Lee Yock Suan
Singapore
“The position will be clear when the regulations have been drafted. Right now we are debating it in the absence of actual wording of the regulations. The regulations will be fair, they are meant to maintain a level playing field, and we should wait for the regulations before we pass judgement. The intention is not to go after everybody.”
“I think the Member will be aware that Internet is a very dangerous place. We can have all kinds of poison letters and they will just spread like wild fire. So we must have some means to try and minimise this and make sure that everything is orderly and fair.”
“The other Members have no problem supporting the Bill, including Mr Chiam. I think the position is about 95% clear. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Mr Lee Yock Suan].”
“Then we will have to see the actual situation. But, as I said, the intention is to go after the popular sites, the main sites of parties and non-party political sites. If it is an individual, eg, a young man posting up his own site and saying "These are my views", we are not going to go after those people.”
“The intention is to make the rules clear for the main parties involved in the contest, in other words, the party websites. These are the areas we are mainly after.”
“I thank Mr Chiam for reminding me about his question. On listening to his speech, I was under the impression that he was asking whether this ban on opinion polls applies to the mass media. The answer is yes, it applies to all media, not just the Internet but also newspapers, TV and so on. Thank you for pointing this out.”
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“We need to take cognisance of these changes and adjust our strategies and policies now to build up the capabilities to enable us to thrive in this future world. Our sound economic fundamentals, stability and cohesiveness will enable us to do so. We do not face the serious domestic structural problems that some other countries are preoccupied with. We have ample resources and our people are skilled and well-trained. We must therefore use this window of opportunity now to enhance our capabilities to widen the gap with our competitors. The CSC's vision is for Singapore to develop in the next ten years into an advanced and globally competitive knowledge economy, with manufacturing and services as the twin engines of growth. In a knowledge economy, the basis for competitiveness will be the capabilities and intellectual capital to absorb, process and apply knowledge. To realise this vision, we require to strengthen our capabilities while managing cost competitiveness. The CSC has identified eight strategic thrusts. These are promoting high value-added manufacturing and services as the twin engines of growth to serve global needs; strengthening and diversifying our external wing and incorporating a global dimension; building world-class companies; strengthening our small and medium-sized local enterprises; developing human and intellectual capital as a key competitive edge; leveraging on science, technology and innovation; optimising resource management; and facilitating by the Government to enhance our business environment. Mr Speaker, Sir, Singapore has managed to weather the crisis relatively well so far.”
“Since then the economic situation has deteriorated further and the contagion has spread to Russia and Brazil. The CSC has recommended that the Government should now implement a much larger cost and tax cutting package worth about $10 billion, equivalent to about 7% of our GDP, to help our companies compete during this difficult period. All the key components of business costs should be addressed, including wages, foreign worker levy, rentals, charges for services like electricity, telecommunications and port services, vehicle-related overhead costs, as well as Government taxes. Here I refer Members to pages 3 and 4 of the CSC Report which set out the details of these recommendations. These measures should be implemented expeditiously to regain our competitiveness, minimise further job losses and position our economy to face intense competition as regional competitors struggle to export their way out of their economic difficulties. Besides the cost-cutting package, the CSC has also recommended measures to improve credit availability, seek out markets beyond the region, attract more businesses to Singapore and build up our capabilities. Long-term Capability Building Measures At the same time, we must not lose sight of the need to address longer-term challenges and take steps now to strengthen our competitiveness beyond the crisis. We need to take into account the long-term global trends which will have an impact on Singapore. Continued economic liberalisation, globalisation and rapid technological change will shape the competitive economic environment of the future. These global forces will not wait for the economic crisis to blow over.”
“2% in the first 9 months of this year while all the other regional countries still managed to register positive export growth to the US. This is due largely to the weak performance of our electronics industry. Our market share of electronics exports to the US has dropped from 9.3% in the second quarter of 1997 to 7.3% in September 1998. For the short term, the key concern for Singapore is how to restore our competitiveness, help our companies to tide over the crisis and minimise further job losses. We also need to continue attracting investments to create new jobs for Singaporeans. Besides raising productivity which takes time, there are two main approaches to restore cost competitiveness in the short term. One approach is through currency depreciation. While MAS has been managing the S$ more flexibly in view of the regional crisis, competitive devaluation is not recommended. A weak S$, in the context of an open economy heavily dependent on imports, will translate into larger imported inflation. This would in turn erode any competitive gains from a currency devaluation. A depreciating currency would also erode confidence in the S$ as a store of value, impact our position as a financial centre and diminish the value of S$-denominated assets held by Singaporeans. The other approach which the CSC has recommended is to reduce business costs directly. This addresses the cost competitiveness head-on, without the disadvantages brought about by competitive devaluation. The Government took the same approach to tackle the 1985 recession, with great effectiveness. In June the Government accepted the CSC's recommendation of a $2 billion package of off-budget measures which have been implemented.”
“8% respectively in the first and second quarter of 1998. Third quarter growth was -0.7%, the first decline since 1985. On a quarter-on-quarter basis, the economy has been shrinking for two successive quarters. For the whole of 1998, Singapore's GDP growth is expected to be around 1/2-1%. Businesses have been hit, some sectors more than others, and more than 20,000 workers have been retrenched in the first three quarters as a result. The seasonally-adjusted unemployment rate has risen sharply from 2.3% in June to 4.5% in September this year. The coming quarters will be difficult for Singapore. We will continue to face weaker demand for our goods and services from the region which is struggling to recover from the severe economic crisis. The slowing momentum in the US and the EU will dampen demand further. As external demand accounts for more than two-thirds of our total demand, 1999 economic growth is expected to remain weak. MTI's preliminary growth forecast for 1999 is between -1% and 1%. A key concern is that the sharp currency realignments have eroded our cost-competitiveness. Our relative unit labour cost (RULC) has been rising gradually but steadily over the years. When the region was prospering, our rising RULC was a concern but not a critical problem. Now economic conditions have changed drastically in the region and we are competing for a global economic pie that is growing more slowly. Feedback from EDB indicated that some companies were facing pressures to pare prices or relocate production to other countries because of the cost differentials between Singapore and the regional countries. Our total exports to the US have fallen by 8.”
“Mr Speaker, Sir, I beg to move: `That this House endorses the strategies and policies set out in the Report of the Committee on Singapore's Competitiveness, contained in Paper Misc. 3 of 1998, as the basis for strengthening Singapore's competitiveness.' In May last year, the Committee on Singapore's Competitiveness (CSC) was formed to critically assess Singapore's economic competitiveness over the next decade, taking into consideration global trends and development of existing and emerging competition. The CSC was tasked to identify problem areas and propose appropriate strategies and policies with a view to maintaining and strengthening Singapore's competitive position. The Committee has completed its work and released its Report on 11th November 1998. Copies of the Report have been circulated to hon. Members. When the CSC first began its work, the focus was on the next ten years. The onset of the regional economic crisis in July 1997 has, however, altered the economic landscape significantly. Given our open economy and significant linkages with the region, Singapore too has not been spared from the contagion despite our sound economic fundamentals. The sharp currency realignments have also weakened our competitiveness. The scope of the CSC Report was therefore expanded to propose measures to help the economy cope with the crisis. The Report hence includes both short- and long-term recommendations to improve our competitiveness. Short-term Measures Mr Speaker, Sir, the regional crisis has significantly impacted our economic performance. Between 1st July 1997 and 21st November 1998, the S$ to US$ exchange rate and the Singapore stock market have fallen by 12% and 30% respectively. The GDP growth rate year-on-year has slowed from 7.8% in 1997 to 6.2% and 1.”
“I think that the signal to the market is that APEC is on track in terms of trade liberalisation. Granted there were difficulties in finally concluding this package of nine sectors because of political problems in Japan over the two sectors of fisheries and forestry, nevertheless, all the 16 participating economies have agreed that this is a package that they are willing to work on and this is to be then submitted to the WTO in Geneva to try and bring more economies on board, especially the European Community. Therefore, this is a good stepping stone to further trade liberalisation. ASSOCIATION OF SOUTH EAST ASIAN NATIONS (Freedom to express concern over any action of other member states) 8. Mr J. B. Jeyaretnam asked the Minister for Foreign Affairs what is the rationale for Singapore's opposition to the proposal that ASEAN member states should be free to express concern over any action of the government or people in other member states even if such action is taken or directed against its own people.”
“The Lakeside Apartments along Yuan Ching Road are private apartments built by JTC in the 1970s. The apartments were sold to private owners with 99-year leases registered under the Land Titles Act. As the restriction period on subletting is over, the lessees are free to sublet their premises without having to seek JTC's approval. JTC has referred cases of unauthorised use of the apartments as workers' quarters to the URA. The URA has inspected the premises and found that four apartments were being used as workers' quarters. Warning letters have been served to the owners to cease the illegal use within 1 month. Further enforcement action will be taken by the URA, if the illegal use is not ceased by then. RAIN SHELTERS FOR MOTORCYCLISTS ALONG EXPRESSWAYS 47. Mr R. Ravindran asked the Minister for Communications whether his Ministry will consider constructing rain shelters for motorcyclists along expressways.”
“Large industry users can adjust their consumption pattern to take advantage of the off-peak rate which is 12% lower than the peak rate. In particular, consumers who operate three shifts have benefited from the lower off-peak rate. With the operation of the Pooling and Settlement System, the setting of electricity tariffs will take into account the cost of generation at different times of the day as indicated by pool prices. The use-of-system charge, which is currently a flat rate, will also be unbundled on 1st January 1999 into Low Tension, High Tension and Extra High Tension categories to reflect the cost of transmitting and distributing electricity at different voltages. The use-of-system charges for High Tension and Extra High Tension categories will be further unbundled into peak and off-peak categories. As such, electricity tariffs, including peak and off-peak tariffs, can be expected to be more cost-reflective. INCORPORATION OF LEGAL PROFESSION IN SINGAPORE 42. Mr Shriniwas Rai asked the Minister for Law whether he will consider allowing incorporation of the legal profession in Singapore.”
“The electricity and gas departments of PUB were corporatised on 1st October 1995. A Pooling and Settlement System, which facilitates competition in the generation and supply sectors, has commenced operation on 1st April 1998. Power Senoko Ltd, Power Seraya Ltd, the Ministry of the Environment (ENV), which generates electricity at its refuse incineration plants, and Power Supply Ltd have begun trading electricity at the Pool. Tuas Power Ltd will also begin trading in the Singapore Electricity Pool when its first power plant commences operation sometime in 1999. Another company, SEMPEC Utilities and Terminal (SUT) Cogen Pte Ltd has been given in-principle approval to construct a power plant on Pulau Sakra. To encourage private sector participation in the electricity industry, the Government has initiated the divestment of Tuas Power Ltd. The tender for prequalification of interested parties was called on 23rd September 1998. Further competition in the generation sector will come from additional generation capacity from independent power producers (IPPs) and co-generators in future. Currently, large consumers whose maximum demand exceeds 5MW may negotiate and enter into special supply arrangements with Power Supply Ltd on a commercial basis. Such consumers may also choose their electricity suppliers when new electricity suppliers are licensed. The supply sector will be further liberalised at a later stage to allow private electricity suppliers to sell electricity to consumers whose demand is less than 5MW. The peak and off-peak tariffs for High Tension consumers were introduced on 1st August 1986 to encourage large industry users to shift their demand to the off-peak period (11 pm to 7 am).”
“My Ministry has urged the oil companies to quickly pass on cost savings to motorists. We will continue to monitor the situation and will not hesitate to take action if we find any evidence of collusion to fix prices. DEREGULATION OF ELECTRICITY MARKET 41. Mr Ong Kian Min asked the Minister for Trade and Industry if he will brief the House on the progress in deregulating the electricity market, and whether, in the interim, tariffs for non-peak periods will be reduced, thereby allowing manufacturers and large industry users to alter their consumption pattern to take advantage of non-peak excess generation capacity to reduce their electricity bills.”
“The recent allegations of price fixing by oil companies pointed to the uniformity of petrol and diesel prices as evidence of collusion. There were also complaints that the recent two-cent cut in petrol pump prices is not commensurate with the larger drop in fuel costs. Between January 1998 and August 1998, the posted price1 of RON 98 unleaded petrol of the major oil companies in Singapore dropped by between five and six cents per litre. During the same period, pump prices came down by four cents per litre. 1 Which can be loosely defined as the ex-refinery wholesale price of a petrol product. My Ministry met the oil companies last week to seek their explanation on the allegations of price fixing, and on the observation that pump prices have generally been unresponsive to drops in fuel cost. The oil companies gave my Ministry their assurance that there is no collusion to fix prices. They explained that in Singapore, where the market is small and with motorists within easy reach of several competing petrol stations, a price variation is unsustainable. Any reduction in prices would be quickly matched by competitors. The oil companies pointed to the large number of petrol products available2, and their focus on product marketing, service levels, free gifts and development of convenience facilities at petrol stations, as evidence of competition within the industry. 2 Seven grades of petrol. On the issue of sticky pump prices, the oil companies explained that fuel cost is not the only determinant of pump prices. They depend also on the land lease, capital depreciation, operating costs, wages and others. Hence, it does not necessarily follow that a drop in fuel cost would translate into a reduction in pump prices.”
“These include the Public Assistance Scheme, Rent and Utilities Assistance Scheme, and the Centre-Based Financial Assistance for Childcare Scheme. ASSESSMENT OF IMPACT OF GOODS AND SERVICES TAX 24. Mr Tay Beng Chuan asked the Minister for Finance if his Ministry will assess the impact and effectiveness of the goods and services tax in terms of achieving its original objectives and consider a downward revision in the tax by two percentage points to stimulate demand and reduce business costs in the light of the changing circumstances.”
“The Skills Redevelopment Programme (SRP), which was launched earlier this year to complement the existing Skills Development Fund, is aimed precisely at this. The SRP provides training that not only leads to certifiable skills which employers recognise, but it also provides trained workers a job, either with their existing employer or new employer. As of September, about 2,200 workers have completed training and another 2,400 are undergoing training. Third, we will help retrenched workers secure alternative employment through active job-matching. The Ministry of Manpower (MOM) has implemented the Employment Assistance Programme and also set up a new Employment Facilitation Team to source and pool job vacancies from companies so that retrenched workers can secure employment expeditiously. These efforts have resulted in more job opportunities being identified for the retrenched workers. To date, MOM has been able to provide job referrals to some 80% of all job seekers every month. The Government recognises that despite these measures, there will still be some affected workers who will be unable to cope with the economic downturn. For breadwinners who are retrenched and have no other resources to fall back on, they can turn to a variety of community assistance programmes available through the Ministry of Community Development (MCD). For example, the Interim Financial Scheme, administered by MCD and the Community Development Councils (CDC), provides short-term financial assistance to help individuals and families facing financial hardship. For those who are in need of longer-term assistance, several other specialised assistance schemes are available through MCD, CDCs, the National Council of Social Services, and the various voluntary welfare organisations.”
“The labour market has indeed slackened as a result of the slowing economic momentum. However, for a large number of those retrenched, many have still been able to secure re-employment. According to MOM, a healthy 63% of those retrenched in 1st Quarter 1998 managed to find a new job by the 2nd Quarter 1998. The average time to secure the new job was 1.4 months. The most effective assistance Government can extend to Singaporeans during this difficult period is to help ensure that workers stay employed. To help workers stay employed during this economic downturn, Government has adopted a 3-pronged approach. First, we will help to keep businesses viable so as to minimise retrenchments. In order to do this, we need to keep our costs competitive so that our companies can compete for the reduced business demand during this period. We will do this by reducing our business costs. The $2 billion Off-Budget package announced in June 1998 was part of this cost-cutting exercise to preserve jobs. Towards the end of this year, the Committee on Singapore's Competitiveness will recommend to Government further measures to reduce business costs. Concurrently, the economic promotion agencies are stepping up their investment promotion efforts. This will help create new jobs to replace those lost. EDB has recently announced that 15,000 new jobs in electronic components, petrochemicals and aerospace and 5,000 more in communications, logistics and headquarter operations would need to be filled this year. There is therefore no shortage of jobs available if our workers possess the necessary skills. Second, we will help to train our Singaporean workers to acquire the necessary skills to match the needs of companies.”
“Apart from Malaysia, my assessment is that countries like Thailand, Indonesia and the Philippines and others, are not taking up capital controls. I think Mr Ginandjar has mentioned something about the possibility of getting their traders to convert their export earnings back to rupiah. So this is something that has to be watched. But the overall tone is that they are aware that these capital controls, in fact, will be a step backwards and it is better to keep the market open and leave the current situation on exchange controls as it is. NON-DOMESTIC NON-PERFORMING LOANS (Status) 7. Mrs Lim Hwee Hua asked the Deputy Prime Minister what is the status of non-domestic non-performing loans (i) in absolute terms; (ii) as a percentage of non-domestic loans; and (iii) as a percentage of total loans; and whether recent capital control measures in Malaysia and further deterioration in regional economic conditions will raise the level of non-performing loans. 8. Mr Shriniwas Rai asked the Deputy Prime Minister if he will give an update on the latest position of the exposure of banks in Singapore as a result of the further decline in the property value and economic conditions in neighbouring countries.”
“Mr Speaker, Sir, I just came back from the Manila meeting last week. My assessment is that the ASEAN Economic Ministers are aware that, in fact, with this current crisis, it is all the more important for them to open up their markets and stay on track as far as trade liberalisation is concerned. Of course, they are closely watching the Malaysian situation. And even Malaysia is keen to attract foreign investments. So we were discussing the possibility of maybe bringing forward the implementation of the ASEAN Free Trade Area as a strong signal to the market that we are on track and, if anything, we want to push forward even more vigorously with trade liberalisation.”
“Sir, it is too early to make an accurate assessment. I do not have any figures at the moment.”
“However, such investments account for only a very small percentage of total investment inflows into Singapore. Another concern is the potential downgrading of investor interest in the region. The outlook for foreign investment has already weakened because of the regional crisis. Uncertainty arising from Malaysia's capital controls may further discourage foreign investors. Malaysia's capital controls represent a step backwards in ASEAN's efforts to liberalise its trade and investment environment. ASEAN will have to work harder to bring back investor confidence into the region. The ASEAN Economic Ministers who met last week in Manila have endorsed the Framework Agreement on the ASEAN Investment Area to enhance the investment climate in ASEAN. Singapore will continue to work with other ASEAN members to press ahead with further economic cooperation and trade liberalisation. On the positive side, if the measures are temporary in nature and the Malaysian government makes use of this period of stability to bring about the necessary reforms, we can look forward to an earlier recovery of the Malaysian economy.”
“Given the close interdependence of the Singapore and Malaysian economies, it is inevitable that Singapore will be affected by Malaysia's capital and exchange control measures. The closure of CLOB is an immediate consequence. Activity in Singapore's foreign exchange market has been reduced by the cessation of Ringgit trades. However, trading in Ringgit had already declined over the past months and was only a small proportion of total turnover just prior to the exchange controls. There will also be some loss of business for our banks and fund managers as they can no longer accept Ringgit deposits or trade in the currency. Offshore loans to Malaysia through Singapore's Asian Dollar Market, albeit a small share of total offshore loans, could also be affected. The measures are also likely to affect bilateral trade. Companies with substantial Ringgit contracts have to re-negotiate their contracts and financing arrangements. There will be additional administrative costs as all settlements must now be in foreign currency. A double conversion cost is incurred as traders have to convert their export earnings into Ringgit and convert their Ringgit to foreign currencies to pay for imports. The ease of getting Bank Negara's authorisation for obtaining foreign exchange for trade and for profit repatriation purposes will be critical. Any bureaucratic delay will mean higher business costs. About 60% of our trade with Malaysia are intra-firm, intra-MNC trade. These are mainly denominated in US Dollars. These operations are unlikely to be affected much by the recent measures. Only about 6% of bilateral trade are denominated in Ringgit. The measures will also mean a drop in Malaysian investments into Singapore as there will be limits imposed on Malaysian investments abroad.”
“Mr Speaker, Sir, may I have permission to answer Question Nos. 5 and 6 together, as they are related?”
“Between 1990 and July 1998, more than 100 companies were awarded the Regional Headquarters (RHQ) incentive. American and European companies account for the bulk of the RHQs awarded. They are from a diverse range of industries including Electronics, Engineering, Chemicals, Life Sciences and Automobiles. None of these RHQs have left Singapore for other destinations after the onset of the regional economic crisis. SPOUSAL VIOLENCE 6. Mdm Claire Chiang See Ngoh asked the Minister for Home Affairs, from January 1996 to July 1998, how many spousal violence cases were reported and what was the profile of abusers by sex, age, occupation and nature of abuse.”
“PUB will be building the first desalination plant in Tuas. It will employ the dual-purpose multi-stage flash (MSF) distillation process, which is a tried and proven technology for large-scale desalination plants. The MSF plant will have a capacity of 30 million gallons (136,000 cubic meter) per day. For greater efficiency, the plant will co-generate electricity, of which about 170 MW will be exported to the electricity grid. The plant is scheduled to be completed by 2005. In addition, a pilot reverse osmosis (RO) plant, with a capacity of 1 million gallon (4500 cubic meter) per day, will also be built to obtain operating data based on local seawater quality. This will help to optimise the design of any pre-treatment facility which may be required for large-scale RO plants. COMPANIES WITH REGIONAL HEADQUARTERS IN SINGAPORE 5. Mr Tay Beng Chuan asked the Minister for Trade and Industry whether his Ministry will provide statistics regarding (i) the number of companies which have established Regional Headquarters (RHQ) in Singapore from 1990 till July 1998; (ii) the breakdown of RHQ in Singapore from 1990 till July 1998, based on country of origin as well as type of industry; (iii) the number of companies which have relocated their RHQ out of Singapore to other destinations after the onset of the regional currency crisis; and (iv) the number of companies which have relocated their RHQ to Singapore after the onset of the regional currency crisis.”
“In fact, MAS had earlier publicly stated (15th July) that we have no intention to break the CIA. USAGE OF SINGAPORE DOLLAR 14. Mr Shriniwas Rai asked the Deputy Prime Minister whether the Monetary Authority of Singapore will allow Singapore based companies to use the Singapore dollar for their projects outside Singapore. BG Lee Hsien Loong: Singapore residents may borrow S$ for use outside Singapore, without the need to consult MAS. Singapore-based companies which are not jointly-owned or majority-owned by Singapore citizens and hence are non-residents, have to consult MAS if they wish to borrow S$ for use overseas. As a working guideline, the amount of S$ financing allowed for such projects will be more generous where the companies are under Singaporean management control or have Ministry of Trade and Industry (MTI)/Economic Development Board (EDB) sponsorship. Such companies will be allowed 100% of the project costs financed in S$ if the Singaporean shareholding is between 21% and 49%, or up to 50% of the project costs if the Singaporean shareholding is less than 21%. Overseas projects without Singaporean management control and MTI/EDB sponsorship will be allowed S$ financing up to the proportion of the Singaporean shareholding. In all cases, the S$ proceeds from the credit facilities must be converted or swapped into foreign currency for use outside Singapore. This follows naturally as the S$ is not an international currency. CLAIMS BY REPATRIATED FOREIGN WORKERS 16. Mr Simon S C Tay asked the Minister for Manpower what arrangements, if any, are there to investigate and, if legitimate, to pursue any claims by repatriated foreign workers for unpaid wages or other benefits due from Singaporean employers.”
“Under this agreement, the currency notes of one country are acceptable in the other country as customary tender, although not legal tender. The CIA applies only to currency notes, but banks in Singapore have extended it to include interbank funds. This reflects the confidence of the banking communities in both Singapore and Brunei in the CIA. This arrangement has benefited both countries. Firstly, it has strengthened financial links between the two countries, enabling Brunei banks to utilise the Singapore dollar banking and financial facilities in Singapore as though they were in Brunei dollars. Secondly, by eliminating exchange rate risk and transaction costs, it has facilitated bilateral trade and investment. Thirdly, both Singapore and Brunei have enjoyed low inflation, as a result of the credible Singapore dollar exchange rate policy. Brunei is currently experiencing some financial and economic turbulence. Contributing factors include the Asian currency turmoil, the sharp fall in oil prices, and also problems that are more specific to Brunei. But unlike other regional countries, Brunei does not suffer from an over-extended financial sector, an overbuilt property market or a current account deficit. Singapore's own economic and financial fundamentals are sound. Brunei is not a large market for Singapore's goods and services, representing 1% of our total trade. Its capital flows are small in Singapore's context. As a result, the developments in Brunei have had only a minimal and transitory impact on the Singapore dollar. The Straits Times (17th August) quoted one senior Bruneian official as saying: "The currency agreement has withstood the test of time and is working very well. We see no reason to change it." Singapore concurs with this view.”
“40% of the increase in NPLs is due to the banks adopting stricter criteria for classifying loans. Banks now automatically classify loans as NPLs once the principal or interest payments are 3 months or more in arrears, compared to the previous rule of 6 months. 3 months is increasingly the international practice. In addition, banks are continuing to treat all loans to borrowers with weak financials as NPL, regardless of whether they are in arrears. The remaining 60% of the increase in NPLs reflects the slowdown in the Singapore economy. _________________ 1 Non-performing loans are those graded Substandard, Doubtful and Loss. The definitions are as follows:- a) Substandard : loans are classified substandard when their normal repayments are overdue or may be in jeopardy. Also included in this category are performing loans which are graded substandard solely because of the borrowers' weak financials. b) Doubtful : loans are classified doubtful when full liquidation of outstanding debts appear questionable and the accounts suggest that there will be a loss, the exact amount of which cannot be determined as yet. c) Loss : loans are classified as loss when outstanding debts are regarded as uncollectible. BRUNEI RINGGIT TO THE SINGAPORE DOLLAR PEG 13. Mr Ahmad Mohd Magad asked the Deputy Prime Minister whether the Brunei ringgit to the Singapore dollar peg poses any adverse risk to the Singapore dollar in view of the widely publicised Amadeo scandal and the current fragility of the Brunei economy; and if so, whether the Government intends to take any measure to delink the Brunei ringgit from the Singapore dollar. BG Lee Hsien Loong: The Currency Interchangeability Agreement (CIA) between Singapore and Brunei has been in operation since June 1967.”
“Singaporean tourists spent abroad an estimated $7.2 billion in 1995, $8.2 billion in 1996 and $9.1 billion in 1997. Based on statistics published by various countries and estimates by the Department of Statistics, the amount spent in the ten most popular destinations are as follows: Spending by Singaporean Tourists in Top 10 Destinations S$ Billion Destination 1995 1996 1997 Malaysia 2.75 3.09 2.98 Indonesia 1.08 1.29 1.50 China 0.62 0.73 0.89 Australia 0.46 0.54 0.63 Thailand 0.53 0.53 0.63 USA 0.47 0.49 0.58 Hong Kong 0.32 0.44 0.44 United Kingdom 0.19 0.22 0.24 Taiwan 0.14 0.14 0.17 Japan 0.06 0.08 0.10 Note: Data includes expenditure by business travellers. Source: Statistical and tourism publications of the selected authorities, and DOS' estimates. DOMESTIC NON-PERFORMING LOANS 12. Dr Lee Tsao Yuan asked the Deputy Prime Minister whether there has been an increase in domestic non-performing loans as a result of the economic downturn, with regard to (i) absolute magnitude; (ii) magnitude as a percentage of total domestic loans; and (iii) the number of such loans. BG Lee Hsien Loong: As at 30th June 1998, the total domestic non-performing loans (NPLs) of the 6 local banking groups amounted to $5.4 billion or 3.9% of their total domestic loans. This compares with $3.1 billion or 2.3% of total domestic loans in December 1997. The number of such loans was 7,913, compared to 6,213 loans six months earlier. 87% of the domestic non-performing loans are in the 'substandard' category, with 6% in the 'doubtful' category and 7% in the 'bad' or 'loss' category. The banks have made provisions for all NPLs in line with MAS guidelines, ie, 10% provision for the unsecured portion of substandard loans, 50% for doubtful loans and 100% for loss loans1.”
“My Ministry monitors the impact of such increases on both the Consumer Price Index and Unit Business Cost to ensure that we remain competitive. Major fee hikes require the Cabinet's approval. MONEY SPENT BY SINGAPOREAN TOURISTS OUTSIDE SINGAPORE 11. Dr Toh See Kiat asked the Minister for Trade and Industry whether there are any statistics or estimates on how much money is spent by Singaporean tourists outside Singapore each year from 1995 to 1997; and whether these figures, if any, can be broken down into the amounts spent in each country.”
“Our cost competitiveness relative to the regional countries has been affected by the sharp depreciation in the regional currencies. The Government has therefore taken steps to reduce business costs through various cost-cutting measures in the FY1998 Budget and the June off-Budget package. These measures include property tax rebates, rental rebates and tariff reductions. Excluding material costs, the major component of business cost is wages. In May this year, the NWC recommended that firms exercise wage restraint and put the flexible wage system to effective use given the economic slowdown. Taking the lead, the civil service cut its mid-year variable bonus payment from three-quarter month to half a month and indicated that there could be further reduction in the year-end payment. Companies and unions have exercised wage restraint this year. Many have settled for a wage freeze; some a wage cut. If the economic situation deteriorates further, a cut in the employers' CPF contribution rate may be necessary to reduce wage levels across the board. My Ministry is monitoring the overall business cost situation closely. We will do whatever is necessary to keep Singapore competitive. This includes reviewing all Government fees and charges as well as a possible CPF cut. The Committee on Singapore's Competitiveness has obtained feedback from businesses and will deliberate further on this matter. On Mr Tay's second question, it is not necessary to set up another committee to monitor and coordinate major fee hikes. There is already a mechanism in place to coordinate fee increases. The Ministry of Finance monitors and coordinates the magnitude and timing of any fee increases.”
“Mr Tay Beng Chuan asked the Minister for Trade and Industry whether the Government, in recognising the pressing need to watch and lower the business costs in order to woo investors, save jobs and help firms stay competitive, will (i) take immediate steps to reduce government charges and levies, including the foreign worker levy, port charges, Electronic Road Pricing charges, petrol taxes, Housing and Development Board/Urban Redevelopment Authority car parking charges and Goods and Services Tax; and (ii) seriously reconsider establishing an Inter-Agency Government Charges and Levies Review Committee to strengthen the existing Government mechanism of monitoring and co-ordinating all the major fee hikes of all Government agencies to maintain our international competitiveness.”
“Local companies which require fixed asset financing for regional projects can apply to the Economic Development Board for its Regionalisation Finance Scheme (RFS). This scheme provides SMEs with financing for equipment and industrial properties in their overseas operations. Since the regional financial crisis started, the EDB has received and approved more RFS loan applications. In the first 7 months of 1998, 9 loans amounting to $12 million have been approved, compared to a total of 10 loans for $8 million in 1997. The Trade Development Board has expanded its Trade Development Incentives to assist companies in setting up overseas marketing offices and other business development programmes such as branding, franchising and licensing. To assist companies in exploring new markets, TDB has also increased its funding for companies participating in its trade missions and in approved trade fairs. My Ministry welcomes suggestions on how we can further assist our investors here and abroad. Any measure taken must be based on sound market principles and recognise the financial risks and rewards of any investment decision. We cannot use public funds to bail out any project which has become non-viable as a result of the regional economic crisis. GOVERNMENT CHARGES AND LEVIES 10.”
“This study will also provide further insights on why juveniles turn delinquent.”
“Last year, the situation stabilised, with the number of juvenile offenders arrested rising only slightly by 37 to 2,147. In the first six months of this year, 1,028 juvenile offenders were arrested, which was a slight 1.5% increase over the corresponding period last year. Juvenile delinquents commit mainly property-related offences such as shoplifting and theft, and gang-related offences such as rioting and unlawful assembly. The increase in the total number of juvenile offenders in 1997 and the first six months of 1998 is mainly due to more juveniles arrested for shoplifting and other property-related offences. Juvenile delinquency is a multi-faceted problem. The reasons why a juvenile turns to crime are diverse and complex in nature. Studies on juvenile problems have shown that the reasons for juvenile delinquency include ineffective parenting, parental neglect, boredom, undesirable peer influence, greed, the desire to do the unconventional, or a combination of these factors. We have not detected specific juvenile problems that need to be urgently addressed so far. Only with more information can Government, families and the society in general be able to target specific groups of juveniles that need assistance most. This is being looked into. MCD is chairing an Inter-Agency Work Group, which has been set up to develop a centralised inter-agency database on juvenile pre-delinquents and delinquents. This database will facilitate the monitoring of juvenile delinquency trends. It will also help to highlight specific juvenile problems. In addition, the Inter-Ministry Committee on Juvenile Delinquency (IMJD) has also commissioned a study on juvenile delinquency, which is expected to be completed by year-end.”
“Mr Speaker, Sir, there is no need to establish another separate committee to study the economic situation in Singapore. The Ministry of Trade and Industry and the other economic agencies are closely monitoring the economic situation. They rely on regular meetings with businessmen, surveys of companies, and statistics on trade and industrial production. This combination of on-the-ground feedback and timely, hard data enables the Government to keep close tabs on the economic situation and the problems faced by businesses and Singaporeans during this difficult period. In addition, there is already established a Committee on Singapore's Competitiveness (CSC), chaired by the Minister for Trade and Industry, and comprising private sector members from all the economic sectors. The CSC was originally tasked to assess and make recommendations to sustain Singapore's economic competitiveness in the medium to long term. But since the regional crisis began, the CSC has broadened its scope of work to cover the impact of the crisis on Singapore, and the immediate measures needed to sustain the Singapore economy. The Government took into account the CSC's inputs when it formulated the economic measures in the FY1998 Budget and more recently in the off-Budget package. JUVENILE DELINQUENCY 15. Mr Zulkifli bin Baharudin asked the Minister for Home Affairs (a) whether juvenile delinquency is a serious or growing problem in Singapore; (b) what are the trends in recent years; and (c) whether there are particular juvenile problems that require the attention of families, Government and society in general. Assoc. Prof. Ho Peng Kee: Sir, the number of juvenile offenders arrested rose steadily from 1,205 in 1990 to 2,574 in 1995 before falling to 2,110 in 1996.”
“Sir, I can assure the House that that would be the case. As I have mentioned, our plans are well in hand for us to put up the first desalination plant. So it is just a matter of putting in the money. The technology is proven. It has been done in so many other countries. So long as we are able to pay and buy the energy and pay for the plant, we can have the water. COMMITTEE TO STUDY ECONOMIC SITUATION IN SINGAPORE 14. Mr Shriniwas Rai asked the Prime Minister if he will appoint a committee to study the economic situation in Singapore.”
“Sir, the problem could be more in Bintan because it is a small island. If a lot of immigrants come in, it could affect the reservoir area. But the Kampar area is enormous. So we think there should be no problem there.”
“Sir, we continue to proceed with our plans for the first desalination plant of 30 mgd, based on the multi-stage flash evaporation process. So those plans are in hand and we are in the process of preparing for that. We will work within the time frame where necessary. There is no need for us to hurry and do it just because of the problems. Because when we bring in the plant, we must operate it. So we have this window when we must put in the plant, and our plans are well in hand. We are proceeding as we have announced previously.”
“Sir, I suppose the current state of relations must affect the negotiations. The CIQ is one issue. But we should try and keep the issues separate. We need water. The first Agreement which allows us to draw up to 90 million gallons of water per day is expiring in the year 2011. So we are still very keen to buy water. As I said, if we do not buy the water from them, it will just be discharged into the sea and it is of no value to them. So I hope it will be seen in the light that it is of mutual interest to come to an early agreement.”
“Water from Bintan is expected to be competitive and it is probably cheaper than desalination. Water from Kampar is likely to be expensive because it is a long way away and we have to put in a very expensive pipeline. But as I have mentioned in my answer, these sources are viable. It is a matter of deciding which are the alternatives we want to adopt.”
“The talks are still on-going. Since the last meeting, there has been not much progress. But we are still hopeful that at some stage we will be able to come to an agreement. Because we are interested to buy water and if they do not sell the water to us, it just goes to waste. So it is really a commercial deal. It is a single buyer, single seller, kind of situation.”
“Sir, I presume he is asking about the latest situation on the negotiations.”
“Our current consumption is about 280 million gallons per day. So 1,000 million gallons per day is about three times that volume.”
“Mr Speaker, Sir, on 28th June 1991, Singapore signed a water agreement with Indonesia. It enables Singapore to develop water resources in the Riau Province of Indonesia and draw up to 1,000 million gallons per day of water for 100 years. PUB has identified Pulau Bintan and Sungei Kampar as possible sources of water. The agreement provides viable supplementary or alternative sources of water for our long-term needs. Its implementation will be carried out at the appropriate time, after evaluating the various options, including desalination. Water is a strategic resource and Singaporeans should be regularly reminded to conserve water.”
“Sir, I think this question is better answered by MAS or the Finance Ministry. My own expectation is that it will be significant. WATER SUPPLY FROM RIAU ISLANDS (Progress of discussions with Indonesian government) 13. Mr Zulkifli bin Baharudin asked the Minister for Trade and Industry what is the status and progress of discussions with the Indonesian government with regard to the possibility of Singapore obtaining water supply from the Riau Islands to meet our long-term needs.”
“5 percentage points above the average inflation rate of the three countries with the lowest inflation rates. Monetary policy under the EMU is expected to maintain this price stability and help keep price increases at bay. Given the high import content of our economy, this development should have a small positive effect on imported inflation for Singapore.”
“Mr Speaker, Sir, the European Union is a significant trade and investment partner for Singapore. As a bloc, it was our third largest export market last year, accounting for 14% of our exports. It was the second largest investor into Singapore (accounting for about 20 % of our total inward investment) and our third largest investment destination abroad (accounting for about 12 % of total investment abroad). The introduction of the Euro with the target of monetary union by 2002 is a fundamental shift. There are still considerable uncertainties surrounding the final shape of the European Monetary Union (EMU) and its effects on EU growth and trade patterns. Our current assessment of the impact on Singapore is therefore tentative. The creation of a single currency per se should not affect the volume, direction and composition of trade and investment flows significantly. While a single currency eliminates cross-border transaction costs and could lead to increase in intra-EU(15) trade at the expense of trade with the rest of the world, there is no historical evidence that this will necessarily be the outcome. For example, the Single European Market was formed in 1993 and yet, over the period 1990-96, the trade growth between EU (15) and Asia at 9.1 % per annum was faster than the intra-EU (15) trade growth of 3.6 % per annum. From a longer-term perspective, it is widely expected that Europe would benefit from higher efficiency and market orientation as a result of the EMU. A stronger EU is likely to increase imports from Asia and the rest of the world. To qualify for entry into the EMU, according to the criteria of the Maastricht Treaty of 1991, member countries had to keep their inflation rates low, at not more than 1.”
“Mdm Claire Chiang See Ngoh asked the Minister for Manpower why the hotline number 1822-5358047, which is meant for assisting retrenched workers in securing alternative employment, is a recorded mail voice which only gives website access code and general employment information and not a personalised service to identify job needs and vacancies of callers, especially callers who speak limited English or Chinese.”
“Mr Gerard Ee asked the Minister for Information and the Arts, in such times when just about anything on the Internet can be accessed, whether private individuals could be given licence to access by satellite dishes. BG George Yong-Boon Yeo: The Government has disallowed the installation of satellite dishes for households in order to keep out undesirable satellite broadcasts which can undermine our multi-racial and multi-religious society. Commercial establishments, financial institutions, and media organisations are, however, free to apply for such licences. The ban on satellite dishes for households will continue for as long as it is effective and useful. The Government is committed to providing an alternative to satellite television, through a national cable network linking every office, school and home. The cable system will be completed by the end of 1999. For the Internet, SBA is working with Internet Service Providers (ISPs) to provide web-filtering software as standard items in their starter kits. In addition, at the national level, our ISPs are offering a separate Family Access Network (FAN) which allows more-sanitised Internet access as an option for parents who are concerned for their children. Existing subscribers can opt to switch to FAN if they wish. SingNet has already launched its Family Online service on 1st July 1998, and the other two ISPs will follow soon. HOTLINE FOR ASSISTING RETRENCHED WORKERS 4.”
“The Government is in regular consultation with retailers, and is mindful that, apart from the structural problem of over-capacity facing the retail sector, retailers have been particularly affected during this economic slowdown. In the recent off-Budget package, several measures were targeted at providing relief to retailers: - A 40% property tax rebate on commercial properties for the year commencing 1st July 1998. This is on top of the 15% rebate announced during the FY98 Budget Statement. Landlords should pass on such tax savings to their tenants. - Suspension of the Carpark Surcharge Scheme with effect from 1st September 1998. Currently, a surcharge of $60 per month is levied on each lot in non-residential car parks with at least 5 parking lots in and around the Restricted Zone (RZ). - From 1st September 1998, when Electronic Road Pricing is extended to the RZ, the Area Licensing Scheme (ALS) operational hours will be shortened on Saturdays. The Singapore Tourism Board has also intensified its tourist promotion efforts in markets such as Australia, China, Europe, India and USA to make up for the declining number of tourists from ASEAN and Japan. These efforts should have spin-off benefits for our retailers. Retailers themselves have to act to weather the present downturn and overcome the structural problems. The Government has in place several schemes to promote their long-term upgrading and development. Further details are provided at Annex I (Cols. 743 - 744) . ANNEX 1 - PROGRAMMES/SCHEMES TO HELP RETAILERS (Cols. 743-744) LICENCE TO ACCESS BY SATELLITE DISHES 3.”
“JTC and HDB properties are meant for the lessees to carry out their industrial activities. However, as business activities do fluctuate over time, JTC and HDB allow some degree of subletting by the lessees. Current policy limits the extent of subletting to 50% of available space. For subletting to related companies, the limit is raised to 70%. These are reasonable caps since leasing properties is not the primary activity of these lessees. Nevertheless, in view of the current economic slowdown, JTC and HDB will be flexible in applying their subletting policy, taking into account any special circumstances faced by the companies on a case-by-case basis. TIME FRAME FOR IMPLEMENTATION OF EMAS 37. Mr Ahmad Mohd Magad asked the Minister for Communications whether a time frame has been established to implement Expressway Monitoring and Advisory Services (EMAS) on other expressways, in view of the evident benefits of the system on the Central Expressway.”
“Sir, an obvious channel is through the mass media. I think Members may be aware, for example, that yesterday there was an article in Business Times by some shipping association pointing out the errors and fallacies of the Malaysian approach. We want to take a very rational approach to the whole issue. We are good neighbours with them. We want to cooperate with them. But they must know that whatever action is taken will hurt both parties. So I hope Members, if they have opportunities, will also air their views and this could be carried in the mass media, not only by the local press but internationally. APPOINTMENT OF BANKING OMBUDSMAN 7. Mr J B Jeyaretnam asked the Deputy Prime Minister whether the Government will consider the appointment of a Banking Ombudsman to make banks more accountable to their customers.”