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“Sir, I would like to ask the Minister if the Government has a framework to review and reduce outdated and obsolete regulations on a regular basis to keep the regulatory burden light.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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“Of course, parties can also choose to notify the CCS after the merger is effected or not at all. It is entirely their own choice and they should make their own commercial assessment. The CCS will soon publish guidelines to help merger parties assess whether their mergers are likely to infringe the Act. Mr Inderjit Singh pointed out that the CCS does not have the power to require commitments and suggested that it should at least have the power to require assurances or to vary commitments. While Mr Singh is right that the CCS does not have the power to require commitments, I should point out that the CCS can invite the merger parties to propose suitable commitments to address competition concerns. I would like to assure Members of this House that only after CCS has been satisfied with the proposed commitments that it would allow the merger parties to proceed with the merger. If there is a need to, commitments can be varied and substituted. Mr Inderjit Singh asked whether it is workable to register commitments in court to enable them to be enforced as order of courts. He suggested that it might be better to punish a breach of a commitment with a fine whose amount can be tailored to ensure disgorgement of the benefit by non-adherence to the commitment. This may not be a good idea, as a breach of commitment is not a criminal offence. It might be more appropriate to treat commitments similar to directions issued by the CCS, ie, by registering them in court, and failure to comply with them will constitute contempt of court which is punishable by normal court sanctions, including fines. At this juncture, I should also mention that I will be moving a Notice of Amendment shortly after this.”
“Mr Speaker, Sir, I would like to thank the Members of this House who have spoken and given their support for the Amendment Bill. Let me address the points they have raised. Mdm Ho Geok Choo asked why the criterion for a joint venture merger is being changed from an "indefinite basis" to a "lasting basis". Under the current definition, joint ventures with long but definite periods, for example, 10 years, may not be regarded as mergers of indefinite basis even if they result in a lasting change in the merger parties' structure and eliminate competition between them. This is undesirable as the impact of such joint ventures on competition will be similar to that of a merger. The new definition will subject them to the merger regime. The term "lasting basis" is also used by the European Union. What constitutes a lasting basis will depend on the facts. For example, the US competition authorities use 10 years as a benchmark although the duration will vary according to industries' specific circumstances, such as technology life-cycles. Mr Inderjit Singh sought clarification on the types of anticipated mergers that merger parties may be required to notify. Sir, the purpose of section 56(3) is to allow the Minister to specify the anticipated mergers can only be notified after they are no longer confidential. This is to allow the CCS to consult and seek views from other market players, stakeholders and competition so that a well-informed and robust decision can be made. I must point out that there is no requirement for mergers or anticipated mergers to be notified to the CCS as notification is voluntary under our merger regime. Basically, merger parties with some concerns can choose to notify the CCS of the merger. The Act facilitates this process.”
“Ability to augment resources Amendments are also made to enable CCS to deploy temporary external staff to assist in investigations. In summary, the amendments will reinforce the ability of CCS to enhance the efficiency of Singapore's markets and strengthen our economic competitiveness. Mergers and acquisitions are part and parcel of business activity environment. The amendments will ensure that they do not harm Singapore's overall competitiveness while maintaining the smooth functioning of the economy. They will also help to better empower the CCS to achieve this goal. Sir, I beg to move. Question proposed.”
“The Bill also contains ancillary amendments that clarify matters such as the interpretation of control, definitions such as what constitutes a joint venture merger, the powers of the District Court in enforcing directions, and the inter-relationship of the sections 34 and 47 prohibitions vis-a-vis the merger regime. Other non-merger related amendments In addition, the Bill introduces amendments that fine-tune the Act and enable the CCS to better carry out its functions. Power to require documents or information that is not in the public domain for market inquiries and notifications Clause 9 empowers the CCS to require documents or information that is not in the public domain for market inquiries and notifications. Currently, industry players or third parties can refuse to provide the CCS with information even if the CCS has reasonable grounds to suspect a market competition distortion or an infringement. This information can play a critical role in helping the Commission to understand the intricacies of market practices and their competitive impact, thereby leading to sounder and more robust decisions. The amendment will allow the CCS to require any person to furnish information and documents when it is assessing notifications for decisions or conducting market inquiries. It may only invoke this power when it has reasonable grounds to suspect that the Act has been infringed, or that competition in a particular market is restricted. Ability to prescribe decisions that can be appealed Clause 17 gives the Minister the power to prescribe the types of CCS decisions that can be appealed. This power, which currently resides with the CCS, is more appropriately vested in the Minister.”
“Subsequently, when it was assessed that the merger would result in substantial lessening of competition, the UK authority allowed the merger to proceed provided the two companies agreed to undertake specific actions or commitments to address competition concerns, such as the divestment of certain assets. Exclusions from the Act Clause 24 amends the Fourth Schedule to clarify the types of mergers that are excluded from the Act. These fall into two categories. First, mergers are excluded if the written law requires them to be approved by a Minister or a regulatory authority. This exclusion, however, does not extend to mergers approved only by the court or by the shareholders of a company, without any sectoral regulatory oversight. The amendment also clarifies that mergers under the purview of the Monetary Authority of Singapore, including mergers covered under instruments, such as directives, notices and licensing conditions, are excluded. Second, mergers are excluded if the economic efficiencies to Singapore resulting from the merger outweigh any substantial lessening of competition caused by the merger. Such mergers may lead to greater innovation or choice, higher quality and lower costs. They are of overall benefit to Singapore and should be allowed to proceed. Other competition authorities also take a similar approach. For instance, the Australian Competition and Consumer Commission allowed the only two glass container manufacturers in Australia to merge in 1991 on grounds of public benefit. In arriving at its decision, the Australian authority considered, amongst others, the merger's positive impact, in terms of wider consumer choice, greater economies of scale, and the improved quality and safety of goods.”
“Similarly, parties will be allowed, at their own risk, to proceed with an anticipated merger or to further integrate a merger, while a notification or investigation is pending CCS' decision. The amendments will empower CCS to prevent parties from taking actions that would prejudice the consideration of the merger or to impose directions or remedies to address the competitive harm. This is on the basis that the CCS has reasonable grounds to suspect that a merger is anti-competitive. As a matter of urgency, the Commission will also be allowed to take action to prevent serious irreversible damage or protect the public interest, thereby obviating significant costs of unravelling a merger. The CCS already has the power to do so with respect to the sections 34 and 47 prohibitions. Power to accept and vary commitments Fourth, the CCS will be able to accept commitments. Commitments are undertakings given by merging parties binding them to act in a specific way to address competition concerns arising from a merger. They are given in exchange for clearance of the merger, and are widely used overseas to clear a merger speedily. The use of commitments will save both merger parties and the Commission valuable resources and time. Let me use an example to illustrate how pre-emptive action and commitments may be used. The UK competition authority recently examined the merger of two waste management companies. In doing so, it sought undertakings from the two companies to, amongst others, not further integrate the two companies before a decision was issued. Such interim directions serve to prevent the companies from taking any action that may prejudice the authority's consideration of the merger.”
“Specific amendments and rationale Sir, let me now outline the main amendments in the Bill. Clause 8 introduces the key amendments to the merger regime. First, the Act will be amended to allow merger parties to notify the CCS for a decision on their anticipated mergers that are no longer confidential. The Act currently allows businesses to obtain CCS’ assessment of a merger only after it has been completed. This is not ideal, because merger parties will face significant costs if they are required to unwind a completed merger found by the CCS to be anti-competitive. Businesses can, however, still decide to opt to notify the Commission after a merger has been completed. Removal of provision of confidential guidance by the CCS Second, the provisions allowing merger parties to apply to the CCS for confidential guidance on a merger will be removed. Experience in the UK and Australia has shown that such guidance is of minimal value to businesses as the competition authority would not be able to get market feedback or issue a definitive decision, ie, the guidance may be reopened if there are further complaints. The removal of this provision will also streamline the merger notification process. To assist merger parties, the CCS will hold informal, confidential pre-notification discussions with the merger parties on how to file notifications and, where possible, highlight potential areas of concern. Power to take pre-emptive action Third, the Act will be amended to give the CCS power to take pre-emptive action. I had earlier mentioned that the merger parties are expected to self-assess and decide if they should notify a merger to CCS for a decision.”
“Some degree of rationalisation and consolidation is inevitable to achieve economies of scale and, in some instances, minimum operating scale. Hence, it is proposed that only mergers that substantially lessen competition and which do not have offsetting efficiencies will infringe the Act. In preparing for the merger regime, like the other prohibitions, the CCS studied international best practices. The study showed that changes to the proposed merger regime were needed to better align it with international best practices. Industry and lawyers had also provided feedback to the CCS on areas for improvement. As these changes would have a wide-ranging impact on mergers that affect Singapore markets, the CCS conducted a public consultation from October to November last year, on the amendments as well as its proposed guidelines. The feedback gathered was carefully considered and, where appropriate, included into this Bill or the CCS’ guidelines. I would like to thank all the individuals and professional bodies that had provided useful feedback. The Act currently provides for a voluntary merger notification system. This means that merger parties will self-assess if their merger would lead to a substantial lessening of competition. If they are of the view that there could be competition concerns, they can apply to the Commission for a definitive decision. As most mergers are unlikely to raise competition concerns, we will retain the voluntary notification system. A system requiring mandatory notification of mergers would be more onerous on businesses and impose unnecessary costs. The Commission will publish guidelines shortly to help businesses assess whether to notify their mergers and outline its procedures and method for assessing mergers.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Overview of the Competition Act The Competition Act aims to promote the efficient functioning of Singapore’s markets and strengthen our economy. The Act prohibits activities that unduly prevent, restrict or distort competition. When the Competition Bill was passed in Parliament in October 2004, it was announced that the Act would be implemented in phases. We have followed the plan and made good progress since. Allow me to highlight the key milestones. The Competition Commission of Singapore (CCS) was established on 1st January 2005. A year later, on 1st January 2006, the first two key prohibitions of the Competition Act came into effect. They are: section 34 - the prohibition against anti-competitive agreements, decisions and practices - and section 47 - the prohibition against the abuse of dominance. So far, the CCS has received three notifications for decision, seven notifications for guidance and 14 complaints. The majority of the complaints relate to anti-competitive agreements under section 34. They involve practices such as co-operation agreements between competitors, standard contract terms, exclusive contracts, bid-rigging and the bundling of products. The CCS has closed out about half of these cases, while the rest are still under investigation. The CCS has also actively carried out outreach and education programmes to gain public support for and foster understanding of our competition law. The third and final component of the Competition Act: section 54 - the prohibition against mergers that substantially lessen competition - is the main subject of today’s Bill. Overview of the merger regime Singapore is a small and open economy.”
“These are key issues for a country … countries with governments that have strategic vision and the ability to implement, also have strongly-performing stock markets. Those that don’t, have not.” Sir, persuading the ablest men and women to lead this country must be an urgent priority for the present generation of leaders. The Prime Minister needs every tool he can have to make it easier, not harder for talented people with the right character to come in. We should give our strong support to the proposal to pay Ministers and senior civil servants, and statutory appointment holders market-based salaries. Sir, paying S$56 million for a Cabinet to run a GDP of S$210 billion is cheap. You cannot get that anywhere in the world. Conversely, paying a team $46 million (or even $4.6 million for that matter) can be too expensive, if the result is a floundering economy, high unemployment, empty government coffers and a divided people. All these can happen faster than you think, with an incompetent government. Sir, the choice is clear. 7.03 pm”
“In Singapore, we set up JTC just to do that. How is it that you can develop greenfield industrial parks and still make money?" The founder-Chairman replied, "Oh ... in my country, the government is not so organised and have people like yours. We, the private sector, must organise ourselves to build our own industrial parks. Besides charging land rental, I also provide utilities, telecommunications, canteens, workers’ uniforms, housing... anything that my tenants need I would provide. We create a revenue model from our tenants and we become profitable." So impressed, I asked further, “But you have created a new industrial park from ground up. What about your capital city? It is a large metropolis. But traffic congestion is choking it. Is there any plan where you or your government has to tear some of the old buildings down, widen up the roads, build more subway lines and perhaps also bury overhead cables underground?” Without much hesitation, this entrepreneur said, “No, if the government attempts to do that, there will be riots. They will be overthrown the next day. We are too democratic, too many voices and there are too many interest groups. Don’t forget, our government is weak. Your PAP government is half a communist! When you say you do, you will do!" Sir, whatever others may call us, we deliver benefits to our people. The latest Merrill Lynch report has this to say about Singapore: “At the risk of being abstract, we would say that Singapore is amongst the best countries in the world. There is no prescribed way to analyse a state’s Grand Strategy. But you can start with its perspective. How it sees its goals, its strengths and fears.”
“Yes, but we should also recognise that good business leaders deliver strong performance over a period of time. Likewise, we should look at a Cabinet’s performance in leading the country in its five-year term or longer. However, I also want to caution against an over-zealous performance-based implementation that will encourage short-term behaviour. We know that not everything that is quantifiable is important, but not every important thing is quantifiable. Many decisions taken for a country must be long term in nature - master-planning of the city, the population model, policies on a social safety net, defence policy, etc. Even when to build our new MRT lines has very long-term implications. If we over-incentivise short-term behaviour, as you see how many other governments do, we could end up implementing populist policies, squandering our reserves away and neglecting capacity building and investments for the future. In the corporate world, we have heard of CEOs creating short-term results or turnaround by stripping assets, scrapping staff training and trimming R&D budget just to maximise profits. A company can be propped up for a few years but will die of poor nutrition thereafter. This approach should not be the outcome of our performance-based compensation system for Ministers. I met with the Chairman of a large industrial park developer in a neighbouring country about two years ago. I was very curious at his business model. So I asked him, "Industrial park development in most countries is a money-losing proposition. Government typically has to put in a lot of infrastructure around the industrial park for it to work. Roads, water, power plants, sewerage system, telecommunications and all these are very expensive investments.”
“Then, as we begin the filtering process, using the “heart” criterion and relevant skill sets, removing PRs and non-Singaporeans along the way, we will quickly come to a much shorter list of qualified potentials. If we talk to them, telling them the kind of drastic pay cut they need to expect, and the heavy burden and nature of the political office, I think they will consider the four components of a career choice, speak to their family members and, finally, politely decline the opportunity to serve. We will have very few people coming forward. With the war for talents intensifying, the situation will be worse in the future. Should we then lower our standard of selection, by going down to the next 500 or next 1,000? The further down we go, the less capable people we are recruiting into the team, the less assured will be our future. Some people argue that business leaders are faced with greater risks. But would not leaders of nations face the same risks and more? We just need to remember the Asian financial crisis, 911, SARS, terrorism, possible pandemic flu, the rise in oil prices, and, of course, in recent months, the shortage of sand. A business can leave a hostile operating environment, retrench workers and pack up and move to greener pastures. However, our Government cannot relocate Singapore. We have to accept the situation as it is, retrain displaced workers, restructure on a national scale, sustain livelihoods and maintain confidence. Bankrupt businesses can fold up under Chapter 11 and get reborn with new capital and owner. If Singapore folds up, we would not even have a place to call 'home' anymore. Some people argue that corporate leaders face fluctuating incomes every year. They argue that Ministerial pay should be tied to their work performance.”
“Earlier on, it was also reported that SingTel’s new CEO, Ms Chua Sock Koon, would be paid $5 million if she meets her performance targets. I think our companies paying their CEOs regionally-competitive salaries is a good sign. As our companies grow in sophistication, assets and their international reach, their management teams will also become valuable to other international companies. I am sure their boards, in deciding the level of compensation, have taken into consideration the job scope, complexity and the market value of these leadership positions. Some people argue that running a business is different from running a country. Running businesses require functional and execution skills; you also need market knowledge and business acumen. Hence, you need to pay top dollars for this unique blend of rare qualities. For political leaders, do they also not need to possess strong functional skills and the political acumen to take into account a wide range of variables in decision-making? See how the Thai stock market plunged by 15% and US$25 billion was wiped out overnight on the announcement of currency control measures. What about anticipative work, such as averting terrorist attacks, keeping our sea lanes open, keeping drinking water flowing, ensuring sand and granite supply coming? Do they need organisational skills and execution skills? Do they need plans and preparation? Do they need imagination and risk-taking? I believe good political leaders not only need to be rational and analytical - the head factor, they must also have the character, empathy and the temperament - the heart factor. They must have exceptional abilities to connect with people. It is fair to assume that the top 500 professionals in Singapore have the basic “head” factor.”
“Of course, I am not trying to over-simplify any career decisions at the senior level to just a single dimensional consideration of “dollars and cents”. In fact, I believe it is most common for any executive offered an opportunity to consider four key factors: (a) mission and meaning of the job; (b) challenge and growth opportunities; (c) environment for self and family; and (d) monetary compensation. In the talent wars out there, firms are competing by raising the bar in every of the four components above. If all that we can offer in public sector leadership are the first three components, and have a very weak fourth component, it is most unlikely that we can compete effectively against other career opportunities, much less convince anyone to take up public sector leadership positions. For multinationals, they can recruit worldwide for their CEO and the senior management team members. In Singapore, for positions of Ministers and Permanent Secretaries, we can only choose from the limited pool of top local talents. We cannot possibly appoint foreigners or PRs to the Cabinet, lest we will end up having many foreign Ministers! This is a severe constraint on our building the best team from a population base of 4 million. The Straits Times reported on 6th April 2007 that Mr Wee Cho Yaw was the best paid banker at $9.25 million last year. DBS’ Jackson Tai and OCBC’s David O Conner were reported to receive around $7.5 million and $5 million respectively. In the real estate sector, Capitaland’s Mr Liew Mun Leong was paid $5.14 million, City Development’s Kwek Leng Beng received $4.25 million and Keppel Land’s Lim Chee Onn $5.5 million.”
“Does it make sense now that we know we are dealing with trillions of assets in Singapore and we want to start to relax the system and have lesser people to run the country? Consider an executive search firm’s view below. I quote: "Singapore's bureaucrats are seen as "positive-minded achievers who know how to work ethically within the system with a view to actually get things done and delivered to the population quality products and services” - be it in healthcare, public amenities such as transport and housing, utilities like water and power, environmental issues and, most important, education." “The current "global initiatives" of Singapore to expand its presence beyond its shores and into the large emerging markets of India, China, etc, are being watched closely. Singapore's experiences in setting up SEZs in Bangalore and in China are practically textbook cases for many countries which are looking to expand their GNPs by co-investing worldwide. The successes of Singapore’s Civil Service Professionals in these areas make them extremely valuable to countries seeking to repeat these achievements. So the next wave of Executive headhunting from Singapore to many other countries in emerging markets could involve senior civil servants - at salary levels far in excess of the ones currently prevailing at home. This process could start happening within the next two to three years as more and more countries are on a platform to take off and need high quality governance to ensure sustainable world class infrastructure is in place." Sir, I am worried that there might be an exodus of talents from the civil service. If we are not able to appreciate our own talents, others will express the appreciation on our behalf.”
“I think if we had offered, they would have bought up not just JTC, but PSA, CAAS, IDA, MOE and many other institutions. Sir, as far as I know, not a week passes by without a foreign delegation in town studying our systems, with the aim of adapting it back in their countries. They come from China to the Middle East, Russia to India, and not to mention many officials under training from ASEAN countries. They are interested in our urban planning, environmental protection, medical 3M, e-Government, workers upgrading programmes, CPF and soon, the Workfare Bonus programme. This week, the second Jiangsu province delegation, comprising 18 party secretaries and 11 Mayors, are visiting Singapore. What makes the delegation unusual is that either the Number 1 or Number 2 persons of the major cities in Jiangsu are here at the same time. They are very serious about studying our urban planning and public administration system. When the first Jiangsu delegation visited us in November last year, one of the Mayors commented to me, "In terms of individual buildings, I believe we have more outstanding architecture than you have. But when you assemble all your buildings side-by-side, your city looks so neat and beautiful. They are in harmony. So what is your secret?" Our former chief national planner, now a senior director of RSP Architects, Mr Liu Thai Ker has been doing many architectural and city master-planning work all over the world. He reminded me that “Singapore is the world’s only brand new, well functioning global metropolis built up in the last 40 years”. That is why we are a subject of case studies and analysis, from countries near and afar. What kind of people do we need to do the job?”
“While these job descriptions may seem common for many governments, the job of governing Singapore is made much more difficult because of our smallness and vulnerabilities. Despite all odds, we have accomplished much. Singapore is worth much more now than 40 years ago and the stakes are high. How much is Singapore’s worth? Based on our GDP of S$210 billion growing at 4% to 6% annually, every five-year term of good government will produce new combined value add in excess of S$1 trillion. What about our foreign reserves managed by GIC, savings in the banks and investments in the SGX? They run into hundreds of billions. We all know that commercial buildings are worth a certain price. Likewise, our factory buildings, MRT system, roads, airport and seaport all have monetary values that can be realised if they are listed and sold to international investors. Yet, we have not put a price tag to these assets. Imagine if we go one step further and impute values to the intangibles of the operating environment in Singapore: safety, reliability, stability, efficiency and "integratedness". These are valuable attributes money cannot buy and yet, these values have become synonymous with Singapore’s infrastructure. Singapore’s value is also expressed through other countries’ curiosity at our achievements. Just a few months back, a middle-eastern country actually wanted to buy over the entire JTC. In Saudi Arabia, one marketing brochure for a new 150 sq km City reads “Singapore in the Middle East”. Many of the oil-rich middle-eastern countries are now diversifying their economies by building new cities and infrastructure. Many of them wish they could build an “instant Singapore” into their systems.”
“Of course, with an ageing population and economic growth, such assistance packages may be increased rationally. In any event, I believe that we should be able to strike a good balance between creating a loving and harmonious society and encouraging our people to be self-reliant. Attracting the able with high salaries, maintaining the people with integrity with high pay may not be a common practice in the world. However, so long as it is practised properly, benefiting the people, even when we may be creating a precedent, we should not hesitate to make the move. I hope that with the future of our nation in view, we would all support the best people to join the Government and the civil service. (In English ): Our debate today is about fair pay for Ministers and civil servants. Their job is to lead the country, translate vision into reality. If they do their job well, our economy will grow, our society will remain cohesive and the lives of Singaporeans will improve. Before we can come to any conclusions, I think we need to address three questions: (a) What is the job about, ie, what is at stake; (b) What kind of people do we need to do the job well; and (c) What is a fair pay for these people. What is the job about, what is at stake? The job of any modern government is a complex one. It not only has to address current issues, but it has to plan for the future. It has to affirm the successful, it has to encourage and assist the weak. It has to protect its citizens, but also to challenge them to be responsible. It should not be populist, but should seek to strengthen consensus and unity amongst its constituents so as to achieve a common vision.”
“China is also promoting the concept of prospering the nation by technology and education to attract its overseas students to return to serve the nation. Whether or not we can continue to be prosperous will depend on whether we can strike a balance among the three major premises of “political ideology, mechanism and talents”. From my own observations, we will be facing strong challenges in the “talents” aspect. When faced with market pressure, other countries and foreign companies will unhesitatingly and mercilessly poach the talents from Singapore. The Middle East countries are offering double or triple annual salaries of more than a million dollars to recruit middle management staff in their 30s to work there. So, if we do not raise the salaries of our civil servants now, we are resigning ourselves to death, awaiting our doom. Some time down the road, we will find that we have not enough good people to drive our system and mechanism. This will be a national crisis and a sign of weakening. Of course, not every Tom, Dick and Harry will earn an annual salary of $1 million to $2 million, but we are beginning to see more of such cases. To the man-in-the-street, a million or two may be a huge sum of money, but I would like our Singaporeans to be understanding and rational people. We have to be magnanimous. Only if we have a good government and a good civil service can our economy develop and prosper, creating wealth to be shared with the people. In fact, since 2001, the Government has shared some $11 billion with the less fortunate people in Singapore by way of assistance packages. The destitute elderly, the patients who need medical care, the unemployed and the school children have benefited from these packages.”
“Yet, there are some other countries with a host of talented people but lack a sound system and mechanism, with the civil servants fighting among themselves rather than coordinating and operating as a team, resulting in super high personal IQ but low organisational IQ. So the successful operation of a government depends very much on the three fundamental factors of “political ideology; system and mechanism; talents and experts”. All the three factors must be present for the absence of any one of the three may result in their getting nowhere. Hitherto, I have been speaking on the major issue because if the country is not wealthy, the people will not be strong. During the Warring States in ancient China, in a petition to the Emperor of Zhao, the sage Xunzi wrote, “An enlightened emperor must prudently maintain harmony by reducing expenditure while broadening sources of income, and carefully use his discretion in the State’s spending. Then the State will have surpluses and there will be no worry of insufficiency.” This is the basic concept of a wealthy nation, strong people. There must be economic development first before there will be wealth to be shared with the people. On the contrary, if the economy is weak, all the people can share is its poverty. Our present economic system is completely linked to the global economy. As a result, our experts and talents do not belong to our country and our people alone. Those who are talented can find greener pastures all over the world. While the water flows to the lower planes, people will strive to move to higher grounds. The United States rose to become a superpower because it attracted and absorbed talents from all over the world and the Jews from Europe.”
“Mr Deputy Speaker, Sir, I would like to start with Mandarin. (In Mandarin ): [For vernacular speech, please refer to Appendix A*.] Singapore's achievement over the past 40 years is *Cols. 199-202. indeed a case study of successful economic and social development in contemporary history. This tidy country has very limited resources, next to nothing, but yet, it is able to compete and survive in a not too favourable political environment. Our founding fathers were firm and resolute. With extraordinary courage and wisdom, they were able to persuade the people to develop this unimpressive island into a brilliant and famous metropolitan city. Countries, near and far, big and small, are full of admiration for our strict political style, and the humane and social harmony and development we have achieved. The reason for Singapore's success is because we have a very good people-oriented political ideology. From the formulation to the execution of the policies, we have a very good civil service system and mechanism to ensure their success. Within the system, we have enough talents and experts to realise our various dreams and visions. We have been able to achieve the actual effects of “To talk about what we think about; and to carry out what we talk about.” Many other countries can fulfil only two of the three conditions, hampering the development of the country and the quality of life of their people cannot be improved. In some of these countries, the people in power neglect the problems of the people’s lives, caring only for their own personal benefit. Some governments may have the vision but not a team of clean and honest civil servants to formulate policies and see to their execution.”
“At this point in time, I think the approach we are trying to take is to give CASE more powers through the Fair Trading Act to empower them to take certain steps to regulate the time-sharing industry as well as other industries that are known to have created problems for consumers. So once that is done and through accreditation, we will be able to identify good players and bad players in the market, and for bad players as with the existing mechanism, there are ways to stop them and publicise their shortcomings to the market. In this way, we feel it is more effective than by way of regulation or legislation on one particular industry.”
“There are 60 over incentive programmes that the Government agencies run for SMEs. In fact, they all fall under the category either of capacity building or helping them to go international or getting them finances. So there are many indeed, and all these programmes have their own KPIs, as the agencies will put it, and they are monitored on a regular basis. On the issue of local and foreign SMEs, the way we see it is really over time Singapore should have a larger pyramid of enterprises - the small and the startups forming the base, the larger one at the tip. What we try to do is to make the system efficient, as if we put in the catalyst or enzymes so that those at the bottom starting out can rise quickly to the top and become big companies. And this will bring about benefits in terms of economic spin-offs and jobs, etc. I want to assure Mdm Ho that there are many indicators in place and we track closely the performance of SMEs as well as the programmes designed to assist them.”
“May I ask what programmes the Member is referring to?”
“Sir, for the idea of a tribunal on time shares, we are at this moment not convinced that a tribunal would work. We still prefer to take steps in strengthening the commercial practices and best practices in this industry before recommending a tribunal. But we will be happy to work with CASE to study the idea further.”
“I thank Mr Yeo for his questions. Yes, the Ministry will consider proposals to refine the current framework to enforce and encourage better commercial practices on the time share industry. But I think we should be quite careful in making legislation specific to a particular industry because legislation can also work towards stifling the flexibility needed for the industry to thrive. So we need to strike a balance, but we welcome suggestions on how to improve the regulations of the time share industry. As for lemon law, we are studying the proposals and we would be happy to work with CASE to see how to implement some of these ideas of lemon law in Singapore, but I still think the first preference in terms of solving problems like this is to enforce accreditation and raise the commercial practice standard.”
“Consumers must play their part, and be vigilant when making purchases. Ultimately, we believe that the best way to protect consumers is to ensure that they are well-educated about their rights and protect them with a balanced legal framework. Finally, Mr Singh asked about the effectiveness of the Competition Act. The Act has a short history, with the prohibitions against anti-competitive agreements and abuse of a dominant position only effective from 1st January 2006. The third and final prohibition against anti-competitive mergers will come into effect on 1st July this year. As the Act is still in its early days of implementation, it may be premature to say how effective it has been at this juncture. If the Member or the public has information to suggest that the oil or taxi companies are engaging in anti-competitive activities, I urge them to lodge a complaint to the CCS. The energy sector is excluded from the Competition Act, and under the purview of the Energy Market Authority. Mr Inderjit Singh cited a generation company which is facing difficulties in its bid to enter the electricity generation market. Let me reiterate that my Ministry is committed to having a competitive gas market, to complement the electricity market which has been liberalised. We will ensure that all industry players, both the incumbents and new players, will have open access in the gas market. Tourism”
“In the US, for example, lemon laws generally deal with specific product types and these allow the laws to cater specifically to the products of concern. The UK, on the other hand, strengthened its consumers' right to remedies through its generic Sale of Goods Act. Given the potentially extensive impact, this issue requires closer study and deliberation. We will do so with the various stakeholders' inputs. Mr Yeo proposed to introduce new legislation to regulate the timeshare industry. He also made some specific suggestions on what the legislation could cover. We appreciate his thoughtfulness. We believe that an industry or consumer-led accreditation system, such as CaseTrust, is a better approach to encourage fair practices in the timeshare industry, and provide a monitoring mechanism to ensure compliance. Conditions raised by Mr Yeo, such as those relating to operational hours and prospectus requirements are better dealt with by the industry or through a consumer body like CASE. Additional legislation may not be the best solution. For example, it would not be practical for the Government to legislate the number of hours a customer can spend at the premises of a timeshare company. As a matter of fact, we do not legislate so finely for any other industry at all. Notwithstanding, we are prepared to review some of the specific suggestions to weigh in on good practices. For instance, the CPFTA today already makes provision for a cooling-off period for direct and timeshare sales. We would look into Mr Yeo's suggestions to further enhance the cooling-off provision. We will continue to work closely with CASE to review and improve our consumer protection framework. We will do so while maintaining a good balance between regulatory action and consumer responsibility.”
“As we make our environment more pro-business, we can expect high quality foreign SMEs to move here. We should welcome them, but we will also study Mdm Ho's suggestion on ways to better foster collaboration between foreign and local SMEs. We are committed to building our SME sector as a key thrust in our economic development efforts. I am confident that by working together, we can achieve our vision of having a vibrant SME sector, thriving with globally competitive enterprises. 1.15 pm Let me now move to the topic of consumer protection. I thank Mr Yeo Guat Kwang and Mr Lim Biow Chuan for their comments on the Consumer Protection (Fair Trading) Act. Since the Fair Trading Act was implemented in 2004, the Consumers Association of Singapore has been actively raising awareness and helping consumers resolve issues covered by the Act. In 2006, CASE took up close to 600 Fair Trading Act related cases. Last year, a taskforce led by CASE and MTI completed a review of the Act, and has submitted its recommendations. Among the recommendations are proposals to enhance CPFTA, such as expanding its ambit to cover financial services, and tightening existing provisions on cooling-off periods. My Ministry has accepted all of the taskforce's eight recommendations and is now in the final stages of finalising the proposed regulatory changes for public consultation. We will do this over the next three months. The issue of "Lemon Laws" was also raised by the taskforce. These laws typically provide consumers with remedial rights for substantial defects in goods that persist after a reasonable period. Different countries have adopted different approaches with regard to the scope and extent of consumer rights to a refund or replacement.”
“I must say that, based on my personal observation, many of our companies are beginning to work as teams. In 2004, IE Singapore launched the iPartners Programme to bring our enterprises together to bid for overseas projects as consortiums. To date, 25 consortiums comprising 130 companies have been formed. Many GLCs are leading or participating in such consortiums. For example, the Security Consortium, led by ST Electronics, enabled three SMEs - Teleradio Engineering, Technologies Creation, and Arrowcrest Technologies - to clinch $8 million worth of security projects in the Middle East. Other non-GLC but large local companies are also leading smaller companies in consortiums. Mdm Ho and Ms Low expressed concern for local SMEs against foreign competition. Let me explain our approach. Last year, we launched a five-year $4 billion Enterprise Development Fund (EDF) III. 99.5% of the 2006 funds actually went to local SMEs. We assure Members we will continue to direct our efforts to build local SMEs to become tomorrow's MNCs. Our SMEs operate in a globalised environment. Thus, shielding them from competition domestically will not help them as they internationalise. Foreign SMEs can help stimulate local enterprise development by bringing in new capabilities and market opportunities. One example is a Korean SME Colorzip which brought in ZapCode, which has already been adopted by the likes of Amazon.com and eBay, and creates new marketing possibilities for Singapore. Foreign SMEs collectively employ 165,000 workers here and contribute to almost 20% of GDP. In fact, foreign SMEs only account for 9% of the entire 130,000 SMEs base in Singapore but they contribute almost as much as the local SMEs here.”
“An example of cooperation under the LEAD programme would be: the Container Depot Association of Singapore, the Singapore Transport Association and the Singapore Logistics Association, which came together to work with PSA to implement the Containerised Traffic System to improve turnaround time using GPS technology. The fourth thrust is facilitating market opportunities, issues which Mdm Ho and Ms Low raised. To help our local enterprises internationalise, IE provides a comprehensive suite of Government assistance, such as the Internationalisation Finance Scheme, which extends loans to enterprises venturing overseas. IE organises missions and trade fairs to bring Singapore enterprises to new markets. It also introduces foreign buyers to Singapore enterprises. In 2006, over 300 trade missions and fairs led to $1.7 billion of overseas sales for 3,500 companies. IE's outreach programmes helped 3,000 companies learn to exploit our FTAs, saving $470 million in tariffs last year. IE recognises that start-ups and small companies have different internationalisation needs from the larger companies. To cater to these companies, IE will launch a New Exporters Programme this year to help them through training workshops and expert advice. Let me now address Ms Lee Bee Wah's suggestion that Government-linked companies, or GLCs, should help SMEs internationalise. Many of our GLCs are public listed companies. They operate as independent commercial entities and are free to choose to partner with local or foreign companies in international ventures. We encourage like-minded companies, large and small, to work together for the many obvious benefits. This is a process not to be mandated, but evolved over time on mutual understanding and trust.”
“It also allows technical experts to be seconded to SMEs, complementing an existing 'Growing Enterprises through Technology Upgrading', or GET-Up programme. Furthermore, under TIP, three Centres of Innovation are being set up for the Food, Marine and Environmental industries. As mentioned by my Minister, the NRF will also commit another $250 million to these efforts. Mdm Ho asked how we help SMEs with marketing. I agree that SMEs need to differentiate their offerings to succeed. A strong brand helps. Thus, we run the BrandPact programme to raise awareness and adoption of branding as a competitive strategy. So far, 2,700 companies have benefited from the workshops, and 90 have received project funding. PGS Design, for instance, which produces signages for customers, like Food Junction and Kopitiam, expects sales to double in 2007, after the BrandPact exercise. Mdm Ho and Mr Singh asked about management training. SPRING successfully piloted an 18-week Executive Management Programme with SMU last year. SPRING will soon release details for its new management development programme for SMEs. At the industry level, our agencies work through various channels to maximise our reach to SMEs. We believe that if our industry players work together, many industry-specific programmes can become feasible to substantially raise the capacity and competitiveness of the industry. Since 2005, more than $65 million has been committed by the Government and 14 industry associations under the Local Enterprise and Association Development (LEAD) programme. We expect 40,000 enterprises to potentially benefit from these initiatives.”
“Overall, start-ups and SMEs now have many more options and better access to funding, as these banks offer collateral-free loans, trade services, and investment banking facilities. A recent report by the Milken Institute ranked Singapore second best for businesses’ access to financing. Mdm Ho does not think that 8% of our SMEs taking up the LEFS scheme is a good sign. Should it be higher? How much higher? Our target should be that every bankable project from the SMEs should be able to find its financing, ideally from a number of offers, from an efficient financial market. We see the Government's role in financing as a catalyst, identifying and filling gaps not well served by the private sector. Over time though, financial institutions in the private sector should, through our policy encouragement, introduce more varied and specialised financial tools for our SMEs, continually enhancing Singapore's attractiveness as a SME hub, a hotbed for SMEs to start up and flourish. This is why we are reluctant to set up a SME Bank per se. Going forward, we will continue to work with the private sector, including the ACE Finance Action Crucible, to bring about even more market-based financing solutions for our SMEs. Thirdly, capacity building at enterprise and industry-level. Ms Low and Mr Singh are right in wanting to help SMEs exploit technology. This is necessary to grow enterprise in the knowledge economy, and to compete against lower-cost competitors. SPRING launched the $150 million Technology Innovation Programme (TIP) last year to encourage SMEs to adopt technology innovation. TIP provides funding support for projects.”
“Mdm Ho, Miss Penny Low and Mr Singh asked about our plans for enhancing the competitiveness of local SMEs. Allow me to bring Members through our SME development efforts, under the 4-C framework: First, we create a pro-business environment. To render Singapore attractive for small businesses and start-ups, we must continually simplify our business environment, cut red tape and lower barriers to entry by promoting fair competition. The Pro-Enterprise Panel, a public-private sector partnership, actively solicits suggestions to ensure our rules are pro-business. The EnterpriseOne web portal and Enterprise Development Centres (EDCs) provide one-stop services for businesses. I am happy to note that the World Bank Doing Business reports consistently rank Singapore amongst the top three easiest places in the world to do business. Together with the recently announced Budget measures, we have one of the most pro-SME environments an entrepreneur can hope for. Secondly, capital. Access to financing has always been a concern for SMEs. We have been working with our financial institutions to address this. Since 2001, the Government has provided $40 million worth of equity financing for 170 start-ups, and extended $3.6 billion worth of loans to 14,000 SMEs. Our intent is to introduce more SME-focused solutions from the private sector. I was therefore heartened to see Philips Securities launch an Over-The-Counter (OTC) platform last year. So far, two companies have raised $5.7 million. When I first worked with SMEs in year 2000, SME was not the focus of many banks. Today, almost every major local and foreign bank in Singapore has a SME Banking Group.”
“For those in the domestic sector, the 20 retailers, including SMEs, who participated in the pilot phase of the Government's Customer Centric Initiative to improve service quality reported 8% improvement in service level, and expect sales to increase by $150 million. We applaud their achievements. The Government will continue to support their growth, and create a vibrant, dynamic and competitive base for SMEs. Mr Inderjit Singh and Dr Ong Chit Chung suggested that we transform SPRING into a local enterprise champion that assists start-ups with internationalisation and technology through their growth stages. I also want to thank them for having identified the Prince Charming for the SMEs. I am pleased to inform them that SPRING thinks of herself as "the champion of enterprise growth" in many of her outreach programmes. As the champion agency, SPRING recognises that enterprises' needs change as they grow. Broadly speaking, SPRING's assistance programmes for SMEs can be grouped under a 4-C framework, namely: (a) Creating a Pro-Business Environment; (b) Capital - making it easily accessible; (c) Capacity Building; and (d) Connections - linking up with the world. The various programmes under this framework can be further classified into basic, intermediate and advanced levels, to meet enterprises’ needs at the start-up, growth and internationalisation phases. While SPRING should not duplicate the role of other agencies, it endeavours to work with them as one government to help SMEs. For internationalisation, SPRING works closely with IE Singapore (IE). To help SMEs exploit technology, SPRING works with A*STAR. In this way, start-ups with internationalisation and technological needs can still get the necessary help through SPRING.”
“I thank Members for their comments on SMEs. Let me assure Members that we share their sentiments and passion on the importance of having a vibrant SME sector. The term "SME" has been used widely and loosely with good intention, to refer to a wide range of companies: sometimes start-ups, sometimes large companies by Singapore standard but small internationally. Different speakers may have different SMEs in mind when they expound SMEs' needs and how best they can be met. 1.00 pm Thus, it is useful to highlight SPRING Singapore's definition of SMEs as enterprises with $15 million or less in fixed asset investment and, for non-manufacturing enterprises, 200 or fewer employees. SPRING uses this to qualify companies for its programmes. This has served us well, but we agree with Mdm Ho Geok Choo's suggestion to design even more targeted solutions based on more granular sub-classifications of SMEs. By this definition, 99% of establishments here are SMEs. SMEs form an important pillar of our economy, employing 56% of our workforce and contributing 42% of our GDP . They form a broad base from which new businesses and innovative ideas sprout, and tomorrow's multinationals emerge. Overall, many of our SMEs are doing well here and internationally. Aeromobiles, for instance, has the largest market share for aircraft Hi-Lifts in the Middle East. Esco Micro is among the top laboratory equipment companies in the world, counting Pfizer International and Harvard University as its customers. As a group, the top 500 SMEs here have seen total turnover increase by 30% to $13.5 billion over the past five years, and net profits almost double to $630 million.”
“Mr Speaker, Sir, I agree with Ms Lee's recommendation. SUNGEI BULOH WETLAND RESERVE (Flotsam pollution) 4. Ms Lee Bee Wah asked the Minister for the Environment and Water Resources (a) whether his Ministry is able to trace the source of the flotsam and other rubbish that may have come from the Johor Straits that has been polluting the Sungei Buloh Wetland Reserve; and (b) if there are other options to solving this problem on a permanent basis apart from just removing the floating debris. The Senior Parliamentary Secretary to the Minister for the Environment and Water Resources (Dr Amy Khor Lean Suan) (for the Minister for the Environment and Water Resources): Mr Speaker, Sir, the PUB has installed gratings in the drains and canals that lead to the Sungei Buloh Wetland Reserve, to prevent litter and debris that may be present in our inland water courses from landing on the Reserve. However, the Reserve, being located along the Straits of Johor, will continue to face the problem of flotsam being washed onto its shores from time to time. NParks, which manages and maintains the Reserve, will study ways to minimise the amount of flotsam that is washed onto the Reserve from the Straits of Johor. Nonetheless, as flotsam can originate from various sources, including litter that ends up in waterways, we need the cooperation of the community in keeping public areas clean.”