoy a stable growth for years. Let me take Polar Puffs and Cakes as an example. It used to be a traditional cafe and how many pieces it could sell depended on how fast the chefs could make them, and also the number of customers patronising its cafe. 6.00 pm To grow such a business model, there are only two ways – open more outlets, and hire more kitchen staff. However, this is the traditional way. Many people are, in fact, doing it, but this is certainly not the most profitable way. In the 1980s, Polar changed its business model. Instead of relying on manual production, they set up a central kitchen and gradually established its supply chain and sales outlets. Since then, its growth was no longer restricted by their small shop front and the number of staff it had. It then opened up a path for healthy and stable growth. Today, Polar Cafe is partnering a number of petrol kiosks. They are looking for more development opportunities in the B2B space.”
“We also have productivity consultants to help companies acquire the know-how to implement productivity initiatives. To date, 17,000 companies have benefited. To complement the NPCEC initiatives, we also have broad-based enablers, such as the Productivity and Innovation Credit (PIC). PIC has helped about 40% of active companies in 2013. This was discussed extensively by DPM Tharman in his round-up speech. Mr Chairman, may I now speak in Mandarin. (In Mandarin): [Please refer to Vernacular Speech.] Mr Teo Siong Seng asked what determines the value-add and productivity of sectors or firm. He also asked how we can help to develop our traditional sectors. Traditional sectors like food services and food manufacturing are, in fact, our NPCEC priority sectors. The Singapore Food Manufacturers' Association, SPRING and the NPCEC are working hand-in-hand to raise the sector's productivity and capabilities, while helping companies and workers retain precious traditional skills. To put it simply, productivity is defined as value-add per worker. To increase value-add, a company has to increase its operating profit, or EBITDA, Page: 142 and workers' wages. In even simpler terms, it means the more profitable a company is, the more productive it can be. Of course, the price of a piece of beancurd cannot be compared to a computer chip. But I know of many famous local hawkers who have made a name for themselves using their own unique recipes and thereby attracting a steady stream of customers every day. From the fried Hokkien mee at Upper Changi Road, to the frog leg porridge at Geylang, to the bak kut teh at Balestier Road, and to the Hainanese chicken rice at Thomson Road. Because their business is good, they charge more for their food and they make a higher profit.”
“Mr Chairman, may I have your permission to display some slides on the LED screens later on in my speech. May I also add my thanks to the various Members who have spoken on the various issues regarding our economic restructuring. Minister Lim Hng Kiang has highlighted the need to stay on course in our economic restructuring. We need to press on with our productivity efforts. Companies need to transform and evolve themselves with business models commensurate with Singapore's cost structure. Many need to find new markets here and overseas to grow their profits. Mr Heng Chee How and Dr Lim Wee Kiak asked about the progress of our productivity drive. Since 2010, our national productivity growth has averaged Page: 141 2.7% per year. This is within our target of 2% to 3% per year. However, the growth was front-loaded due to the strong cyclical recovery in 2010, and became weaker subsequently. At the sectoral level, some sectors are doing better than the national average. Precision engineering and transport engineering, for instance, saw good productivity growth. Sectors which performed below the national average included construction. These sectors added manpower faster than they could raise output. Our goal, therefore, is to help the leading sectors grow even more, and the laggards to catch up. Productivity improvement is a long-term undertaking. This is nearly an inside-out process. To do so, we have taken a sectoral and broad-based approach. Since 2010, the National Productivity and Continuing Education Council (NPCEC) has been working with the industry to develop and implement sector-specific productivity roadmaps. Fifteen roadmaps out of 16 priority sectors have been endorsed. These roadmaps seek to build capabilities and address weaknesses in the sectors' eco-systems.”
“Mdm Speaker, generally, HDB does not specify or restrict the time of operation of business establishments in the estate. That is the general rule. In other words, businesses are free to operate in the hours they deem fit, but for certain areas such as the Outdoor Restriction Areas (ORA), HDB will consult the advisors and grassroots organisations to ensure that the ORA operators operate within the specific hours, such as stopping operations before 11.00 pm. We also should realise that 24-hour shops and supermarkets exist for a purpose: there is demand and they cater to workers who work night shifts such as taxi drivers and healthcare workers. Some of them, indeed, serve to cater to that demand. In balancing the needs of the residents, we have to take a balanced approach. Yes, there have been complaints but the complaints are rather small in perspective. For example, last year, HDB received 60 cases of feedback on noise disturbances from 24-hour coffee shops. This is about 5% of the 1,200 coffee shops that there are altogether. There is less than 1% complaints about 24-hour supermarkets. These are manageable. But we also realise that for specific stores and supermarkets, there may be repeated infringement. In those cases, we really got to work very closely with the advisors and grassroots organisations to ensure that the business owners know what are the requirements and HDB will enforce those requirements. Page: 16”
“Mdm Speaker, most Town Councils operate on the basis that they engage a managing agent and the selection of managing agents is through open tender. On that basis, the most competitive managing agent will have to be selected and they themselves will appoint their staff to perform the jobs. I cannot answer the Member's question but this is how it is done in the interest of the public.”
“I thank the Member for his various suggestions. The co-funding programme has just been revised about a year ago and it is our intention to work closely with the various property owners to introduce the rebuilding of the pedestrian links, it will take a while for the links to be established over time. The Member mentioned the example of Iluma and also Jurong Gateway. Sometimes, the GFA exemptions are being used because we need to provide space for some of the common mechanical and electrical ventilation systems. So, where it is appropriate, URA will consider giving these. But for other redevelopment and new developments, when the property owners are submitting their plans for approval, URA would require them to build those links, including covering any 2- or 3-metre gaps that may be there. We are, at this stage, not considering legislation as yet because we think a better way is still to work closely with the building owners to hasten the building of the links.”
“Mdm Speaker, I would just like to clarify that, currently, both BCA and NEA have no regulations on indoor air quality per se. What NEA has introduced is a code of best practices that building owners would want to adhere to for maintaining their air conditioning in office buildings. These are Page: 63 guidelines. Instead of running the risk of over-legislation, we have to, in this instance, depend on the indoor users – the office workers and those people working in the air-conditioning environment – to take some responsibility and make sure that they provide feedback to the owners and the facility managers for building maintenance. So, this is a premise that we are working on and it has worked well. Whether we would want to refine subsequent best practices for indoor air quality, we will have to wait for the technical study that is being carried out. Necessarily, we would require quite a bit of data support to establish the difference between outdoor and indoor air quality. And, of course, as a technical standard, the Member will appreciate that it has to be implementable and also measurable when we publish the standards.”
“I thank the Member for his suggestion. The RPWG and CASE regularly publish prices of food items on our websites. The idea is, as the Member suggested, to provide some indication of the current market data. I would hesitate to describe them as guidance because, for a free and open market, there should really be competition and our vendors and retailers should strive to provide their goods at the best price. And also considering that there are different brands of N95 masks and the masks are sold at different locations, necessarily there is a price range, which is healthy. But the fact that it has shot up reflects the demand which is also an important signal to the wholesaler that there is such strong demand and they should replenish their stock quickly. Some of the dislocation in supply is not so much that the wholesaler or the main storehouse does not have the masks. It is purely logistics because they could not get the resupply run fast enough several times a day to reach their retailers and their store outlets. These are all lessons for learning. Going forward, we would consider the Member's suggestion.”
“Mdm Speaker, I thank the Member for raising this consideration. Essentially, our retail system provides a frontline of supply on items or essential items including, in this case, N95 masks. One point that perhaps has not been emphasised enough in a resilient supply system is for Page: 58 households to continue to consider equipping themselves with N95 masks even as the haze has subsided. If every household has five, 10, 15 or 20, depending on the number of members in the family, then we would not have a situation where we have to urgently supply masks, however efficient our system, to every household in a very short period of time, which is in itself a difficult undertaking. But I would add that the current Control of Essential Supplies Act is in place and the last time we used it was in the early 1980s for petroleum as well as for liquefied petroleum gas. So, in those circumstances, they were in the end revoked because the market had operated maturely and it was deemed unnecessary. The market itself was able to provide supply and price stability.”
“RPWG and CASE will continue to stay vigilant and take action when cases of profiteering come to their attention. Any substantiated reports of anti-competitive practice that come to Government's attention will also be referred to the Competition Commission of Singapore for investigation.”
“The Control of Essential Supplies Act, which was enacted in 1973, provides the Government with the powers to control and ration the domestic sale of essential supplies during a crisis. The President may, by order published in the Gazette, declare any article or food to be a controlled article. Page: 57 The Act was not invoked during the haze period, as the spike in PSI to unhealthy levels was for a relatively short duration. When the PSI went into the unhealthy range, there was a spike in demand from the public for N95 masks. The supply at the retailers was insufficient to meet the surge in demand and, as a result, some members of the public could not obtain the masks. As the Minister for Health has explained earlier, MOH maintains a dedicated stockpile in preparation for a possible flu pandemic. This stockpile was subsequently released to retailers such as Giant, NTUC FairPrice and Watsons, to ease demand. MOH is now working on re-stocking the national stockpile levels so that we will be fully stocked, should there be an outbreak of pandemic flu in Singapore. The Government has in place various channels for the public to provide feedback on issues and concerns related to this matter. For example, the Retail Price Watch Group (RPWG) keeps a watch out for excessive price increases of daily essential goods and anti-competitive behaviour. RPWG members come from both the private and public sectors, and include Mayors, business leaders from the retail sector, as well as officials from AVA, Competition Commission of Singapore and CASE. In addition, CASE also serves as a key partner, providing feedback on issues faced by consumers and following up with businesses on consumer complaints. Consumers who come across unfair trading practices can report them to CASE.”
“Instead, the Bill imposes a five-year debarment period during which ex-offenders cannot take up responsible positions in a licensed firm. This approach is consistent with the disqualification for persons convicted of fraud and dishonesty-related offences from holding company directorships under the Companies Act. We think this requirement is fair because developers are selling properties for significant sums of money. It is, therefore, important to ensure adequate prudence in the licence-approval process. The Act defines a "responsible position" in a company as a director, manager or secretary; companies which employ ex-offenders in other positions are not affected by the requirement. Mdm Speaker, let me conclude by saying that the Bill is not a short-term response to the current state of the private residential property market. It is a timely and necessary exercise to enhance the administration of the Controller of Housing function and ensure that the Act remains relevant and effective. It Page: 84 seeks to protect buyers of uncompleted private properties by stipulating greater clarity in product information and developers' obligations in marketing and transaction. Our developers here have largely been responsible and professional in their dealing and, with this Bill, we hope we will raise the professionalism and efficient working of the industry. Mdm Speaker, I beg to move. [(proc text) Question put, and agreed to. (proc text)] [(proc text) Bill accordingly read a Second time and committed to a Committee of the whole House. (proc text)] [(proc text) The House immediately resolved itself into a Committee on the Bill. – [Mr Lee Yi Shyan]. (proc text)] [(proc text) Bill considered in Committee; reported without amendment; read a Third time and passed. (proc text)]”
“Of these, there has, so far, been no licence revoked but there have been a small number of cases in which the Controller of Housing has disallowed developers from selling units off-plan. I believe this Page: 83 attests to the overall professionalism of the industry. Asst Prof Tan and Mr Lim are of the view that the increased fines are still not hefty enough and may not be a sufficient deterrent to the cash-rich developers. I understand their concerns if fines are the only deterrents developers are liable to. Instead, the deterrence measures contained in the Bill are multi-levelled, including imprisonment, suspension and revocation of licence. For example, the Controller of Housing can prohibit a developer from marketing and selling homes until all units are fully completed. This applies not only to the project in question, but also on the developer's future projects. Developers' revenue inflows will be severely constricted as they cannot rely on instalment payments received during the construction process to fund development of the project. There is also the negative impact on the developer's reputation amongst would-be buyers. A developer also risks affecting his track record, which is a key assessment criterion for future licence applications. We believe that all these, taken together, constitute sufficiently strong deterrents against offences. We remain watchful of the situation and we will not hesitate to push for harsher penalties, through further legislative amendments, if necessary. Mr Dhinakaran commented that there is an over-generalisation of former convicts in this Bill. Let me clarify that the Bill does not permanently prohibit companies from hiring ex-offenders.”
“Asst Prof Tan suggested that the Bill can go further to provide the Minister and/or Controller of Housing with more power to make rules so as to promptly respond to rapidly changing market practices that attempt to tilt the playing field to the disadvantage of home-buyers. Mdm Speaker, the approach we are taking with this Bill is a balanced and fair one. We fully recognise how dynamic the private property market is. Hence, it is important for us to be nimble in the face of new concerns and problems which may arise now and in the future. This Bill already empowers us to make rules in several key areas, if and when necessary. So, I thank Asst Prof Tan for his suggestion. The Members have also provided feedback on specific issues relating to the Act. Let me respond to them. Mr Lim asked if the Act could be extended to impose the requirement for a housing developer's licence for any development of more than two units. This is, indeed, an issue we are looking into. However, we will need more time to fine-tune the implementation details to ensure that small developers are not over-burdened by new requirements, without compromising the protection extended to home-buyers. We will consider this in a future round of the amendment of the Act. Suffice to say, on average, less than 1% of our development comprises five units or less. Asst Prof Tan has also asked for the number of licences granted and revoked or not renewed. I would first like to clarify that a licence for each project undertaken by a developer is valid until the project is completed. There is, therefore, no renewal of licences involved. Since 2000, some 6,800 licences have been granted to developers.”
“We have also made provisions in this Bill and will monitor the situation before assessing if further regulatory safeguards are needed. Mr Ang has called for greater regulation of property websites which may provide inaccurate information to the public. He has also called for more information to be supplied to buyers on the developments, features and amenities in the vicinity of the housing project, a point echoed by Mr Lim as well. These are suggestions that we will consider as we refine the Housing Developers Rules with the passage of this Bill. Asst Prof Tan has asked if we will make as much market information freely available to the public without the need to pay a fee. I wish to inform the House that comprehensive real estate market information is already provided free-of-charge to the public on URA's website. Such information is also provided through mobile Apps made available by URA which home-buyers can download free-of-charge if they want to access information on-the-go. This Bill Page: 82 will enable us to enhance the existing information to be provided and to do so in a more frequent and timelier manner. Mr Lim asked for the rationale behind the deletion of section 22(2)(b) of the Act. We have deleted this clause as the function of regulating names of buildings and estates is now under the Street and Building Names Board. Since April 2010, the Urban Redevelopment Authority has taken over the secretariat functions of the Board. So, names of housing developments should still have to be approved by this Board.”
“This provision of a margin for error exists as variations in floor area could arise due to construction difficulties or the use of different construction methods. Our view is that this plus or minus 3% could be reviewed in the future if technology allows for more accurate construction methods. We have received very few complaints on this matter over the past 10 years. With regard to Mr Lim's suggestion on the exclusion of unusable areas such as planter boxes and air-conditioner ledges, in the computation of the area sold by the developer, we do not think it is necessary to do so now. Today, developers are already required to indicate on the plans and in the showroom the exact dimensions of such ancillary spaces so that buyers can make informed purchasing decisions. Although these areas are perceived to be less useable, they are, nonetheless, functional spaces which constitute a residential unit, and it is the responsibility of home owners to maintain them. As such, these areas should still be computed as part of the strata area of a unit. Even if developers were required to exclude such areas from the computation of prices, they could compensate for this by marking up the average per-square-foot price of other parts of the unit. Mr Lim also urged the Government to disallow some of the practices of real estate agents, such as the deliberate forming of queues at the launch of a new development, as well as the collection of blank cheques from potential buyers to buy a property. For a start, the Council for Estate Agencies (CEA) is already working with the relevant Government agencies and the real estate industry to set guidelines on the collection and proper use of cheques.”
“Mdm Speaker, I thank Asst Prof Eugene Tan, Mr Lim Biow Chuan, Mr Dhinakaran, Mr Ang Hin Kee and Mr Gan Thiam Poh for their many very good suggestions and for spending time to read the amendment Bill, and also for their general support of the Bill. I would also like to thank all Members who have previously shared their feedback and suggestions. Many of the suggestions raised by the Members relate to the provisions we can include under the Housing Developers Rules and not so much the Act per se. So, let me assure the House that we will take these views into account as we embark on the changes to the Housing Developers Rules, following the passage of this Bill. Let me also respond to the various points raised one by one. Asst Prof Tan, Mr Lim, Mr Dhinakaran and Mr Ang suggested that show flats be better regulated. We agree and are, therefore, prescribing show flats as an area in which the Minister shall be empowered by this amendment Bill to make precise rules. While we have yet to finalise all the new rules, we have thought about a number of areas which we intend to tighten up. For instance, we intend for all structural and external walls to be erected in the show flat, in the same thickness as the final product. All "add-ons", such as furnishings, finishes and interior fittings, must be duly labelled and made known to the buyers. The Controller of Housing will also be granted investigative and enforcement powers to enter and even close show flats if serious breaches are discovered. Mr Lim asked if the Government would consider reducing the margin of error, as stipulated in the prescribed sale and purchase agreement, from 3% to Page: 81 1% of the area of the property.”
“The new rule-making powers will allow us to regulate marketing and promotional activities across a variety of channels and platforms. They will also allow us to ensure that the marketing and prospective sale of residential properties are conducted in an orderly and transparent manner, with due regard for the interests of all buyers. For instance, rules could be introduced to regulate the practice common among some developers to collect blank cheques from prospective buyers as a form of advance booking for a residential unit. Although developers will retain flexibility in their marketing and promotional activities, the new rules will empower the Minister to regulate such activities if there is a need to do so in the future. Fourth, this Bill substantially increases the monetary penalties for non-compliance. For example, the maximum fine imposed on developers who fail to comply with any of the conditions laid out in their licences will be raised from $20,000 to $100,000; they could also be subject to an imprisonment term of up to three years. Madam, we believe that this Bill is timely. A home is, in most cases, the single largest investment in one's lifetime. It is only right that home-buyers are provided with the appropriate tools and legal safeguards to make informed decisions. This Bill will also enhance the professionalism of the residential property industry. With that, Mdm Speaker, I beg to move.”
“In addition, section 11 of the current Act will be amended to give the Controller of Housing legal power to collect and publish information on building projects, units sold and made available for sale by developers, and sales transactions. Data collected will be published in an aggregated fashion, as frequently as weekly, to aid home-buyers in timely decision-making. Mdm Speaker, I will now outline how this Bill enhances the governance of housing developers. First, the amended section 7 will expand the grounds on which the Controller of Housing can revoke or suspend a licence. New grounds for revocation include the failure of the developer to furnish information concerning the development project, sale of the project and sales transactions. The amendments to section 25 will also debar persons who have been convicted of, or have served a sentence of imprisonment for, a fraud or dishonesty-related offence in or outside Singapore, from holding or continuing to hold responsible positions in a licensed housing developer for a period of five years. Second, this Bill will require developers to make public their audited financial positions. Currently, section 10 of the Act requires a developer to publish its last audited balance-sheet and profit and loss account. This section will be amended to require a developer to submit its audited accounts and the Page: 67 report of its auditor to the Controller of Housing. In addition, the developer must allow the public to freely inspect the accounts and report for a period of 24 months either via the Internet or at its place of business. Third, this Bill empowers the Minister to set rules regulating the marketing and promotion of residential units. This goes beyond the existing regulatory scope of advertisements.”
“It is therefore crucial for show flats to be built to scale, and be "WYSIWYG", or what you see is what you get. For instance, all structural walls of a show flat should be erected with dimensions as per approved in the approved building plan. Using a glass panel in lieu of a solid brick wall would be misleading. Likewise, the ceiling height of a show flat shall be the same as that approved in the building plan. This Bill also introduces section 17A to empower the Controller of Housing to investigate and penalise instances of non-compliance with the requirements relating to show flats. Page: 66 Second, we have made provisions in this Bill to give the Minister new rule-making powers requiring developers to disclose and publish all rebates, discounts and other benefits offered or extended to home-buyers. Over the years, we have noticed more and more developers offering discounts to home-buyers. More recently, some developers have started to mark their units at a higher price, while offering significant discounts through rebates and other benefits such as furniture vouchers. Such inflated sale prices mask the real transacted prices and undermine transparency in the property market. The proposed amendments will require developers to provide accurate information on residential transactions to the Controller of Housing in the same way they would to the Monetary Authority of Singapore for the purpose of loan applications. In other words, they will need to disclose any price discount, rebate, or any other benefit, including the reimbursement of any stamp duty or tax granted to home-buyers.”
“As part of this review, the Urban Redevelopment Authority carried out extensive consultations with members of the public, real estate professionals Page: 65 such as property agents and consultants, and professional bodies such as the Consumers Association of Singapore, the Law Society of Singapore, the Institute of Estate Agents and the Singapore Accredited Estate Agencies. The URA also consulted the Real Estate Developers' Association of Singapore and individual developers. Mdm Speaker, I am pleased to inform you that these parties expressed support for amending the Act, as the various initiatives in the Bill will help foster a more transparent property market and professional real estate industry. In particular, the professional bodies provided many constructive suggestions for its refinement. This Bill will provide additional safeguards to home-buyers in two key ways. First, there will be measures to improve the quality of information on housing developments and the sale of housing units. This information will enable buyers to make more prudent and better-informed purchasing decisions. Second, housing developers will be subject to higher standards of accountability and professionalism, so that their business activities will further enhance the credibility of the industry. This set of amendments deals with the Government's regulation of developers Mdm Speaker, I will now detail the key amendments proposed, starting with measures to improve the quality of information made available to the public. First, we will amend section 22 of the Act to empower the Minister to make rules requiring developers to accurately depict homes through show flats. Many home-buyers base their purchases on what they see in the show flats.”
“Mdm Speaker, I beg to move, "That the Bill be now read a Second time." The Housing Developers Act was enacted in 1965 to safeguard the interests of buyers of uncompleted private residential properties through the control and licensing of housing developers. In so doing, the Act also helps to ensure that the private residential property market functions smoothly for the benefit of buyers, developers and other stakeholders in this market. All licensed developers are required to comply with a set of stipulated controls under the Act. For example, developers are required to provide financial statements to the authorities and use project accounts for the deposit and disbursement of construction loans and sales proceeds. The Act also empowers the Minister to make rules – the Housing Developers Rules – for the implementation of the Act. Advertisements by developers are also regulated by the rules. The Act itself was last amended in 1984 to introduce the Project Account requirement. However, the Housing Developers Rules have been updated several times, in 1997, 2005 and 2012. For instance, we amended the rules last year to require developers to provide more information to home-buyers on housing projects and properties prior to issuing the Option to Purchase. Such information includes a drawn-to-scale location plan, site plan of the project, unit floor plan and breakdown of a unit's floor area by the various spaces such as bedrooms and balconies. This Bill seeks to ensure that the Act remains relevant and effective in safeguarding the interests of home-buyers, taking into consideration developments in the private residential property market. We are also taking this opportunity to improve the administration of the Controller of Housing function.”
“Mr Zaqy Mohamad warned against "poach-tivity" and "property-vity". We agree that in the long term, these are not viable strategies. By putting off much needed productivity improvements, companies will eventually face a crunch again. Raising productivity is the only means to achieve sustainable growth. We discussed some examples of successful SMEs doing so. Their experiences show that it requires commitment and great efforts but it is possible. Many SMEs have told me they understand the need to change and restructure. The question now is not why and what, but how. As we endeavour to create the most conducive support system for change, let us work together on the "hows" by gleaning best practices from other industries and markets, by brainstorming individually and collectively. I believe we can do it. In fact, we must succeed in order to arrive at the next phase of quality growth.”
“MRA can be applied to individual company or trade associations. For individual companies, IE Singapore will co-fund up to 50% of the eligible costs associated with foreign market assessment and market entry, including legal advice, tax advisory and consultancy services, up to a maximum of $20,000 per company per year. IE Singapore will launch this programme on 1 April and expects to benefit up to 1,000 companies. For trade associations and chambers, IE Singapore will co-fund the cost of hiring in-market agents to seek out overseas business opportunities for the association members. In addition, IE Singapore will continue to organise iAdvisory seminars and clinics for companies seeking new markets or overseas growths. These seminars will cover topics, such as issues related to tax regulations, restructuring and relocation. Page: 95 Mr Sam Tan asked how the Government can help internationalising companies cope with manpower constraints. Under the Global Company Partnership (GCP) programme, IE Singapore will be setting aside $20 million to help businesses address three critical manpower challenges: attracting talent, developing talent, and establishing an international manpower strategy. Under the programme, IE Singapore will provide more overseas training opportunities and scholarships for local undergraduates to prepare them for international careers, match young talents to internationalising companies, and help key company executives acquire international HR expertise. Hopefully, our firms will learn to recruit, develop and retain talents suited for regional and cross-cultural operations. Mdm Chair, companies can raise productivity in many ways. Fundamentally, they have to find ways to raise revenues and reduce costs.”
“00 pm Soon, BreadTalk will open its new international headquarters building at Paya Lebar. By then, it will create more skilled and high-paying jobs for Singaporeans, in areas such as regional HQ management, product Page: 94 development, training and logistics and so on. From the above example, it is clear that, at some point, our SMEs must transcend our small domestic market to realise their next stage of growth. Singapore is fortunate in that we are at the centre of growth in Asia, just as Minister Lim has highlighted earlier. China has a rising middle class of around 300 million, while India has 160 million. Consumer demand is also growing in the ASEAN economies with their youthful demographics. Our SMEs are indeed well placed to take advantage of these opportunities at our door step. Further away are emerging markets, such as those in Latin America, Africa, the Middle East, Russia, Central and South Asia, offering some niche opportunities for our export businesses. Though less well known, Singapore businesses are already trading with, or investing in some of these economies. With the right strategy, our firms will find niche opportunities in these markets. Ms Jessica Tan, Mr Teo Siong Seng and Mr Inderjit Singh will be glad to know that in 2012, IE Singapore assisted over 15,500 companies in their internationalisation drive, and supported 6,000 companies through its incentive programmes. IE Singapore also launched the Global Company Partnership (GCP) to help companies internationalise by providing support in four key areas, that is, capability building, manpower development, market access and financing. To help SMEs accelerate their pace of internationalisation, IE Singapore is launching an $18 million Market Readiness Assistance (MRA) programme.”
“An increase in productivity of more than 10% helped it cope with the tight labour market and rising business costs. Freshening Industries is a typical SME, which faces similar challenges and difficulties with the rest. We hope their successful transformation will inspire many others to do the same. The restructuring process may not be easy, but there are those who have done it. As the saying goes – when there is a will, there is a way. Let us work together. (In English): Mdm Chair, as I alluded to earlier, everything being equal, rising sales of a company will also raise productivity. This is important because many productivity discussions focus on labour productivity and omit revenue generation and value creation, just like Mr Inderjit Singh has highlighted. Internationalisation is very crucial in raising a company's productivity. Singapore firms need to look beyond our small domestic market and tap into new regional demands. The BreadTalk group started as a one-shop company in the year 2000. Today, the group has over 700 outlets under eight brands in 15 countries. BreadTalk has tackled productivity challenge from all angles. It has creatively differentiated itself through product innovation and has continually revamped its business model. It has evolved from a one shop to many chains, one brand to eight brands, in-shop baking to central kitchen and a local company to a regional player. These efforts have helped BreadTalk to grow its revenues and profits. By expanding boldly into new overseas markets, BreadTalk has enhanced its competitiveness and enjoyed economies of scale. BreadTalk now has more resources to invest in technology and do product development. It enjoys strong brand recognition internationally. 3.”
“Time is needed to introduce productivity improvements and for them to bear fruit. The Government is committed to supporting businesses, especially our SMEs, during this transition period. There are those who have managed this transition well. Consider the example of Freshening Industries, an SME manufacturer of hygiene wipes. This SME started in 1994, with humble beginnings, and it grew steadily through its pursuit of quality and development of customised products for each client. Freshening Industries now exports to more than 33 countries and supplies more than 5,000 restaurants, major airlines and global hotel chains. The distribution channel has increased to more than 35 countries. Freshening Industries' success can be attributed to the company offering tailor-made services and customised products developed according to their customers' needs. The company has also been pro-active in its pursuit to improve productivity, tapping into the incentives provided by the Government. Freshening Industries embarked on its productivity journey in 2010, with the help from a productivity consultant at an Enterprise Development Centre (EDC). It started with an initial productivity assessment through the IMPACT benchmarking tool, moved on to adopting the 5S methodology for workplace Page: 93 organisation before implementing other improvements like Business Intelligence and Customer Relationship Management software. Managers at each level were trained to upgrade their leadership skills to guide the effort. All these improvements were supported by the programmes from SPRING and the Employment and Employability Institute (e2i). The costs were also claimable under the Productivity and Innovation Credit (PIC). Results have been tangible.”
“To give an example, SMEs in the F&B sector can reduce their manpower requirements by aggregating demand and collectively outsourcing their food preparations to suppliers. They could also pool logistic assets, such as warehouses and delivery trucks, to benefit from economies of scale. Hopefully, CIPs can also bring about greater integration in the supply chain and reduce wastage and inefficiency. CIPs could also potentially see new players and modify industry structure in the longer term. Page: 92 We will commit $90 million for such projects over the next three years in the six sectors led by SPRING and will roll out the first call for projects in the second half of this year. Mdm Chair, may I speak in Mandarin. (In Mandarin): [Please refer to Vernacular Speech.] Beyond the sectoral level, we also need individual companies to initiate change on the ground. As our restructuring efforts gather pace, more companies now recognise the importance of productivity and innovation as the only way to achieve quality growth. We will continue to work closely with companies for productivity improvements across all sectors. We urge more to come forward and tap the programmes available to help them enhance and develop higher value capabilities. In order to make the shift towards productivity-driven growth, companies will increasingly need to re-examine their growth strategy and fundamental business models, and to contemplate new ways of creating value that they have not done before. In short, they need to move out of their comfort zones and cannot stay unchanged. It will not be an easy and straightforward road as businesses have to make difficult adjustments. We also recognise that businesses have many other concerns on their minds.”
“Sector by sector, we are implementing customised productivity roadmaps systematically. In the retail industry, for instance, 200 retailers have undertaken productivity and services upgrading projects. Two hundred CEOs and productivity managers have participated in training, and 14,000 retail workers took classes at different levels offered by WDA. Clearly, a lot more retailers and retail professionals can benefit from these programmes, and we have the capacity to train them. Besides reaching out to more, SPRING will also go deeper. It will introduce more in-depth projects designed to help integrate the supply chain and promote wider adoption of technology, such as integrated point-of-sale systems and inventory management systems. Embracing technology at the industry level will bring about a larger quantum of productivity improvements. At the firm level, we also have committed $180 million in grants to about 10,000 companies. Among them, 90% were SMEs. Again, we have the capacity to fund more firm level projects and we want more firms to step forward. At the national level, we have committed about $1 billion from the National Productivity Fund to support the many sectoral plans and horizontal programmes. One new initiative we are introducing is the Collaborative Industry Projects (CIPs). We will extend the collaborative industry projects to six more industry verticals led by SPRING, including food services, retail, food manufacturing, furniture manufacturing, printing and packaging, and textile and fashion. The objective of these CIPs is to help achieve a step change in the productivity of a large group of companies by encouraging them to work together in areas that bring them the benefits of integration and economies of scale.”
“Madam, I too like to thank the Members who have spoken on productivity and internationalisation. They are two related topics and a key determinant to the success of our restructuring. Assoc Prof Fatimah Lateef highlighted that the concept of productivity differs between sectors. Yes, it is true that different sectors measure productivity in ways that make more sense to them. This is why the National Productivity and Continuing Education Council adopted a sectoral approach towards driving productivity growth. Consulting closely with the respective trade associations and chambers, we developed customised productivity roadmaps to tackle the different challenges that each sector faces. We also complement macro level measurements with sector specific indicators. Likewise, our public outreach effort is also tailored to specific sector. For instance, under the "Way to Go" national productivity campaign, we highlight stories of best practices in different industries. Many Members would have read some of the stories in The Business Times and Lianhe Zaobao in the year-long education and outreach campaign. Mr Sam Tan and Mr Zaqy Mohamad asked about the progress of these productivity efforts. Year to year, headline productivity numbers fluctuate. In 2010, our productivity shot up by 11.1%. In 2012, it declined by 2.6%. Productivity measures are sensitive to economic cycles. A sharp drop in product prices can, for instance, mask the improvement made in labour productivity. In Page: 91 the long run, however, the value added per worker ought to rise, reflecting rising productivity. The Government remains therefore fully committed to helping our industries achieve long-term and sustainable productivity growth.”
“Mdm Chair, in response to Mrs Lina Chiam's question on common spaces. I think she also commented on the void deck space usage. Page: 47 In deciding to allocate to a specific purpose, HDB does consider the common spaces in a precinct, in a few blocks together. We would not advise, even if the needs are very pressing and justified, to co-locate too many services in a very congested manner to take up the entire block, for instance. This is an interactive process. There are many needs in our society. We need childcare, we need elderly care, we need active corners for youths, we sometimes need dialysis centres and so on. Obviously in the newly planned towns, we can accommodate all these designs. We will try to create common spaces for them. But in the existing ones, we just have to do our part to persuade people, where necessary, to accommodate these needs in their precinct because we live together as a large community.”
“Madam, I refer to Mr Seah's suggestion. As we were rolling out the EASE programme in the early phase, the response shows that it has good reception among the elderly families. In the HDB situation, we try to bundle it with the HIP when possible so that it would minimise the kind of intrusive work that you got to do within the household. In order to benefit more seniors, we are now rolling out EASE nationwide. So, interested families and qualified families can call, and the HDB will respond. At the same time, we are also working with hospitals and family service centres to surface the kind of vulnerable families, as the Member has said, to give them priority and to put up some fixtures for them. Whether we can go to the next stage of taking care of some elderly in the private estates, I think we will Page: 45 consider, but it will also be a matter of our capacity, as well as funding, and whether we want to park EASE as it is, in the current form, or we can work with the other Ministries to roll this programme out.”
“Mdm Chair, let me now address Mr Zainal Sapari's suggestion of a Tripartite Cluster for the landscape industry to raise productivity and workers' wages. In fact, NParks currently chairs the Singapore Landscape Industry Council (SLIC), which serves a very similar purpose as a Tripartite Cluster proposed. Page: 16 The Council has helped raise professionalism of the landscape workers by developing, validating and endorsing training and curriculum content for the landscape industry, including those for WSQ certification, with industry-wide participation. Mdm Chair, we understand that our built environment sector is under severe pressures of manpower crunch and rising costs. But we also know that unconstrained growth of foreign workers cannot be sustainable, too. We must, therefore, give up the old ways of doing things and we must innovate. In helping the industry evolve to a new industry structure, BCA will help look for other new resources needed. For instance, BCA will set aside more land for the production and storage of precast, prefabricated components, heavy equipment and machinery. BCA has successfully launched the first Integrated Construction and Precast Hub at Kaki Bukit. We aim to build more of such hubs in future to support the industry's restructuring. Mdm Chair, let me call on all stakeholders again to work together to help the industry restructure. We need to quicken the pace of change. We need a successful transition. Building a Singaporean Town”
“Given the large numbers involved, it is more practical to train and test these workers overseas before they enter Singapore. But I agree with Dr Teo that we should find ways to raise the skill standards of construction workers before and after they have joined us. To retain skilled foreign construction workers, we use a tiered-levy framework that accords "higher skilled" workers with lower levy and a longer period of employment. Starting this year, these workers are required to undergo continual education and training (CET) every two years. My Ministry has also received feedback on how the impending cuts to the S Pass sub-dependency ratio quota in the services sector would adversely affect the engineering, architectural, project management and quantity surveying consultancy firms, which are all part of the built environment sector in the process of restructuring. We heard you. As we reduce demand for foreign workers, we will work with the industry to stabilise unproductive churns of skilled workers while attracting more Singaporeans to join the sector. BCA will continue to enhance its comprehensive suite of manpower development programmes, including scholarships, sponsorships and apprenticeships at the University, Polytechnic and ITE levels to build the local talent pipeline. For mid-career and mature job seekers, BCA offers workforce training and upgrading programmes to train them for the industry. MND and BCA will work with MOM to explore measures to mitigate the impact of the tightening in S Pass policies. In the long term, we want a strong core of highly skilled Professionals, Managers and Executives (PMEs), and Technicians and Associate Professionals (TAPs) to form the backbone of our built environment sector.”
“For instance, climbing scaffolds which can mechanically be lifted to the next floor, only require four workers to install, compared to the traditional scaffold system which requires six workers. To support the adoption of higher Buildability and Constructability scores, the public sector will take the lead. Our Government Procurement Entities (GPEs) with new projects will adopt standards higher than the minimum standard, starting later this year, to lead the way of change. In addition, from July this year, consultants and contractors with high Buildability and Constructability score records respectively can score higher in the Quality component of their tender bids, giving them an edge over other bids. Under our tender evaluation framework, it does not necessarily mean that bids with the lowest price will always win the tender. For private developers, who are a key part of the construction value chain, we are exploring, for new Government land sales for private and industrial developments, to specify a new requirement of higher Buildability and Constructability scores. We are also considering making productivity requirements a pre-requisite for existing bonus GFA schemes. BCA and URA will share more with the industry in the coming months. I agree with Dr Teo Ho Pin that we must continuously raise the skills of our construction workforce. Today, all foreign construction workers typically undergo three to four months of full-time training, and have to pass a one-hour theory test and a four- to five-hour practical test in specific construction trades conducted by BCA officers in the source countries. They will then qualify as Page: 15 "Basic Skilled" construction workers. There are no unskilled construction foreign workers as such.”
“Third, we will launch a new Mech C Referral scheme to incentivise main contractors to refer their sub-contractors to CPCF programmes. This, we hope, will accelerate the proliferation of technology use amongst smaller firms. To-date, we have committed $85 million of the $250 million CPCF, benefiting some 2,300 individual firms, of which more than 80% are small firms. More, however, can be done. We are thus working with the industry associations through regular Productivity Clinics to reach out to more firms. Let me now talk about another impetus for significant productivity improvement – Buildability and Constructability of our building projects. To encourage the various stakeholders to come together early, for upstream coordination and integration, we will raise the minimum Buildability Page: 14 and Constructability scores progressively for new projects submitted for planning approval from July 2013 and July 2014. By raising the Buildability score, architects and engineers will need to deliver easy-to-construct design and technologies. An example is the use of prefabricated bathroom units, or PBUs, as it is called. Constructing the conventional bathroom onsite involves 13 different tasks, from plumbing to plastering to tiling. For PBUs, all these tasks can be done more efficiently offsite. Completed PBUs are then transported to the work site and hoisted up for installation. With such a method, contractors can cut down the number of onsite workers from 20 to five, and install the PBUs twice as fast. At the construction stage, contractors will have to make use of more manpower-saving construction methods to meet the higher minimum Constructability scores.”
“With these challenges, my Ministry, together with BCA and other agencies, will intensify our dialogue with our industry partners to transit to a more efficient and sustainable industry model. 11.15 am Page: 13 One way for us to transit successfully is to beef up our resources to help firms adopt productive methods and technologies. For a start, we are enhancing the $250 million Construction Productivity and Capability Fund (CPCF) in three ways. First, we will increase our co-funding level from the current 50% to 70% under the Mechanisation Credit (Mech C) scheme for equipment that can achieve at least 30% productivity improvement. This will help firms lower the cost of acquiring or leasing equipment. For example, to smoothen a concrete floor, a contractor has two choices. He can use a mechanised concrete power trowel operated by one worker, or the traditional manual method which requires at least two workers to complete the same amount of work. The mechanised trowel typically costs $3,000. Under the enhanced Mech C scheme, plus more funding under the Productivity and Innovation Credit (PIC), the final cost to the contractor is less than $300, for a 50% improvement in productivity! In fact, the contractor would also save on wage, levy and accommodation costs by deploying fewer workers on-site. Second, we are raising the support level for the Productivity Improvement Project (PIP) scheme from 50% to 70%, to encourage the re-engineering of work processes to achieve at least 30% higher productivity. In addition, the cap for firm-level projects will be raised from $100,000 to $300,000. At the industry-level, projects gaining 40% productivity improvement and are game-changing can enjoy PIP funding of up to $5 million.”
“Our firms will have to adapt to the tightened labour supply, while seizing all opportunities to mechanise, automate and streamline workflow for higher productivity. This is my key message. This is why we have further differentiated the two tiers of construction levy. The first tier remains unchanged at $300 for higher skilled workers employed within the MYE quota. This is so that skilled and experienced workers can continue to be retained and upskilled. The second tier has been raised to $1,050 for basic skilled workers hired beyond the MYE quota. This is meant to serve as a "safety valve", if you like, so that firms could still have access to workers beyond their MYE, but at a cost that will encourage them to switch to more efficient construction technologies and processes. How can we, in the next three years, make a paradigm shift to a more efficient industry structure, one that is more professional, better integrated and lean on manpower? Already, we have a number of our most progressive main contractors, such as Woh Hup and Tiong Seng Contractors, which plan, organise and carry out most of the work themselves. They do not rely on multi-layers of subcontractors to deliver projects. Their hands-on approach gives them clear visibility of project management, work coordination and workforce productivity. The question is how we can encourage more local firms to emulate these progressive contractors so that, as an industry, we can progress to the next level. Talking to the industry, I know many of our firms felt overwhelmed by the simultaneous reduction in MYE and levy increases. But we must also be acutely aware that the labour-driven growth model in the industry has to change.”
“Mdm Chair, let me thank the three Members who have spoken. Let me address the comments made by Dr Teo Ho Pin and Mr Charles Chong on raising construction productivity. It is now more than two years since we launched the Construction Productivity Roadmap. We set ourselves the target of raising construction productivity by up to 3% every year to 2020. The Deputy Prime Minister and Minister for Finance earlier announced that the Government would proceed to cut the Man-Year Entitlement (MYE) quota for new projects by another 15% in July this year, bringing the cumulative reduction since 2010 to 45%, as announced last year. This effectively means that while, previously, a project may be allocated 100 workers, a new project of the same scale, starting from July, would only be granted 55 workers. The 45% reduction in MYE is necessary because in the past five years, the built environment sector has, on average, accounted for more than half the annual foreign worker growth for the entire economy. The sector's share of foreign workers has been disproportionately large. We must try to rein in this growth. We must do things differently. Fortunately, for the next few years, we foresee a healthy demand for the built environment sector such that our restructuring efforts can take place in a Page: 12 relatively favourable environment. But we must be careful not to allow the tight labour market affect the timely delivery and the quality of our key public projects, including the on-going and new BTO flats construction, and accelerated MRT line construction works. The next three years are, therefore, a crucial transition period for the built environment sector.”
“Recently, HDB also piloted "Building Our Neighbourhood's Dreams" (BOND!) in Bukit Panjang. HDB invited residents to co-design their community facilities under the Neighbourhood Renewal Programme. HDB observed that residents were happy to be part of the process and to "own a piece of the community". Chairman, HDB builds flats; people own them and make them home. HDB builds towns; people give them life and make them communities. Just as we will involve the people more in designing housing policies, we will also work with the people more to co-create HDB towns and build vibrant and active communities.”
“Besides the annual operating grant, the Government also provides S&CC rebates directly to residents, from time to time, to help them with rising cost. We are giving $77 million in this Budget under the S&CC rebate scheme. Mr Png Eng Huat asked specifically about grants for the maintenance costs of lifts. On this point, I would like to stress that, when carrying out LUP, HDB has been prudent in the number of lifts added as this impacts on both the upfront cost of LUP as well as subsequent maintenance cost to be borne by the Town Councils and eventually the residents. And this is why we also go through a polling process to ensure that residents are aware of the decisions they are going to make. So, to help Town Councils with their co-payment of the initial cost, $130 million of LUP Assistance was disbursed in 2010. Towns that required more extensive lift upgrading received more grants. Still on community involvement, we also think of other ways to encourage residents' contributions in terms of ideas and suggestions. I launched the "Cool Ideas for Better HDB Living" Competition in 2011 to source for ideas from the community. We received more than 100 suggestions in a series of competitions from students, housewives, working adults, retirees and SMEs. The Cool Ideas platform also serves as a good avenue for greater community interactions. Page: 169 Encouraged by this positive response, we will roll out Cool Ideas in other precincts this year. To engage the community in the planning and design of its precincts, HDB also conducts surveys and focus group discussions among residents. They gave feedback on usage patterns of the communal facilities, satisfaction levels, interaction patterns and suggestions for improvements.”
“Thank you for the extension. We believe that the TCMR framework has strengthened accountability. With information in TCMR, residents can then work with their Town Councils to determine the priorities for the town and improve its upkeep. While we give the local Members of Parliament and town councillors autonomy, we do at the same time need to establish a larger legal framework Page: 168 to provide guidance and clarity to facilitate the autonomous operations of the Town Councils. The rules and regulations under the Town Councils Act and Town Councils Financial Rules are put in place for this. MND has set up a team to review Town Councils' operations. In this review, we will re-examine the fundamental nature of Town Councils, including the standards of corporate governance that should apply to them to best serve the interests of the public. We note Ms Sylvia Lim's suggestions on the definition of common areas and we will take her input into consideration. Er Dr Lee Bee Wah asked if there could be more grants for Town Councils to help them cope with rising costs. We expect Town Councils to fund their operations through the Service and Conservancy Charges (S&CC) they collect from residents. This is in line with the Town Councils' operational and financial autonomy. Town Councils have the authority to set their priorities and determine their programmes in discussion with their residents. They thus also have the flexibility to set S&CC charges to fund them. Periodically, they would also need to revise their S&CC to meet higher resident expectations, improve service and keep pace with rising cost. To help Town Councils offset part of their cost, MND provides an annual operating grant of about $90 million a year, and this accounts for 15% of the Town Council's annual budget.”