Leong Horn Kee
Singapore
“My question is that, although at the point of purchase when the blocks were built, this may not be structural deficiency, as the Parliamentary Secretary said, but it is now because the demand or desire is for lift access.”
“Lastly, by centralising at MOM, I wish to urge the kind Minister to provide more funds and resources for job search programmes. Most feedback from residents is that they are not getting sufficient help and satisfaction on job search services at the CDC level.”
“At the same time, our SAF soldiers are better educated and trained to handle more sophisticated fighting system. Thus, the combination of both modern weapon systems and better trained soldiers will provide a good platform for our SAF to build a strong and capable integrated fighting force.”
“All right, "may" allow two months of disruption. But in terms of cohort, after the students have left school, they are no more in the same cohort. They actually enter enlistment at different times of the year. So this issue of relating cohort to enlistment period may not be valid. Therefore, why not just have a clarity of rule?”
“Sir, on this issue of early disruption of two months, we should actually look at it not from the two months' point of view of early disruption, but from the 10 months of waiting time. The servicemen will have to mope around waiting for 10 months for his tertiary education.”
“If the safety and personal security in Johor is not improved, no matter how excellent or scenic a bridge we build, Singaporeans will be hesitant to visit Johor and spend time and money there.”
The complete record
Every one of 876 lines we hold for Leong Horn Kee, in date order, each linked to its source. Free to read, in full, without an account. Page 4 of 18.
“Someone called this the No U-Turn Syndrome (or "NUTS", in short). In the US, the general traffic rule is that a driver can do U-turns along any road unless specifically prohibited by No U-turn signs. In Singapore, it is the reverse. Motorists are not allowed to do U-turns unless specifically permitted at locations where permitted signs are shown. That means that they cannot do anything, unless the authorities say "yes". This mindset of NUTS (or No U-Turn Syndrome) is so ingrained in our Singaporean mentality that we do not dare to do anything unless we get a "yes" from the Government. How then can we promote initiative and creativity? Let me cite another traffic rule example. In the US, where traffic is right hand drive, motorists are allowed to turn right at all signalised junctions on red light, provided the traffic is clear; and unless there are signs prohibiting this right turning. But, in Singapore, it is again the reverse. We cannot turn left at signalised junctions on red. However, a few years ago, LTA allowed the rule of "Turn Left On Red" or "TLOR" at some minor roads. The shocking thing is that I have seen with my own eyes, motorists who dare not make left turns on red, even though there are signages permitting it, and the traffic is clear! This is the Singaporean mentality. I would like to get our people to be more entrepreneurial. I believe the Government, being a caring parent, must learn how to "let go". We should cut down on rules and red tapes. We have to give the people their choices to make. We have to get out of the habit of planning every minuscule matter for our people. Give them more avenues to express themselves.”
“Some of the factors cited are : (a) 12% deterioration in terms of trade since 1996, ie, after the Asian financial crisis; (b) Rise in regional political risk premium and lower direct investment to the region; (c) Emergence of competition from China; and (9) Restructuring of Government-linked companies involving lay-offs. I would add to the above list that there is also the uncertainty in the domestic sector with the recent high profile lay-offs in the Government sector - of PSA Corporation and HDB. So, I am indeed very fearful that if it is the professed intention of the Government to keep wages and land values low, it will further dampen the already depressed mood of the people, leading to lower domestic spending which, in turn, will cause domestic demand to spiral downwards into a deflationary loop. I strongly urge the Government to look into this concern of threat of deflation. Next, changing mindset to promote entrepreneurship. Another key thrust of the ERC Report is to promote entrepreneurship, so as to cultivate an entrepreneurial nation. One of the three main tenets of the Report is to remake Singapore into "a creative and entrepreneurial nation willing to take risks to create fresh businesses and blaze new paths to success". I like this principle and I fully support it. However, I feel that this is easier said than done. It requires substantial effort and total commitment from all. Our people and our children are too used to being led, guided and spoon-fed by the Government. We have to break out of the old mould. We need a fundamental mindset change, to be creative and take initiative. But can we? Let me quote an observation that shows that we have an arduous task to change the people's mindset, though we must.”
“Every year, every employee wants to see an increase in his take-home pay, so as to at least match or better inflation and rising costs of expenses. They want to see improving living standards for themselves and their families. How then can we intentionally hold down prices? Moreover, it is not correct to artificially press down values. Do we not recognise that we cannot compete with our neighbouring countries, especially against China and India based on low production cost? I wonder what happened to the previously much promoted policy of going for higher technology and higher value added products, and to promote our brain services sector. Not much has been said in the ERC Report on this aspect. Is it an understood issue or is it deliberately de-emphasised in the Report? If it is intentional, it is useful to explain why. Next, concern on deflation. In line with my doubt on the wisdom of focusing on depressing the costs of production, and therefore depressing values, I also have a worry on the underlying deflationary effects of such a policy. It is therefore timely that I read in a report warning about "Overshooting deflation threatens Singapore" in the Business Times on Saturday, 8th March 2003, in a study by the US investment bank, Goldman Sachs. In the report, Goldman Sachs forewarned that, in recent years since the Asian financial crisis, there have been a series of negative shocks which add up to the largest deflationary demand shock the modern Singapore economy has ever faced.”
“Generally, no excitement. I have to admit that I tend to share some of these sentiments. However, on balance, I wish to point out that the ERC Report has accomplished its mission very well. No one should belittle the profound effort, the numerous valid recommendations and the vital conclusions of the ERC Report. One thousand of the best minds, top managers, businessmen and political leaders had, in great earnestness, reviewed all the major economic and economic-related policies that literally left no stones unturned. It is also correct that those stones that are found to be all right are put back - no need to change for change's sake. The involvement of the large number of people has served the purpose of bringing together wider participation of many people in charting the future of Singapore. The Report has been most comprehensive, covering every economic and related issue. I support, in principle, all the recommended policy changes with regard to taxation, CPF, manufacturing and service industries development, human capital and others. Mr Speaker Sir, allow me to spell out my specific comments regarding certain recommendations in the ERC Report. First, concern on depressing wages and land values. A main thrust that appears to come across strongly in the ERC Report is that, henceforth, the Government wants to keep the factors of production, ie. land, rentals, wages and other operating costs low. This is a well-intended objective. I have no quarrel with that. But I wish to remark that we cannot artificially hold down prices. We do wish to hold down increases in Government rates and fees, wherever possible, but many costs, such as wages, land and rentals, are dictated by the market, and the general affluence of the people.”
“Mr Speaker, Sir, thank you for allowing me to start this important and landmark Budget Debate for FY 2003. This year's Budget is different from the norm in the past years. It contains Government's strategies and plans over the longer term based on its response and general acceptance of the Economic Review Committee's Report. At the same time, as a standard practice, the Budget Statement spelt out the Government's immediate fiscal and monetary plans, tax changes and action plans for the new financial year. This two-pronged long term and short term discourse of the Government's strategies and plans does require some re-orientation to readers and observers, trying to understand better this year's Budget. Along the same vein as the Budget announcement, I shall also structure my comments on this year's Budget into two sections, covering first the ERC Report and then the FY 2003 Budget. First, on the ERC Report. This is a monumental exercise involving about 1,000 persons directly involved in sub-committees and working groups over a period of one year. I liken this exercise to 1,000 cooks labouring together to create a Singaporean favourite dish, eg, the char kway teow, with DPM Lee as our chief cook. Now, this dish is cooked and being served to the people. What are the responses and reactions so far? Are the people satisfied? I believe the verdict is, like all recipes, it cannot cater to all tastes. Some like it, some do not. And some do not care! So, not everybody can be fully satisfied. Some want extra hot, some like it sweet. Everybody wants more goodies in it, but no one wants it bitter. Many people have said that the final ERC Report is not exciting. Nothing new or phenomenal has resulted from it. There is no grand vision. Where are the bold measures?”
“Should we not talk to them about the possibility of this spare capacity to be used for their own water processing, instead of spending their money on building new plants for their purposes? In the process, there is mutual benefit. We can put it in the terms for discussion, so that we can find it mutually beneficial for us to help them to process their water and become part of the agreement. Because the water processing plant can be very expensive for the Malaysians to build themselves. Finally, on Pedra Branca, I want to ask the Minister what really is the economic or real value of this piece of rock, so to speak, for the Malaysians? For Singapore, we know it is our sovereign right, because we have been owning this piece of island for the last 150 years. But I am surprised that the Malaysians suddenly took a stand and want to claim it. Is there any particular economic, or maybe touristic, reasons for Malaysia wanting to make a claim on this island?”
“Thank you, Mdm Deputy Speaker, finally, you caught my eye! I would like to join my colleague, Dr Ong Chit Chung, in expressing our appreciation to the Government for its very level-headed and rational approach to this very important issue, in contrast to the Malaysian style, which seems to be twisting and turning all the time. I have four questions for the Minister. First, I note in the Minister's statement that the Malaysians now want to review the second Water Agreement only in 2058. This seems to be a bit late in the day because, as he said, there would be only two years left before the expiry of the actual Agreement. I want to ask whether in the formal Agreement itself, is there a timeframe for an earlier form of consultation or discussion because, obviously, two years is not enough for us to prepare ourselves. If it is true that there is not enough time for us to review until 2058, what are we going to do about our own water provision plans before that? My second point is that the Minister said that the Malaysians always have this cycle in their relations with us - there are ups and downs, and now it seems like we are in the low end of the cycle. Maybe the Foreign Minister could enlighten the House on whether there are reasons behind their more agitated behaviour now, eg, domestic reasons or other reasons that cause them to want to always use Singapore as a whipping boy on this water issue. My third point is that we also read in the papers that the Malaysians now want to have their own water processing plant in Johor. In future, they would not need to get processed water from Singapore any more. But we know that Singapore has spent a lot of money; in fact, $1.5 billion on our own water processing plant, which can also cater for Johor.”
“I am very gratified to note with pride that we have a rational and responsive Government in charge which is also closely attuned to the plight and worries of the people.”
“Sir, I would like to put on record my support for the Government on the phased-in approach to the GST implementation. This phased approach to increase from 3% to 4%, and then from 4% to 5%, will lessen the impact on the lower income group and lighten their burden - the so-called psychological impact on the people. It also took into account the changing economic conditions and reflects the Government's sensitivity to our people's plight. Sir, I would like to join the other hon. Members who have spoken earlier in congratulating the Government and the Deputy Prime Minister for adopting this phased approach. I see great value in the sensitivity and financial prudence of the Government. It gives confidence to the people when dealing with Government bodies. In particular, I like very much the Deputy Prime Minister's message that Government bodies would have to cut back on their spending, so that the Government can maintain a balanced Budget. This financially prudent policy of living within our means is an excellent one to adopt. This is a very clear signal of the style of the Government: that it is a level-headed and clear-minded one which is at the same time sensitive to the worries of the people. It will strengthen the public's confidence in the Government. At the same time, the decision to retain the entire relief package, while only phasing in the GST increase, shows that the Government is also very generous in this instance to retain the measures to help the poorer people. Therefore, the Government has a feel for the poor. Sir, I would like to conclude by reiterating my support for the proposed amendment and the choice of the Government to adopt the phased-in GST approach.”
“Mr Speaker, Sir, I am very pleased to hear from the Deputy Prime Minister and Minister for Finance that he has decided to phase-in the increase in GST from 3% to 4%, and after one year, from 4% to 5%. I believe this decision will be well received by the people and this House. Even with this phased-in approach of a 1% increase, may I ask the DPM whether it would still have a dampening effect on the economy, in view of the fact that the economic prospects are currently uncertain. I am very concerned whether a GST increase would have a further dampening effect on the economic downturn. My second question is with regard to the point made by DPM that there will be deficit budgets for the following two years. I think that was what he said. Would it also impact the Government's coffers, and how does the Government intend to deal with the deficit budget? Is it going to come from the national reserves? Thirdly, I would like to ask a question that I asked previously in this House, whether the Government would consider reintroducing the Economic Downturn Relief Scheme that had been stopped at the end of November. This scheme is useful because with the continuing economic downturn, more people will be facing unemployment. With the scheme re-introduced, there would be some form of relief for them.”
“From the private sector's point of view, there are also many small and large private companies which are involved in the transhipment, trading and brokering of strategic goods, such as software and technology products. With these new measures being put in place, would they be hampered or handicapped in terms of operational efficiencies in their businesses? Will the additional documentation and procedure controls lead to delays and inefficiencies in their brokering business or even transhipment business, for the movement of such strategic goods? In the process, they may become less competitive against our neighbouring countries which do not have such kinds of controls. As the Minister has said, we are the first country in Southeast Asia to have this form of controls. Mr Speaker, Sir, may I conclude by emphasising that once again I do support this Bill, but I wish to ask the Minister of State whether he could give an assurance that the carrying of legitimate materials would not be unduly affected.”
“Mr Speaker, Sir, thank you for allowing me to speak on the Second Reading of this Bill. After hearing the explanations of the Minister of State for Trade and Industry, and reading the contents of the Bill, I wish to express my support for this Bill. May I take this opportunity to seek a few areas of clarification with respect to the general objectives and the implementation of these new measures on control of strategic goods. Firstly, I support the concept of having a central agency to be the single authority to be responsible for this Bill. However, I notice that the Strategic Goods for Control Items related essentially to military, chemical, biological and technology-related goods and materials. Therefore, in essence, this Bill, in my mind, relates to defence and security items. So I wish to ask whether it is appropriate for this control of strategic materials to be vested in the Ministry of Trade and Industry, which is more interested in trade issues, rather it should be vested in the defence or security agencies like the Ministry of Defence, or the Ministry of Home Affairs. Mr Speaker, Sir, the second area of enquiry is with regard to whether the implementation of these new measures will hamper the free flow of legitimate trading and importation of non-offensive goods and materials, which are classified within the areas of being strategic goods. For example, our defence industry, most of which are Government-owned in fact, and they do engage in activities in manufacturing and trading, as well as importation of military and sensitive products. Therefore would their businesses be affected or hampered in the process?”
“Those who are needy can get help. As all of us know, they can go to their MPs, and those who are assessed to be truly needy and are trying to help themselves will receive help from us. The CCCs are quite willing to extend assistance, case-by-case, to any Singaporean who is needy. So, we are very mindful of the fact that Singaporeans are going through a difficult period and some are in need of help. We should continue to help them. But let us not institutionalise schemes which were intended to serve a one-off purpose, like the EDRS.”
“Sir, I would like to ask the Senior Minister of State, in view of the bleak outlook that he has just portrayed to us, what would the unemployment situation be like in the forthcoming quarter and next year. And in view of this weaker economy, should the Government not reconsider continuing with the Economic Downturn Relief Scheme, in the light that there may well be a continuation of the downturn and more help will be needed by the people? Mr Tharman Shanmugaratnam: On the first part of Mr Leong's question, again, as mentioned, I will leave it to the Minister for Manpower who is going to address the issue of unemployment. On the second part of his question with regard to the EDRS, as I have explained, we should not react by off-Budget packages or stimulus measures every time we see a dip in the growth numbers. We are no longer in recession. We are going through a dull recovery, but we have to prepare for what might be a long haul, a difficult period where the numbers fluctuate somewhat from quarter to quarter, and we have got to adjust to the situation. The EDRS has served its purpose. It was introduced at a time of severe economic difficulty and it has served its purpose. I think we should not institutionalise it. In fact, we should not institutionalise any relief scheme. We should retain our ability to respond where really necessary, and respond in a focused fashion, and make sure that we are always helping those who are truly needy. We will continue to monitor the situation carefully. We cannot say for sure how the economic situation will unravel in the coming months. So, we will continue to watch it carefully. If the situation gets much worse, then Government will have to consider what measures to introduce. But I do not want to jump the gun on this.”
“Resolved, That this House, taking into account the Report of the Entrepreneurship and Internationalisation Sub-Committee (EISC) of the Economic Review Committee and the press release by Temasek Holdings (Pte) Ltd on the new charter of the Government-linked companies (GLCs) and in view of the concerns of the private sector regarding GLCs, urges the Government to implement the recommendations of the EISC which define the new roles and positioning of the Government and GLCs in business and, in so doing, support the growth of private enterprise and entrepreneurship in Singapore. ADJOURNMENT Resolved, "That Parliament do now adjourn to a date to be fixed." - [Mr Mah Bow Tan]. Adjourned accordingly at Ten minutes to Five o'clock pm to a date to be fixed.”
“Sir, to emphasise the point on the need to reinvent for the success of Singapore, a comparison can be made between Korea and Japan. During the Asian financial crisis in 1997, Korea was badly affected and nearly went bankrupt. But now they are bouncing back strongly, because they have changed everything. They have changed their constitution, changed their President and changed the way their economy is run. In contrast, Japan's economy was drifting for over a decade, because it was unwilling to make painful but necessary changes to its economic structure. Japan is still languishing today. Sir, during the debate on this Motion, much has been said to clear the air and the smoke about GLCs. The concerns started about 15 years ago which resulted in the Public Sector Divestment Committee under Mr Michael Fam. Fifteen years later, we are still having this debate on GLCs. I do hope that with the EISC Report and the Temasek Charter, and the explanations given by the Deputy Prime Minister, there may not be a need for debate 15 years later. Sir, I wish to conclude by agreeing with the DPM that going forward, GLCs will coexist side by side with private companies, each playing a vital role, each helping and supporting the other to grow. The ultimate objective is to create world-class companies for Singapore. It does not matter really whether they should be GLCs or privately owned companies. We should have a good mix of both. Above all, we want to have a system, an economic and industrial model, which is the best for Singapore. We want a model that can take us into the future. Finally, I wish to thank the Speaker and you, Mr and Mdm Deputy Speakers, for your patience and indulgence. Question put, and agreed to.”
“Sir, the other point I would like to clarify is that the annual report to be prepared by the Ministry of Finance and Temasek Holdings is meant more for the non-listed companies, and is meant as an avenue for the Government to take stock, perhaps every year. On the point about Ministers in private practice or professional business, I did not say that they should go into private practice or into professional business. I said that if they had been, they would have made very good entrepreneurs or good businessmen - "if they had been". I agree that we are glad that they did not go into private business. For the sake of Singapore, we are pleased to have very good Ministers in charge. I just want to make the point that because of being scholars, if they had not taken up the scholarship, they could, on their own merits, have become great entrepreneurs. That was the point I was trying to make. Finally, on the 10 recommendations that I made to the DPM, I did not count because he was going through them very quickly. I think I got about 6-7 right. So, it is above the passing mark! Sir, I wish to say that much criticism had been levied on the GLCs. I wish therefore to put into perspective the values of GLCs. I agree that they have several plus factors. They have contributed to the economy, and given employment. They are mostly efficient, well run, and they are clean and non-corrupt. Of course, some GLCs, like SIA, have helped to put Singapore on the world map. Some people actually asked me why am I knocking the GLCs. I would like to explain that I am not complaining about GLCs per se. What I am debating is the fairness and the benefits against the evils of Government in business. All of us have friends, relatives and constituents who are working in GLCs.”
“Mr Deputy Speaker, Sir, I wish to thank all the 24 Members, including the 22 PAP MPs and NMPs, MOS Raymond Lim and DPM Lee Hsien Loong, for speaking on this motion. I have listened very carefully to all their speeches, particularly by MOS Raymond Lim and DPM Lee Hsien Loong. They have all made very good points. I wonder why none of the Opposition MPs and the NCMP spoke on this motion. Perhaps, they thought that this motion is not very important enough for them to debate on it. I do not agree with them. Sir, I would like to thank the Minister of State, Mr Raymond Lim for his considered reply. I am pleased to hear from him and, as explained by him, there will be no "Great GLC Sale". As to the response by DPM Lee Hsien Loong, I would like to thank him specially for his very thorough and robust reply. He has set down clear policies on GLCs and the basis for Government in business. He has put across the total picture in a very clear perspective. I would like to especially thank him for the clarity of his reply and explanations. Sir, just on a few points about the comments that I have made. I want to clarify that in the case of the joint venture with three GLCs and a local company, I did not mean to say that the bank had made an irrational decision. In fact, the bank had made a very rational decision. In contrast to the private company, the three GLCs are much larger and stronger and therefore given lower interest rate. As the DPM has said, it is a question of size. For a smaller private company, our corporate guarantee was deemed to be of lesser value.”
“They are strategic partners and they are interdependent. They will play a crucial role in the GLCs' successful transformation into global players. Thirdly, while GLCs go through its restructuring and repositioning process, they must do so cautiously. Success or failure of a good plan often depends on its process. While it may be inevitable that some GLCs or their subsidiaries need to be divested or, in the worst case, liquidated, the decision must take into account not only economic factors, but also several other factors, including its repercussion on the supporting industries that may depend on it to survive, especially in this difficult period. Some of the restructuring process may also entail retrenchment leading to even higher unemployment rate. Therefore, while the restructuring process is necessary, the GLCs must manage the process carefully to minimise disruption. This is especially sensitive at this time when unemployment is still high. It is also important for GLCs to communicate the process carefully to the stakeholders, not just the shareholders, but also the employees, customers as well as suppliers, and use their best efforts to help them adjust to the changes. In this way, it will minimise misunderstanding and ill feelings. Mr Speaker, Sir, the recommendations of the EISC have been very comprehensive and I must take this opportunity to congratulate the Minister of State, Mr Raymond Lim, for the Report. Assuming that the Government adopts the main recommendations perhaps after some refinements, I would like to urge the Government to implement them as soon as possible and to take great care in communicating to the affected parties to minimise any adverse effect that may negate our effort to restructure our GLCs. On this note, Sir, I support the Motion.”
“Granted that some of these things cannot happen overnight and the timing may not be within our control, it is still important to set our major milestones to demonstrate our intent and commitment. Secondly, I think GLCs must share in the responsibility of helping the local small and medium enterprises. I am glad the Committee has recommended the encouragement of a culture of partnership among GLCs, MNCs and SMEs. However, I feel that GLCs must go one step further and go beyond mere partnership. Given its dominant position in our economy, they should adopt the leadership role by showing the way for our SMEs to upgrade and transform themselves to remain relevant and competitive. Furthermore, I would urge them to also consider providing direct assistance to SMEs, whether be it in the form of financial investment, technological know-how, management expertise, or otherwise. In particular, as they venture overseas, SMEs would need a lot of hand holding in unfamiliar environment which is often hostile. GLCs which have made inroads into overseas markets will be in a good position to help. One of the main concerns of the local SMEs is that GLCs tend to inadvertently squeeze them out by their sheer size and might. Such concerns may well be a perception issue. It will surely help to correct this adversarial approach if GLCs can go the extra mile in helping SMEs, especially those which have the potential of becoming a major international player one day. The GLCs need not look upon this as national service. The truth is that many of these SMEs are suppliers or contractors of GLCs. It is in the commercial interest of GLCs to ensure that they have strong and competitive suppliers and contractors that can support them in their effort to globalise.”
“SingTel and DBS Bank, on the other hand, are fast becoming regional players and, hopefully, in time to come, they too will attain the same global standing as SIA in their respective business sectors. It is important for us to develop our external wing quickly. As technology advances, the world is becoming smaller and more competitive. Geographical distances and national boundaries are no longer effective barriers. Soon, we will not be competing with immediate neighbouring countries any more but, instead, all of us will be competing against emerging economies, such as China and India. If we do not develop our external wing quickly, we may miss the opportunities that these fundamental shifts in world economies offer us. Developing an external wing will not only give us access to global business opportunities but may also help us in attracting foreign talents. For example, I am sure that, with SIA's international standing, it would have no problem attracting the world's best talents in the airline industry to work for them. Even if they are not physically resident in Singapore, their expertise will be available to us through our global network. Instead of directly recruiting foreign talents, GLCs can consider partnering global players through mergers and acquisitions, or through strategic partnership, and as a result bring their management talents within its group. Given the urgency of developing an external wing for Singapore, we must impress upon the GLCs their role in this respect and that they must set their sight on global business in the long term. In fact, I would like to urge each GLC to go beyond mere mission statements and to formulate a clear road-map and broad timetable to transform itself into global players over the next 5-10 years.”
“After all, they take up a big chunk of the capital market in Singapore and contribute significantly to our GDP. Sir, we must take a balanced view. We must first recognise that Singapore's economy is somewhat unique in many aspects. We do not have a huge domestic market. We do not have a large pool of talents. There is little room for error when it comes to economic development and industrialisation programmes. In this respect, the GLCs have played a pivotal role in spearheading our economic progress in the past. However, the recent economic slowdown has put additional pressure on our SMEs and this has once again rekindled the debate on the role of GLCs. It is therefore timely for the EISC to release its findings and recommendations on the role of GLCs. Its report serves not only to remove some of the scepticism and reservation people may have on GLCs but also as a guide post for Government's future involvement in business. Sir, I would like to share my views on three specific aspects in the report. Firstly, I support the Committee's recommendation that GLCs should aim to be international players. They must play a key role in developing our economy's external wing. I am not saying that private enterprises cannot become global players. In fact, there are many examples. Creative Technology is just one of them. But given the size of GLCs, as well as their financial and management resources, they are well positioned to compete internationally and have a better chance of eventually becoming global players. We do have some success stories. Singapore Airlines, for example, is not only a global player but a global leader in the airline industry.”
“I want to clarify a point made by Ms Indranee. I did not suggest that SM should become a top-notch lawyer. I said that he would be, if he did. In fact, he would give very stiff competition to other lawyers, if he did. Everybody is glad that SM had decided to become a political leader to lead Singapore to become what it is today. Mr Gan Kim Yong (Holland-Bukit Panjang): Mr Speaker, Sir, I have the benefit of working in the civil service in the early years of my career. And now, I am working in a private sector company which was once upon a time a GLC, until late 1980s, when Temasek divested NatSteel. Temasek's stake in NatSteel now is less than 10%. Therefore, I have the benefit of looking at the issues from many different angles, from the Government, from the GLC's point of view, and non-GLC's point of view, as well as the process of the transition. Sir, the issue of Government's direct involvement in business has been a regular topic for debate in this House. The question has been focused around whether the Government should play an active role in owning and operating businesses, or should it stay out of business and focus instead on macro economic policies. Many have argued that the Government's presence, through the GLCs, may have an adverse impact on the ability of the local small and medium enterprises to develop and mature. The sheer size of the GLCs meant greater economies of scale and this coupled with the availability of Government funding may have given them an advantage in competing with the SMEs which have to be run commercially and with limited resources. Many even suggested that the GLCs have scooped up whatever talent that was left after the Government has taken the first bite.”
“Regular Study by Department of Statistics on GLCs' share of GDP Sir, my final recommendation is that since the study by the DOS was done on GLCs' share of GDP in 1998, I would like to propose that the DOS be tasked to do regular study to update its report. It is important to continuously monitor the encroachment of GLCs into private enterprise. Sir, I have made a long speech and covered much ground. At last, I have released off my chest a whole host of issues and concerns I have regarding GLCs, TLCs and NLCs. These concerns I have expressed are to reflect the concerns of the local businessmen and the man-in-the-street. Members of this House will have more to say on this subject as I note that there are over 20 MPs wishing to speak on the Motion. Mr Speaker, Sir, may I conclude by expressing the hope that the Government leaders will heed our worries. I have spoken honestly and forthrightly of the fears of the private sector. I have also spoken sincerely with the interest of the nation at heart. I hope that the Government leaders will listen, take stock of what we have said, and give us satisfactory replies on the future roles of GLCs and Government in business. What we want is to do what is best for our national interests. We want to create world-class local companies led by capable world-class business leaders, who can compete against the best in the world.”
“I would urge the Government to encourage more of such MBOs. Where appropriate, local Management Buy-Ins should also be considered. This is the reverse of MBOs where an external management group is allowed to buy in to take over a GLC. In addition, since one of the objectives of the GLCs divestment is to create and jumpstart a larger pool of local entrepreneurs, I would recommend that wherever possible, divestment should be into the ownership and hands of local managers or local companies. We should avoid divestment of GLCs into the hands of foreign fund managers or foreign companies, since they have different business objectives compared to the locals. 9. More GLCs and Private Sector Co-operation as Cluster or Consortium Sir, my ninth recommendation is to ask the GLCs and local companies to form clusters or consortia to bid for contracts and projects overseas. They can also co-invest as well. This is a very common practice in Taiwan, Japan and Korea. When a large Taiwanese company enters into a business overseas, such as into China, it will bring along a cluster of supporting Taiwanese companies to cover various aspects of the investment. This way, they operate as a very closely-knit business group. Japanese and Korean companies do the same. Since the new Temasek Charter has earmarked certain strategic GLCs that can spearhead Singapore's external expansion drive, I suggest that each of these GLCs form a cluster of local companies that it can cooperate with to compete for foreign contracts. When a large GLC invests overseas, they can offer co-investment, partnerships or supporting business to the members in their cluster. Such clusters of companies can be formed around large GLCs such as SingTel, SembCorp, Keppel Corporation, PSA Corporation, and others. 10.”
“If the NTUC takes the route of creating NLCs, then they are competing instead of offering business to the private sector. 6. Give Priority to enacting a Competition Law Sir, I strongly support the recommendation of the EISC to enact a Competition Law. This law will help to set the ground rules on competition between all companies, ie, the GLCs, TLCs, NLCs, MNCs and private companies. It will ensure that the playing field is expressly level. It will also have the benefit of ensuring transparency of operations of all companies operating in Singapore. 7. GLCs to enlist more Private Sector persons into Boards and Management I would like to propose to the Government to appoint more private sector representatives on the Boards and Committees of GLCs. As for the appointment of CEOs and top management, Temasek should get the best person for the job, whether from the public service or from the market. From the public's point of view, we often have the impression that GLCs are the retirement resting place for ex-Ministers, top civil servants and MINDEF generals. I know this is not the intention. I recall that DPM Lee has said so in this House. But it does not help to clear this misconception each time we read about another ex-top civil servant or retired general being appointed to head a GLC. More private sector representation means that there will be closer mutual understanding and trust between the public sector and the private sector. Fostering this mutual trust is important. 8. Encourage more MBOs and divestments to locals I am very heartened to read about the progress of Mr Ang Kong Hua in leading an MBO to buy out NatSteel Limited from the shareholders. This is an excellent example of divestment of a GLC to good, safe and capable local hands.”
“I strongly urge that there should be a curb on the proliferation of GLC formation, not just by Ministries, but by the statutory boards, Government agencies and existing GLCs as well. 5. NTUC/SLF to Review its Stable of Companies Mr Speaker, Sir, although NTUC-linked companies (NLCs) are technically not defined as GLCs, as I said earlier, the public views NTUC-linked companies in the same vein as GLCs. I would urge that a review should also be done on the need to continue to divest NLCs; and the same rule to avoid proliferation should be applicable. I can appreciate that the NLCs are formed with different objectives from GLCs. NLCs are formed with the social objectives to help union members, to help curb profiteering and keep prices low, or to provide recreational outlets for workers at low cost. These are very noble and laudable aims. I would suggest that for NLCs that have achieved a strong market presence to perform these social objectives effectively, such as the NTUC Fairprice, NTUC Income and the Pasir Ris Resort, it is worthwhile to retain such NLCs. However, there are some NLCs that are smaller and have limited market impact to curb prices or lower costs. I would urge the NTUC and SLF to do a critical review on whether to keep them. Some examples I can quote are the NTUC Denticare and NTUC Foodfare. I must confess that I do not know enough about these smaller NLCs, but I would suggest that nevertheless a comprehensive review of NLCs should be done. To service its union members, the NTUC can consider out-sourcing their needs. The NTUC could use its enormous experience in collective bargaining and the pooling of its demand from the huge number of union members to negotiate for lower prices from private sector operators.”
“There has been a tendency in the past for Ministries, Government agencies and statutory boards to form subsidiaries to undertake work which could be easily performed by the private sector. This is introducing competition and obviously crowding out of the limited business space. If we look around, there are many examples. I wish to quote one example, Sir. For 39 years, the Singapore Confederation of Industries (SCI) used to be the most prominent publisher of trade directories. Tradelink is their flagship publication. About 10 years ago, IE Singapore (formerly TDB) put out a competing product to Tradelink called Singapore Exporter. Because of IE Singapore's reach and capability, the Singapore Exporter has grown faster. Today, IE Singapore's publication unit has expanded to 50 staff issuing 12 publications. This is not to say that IE Singapore has done anything wrong. In fact, it has provided excellent services. The point is that SCI felt that IE Singapore could have cooperated with SCI, instead of competing against it. 4. Review of subsidiaries under the statutory boards and Government agencies Besides the TLCs under Temasek, I note that there are several statutory boards and Government agencies which have formed many subsidiaries and joint ventures. Similar to the review by Temasek, I suggest that the Ministry of Finance do a comprehensive review of all such companies and joint ventures with a view to assess whether these GLCs should continue. All non-strategic companies should be earmarked for divestment. Thereafter, any new formation of companies and joint ventures by statutory boards should seek the consent of the Ministry of Finance.”
“To curb the proliferation of GLCs I suggest that the Government should make a bold and outright decision that henceforth, no new GLC should be formed unless it is for strategic or security reasons. No new GLC should be formed without the explicit consent of the Ministry of Finance. And the Government should not venture into commercial businesses where local businessmen can undertake. This applies even if such business ventures are not yet available in Singapore. To spur the establishment of such new businesses, the Government, through an existing GLC, can only take a minority role and a minority stake. There should be a stated objective that once the new project is on-track, the Government will sell its minority share to other interested buyers. As suggested earlier, the Ministry of Finance and Temasek Holdings should publish Annual Reports for the purpose of more transparency. 2. Government to set a specific timeframe for divestment For the companies that Temasek Holdings has deemed to be non-strategic, I urge the Government to set a definitive timeframe for divestment. This divestment plan should be reviewed yearly and reported by Temasek to the Ministry of Finance. In addition, during the yearly review, Temasek should also review those GLCs which are classified as strategic. Times may have changed such that these strategic companies may no longer be necessary to be held by the Government. As internal reviews by its staff may be inward looking and biased towards self-preservation, an external consultant or review group could be appointed to study and make recommendations. 3. Government to outsource any commercial requirements Henceforth, the Government should set a clear policy that it would outsource any work or projects that the private sector can undertake.”
“The Motion goes on to urge the Government to implement the recommendations of the EISC, which define the new roles and positioning of the Government and GLCs in business. In so doing, it therefore supports the growth of private enterprise and entrepreneurship in Singapore. The final operative words in the Motion are therefore - supports the growth of private enterprise and entrepreneurship in Singapore. During our GPC's dialogue sessions with the Resource Panel members and industry representatives, the consensus was that it is acknowledged that GLCs have made great contributions in the past. Looking ahead, the Government should critically review the roles of the GLCs. As shown in the Department of Statistics study, GLCs already own one-third of the total GDP contribution of locally-controlled companies in 1998. Surely this cannot go on. There must be a point in time when the Government must stop encroaching into the private sector. GLCs should scale down and give more room for private enterprise. However, I can concede that some GLCs are here to stay. They have become an integral part of the Singapore business landscape. The question now is how to define their future roles, so that they can continue to play an effective part in Singapore's prosperity. Since certain GLCs are of such a large size and scale, they obviously can play pivotal roles in venturing overseas together with other Singapore companies. This is the new Temasek Charter. But as for lesser GLCs involved in businesses which can be undertaken by the private sector, I strongly urge the Government to divest them. Mr Speaker, Sir, may I move on to 10 recommendations that I have on how to shape the future roles of GLCs. 1.”
“He said, tongue in cheek, that we should perhaps allow "bar top dancing". Well, I say if "bar top dancing" can squeeze out creative juices from our normally straitlaced Singaporeans, I am all for it. Sir, at a Singapore Institute of Management seminar on 30th July this year, a renowned Harvard Business School don, Professor Michael Porter, said that thanks to the Government's strong support and a strategy of economic development driven by foreign investments, Singapore has attained an extraordinary level of prosperity today. But as the country seeks to remake the economy, the challenge is to jump to the innovation-driven advanced economy stage. The private sector needs to spread its wings and develop itself to take a leading role in the Singapore economy. I repeat, Professor Porter said, "The private sector has to take a leading role in the Singapore economy." Moreover, Professor Michael Porter felt that the Government must now move on to reduce its role in the economy in the next stage of development and grow more local world-class companies. He said, "We have to get the Government out of the way; it is moving but the pace is too slow." The common call is for Singapore to foster a stronger and larger pool of local businessmen to take on the likes of Li Ka Shing of Hong Kong; and nearer home, compete against the likes of Quek Leng Chan, Ananda Krishnan and Francis Yeoh of Malaysia. Mr Speaker, Sir, having said the above, I wish to bring this House back to the Motion of this debate. The wordings are crafted to reflect the concerns of the private sector. As elaborated earlier, the concerns are with regard to unlevel playing field, crowding out and transparency.”
“Their old worries about the unlevel playing field, formidable financial might, strong network and influence of top officers of TLCs will surface again. Now, with Mdm Ho leading the charge, they are afraid that they could be eaten for lunch. Private Sector to be the future Engine for Growth Ask any businessman, bliss to him is a business world in Singapore without GLCs. If there were no GLCs, they would have less competition, and more room to build up their businesses. I urge the Government to be serious on redefining the new roles of GLCs and government in business. Does the Government need to be involved in so many types and number of businesses? This question should be asked of NTUC and statutory boards as well. Even internationally renowned consultants and thinkers agree on the need to review the role of GLCs in the remaking of Singapore. Speaking at a seminar in Singapore on 25th July this year, Professor John Doggett of the University of Texas pointed out that with the rapid economic changes facing the world, countries have to become more entrepreneurial if growth is to continue. He thought that it is urgent that Singapore starts moving towards being an entrepreneurial nation now, as other countries in the region are already powering ahead. In addition, he also mentioned: "If Singapore doesn't start producing more entrepreneurs soon, it will still be able to live an okay life for a while, but it will lose a lot of its vibrancy and its economy will be a flat line .. It will be a big challenge to remake Singapore in three to five years, or it will become irrelevant." The Prime Minister has mentioned this point during the previous Sunday's National Day Rally speech. He said that we have to nurture a more enterprising environment.”
“New Temasek Charter for TLCs Mr Speaker, Sir, my unhappiness with the new Temasek Charter is that it did not adequately address the basic issue, which is when and how should Temasek divest its TLCs. The press release contained many motherhood statements in its preamble on the Temasek Charter and new Mission. Instead of a clear divestment plan, it looks more like a Business Plan. Though this Temasek Charter is prepared in response to the EISC Report, I feel that there is not enough connect between the two documents. Whilst EISC recommends that Temasek Holdings should explore various ways of divestment, the Temasek Charter sets out to be an updated raison d'etre for TLCs, which is to champion the march overseas. Temasek Holdings has recruited a very capable person, Mdm Ho Ching, to be Executive Director to oversee the group. Instead of slowly divesting off the companies, we now see a new Charter that defines the expanded role of TLCs. Read from the private sector perspective, Mdm Ho Ching is a powerful and influential new figure to help mould and transform the stronger and larger TLCs to become substantial players in the international arena. Some may have secretly harboured the hope that Mdm Ho Ching would have worked herself out of a job, with the gradual divesting off of GLCs. Alas, she is putting her capable hands and talented mind to grow TLCs instead. I wish to express my worry over one particular statement in the Temasek Charter. In its last paragraph, it states: "Temasek may also, from time to time, invest in new business, in order to nurture new industry clusters in Singapore." Many local businessmen are concerned with this statement. This signals that TLCs may enter new business opportunities in Singapore in competition against them.”
“Perhaps, we would have more world-class local companies led by capable world-class entrepreneurs. EISC Report Mr Speaker, Sir, I shall now move on to make some specific comments on the EISC Report and the new Temasek Charter. I am in the fortunate position of not being involved in the preparation of these documents. I can be more critical. Unfortunately, my other parliamentary colleagues, Mr Inderjit Singh and Mrs Lim Hwee Hua, who are speaking after me, do not have such liberty, as they would have a hand in the preparation of these reports. As regards the EISC report, I must first say that it is a very well-prepared and meaningful report. May I commend Mr Raymond Lim and his Committee for the excellent work. It points correctly to the future directions of Government in business and the new roles of GLCs. Unfortunately, I have to say that the EISC report has not gone far and bold enough. The suggestion on urging the Government not to enter into any more new businesses if they appear in the Yellow Book, is well-meaning, but too late. The Government and the NTUC are already in most businesses in the Yellow Book. What is there left that they should not get into in the future, may I ask? As for its recommendations, I agree with all of them. In fact, I think the EISC should ask for more. For a start, I feel that the EISC should have explicitly asked for a curb on the proliferation of GLCs. How about the issue of crowding out and urging the Government to make more room and playing space for private sector? How about urging the Government to divest out of its non-strategic companies as soon as possible? Why not suggest a timeframe for divestment? I would prefer that the EISC recommendations be more specific and forceful.”
“The most notable businessmen in current days are Lien Ying Chow and Wee Cho Yaw in the banking sector and Kwek Hong Png, Khoo Teck Puat and Ng Teng Fong in the property sector. There are no industrialists of eminence in Singapore. The only person constantly quoted is Sim Wong Hoo of Creative Technology. Reason for Dearth of Entrepreneurs I would attribute the dearth of entrepreneurs during the last 30 years to two reasons. One is the rise of GLCs in the 1960s till to-date. The second is the monopoly of the public service over the top brains arising from the successful Government scholarship programme. The top brains are given prestigious scholarships. Upon their return from overseas, they are channelled into public service and the SAF. Many are later released to run GLCs. Without scholarships and left to their own devices, I would contend that some of our Ministers, top civil servants and generals could have become successful entrepreneurs, businessmen and professionals. I can imagine that, if not for taking up scholarship and recruited into Government, for example, from the Ministerial rank, we could have a top IT business leader, a Singapore equivalent of Bill Gates in the person of DPM Lee Hsien Loong; a successful banker in the person of RAdm Teo Chee Hean; a successful MNC top executive in Mr Wong Kan Seng; and a prominent industrialist in BG George Yeo or Mr Lim Hng Kiang and many others. If we conjecture further, perhaps our Prime Minister himself, Mr Goh, could have become a top shipping magnate. Senior Minister, Mr Lee himself, no doubt would have been a top-notch lawyer in private practice. We never know. And we can muse about it. What if all these Ministers had not taken up scholarships and not gone into Government service?”
“For contrast, Hong Kong operated differently from Singapore because of our different history. In each's own way, both Singapore and Hong Kong have found their own path to economic success in the last 50 years. They have no major GLCs in Hong Kong (at least not as many as in Singapore). Business is managed on a more laissez-faire manner. Currently, Singapore has a population of 4.1 million, whereas Hong Kong has a population of 6.8 million, that is, 66% more. Singapore's GDP in year 2001 was US$92 billion, whereas Hong Kong's GDP was US$163 billion, which is 77% higher. Hence, in a very simplistic contrast between Hong Kong and Singapore, it seems that Hong Kong's model without GLCs is marginally more productive and efficient than Singapore. However, the bigger contrast is that Hong Kong has a larger pool of successful entrepreneurs and business people. In the list of billionaires in Asia, Hong Kong has a total of 11 names whereas Singapore has only five names. Hong Kong has a long list of successful industrialists in diversified businesses, such as Li Ka-Shing, Michael Kadoorie, Patrick Wang, Peter Woo and others. Hypothetically, if the Government did not create GLCs in the early years in Singapore, I believe we would have a stronger and deeper spread of private entrepreneurs and businessmen now. In the early pioneer days, we had notable successful businessmen like Lee Kong Chian, Tan Lark Sye, Aw Boon Haw, Loke Wan Tho and Runme Shaw. However, I lament to note that there is a paucity of successful private sector entrepreneurs who could rise to prominence in the 70s, 80s and 90s. I call this the vacuum period.”
“In the early years, many were awarded Government contracts because of their special nature. Over time, they grew and grew, and finally became sizeable businesses. But for the purpose of growth and survival, these GLCs ventured into businesses that could well be undertaken by the private sector. The concern is that some GLCs, especially those which are not listed, operated under rules that may not be too transparent. There are perceptions, misconstrued perhaps, that they may be favoured for Government contracts. On the issue of trust, I recall that when I was a junior Administrative Officer in the Ministry of Finance in the mid-70s, my senior used to tell me that we cannot trust the local businessmen. Anything they asked for is for their own benefit. Therefore, we must say no to them three times. Only if they come back after the third no, then they may truly have a grievance and needed help. Of course, things have changed. The mistrust now may not be as pronounced. Nevertheless, it is good that Government can work hand in glove with the private sector to develop more mutual trust. On the other hand, some SMEs fear and mistrust the GLCs. They are afraid that GLCs could steal their ideas or swallow them up if they get too close to them. Therefore, there is a need to foster closer and better mutual trust between GLCs and private companies. This may be achieved by greater transparency. One method, if I could suggest, is for Temasek and the Government to publish an annual report. Comparison of Singapore and Hong Kong It was explained that the genesis of GLCs in the early years was to spur economic development. GLCs were formed to enter areas which the private sector was unable to do because of size, finance, risk or know-how.”
“However, now in year 2002, four years later, I expect the figure to be higher if we include a few large Government agencies that have been corporatised such as the PSA Corporation and PWD Corporation (renamed as the CPG group, I think). Then, if we include a few new subsidiaries of PSB, JTC and other Government agencies and statutory boards and several existing GLCs and NLCs that have expanded, the GLCs' share of the GDP will be larger. The Temasek Holdings' press release stated that seven listed GLCs account for 21% of the total market capitalisation of the Stock Exchange today. They have a total value of S$72 billion. This growth of the GLCs could have been at the expense of the private companies. Sir, at one-third share of the local business pie, the GLCs definitely are a very visible and pervasive group. Once I read an annual report of Temasek Holdings. What struck me most was that it was like reading the Economic Survey of Singapore. GLCs were in banking, shipping, electronics, semi-conductors, transport and logistics, food, property, hotels, retail, media and so on. Practically you name it, they are in it. I have said before in this House that if you throw a stone, you will very likely hit a GLC. Transparency and Trust To a lesser extent, the third refrain against GLCs is that some of them operate under a special cloak of secrecy or different rules because they are Government-owned to serve special national, defence or security purposes. This is the manner whereby the Singapore Technologies group first started. They were formed to undertake production and services for defence and ordnance requirements of Mindef. The public's perception is that these companies operated under strict confidentiality for defence and security reasons.”
“Sir, with your permission, may I ask the Clerk to circulate a table prepared by DOS on this study. [Table circulated to hon. Members.] Sir, this table shows the share of GDP in 1998. Let us take a look at this table. What I found significant is that, of the 100% share, the Public Sector, which is Government, in terms of providing schools, defence and various Government regulatory functions and services accounted for 8.9%. Of the remaining 87.5%, which is under the Corporate Sector, 41.5% was taken up by foreign-owned companies, with 46% by locally-controlled companies. And of this 46% locally-controlled companies, 12.9% were owned by GLCs and 33.1% owned by "others" which is, I presume, the private sector companies. What is shown here is that the total pie of the locally-controlled companies of 46%, one third was already owned by GLCs, leaving only two-thirds for the private sector. This percentage is indeed significant. If we look further into this table, add the 8.9% for public sector to the 12.9% of GLCs, we get a total of 21.8%. Compare 21.8% to the 33.1% which is owned by private sector, the comparison is about 40:60, which means Government in commercial business as well as Government in government business accounts for 40% versus 60% for local companies. Therefore, this is clear evidence that the public sector and the GLCs combined have invaded into 40% of our daily life, compared to the private firms, if we take away the portion owned by MNCs and the foreign-owned companies. No wonder the presence of the Government and GLCs is felt so strongly in Singapore. Many may feel very stifling, others may develop a dependency syndrome. It is assessed that the GLCs accounted for 12.9% of the GDP in 1998.”
“So to be realistic, even if there is a level playing field in terms of the open rules, certain better, stronger and well-connected customers like GLCs will get favoured. Let me quote my personal experience from the receiving end of it. In 1995, I was involved in a private sector company that entered into a joint venture with three GLCs to develop a piece of land in Shanghai. The joint venture partners agreed to borrow from the banks using the land as collateral and each giving corporate guarantees for their share of the loan. Compared to the GLCs, we were informed by the banks that our private sector company will have to be charged higher interest rates for our portion of the loan. The reason is that though the collateral is the same, the value of our corporate guarantee is not the same. Crowding out of Private Sector Mr Speaker, Sir, this second gripe concerning the crowding out is even more serious. The Department of Statistics (DOS) did a study in March 2001 on the "Contribution of GLCs to GDP". It sets a clear definition of GLCs as those wherein the Government and all its agencies own directly or indirectly effectively 20% or more. DOS concluded that GLCs accounted for 12.9% of the total GDP in 1998. This is a very interesting study that is not well-publicised.”
“The Government will make any playing field level for all players. I do not think that there exist rules that deliberately favour GLCs. Nor are there any hidden subsidies for GLCs. Since the Government is always above-board, this is not permitted. But compared to a private company, a GLC enjoys certain advantages. Firstly, in terms of finance, a GLC is usually stable and stronger financially, with Government as the shareholder. Secondly, GLCs have connections and old-boys network of the civil service, which are a distinct advantage. Thirdly, GLCs are favoured just purely because they are GLCs, being of the right pedigree and parentage. Others want to do business with them. In fact, Senior Minister Lee Kuan Yew said so himself in this House on 21st May 1996 during the debate on purchase of properties. Senior Minister, as usual, gave a long and commanding speech that day, six years ago. On a matter of perceived unlevel playing field, he said: "So let us be a little realistic and do not expect that the Government can force private sector to give the professionals a level playing field. No. It is their business. They want to get the best customer that will help them to sell the product and add value." SM went on to say: "Ministers, Parliamentary Secretaries, MPs, you go to a hawker centre. If they give other customers one egg, they will give you two." He quipped: "I know because when in the 1950s, I used to go to Koek Road, the best char kway teow there, other people for 50 cents got one egg. I got two." That was what SM said. SM also went on to cite examples of his shoemaker and tailor giving him special service.”
“The Government, being a market regulator, is also the player, therefore, the Government is both referee and player. Therein lies the fundamental conflict of Government in business. In most countries, in the US especially, the government's role is to assist businesses to grow. It is a firm belief that a businessman, with his personal money at stake, will make better business decisions than government officials. The Government's share of the fruits of success is in the corporate taxes levied. In fact, from the private businessmen's point of view, it is rather ironical that the Government collects taxes from their profits, which could then be used by the Government to invest in businesses which compete against them. This is a dichotomy of Government in business. Essentially, the concerns regarding GLCs are three main aspects: (1) Unlevel playing field; (2) Crowding out of the private sector; and (3) Transparency and trust. Unlevel playing field Private-sector companies are very concerned about the unlevel playing field. Their concerns are that the GLCs have strong connections. They have chairmen, directors and CEOs who are former Ministers, top civil servants, generals and admirals. Besides these clout and connections, GLCs have strong finances. Hence, because of their muscles, they can edge out any SMEs. A common mistaken perception is that "all things being equal, the award of a contract will invariably go to a GLC". Sir, I recall that when I raised this perception of unlevel playing field to Deputy Prime Minister Lee Hsien Loong, in a debate in this House several years ago, his response was that the Government's policy was to lay out a level playing field. He suggested that we could measure it with a theodolite.”
“Generally, the public loosely considers a company to be a GLC if it has close ties to the Government, either in the form of direct or indirect shareholdings or having Government representation or control on the Board or management. A more precise definition has been commonly used nowadays. A GLC is defined as a company with more than 20% owned by the Government through Temasek Holdings of the Ministry of Finance, or by other Government Ministries, statutory boards and agencies. Temasek Holdings now wants to call them TLCs, to differentiate TLCs which are Temasek's stable of companies, against Government-linked companies which are owned by other Government agencies. However, I feel that, to make the picture more complete, when we should refer to Government in business, we should also include GLCs owned by Temasek and other Government agencies. I would like to include companies under the ambit of NTUC and the Singapore Labour Foundation as well. I shall explain. Let me coin a new acronym for NTUC and SLF-linked companies to be called NLCs. A Minister without Portfolio is head of the NTUC. The companies under the SLF are another NLC group headed by another Minister. Although NTUC and SLF-linked companies are technically not under Government shareholding influence, they are exerting the same nature of Government connections and clout like GLCs. Therefore, any policy rules or decisions on GLCs which are applicable to Temasek's TLCs, corporatised Government agencies, and subsidiaries of statutory boards, should also be applicable as well in form and spirit to the NTUC/SLF-affiliated companies, ie, the NLCs. Concerns regarding GLCs Sir, what are the concerns regarding GLCs? The concerns stem from the fundamental issue that GLCs have parentage that is linked to the Government.”
“They have given their valuable input and suggestions. I wish to thank them. GLCs' divestment history Sir, the first major review of GLCs was completed on 21st February 1987 by a committee chaired by Mr Michael Fam, called the Public Sector Divestment Committee. This was 15 years ago. The committee identified 15 GLCs for listing, nine GLCs for reduction of Government shareholding, and 17 GLCs for total privatisation, making a total of 41 GLCs recommended to be divested over a 10-year period. I regret to note that the actual divestment rate of GLCs has been painfully slow. A quick check will reveal that only about two-thirds of the GLCs recommended for listing have been done. In fact, on the contrary, several GLCs have continued to expand and became very sizeable companies. Contrary to shrinking and divesting, the GLCs had gone forth and multiply. There are now more GLCs in terms of size, number and coverage of the economy than before 1987. Has Mr Michael Fam's Report been totally forgotten? Meanwhile, over these years, the cries of the private sector against GLCs got louder and louder. Most of the complaints were reflected by MPs in this House. This is a perennial topic raised during the annual Budget debate and the Committee of Supply. The EISC report and Temasek's new charter for GLCs are therefore timely. They put in perspective the current stage of GLCs and what should be done in setting the policy forward for Government in business. Though not comprehensive documents by themselves, they serve as useful guide-posts to review and plan ahead. I shall delve further into these reports later in my speech. Definition of GLCs Mr Speaker, Sir, before I go on to set out the gripes of the private sector against GLCs, we should first define what we mean by a GLC.”
“Mr Speaker, Sir, I beg to move*, That this House, taking into account the Report of the Entrepreneurship and Internationalisation Sub-Committee (EISC) of the Economic Review Committee and the press release by Temasek Holdings (Pte) Ltd on the new charter of the Government-linked companies (GLCs) and in view of the concerns of the private sector regarding GLCs, urges the Government to implement the recommendations of the EISC which define the new roles and positioning of the Government and GLCs in business and, in so doing, support the growth of private enterprise and entrepreneurship in Singapore. Dialogues with industry Sir, this topic of the role of GLCs has been raised and debated in Parliament numerous times in the past. The reason that my parliamentary colleague, Mr Inderjit Singh, and I wish to table this Motion is because the EISC has presented a report on its recommendations on Government in business. Temasek Holdings has responded with a press release on its new charter. Therefore, I feel that it is a good time to take stock, and have a full debate in this House on the new roles of GLCs. The members of my GPC for Finance, Trade and Industry generally agreed to have this Motion tabled. They shall speak on this Motion airing their views. A thorough airing of the *This motion also stood in the name of Mr Inderjit Singh views will enable the Government to present its position on the important issue of Government in business. Sir, to gather views on GLCs, the GPC for Finance, Trade and Industry conducted two dialogue sessions with our Resource Panel members, representatives of the Chambers of Commerce, the Association of Small and Medium Enterprises (ASME), the Singapore Confederation of Industries (SCI) and other invited businessmen and professionals.”
“Their workers will at least enjoy the benefit of the CPF top-up, for companies that are doing well, and not face lower CPF contributions into their accounts. Sir, my last suggestion is to request the DPM to consider not applying the proposed CPF changes to owners of existing properties when they re-finance loans on their properties. A person may continue to own an existing property but wish to refinance the terms of the loan with the existing bankers or new bankers, so as to enjoy the declining loan interest rates. If the new rules kick in when an existing property is refinanced, then the owners may find that they are restricted from using more CPF contributions once the limit on the withdrawals is reached based on the new rules. This may result in the owners being unable to enjoy lower interest rates if their banks are imposing higher interest rates than other bankers. I am sure that DPM does not wish to see this rigidity that creates a constraint on our people to enjoy lower housing loan rates, particularly for refinancing of existing properties. Therefore, refinancing of existing properties should not be deemed as new loans when the new CPF rules are applicable. If this is not allowed, I would like to ask the DPM to explain to us. Sir, I hope that the proposed CPF changes may be received favourably by the Government for the benefit of all. EXEMPTED BUSINESS (Motion) Resolved, That the proceedings on the business set down on the Order Paper for today be exempted at this day's sitting from the provisions of Standing Order No. 1. - [Mr Mah Bow Tan]. CENTRAL PROVIDENT FUND AND RELATED CHANGES Debate resumed.”
“I believe this suggestion or flexibility of not imposing a valuation cap will be beneficial to all Singaporeans, and lessen their concerns about their ability to service existing or even new housing loans, provided it is a owner-occupied property. I sincerely feel that this suggestion is very useful and meaningful, and urge the DPM to think about it seriously. Mr Speaker, Sir, I would like to turn to two questions that I have filed for Oral Answer. If these two questions are adequately addressed and replied to by the Deputy Prime Minister, I may consider withdrawing these two questions to be tabled for a future sitting of Parliament. My first suggestion is not to lower the CPF contribution rates of older workers aged between 50-55 who have existing housing loans. I wish to ask the Deputy Prime Minister to consider this idea, because the older workers aged between 50-55 may be faced with heavier reliance on their cash or personal finances when their CPF contribution rates are reduced or not restored. This concession will also mitigate their concerns of their ability to continue servicing their existing loans. If their CPF contribution rates are lower (as their employer's contribution will be lower), therefore they cannot service their loans based on the present plans for their existing loans. Sir, I particularly like the idea of the Transitional CPF Component Top-up (TCTC) which has been proposed for civil servants aged between 50-55. I think this idea is a very enlightened and laudable move. May I urge the Government to request private companies and employers who are doing well to consider having a similar scheme for their employees aged between 50-55.”
“The first point I wish to make is that the proposed capping of the total amount that can be used from CPF, from 160% to 150% in the first year, and eventually down to 120% of the property value in the fifth year, means that employees who have loans reaching this limit but they could have some more balance in their own CPF Ordinary Account, are forced to use their personal savings or cash to continue servicing existing housing loans. This may pose, in some cases, severe financial or cash flow problems to these affected persons. In addition, in terms of investment options open to them, this new rule will mean that they now have limited options that can be used in the CPF funds for properties, and may have to switch to investing in other forms of investments, like shares, securities, and other forms of financial instruments. This could create rigidity in the investment options open to them. We have read recent reports from banks and financial advisers that properties have historically been proven to be a better form of investment compared to shares and equities. This new rule may impose more constraints on the CPF account holders to put their money into good investments such as properties. My second suggestion is to request the DPM to consider allowing loans for one owner-occupied property per person to be exempted from the total valuation cap. The limit is 150%, reducing to 120% in five years' time, which would be imposed on CPF withdrawals to be used to service such loans. This concept is practicable and workable, which is the same principle applied in the case of property tax concession where a person with one owner-occupied property is allowed to enjoy property tax concession.”
“Mr Speaker, Sir, I wish to join in the debate on this Ministerial Statement on the CPF and related changes, so as to seek some clarifications and ask for flexibility on the implementation of the proposed CPF changes. Before I start, I wish to declare my interest that I am an Executive Director in an organisation involved in property business and I personally am a property owner. In fact, I am going to reach 50 years very soon and will be much affected by the new CPF changes. Hence, the changes I request for will have an impact on the property market. However, the points I intend to raise are for the general interest of the public. Sir, I wish to support the various changes announced by the Deputy Prime Minister. The DPM has actually announced many changes and some are most welcome. In particular, I would like to express my happiness in the new rule to allow 10% of the purchase price for downpayment to be paid out of the CPF account. This is indeed a welcome move to enable younger employees to buy their first property. Sir, I understand and accept the proposed changes to the CPF regime such that there will be less risk of over-exposure of the people, especially for older people, to property investments. However, there are some concerns of the public on the lowering of the salary ceiling from $6,000 to $5,000 and that these new rules will lessen the ability of the affected persons to service their existing housing loans using CPF. Sir, I would like to raise four suggestions or questions with the DPM.”
“With this strong endorsement, the Government can go about managing the country with confidence. However, I wish to warn that this trust of the people is like a contract. The people's mandate is given on a contractual obligation of the Government that the people's welfare and well-being is taken care of. If there is a spate of unreasonable, unfair fare increases during this period when people are facing a severe economic difficulty and higher unemployment, this trust can be fragile and easily broken. In conclusion, Sir, I wish to earnestly and sincerely urge the Government to be very mindful about the difficulties faced by the people. There is a large segment of the population who have great faith in the Government, but they are facing difficult times. Future fare increases should be deferred as far as possible so that the negative impact can be mitigated.”