Liang Eng Hwa
Singapore
“Sir, in Mandarin, please. (In Mandarin): [Please refer to Vernacular Speech.] I would like to thank IMDA for its flexibility in allowing the filming of "Dear You" in the Teochew dialect, and for approving additional screenings to meet public demand.”
“Thank you, Mr Speaker. Sir, we hope that there will be peaceful resolution to the Middle East conflict soon and that the Strait of Hormuz will be fully open.”
“Sir, I believe the political office holders have not replied or responded to my cut on traffic congestion, so can I perhaps ask the Minister, whether is it because he disagrees with me that the traffic congestion has worsened or that there is no non-pricing solutions to traffic congestion, which I had asked for.”
“Sir, Minister Chee, in his speech mentioned that this year we will be launching 19,600 new BTO flats. So, I would like to ask, how he sees the trajectory in the next two, three years.”
“Also, flexible work arrangements, through inter-agency coordination, could also help flatten peak demand. Sir, road pricing remains important, of course, but it must be a multi-pronged approach to manage congestions. And all these suggestions that I have made, I hope would also help to reduce congestions.”
“Thank you, Speaker. Sir, there are Singaporeans who felt strongly that the founding Prime Minister Mr Lee Kuan Yew's original wish to have the house demolished should be respected. It is not just because this is his personal wish but also the values that he espouse, which is not to have personal monuments.”
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“On the whole, the 50-50 split is prudent and strikes a balance between allowing us to tap on the reserves for immediate use, while growing them over time for the benefit of future generations. I believe that most Singaporeans would find this an acceptable and equitable distribution of the country’s wealth. However, I would also like to raise some points of concern. Our national reserves play a critical role in safeguarding the economic and financial stability of the country. Hence, it is only befitting that we rigorously ascertain the motivation and rationale why the change is needed. The Finance Minister, in his Second Reading speech, gave a good account on the areas of increased fiscal spending in the next 10-15 years, forecasted to cost an additional 3% of the GDP. Besides spending on building capabilities and strengthening competitiveness, there will be more social spending. The natural public finance-related concern would be whether this change would set an unhealthy precedent where future governments will again dip into our reserves to balance the budget for increased expenditure. Future governments, on their part, can always find equally compelling reasons to justify why it is “money no enough” for them, and hence withdraw even more from the kitty. Would our national reserves, our last line of defence in any crisis, become a readily available means to balance budget? I would therefore like to ask the Finance Minister to address the basic principles in which the spending rules can be amended, so that the public understands the Government’s motivation for the change. Also, can the Minister provide some clarity on where the “no go” areas are, in terms of spending the investment returns?”
“The returns for such investments and spending on non-financial assets may not be that tangible, but I believe it will reap us good dividends over the long run. Thirdly, the new framework would still facilitate the continued growth of the reserves for the benefit of current and future generations. Singapore’s national reserves, given our small, open economy and growing population, must continue to grow so as to adequately "capitalise" the country's balance sheet. Again I have to refer to the recent financial turmoil, for we have seen how important it is for us to remain a bedrock of confidence in such chaotic times. For example, the Government’s recent move to guarantee all bank deposits would not have held much water if it was not backed up by the size of our reserves. For a little red dot like us to remain a compelling destination for quality foreign investments, we need to maintain our AAA sovereign ratings as well as demonstrate our ability to manage a stable Singapore dollar exchange rate regime, in addition to the other economic and security prerequisites. Having a strong balance sheet will allow us to fulfil these objectives. In this sense, I applaud the Government’s decision to retain the existing 50% spending cap on the expected long-term real return on assets invested by GIC and MAS as well as the NII on the remaining assets. Indeed, there are no easy fixes to the question of “how much should we spend”. Even public listed companies often grapple with it as well. For example, a firm with a high-growth strategy would usually opt to retain the bulk of its earnings for re-investment. One with a more steady growth strategy, on the other hand, may prefer to distribute more dividends to maximise shareholders’ value.”
“Hence, we may well be in a situation where we continue to spend 50% of the dividends and interests that we received even though the investment values of our reserves may have shrunk. Put simply, we could be spending more than 50% of the returns if we take the reduced market investment values into consideration. As our reserves are increasingly invested in higher returns emerging market economies, its investment risk will grow correspondingly. Therefore, pegging spending rules to total returns is both timely and necessary. The new framework also preserves the real value of the reserves, with mechanisms in place to safeguard their purchasing power over the long term. Since spending out of the investment returns will be computed on a real returns basis, the Government can budget 50% of the investment returns for fiscal expenditure only after it has been adjusted for inflation. This institutionalises the necessary saving discipline and ensures that our reserves continue to grow adequately. Secondly, the additional funds freed up under the new framework would primarily be spent on enhancing our economic capabilities and strengthening social cohesion. At first glance, unlocking more investment returns for current fiscal expenditure could lead to a smaller kitty for future generations to dip into, and hence possibly deprive them of the opportunities we enjoyed. Surely, that is not the kind of “legacy” we would like the future sons and daughters of Singapore to remember us for. Yet, if we carefully invest these additional funds to strengthen our global competitiveness in education or capacity building, for example, we will benefit not only the current generation, but lay the groundwork for a better and brighter Singapore for generations to come.”
“Mr Speaker, Sir, let me begin by saying that this debate on the returns on our national reserves could not have come at a more opportune juncture in history. These are no ordinary times, and the turbulence that has engulfed global markets in the last few months has thrown up good reasons for us to re-examine the issue. For one, there is no escaping that the value of our investments, like many other funds, would also be impacted significantly by the financial turmoil, which brings me to my first reason for supporting the Bill, that is, the new spending framework, which adopts a total return approach and safeguards the real value of past reserves, is a significant improvement from the NII framework. The total return approach which marks the investments to current market value takes into consideration the appreciation and depreciation of the reserves invested. This approach, especially in light of the dramatic fall in asset values, is sound and would better reflect the returns of the portfolio in which the spending is based upon. In contrast, the NII framework, though more conservative on the surface, could potentially skew investment policy towards having more high-dividend stocks and higher yield bonds in the portfolio. This would limit the growth opportunity of the investments as well as expose the reserves to higher inflation risk. In theory, the NII approach could even lead to a situation where we may spend more then 50% of the returns. For example, the stocks and bonds that we invest in may have depreciated in value, but dividends and interest coupons would continue to be paid, as often is the case.”
“Sir, many motorists who drive through Fullerton Road on Saturdays would agree with me that there is actually no congestion to manage there. So, I would like to ask the Senior Parliamentary Secretary whether: (1) the slow speed that was measured by LTA could be because there is a certain stretch of road where the traffic junctions are at close intervals; and (2) LTA can go a bit easy on Saturdays, since it is a non-working day and, hence, the impact on our economy will be much lesser.”
“Sir, can the Senior Parliamentary Secretary give an indication whether this restructuring of the fees is likely to lead to an increase in the overall fee for the consumer and whether the PUB can keep any of these fee changes non-inflationary?”
“Sir, in the second quarter economic survey, we have seen unit labour cost and inflation rose but productivity fell. I would like to ask the Minister whether we are seeing some early signs of wage inflation; and if this trend continues, coupled with our weak economy, we would be seeing more job losses as a result of this reduction in our competitiveness. What more could we do to reduce our overall business cost to retain our competitiveness?”
“Sir, the Minister in his reply to Ms Jessica Tan earlier on, categorised the taxis as high-end in the overall scheme of public transport. I am a little concerned when I heard that labelling because it may just lead to more upside in taxi fares. I differ with the Minister to say that far from high-end, taxis actually currently fill up many of the areas of gaps that the buses and the trains do not fill. And, in fact, like in areas where there are no buses, beyond midnight or in emergency, taxis are essential. So I do not see it as being high-end. Can the Minister clarify?”
“They call their frontline staff cast members, rather than cashiers or waiters. They institute a lot of pride in their staff and of course they are also well remunerated. Sir, I believe the Government can play a catalytic role in the mindset change and further improve our service culture.”
“In a bid to win back visitors, the Hong Kong government came up with a number of initiatives, one of which was to get top star, Andy Lau, to spread the message of good service standard through a TV campaign, and his light-hearted tagline in Cantonese, "Why should we tolerate poor service standard in these days and age?" It became a catch phrase in Hong Kong. Most Hong Kongers bought the serious message behind it. Whether it has anything to do with the campaign, most visitors to Hong Kong now agree that the level of service in Hong Kong has improved and is a far cry from 10 years ago. Back then, shop assistants were known to grumble at shoppers who did not buy. According to the 2007 World Ranking of Service Standards by the World Economic Forum, Hong Kong ranked 7th and was ahead of Singapore, who has improved to 15th. Last year, the Manpower Minister mentioned about equipping Singaporeans with the service DNA so that we can offer a total positive experience to our consumers. Can the Minister share with us how the Government intends to go that extra mile to improve our service culture? Is there a national effort involving the various agencies? One area we need to do more is also to raise the image and professionalism of our service staff. A friend of mine who used to work in one of the top hotels in Singapore related this incident to me where one of his local service staff was not willing to serve a guest at a particular table in the hotel restaurant because the guest at that table happened to be her friend. She felt embarrassed having to wait on someone she knew. We need to raise the status and the type of work of our service staff. The companies, service staff and customers all have a fair share of mindset change to make. Companies like Disney do this very well.”
“Sir, in his National Day Rally speech in 2005, Prime Minister Lee highlighted the need for a mindset change to improve our service culture. He mentioned that all three parties - companies, service staff and customers - have a role to play to improve service. It was a timely reminder. The services sector will increasingly be an even bigger value adding contributor to our economy. With the completion of major tourism-related developments and more international events coming to Singapore, we can expect more Singaporeans to make their livelihood in the area of providing service. More full and part-time service workers will be needed for positions such as guest relations, retailing, tour guides and waiters to give consumers a positive experience. We are truly seeing a significant "experienced" economy emerging in Singapore. But do we have the headcount to meet the growth in this sector? Recent reports in the Straits Times suggested that the numbers are not enough to fill the new openings and labour crunch is only going to get worse. Equally important are also our service culture and service software. Are we geared to give consumers and tourists a memorable experience? While we do have good examples of excellent service standards such as SIA and Changi Airport, many of us have also encountered poor service in our various areas of day-to-day life. I will not cite them here today. Although customer service very much comes under the purview of private business management, the Government can and should play a part at the national level to improve our service culture. During the SARS crisis in 2003, Hong Kong tourism took a severe hit.”
“Sir, the oil price has gone above US$100 per barrel and looks likely to stay high or even go higher. There is growing concern that the recent high oil price is a structural shift rather than a cyclical upswing. The oil price has more than tripled since 2003, and it has already eroded the purchasing power of consumers, as we have seen the likes of petrol, utility prices and transport costs raised significantly. On the business and industry front, high fuel cost will add on to the overall business costs, and perhaps dampen business sentiment. Airlines have also added higher fuel surcharges, pegging the price of air tickets to the price of jet fuel. What is MTI's assessment on the impact of sustained high oil prices on our industries and our economy at large? How could we prepare ourselves for a scenario where the oil price stays above the US$100 per barrel level? Singapore currently depends on gas as our main source of fuel to generate electricity. About three quarters of our electricity supply are generated from natural gas. Besides piped natural gas from our neighbouring countries, we have also diversified into liquefied natural gas with the construction of our LNG terminal. Is our current dependence on gas able to fulfill the level of energy security desired? What are the forward-looking threats we could face, and are we able to turn that into opportunities? Can the Minister give an update on our plans and progress to explore alternative sources of fuel, eg, the non-fossil fuel types? Energy Industry”
“Sir, in the last two years, the smoking ban has been extended to many public locations, including entertainment outlets. I applaud the Ministry for the move. However, enforcing the ban is another issue and there continues to be many complaints from Singaporeans about having to contend with second-hand smoke. The letters that were written to the Straits Times Forum page include instances of smoking seen in office buildings, public toilets, bus-stops, coffee shops and entertainment outlets. I even remember reading about people smoking in the Botanic Gardens. I would like to ask the Ministry if it has any plans to step up the enforcement of the smoking ban and how it rates its implementation of the smoking ban so far. Secondly, I would like to ask if the Ministry has plans to extend the ban to more public areas, especially those frequented by children, eg, outside childcare centres, kindergartens, and children's playgrounds. I think we should implement the ban on such areas straightaway. Children learn by watching the actions of the adults around them. The smokers are not just ruining their own health and others, they are also setting a bad example to the young and the impressionable children. Lastly, would the Minister give us an update on the Government's recent efforts to reduce smoking among the young? Does the Ministry have an estimate on the number of smokers and, if so, how many of these are young people and teenagers? Are we winning the battle to deter more young from picking up the habit?”
“I spoke to some architects and they told me about the nightmare of having to find hundreds of architects overnight, knowing too well that there may not be more projects to sustain them thereafter. They are concerned with the sharp boom and bust in the construction cycle. Even the local players I spoke to from the industry are not happy with the heating up of the sector. Construction costs have gone up by 20% to 40%, several big projects had already been hit. I welcome the Government's announcement to delay $3 billion worth of projects to spread out the construction demand. Can the Minister enlighten us on the basis of how these projects are being selected for rescheduling and how are the priorities determined? What more can be done to reduce the construction costs? Finally, I think it is important that we identify the blind spots which had prevented us from forecasting the construction activity and assessing the construction capacity more accurately. This would help us avoid future overheating in the construction sector. Sustainable Built Environment”
“Some of the major ones are the $20 billion worth of the new MRT lines; $2.5 billion worth of Marina Coastal Expressway; $2 billion healthcare infrastructure costs; $1.2 billion Sports Hub and various other projects. I was told it is now the case of the contract work chasing after the contractors. For example, I heard that there is now a severe shortage of piling contractors. There are piling projects where not a single piling contractor submits the tender. We also heard about the long waiting time for cranes. It is not surprising that most of the capacities are being committed to the two IRs and the other mega projects. While it is good and necessary that we are improving our overall infrastructure and attracting heavyweight investments, I am not sure that it is a good thing to permit so many construction projects at one go and to ramp up in such a short space of time. There are implications when we underestimate the construction capacity. Firstly, it leads to rising costs. We have heard that the Sports Hub has now cost us about 50% more to develop. Inevitably, the runaway construction costs would have an impact on the cost of upgrading to HDB and estate improvement programmes. Some of the essential facilities, such as the Khoo Teck Puat Hospital and community facilities, would also cost more to build. Secondly, quality. Now, more than ever, we have to redouble our efforts to ensure the quality of the projects. Contractors are now facing even tighter deadlines and having to manage even tighter costs and resource constraints. We have to ensure that they will not compromise on the quality. Thirdly, the tight labour markets. The industry is facing severe manpower shortage - the architects, project managers, contractors, sub-contractors, workers.”
“Sir, among the first parliamentary questions that I filed in this House in November 2006 was to ask the Minister for National Development whether there were signs of a bubble or potential waiting in the construction sector. The reason I asked that question was that the Government then had just announced going ahead with the two multi-billion-dollar Integrated Resorts. In addition, there were also various mega projects being awarded, like the BFC, Orchard Turn and some of the public projects. There was feedback from the construction industry that we will be facing a capacity bottleneck. The reply then was that the issue of construction bubble actually does not exist because the Building and Construction Authority has projected that the annual construction outputs would rise to between $14-$17 billion for the next few years, and up from the $12 billion achieved in the past three years. This is significantly lower than the peak volume of almost $20 billion achieved between 1997 and 1998. 6.30 pm Just 12 months later, BCA revised its official forecast for 2007's construction demand to between $19-$22 billion, up by 30%. In his recent speech, Parliamentary Secretary, Dr Maliki, mentioned the value for 2007 is actually $24.5 billion. He also said that the value would be even higher in 2008. We have allowed the pace of construction sector to pick up too quickly after the downturn in 2003 and 2004. Too many projects, all coming in a short span of time, had resulted in the construction frenzy and a severe bottleneck which is unhealthy to the industry and economy. And these heightened pace and activities are expected to carry on in the next few years, given the huge pipeline of projects in the next few years.”
“In some cases, HDB needs to be given more resources to investigate serious cases as well as the teeth to take errant neighours to task. Sir, I believe we can do more to promote neighbourliness in heartlands. Duties of Landlords in HDB Estates and Heartland Commercial Spaces”
“Many of our residents are not talking to their neighbours even though they may be just staying metres apart. A recent survey by Straits Times published last month also suggested that Singaporeans just do not know their neighbours well, if at all. Many of these neighbourliness disputes could have been prevented if residents already know their neighbours and some goodwill or friendship has been built up. I would like to ask the Minister whether the Ministry is satisfied with the state of neighbourliness in our HDB communities and whether there are plans to strengthen community ownership at the heartlands. Currently, the RCs play an important role in promoting neighbourliness within the estate through the activities they organised. Being a more visible resident-centric grassroots organisation, often interfacing with the residents, RCs can also play a mediating and reconciling role. However, as RC members are essentially volunteers and not everyone has the temperament to manage neighbourhood dispute, they would need some dedicated resource and support from HDB and the other agencies. Hence, I would hope that HDB or its regional office can work with the grassroots organisations to play a more active role to promote neighbourliness. And in situations of neighbours' complaints or disputes, HDB should have trained officers at the Branch Office dedicated to support the RCs in this regard. Having received numerous complaints from residents over the years and knowing many of the errant behaviours, perhaps HDB could compile a handy guidebook to tell residents how to be good neighbours and publicise them. It would help promote acceptable norms of good neighbourliness behaviour. RCs can also use this guide as a persuasive tool to help resolve some of the neighbourliness differences.”
“Sir, neighbourliness, or rather the lack of it, is one of the most frequent issues raised by HDB residents during my house visits. Among others, you hear complaints from residents about their upstairs neighbours causing noise nuisance during the sleeping hours or misgivings about their upper floor neighbours hanging wet dripping clothes in the afternoon or, in the case of the next door neighbours, obstructing the corridors with their shoe racks, bicycles or plants. Some even complained about their neighbours having noisy weekends playing mahjong or the smell of chilli "balachan " coming into their house and so on. Others complained about irresponsible pet owners or their neighbours being insensitive to them by hanging brooms near their doors. The list goes on. As their MP, I must admit sometimes I find myself quite helpless as to how I could help solve their problems or disputes. My grassroots leaders, the town council officers or the HDB officers can spend a disproportionate amount of time on the cases and still sometimes some remain unresolved. Each party will always have their side of the story to tell and, in some cases, it can come in a few pages of email. Some of these disputes have dragged on for many years and once in a while you will have some "incidents" or outbursts where, in some cases, the Police are called in. Often, by the time the matter is referred to the Community Mediation Centre (CMC), the relationship between the neighbours would already have become irreparable. A number of factors lead to some of these un-neighbourliness situation at our HDB communities. It is often the case of a few individuals being inconsiderate or showing total disregard for their neighbours. Another is the lack of communication between the neighbours.”
“Sir, the Marina Bay area will be the most vibrant and exciting live-work-play destination in Singapore or even in the region. Over the past few years, more than $9 billion worth of private investments have been put in at the Marina Bay area. Besides the new office places, like the BFC, which will come onstream from 2011 onwards, we will soon be seeing an integrated resort, high-end apartments, Gardens by the Bay, Marina Barrage, the rejuvenation of Collyer Quay and many other projects. This is in addition to the completed iconic Singapore Flyer, Esplanade and Fullerton Merlion Pier. This is an exciting prospect. It has been estimated that 50,000 people will be living and working in that vicinity. The Finance Minister has mentioned in his Budget Statement that there will be further developments at the Marina Bay in the next few years, and it will eventually double the size of our existing financial district. Would the Minister give an update on the development plans for Marina Bay, including the infrastructure to support upcoming and future developments? Beyond 2011, what is the Ministry's projection on the demand for office space at the Marina area? Will we have an over-supply situation of office and commercial spaces come 2011 and beyond? Also, what are MND's plans, if any, for the current Central Business Districts, like Raffles Place and Shenton Way, when the centre of gravity for the financial district is shifted to the Marina Bay? Sir, allow me also to declare my interest that I do work in Shenton Way. Land Use Planning”
“The Budget stance adopted this year also signals that we need to be prudent and thrifty. Earlier, I have mentioned that the Government adopts a strong Singapore dollar policy to curb imported inflation. However, the appreciation of the Singapore dollar cannot be taken for granted. Investor confidence is one key factor to determine whether the Singapore dollar will appreciate in the foreign currency market, in particular, the financial credentials of the Government. Therefore, I believe that prudent fiscal management will strengthen our credentials and all Singaporeans will eventually benefit from it. In conclusion, this year’s Budget is compassionate, prudent and farsighted, and it has achieved a good balance in these three areas. Although this year’s Budget is not a pill that will cure all problems, it is indeed a pill that puts our mind at ease. With this, Sir, I support this year’s Budget. *Cols. 873-880. 12.30 pm”
“This morning, one of my office colleagues even suggested that we should consider reducing the number of dishes served at wedding banquets and dinners from usual 10 dishes to eight dishes. Not only is it good for health, it also helps to cut down on food waste. He said, with some humour that, “this may even take some pressure off the hongbao inflation for wedding dinners”. This is for reference only, and I am not advocating that we pass a law to limit the number of dishes served during wedding banquets. In the next two years, the economic and inflationary outlook is uncertain and not optimistic. Therefore, I support the Government’s policy of being prudent in its Budget, and share part of the budget surplus by way of giving hongbao to the needy. This is so because high food prices are not our only concern. High fuel prices have also created uncertainty in the market. The US subprime crisis is likely to drag the US economy into a severe slowdown. This will have a direct impact on Singapore’s economy. A key factor behind this year’s surplus was the strong growth in the property market, where approximately $3.8 billion was collected from stamp duties on property purchases last year. This is unlikely to be repeated again. Budget surpluses are our precious strategic resource and we should not have a “must spent all” mentality. Rather, it is more important that we spend it the right way and distribute assistance to those Singaporeans who need help. The remaining surplus can still be used for rainy days in the next few years. Given the uncertain prospects of the economy, we should be cautious and keep our powder dry. This is in fact what a responsible Government should do.”
“Nevertheless, during this sensitive period of spiralling inflation, the Government agencies should not be ahead of the curve to increase its charges now. This may lead to the private sector and the various industries to follow suit and increase their prices as well. Therefore, I urge the Government to announce a one-year freeze in Government fees, including medical subsidies, as this will reduce inflationary pressure and further avoid a chain reaction from the private sector. Fourthly, to inculcate right values of frugality. Many Singaporeans are not prepared that the current high level of prices is here to stay for a while. According to the Financial Times report, food prices will hit a 30-year high. Factors affecting food prices include large-scale biofuel production, severe effects of climate change on agriculture, the emergence of developing countries, etc. These factors have affected total demand for food. Food experts warned that this round of food prices increases may be structural and prices will not fall in the short run. Therefore, Singaporeans would need to adjust and make changes to their lifestyle. Businesses are already doing so. For example, some retailers, like NTUC Fairprice, launched their own house brand products. These offer consumers some cheaper options and help them save money on their grocery bills. I hope more Singaporeans will consider these house brand products. Currently, the Government is also looking into diversifying our food sources. This is a very practical strategy. Take, for instance, frozen pork. The frozen food products can be a good alternative food source and it gives consumers another cheaper choice. We should support and promote this policy.”
“For instance, if we have too many mega construction projects all going on at the same time and the construction industry cannot cope with these numbers of projects, this will inevitably push up construction costs and add inflationary pressures. Eventually, the higher construction costs will be transferred through increased prices to the consumers. Take, for example, our future Sports Hub. The fund allocated for the Sports Hub has increased from $800 million to $1.2 billion. Hopefully, this will not mean that sports will cost more in the future. Therefore, I am heartened with the Government’s effort to moderate demand in the construction sector by deferring about $3 billion worth of developmental projects. The construction industry is enjoying its strongest growth and, as such, the Government has taken measures to mitigate the situation. Last year, the construction industry enjoyed a strong growth of 20.3%. With limited capacity and foreign workers to fill the gap, any increase in demand will lead not only to unnecessary increase in prices but also an increase in construction costs. Thirdly, the public sector should exercise restraint in not increasing the prices of its services. Social services such as medical services, tertiary education, JTC rental services, etc, are provided by the Government or its agencies. Therefore, the Government should refrain from increasing the fees, and to delay price increases, if possible, so as not to add to the already rising inflationary pressure. I am mindful that many Government agencies are already charging a fee on a cost-minus basis and their fee revision is lagging behind the market.”
“Besides giving direct financial assistance to the needy, the Minister for Finance has announced a four-pronged strategy to deal with inflation and its long-term challenges, namely, exchange rate adjustments, diversifying food sources, home ownership and, in particular, strengthening our competitiveness in the long run. To achieve sustainable growth, it is critical for us to increase our competency level. By increasing competitiveness, we will have more opportunities, thus more income for the people to cope with inflation. On this note, I would like to make a few points. Firstly, strengthening of the Singapore dollar. All this while, we have allowed for an appreciation of the Singapore dollar to reduce imported inflation. This has been an effective strategy. If we had not pursued a strong Singapore dollar policy, our inflation would have been higher. However, a strong currency will reduce export competitiveness and it may also affect the tourism industry. The Singapore dollar appreciation will also tend to lower interest rates, which means lower interest income for savers and reducing their purchasing power of their savings. A robust economic growth will allow for the currency to appreciates, but if the Singapore dollar continues to appreciate while the economy is slowing, this will translate into slower growth in the labour market and eventually result in lower wages and employment. Therefore, appreciation of the Singapore dollar is not an option that is always available to us. Secondly, to curb growth in domestic demand. Inflation in Singapore is affected by the rise in global inflation. However, some of the inflationary pressure also originated from strong domestic demand.”
“And I can understand their predicament, as the saying goes “Min yi shi wei tian" (民以食为天) - people regard food as their primary concern as food is the first necessity and, as such, there is nothing more important than filling one’s stomach, and to ensure that one’s family gets three meals. For many years, we have enjoyed low inflation rate. Through economic reforms and open economic policies, China, India and other developing countries have increased productivity substantially, flooding the global markets with cheap manufactured goods. But the world is different today. With its emergence as an economic power, China has become more affluent, and this equates with a higher consumption power on the world stage. The country has shifted from being the largest exporter of goods to also one of the the largest importer. Domestic demand has been growing in China, with strong demand for resources such as steel, fuel, food, etc. This has contributed to a rapid increase in oil and energy prices. As such, China today no longer helps in keeping world inflation at a low level. In fact, with its strong domestic demand, it is also one of the causes of the inflationary pressures world-wide. Therefore, I am relieved to learn that, in this year’s Budget, besides investment in our future competitiveness, the Government has also implemented a series of practical assistance packages to help the people cope with inflation.”
“(In Mandarin ): [For vernacular speech, please refer to Appendix A *.] This year's Budget was announced by the Finance Minister in the midst of Singapore’s rising inflation. Like many developed countries, Singapore faces the challenge of soaring inflation, in particular, fuel and food prices are dramatically higher. When I met residents in the constituency, some residents will feed back to me about the rising food prices, such as for bread, butter and vegetable oil. They have no shortages of real life examples to share as to how they are struggling with rising food costs. According to the Financial Times, the global economy is facing a second wave of food inflation after the United States Agriculture Department warned of significant falls in stocks of corn, wheat and soya bean. Officials forecast that US wheat stocks would shrink to their lowest in 60 years, and the US is the world’s biggest exporter of wheat. Soft wheat prices on 15th February 2008 rose to a new high of US$19.88 a bushel, three times higher compared to last year. In the United States, the bakery sector urged the government to curb wheat exports. Corn and soya bean stock prices have also reached a new record high. Rising prices for wheat, corn and soya bean will force up feedstock costs for farmers, leading to higher meat and poultry prices, including pork, beef and chicken, for consumers. Through feedback from residents, I can sense that rising cost is currently the most pressing concern.”
“Sir, I would like to ask the Minister whether the current approach of bundling the profitable and non-profitable routes for the bus operators is the best way to go, given that we are still seeing feeder bus services running at intervals of 30 minutes or more. Contrary to what the Minister has said earlier, we do have feeder bus services that are running at intervals of 30 minutes or more in Bukit Panjang Town, for example. I do not know whether it is a case of the bus operators just doing the bare minimum for some of the unprofitable routes. If that is the case, then it is going against the key thrust of the transport review, which is to make public transport the choice mode of travel.”
“Sir, I would like to ask the Minister, given that our economy is now a lot more globally orientated and that external shocks impact us beyond our control, will the Ministry now adopt a more pre-emptive as well as a benefit-of-the-doubt approach in granting short-term social or bridging assistance so that Singaporeans faced with immediate or unforeseen difficulties financially will not sink even deeper into a financial crisis and, therefore, create other sorts of problems, such as having to sell their flats and so on?”
“I hope that MND can also come up with a scheme for these private apartment dwellers, some of whom may be located in or near the heartlands. Never mind if the subsidy is a smaller amount as it is sometimes the thought that counts. The Government's policy on upgrading has thus far served Singaporeans well and our physical living environments are constantly being improved and upgraded under the various programmes. An HDB survey in 2003 showed that 95% of the households that underwent upgrading were satisfied with the programme. We have seen with our own eyes how many of the older estates now have a fresh lease of life. However, 15 years into the upgrading programme, it might be timely to also review if our upgrading policy has served the social aspect of bringing our residents closer together. Building community ownership and inculcating community spirit should form part of the objectives of our upgrading programme. The upgrading exercise, which involves significant resident participation, is an excellent opportunity to build stronger neighbourliness among residents and a stronger sense of identity and ownership. There should be sufficient avenues for resident participation and the process more closely blended with the grassroots organisations. I believe we can do more to extract more social capital out of our upgrading programme. Mr Speaker, Sir, I support the amendments to the Bill.”
“Could the Government maintain both programmes, that is, to have HIP to address the wear and tear problems of flats and yet retaining MUP for older flats that still make better sense to do a MUP, including space adding features, and so on? One of the reasons cited when the Government implemented the MUP in the nineties was that we want to retain the vibrancy of our older estates and that we do not want our flats to become "old folks home" where the young families shy away. I believe MUP still has its value and usefulness for some selected flats and should be retained. It may cost more to both residents and the Government but, if the budget permits and the residents are in favour, we should still retain it as an option. For example, for some of the older flats where SERS is not a viable option, MUP could be the next best alternative to up the quality of the flat and precinct. I hope the MOS can shed some light on the Ministry's thinking as we make this amendment to the Act. Allow me now to push the envelope a little further. For the HDB dwellers, the Government has a set of very comprehensive upgrading programmes to improve our HDB living environment. LUP, HIP, NRP and SERS are all admirable programmes for our citizens who live in HDB towns. For landed private estates, we have the Estate Upgrading Programme (EUP) to improve the older private estates and enhance their living environment. But for a group of Singaporeans who live in private apartments and condominiums, there are to date no direct programmes that assist them in any improvement works. Some of them are not able to enjoy the attractive HDB offerings, as described by MOS earlier on, because their monthly household incomes are more than $8,000.”
“I urge the HDB to be more generous in its classification of the essential improvement items and to include items, such as replacement of aluminium window frames, fire safety features, energy conservation items, replacement of air-conditioned unit supporting frames and accessibility features for the elderly or disabled. These items, if left optional, will probably be opted out by residents as they have to weigh the costs and other choices available. There were also questions as to how HIP will be implemented. For some deserving estates, for example, flats that are in need of both internal improvement works as well as precinct improvement works, would the HDB allow both the HIP and the NRP to be done at the same time? MUP was implemented in the 1990s as part of the asset enhancement policy to increase the value of our homes and, in a way, to share the economic wealth of the country by increasing the value of our assets. Under MUP, flats that are basic and spartan are being transformed through flat, block and precinct upgrading, giving the older flats a fresh look and better ambience. HIP, on the other hand, is more maintenance in nature and hence would have lesser enhancement value to the flat owner. In fact, for some of the improvement works, like ceiling leaks, HDB already has an on-going scheme to co-share some of the repair costs on a goodwill basis. By replacing MUP with HIP, does it signal a change in the Government's policy on asset enhancement for HDB dwellers? Is the high cost of MUP the key reason why the programme has stopped? Or is it simply a case of MUP losing its appeal over time?”
“However, it is also not only in flats that were built before 1986 that experience these problems. Even some flats that were built after 1986 do have such seepages or ceiling leakages. I have seen fairly recent flats in my precincts where my residents have to contend with this problem. Hence, even as we implement this HIP, I hope that HDB could also look at ways to strengthen the quality control of our new HDB flats and take the contractors to task for any instances of poor workmanship. Like the LUP, which the Government targets to complete for all eligible flats by 2014, I hope that the Minister can also set a HIP completion target date for the 200,000 flats that were identified by PM in his National Day Rally speech last year. Our tropical wet climate can be very harsh on buildings and building materials, even though of good quality, never mind buildings with defects. Residents would appreciate repair works done in anticipation of deterioration, rather than waiting for the problems to worsen and cause all kinds of inconvenience before attempting to fix them. Hence, I hope that the Government would also consider extending HIP for flats built after 1986, if the flats' conditions warrant such improvement works to be done urgently and in totality. Under the HIP, we have two categories of improvement, namely, the optional improvement items, which the lessee co-pays a small percentage depending on flat size; and essential improvement items, which will be fully funded by the Government.”
“Mr Speaker, Sir, the Home Improvement Programme (HIP) is welcomed, much appreciated and, as some said, long overdue. It is much more practicable and it is targeted at areas that matter most to the residents. The slightly higher proportion of Government subsidy, coupled with the lower overall cost outlay, as compared to MUP, certainly makes HIP more affordable and increases its attractiveness. Amending the Act to allow polling for the HIP to be conducted on a block basis, rather than on a precinct basis, is more flexible as well as more manageable in terms of securing consensus among a smaller group of residents. Hence, depending on the condition of each block, residents can better decide on what they need and want for their homes, instead of being bounded by the decisions of residents in other blocks, which may bear no semblance to theirs, even though they are in the same precinct. Allowing residents to opt out of items they do not want is also a more equitable and practical move. The upgrading can then be tailored to meet specific needs and avoid the situation of over-providing. This amendment is certainly an improvement on our current legislation. This HIP is overdue and, in fact, urgent for some flats, as perennial ceiling leakages, seepages and spalling concrete are common problems faced by these residents. I am glad that the Government has identified those flats that were built in the eighties, up to 1986, as there were cases of poor workmanship when HDB mounted an ambitious programme to build a large number of flats within a short span of time to meet the housing demand then. It is therefore very gracious and thoughtful of the Government to acknowledge this and identify these flats as the priority batch.”
“In this case, the lucky number is 85, of course. He said that if you live beyond 85, it is as good as striking lottery and you get the payout. Of course, the chances of striking a lottery at 85 is a lot higher and increase by the year. So I would prefer to see the compulsory annuities as a hedge against the big unknown, ie, whether you will live beyond 85. While many countries have already started annuities scheme and some, like Switzerland, are doing it as a compulsory scheme, the annuity concept is new in Singapore. Singaporeans need some time to better understand the concept and would need more details, such as the amount of the premium and the payout, to be convinced. I believe, over time, and with more details made known, many would see the benefit and even be prepared to buy more. As a society, we should increasingly move towards allowing for choices and individuality where possible. We should try to keep as few things compulsory as possible. We already have a national compulsory savings scheme that takes care of our citizens' needs up to 85 years of age. Beyond 85, let us give education and persuasion a chance and at the same time strengthen the family values as a second line of support for a secure retirement. I believe the significant airing of this issue of longevity risk, following PM's National Day Rally speech, has raised the awareness of the problems and would get Singaporeans better prepared for old age and better prepared to live longer. 6.56 pm”
“Both the CPF funds and Government bonds are also risk-free, and such market-determined returns are more sustainable to the Government in the long run. On the issue of compulsory annuities scheme, we have heard the strong ground reactions, as expressed by many Members in the House. Much has been said. Many Singaporeans take issue with the scheme being made compulsory. Are we too trigger-happy to make this scheme compulsory? For argument's sake, one may think that the MediShield coverage, for example, may be of a more immediate need and, therefore, have a stronger reason to be made compulsory than the annuities scheme which pays interest only after 85 years of age. Perhaps, a more palatable way to implement this would be to repackage our 1% bonus interest for the $60,000 in such a way that, for example, the 0.25% of the 1% can be used to pay for the longevity insurance. I am glad that the Government is not rushing into the scheme and would form a committee to consult widely on the structure of the scheme, and that the compulsory annuities are for those who are now below 50 years old. Indeed, this is not something we need to turn around in a few months or even in a year. In the meantime, we should encourage more Singaporeans to voluntarily sign up, including many housewives and the self-employed, who may have no CPF or low CPF. We should allow top-ups from relative's CPF accounts to buy such annuities. I do believe that a lifelong annuity is the way to tackle the longevity risks. One of my grassroots leaders likens it to a compulsory lottery. It is like buying Toto. You throw in the money into the pool and at the end of the day somebody would strike the number and take the money from the pool, which belongs to everyone else.”
“Hence, I was initially a little disappointed that the Government has decided to do away with 4% or the 1.5% over CPF rate, and going forward would be pegged to a long-term bond yield. A colleague of mine actually said that the 4% is too good to last. But having heard the Minister's announcement a while ago on the new peg, I think the new scheme looks fairly attractive as well. The 1% mark-up, added on to the 10-year bond yield to project a 30-year yield, looks reasonable, given the flat Singapore interest rate yield curve. The 10-year bond is also well traded and, using the one-year average daily yields for the computation, should smoothen out the volatility. As the bond market develops over the years, I hope the Government will also review the other tenures of the bond to be included in the benchmark, perhaps with different weightings. That would make the benchmark more representative. Having a floating benchmark is good as well, as the bond yield tends to move along with the inflation rate, so maintaining the purchasing power of the savings in the CPF. Sir, I welcome the Minister's assurance also to hold the 4% floor for two years. All in all, I would say that the new scheme is still fairly generous. Unlike the OA funds where members withdraw at the age of 55 and can use the money at their own free will, funds from the SA, which are meant to take care of members' financial security from 65 to 85, should have a more steady return. Fundamentally, I cannot disagree with the principle of pegging the returns of SA to a long-term bond yield. In terms of tenures, it is a better match, as the SA funds are also meant for long term.”
“Hence, a higher CPF OA rate would end up raising the HDB loan rates and thereby increasing the interest burden for the first-time HDB home buyers. So I am glad that Government has kept the HDB concessionary loan rate unchanged even with the additional 1% bonus interest. However, going forward, I hope that the Government can look at de-linking the two as the transfer pricing may be seen as unfair to one side. Given this prospect that the OA rate is unlikely to rise much any further, CPF would need to facilitate and make CPFIS even less cumbersome so that members can have the option to seek higher returns elsewhere. It should be made simple and worthwhile even for members with small OA balances. As a national savings scheme, I feel that CPF could play a more active role to strengthen the financial security of the members. CPF should be more than a gate-keeper in screening investment products but also play a more direct role educating the public on investment risks, the principle of "no free lunch", the need to diversify, and the use of insurance to manage risk. I join the many who have called on the CPF to play the aggregator role to place the members' funds out for investments. Besides the benefits of economies of scale, CPF can value-add by offering its members various investment plans that offer different risk-return profiles. The members would then choose the investment plans based on their individual risk appetite and, thereafter, live with the outcomes. For the SMRA, I welcome the Minister's announcement to peg the return to a 10-year bond rate plus 1%. From a comparable risk-return standpoint, many would agree that the minimum 4% that the CPF Board pays is attractive.”
“But it is certainly not withdrawal-on-demand for members' other liquidity needs, such as to pay for a large unexpected expense, or can be tapped upon for GIRO payments. Members would only get to see their savings at the age of 55, after setting aside the Minimum Sum. Depending on the investment strategies of CPF, a significant portion of the funds would have been invested for a longer horizon, ie, greater than 12 months. Hence, for a compulsory savings scheme, it can be argued that to give up this flexibility and liquidity for their savings, members deserve more than a 1-year deposit or savings rate return. Moreover, savings rates tend to be much lower than the deposit rates, and I suspect it is the reason why the weighted rate has been staying below the 2.5% floor rate for many years. I suggest that the CPF also explore other benchmarks to peg the OA rate, such as the Singapore Interbank Offered Rate (SIBOR), which is a more transparent market benchmark. I must, however, also credit the Government for keeping a floor rate of 2.5% for the OA, as this is of some intrinsic value to members, especially in times of low deposit rates. I hope that the Government will continue to keep the floor as a key pillar of the risk-free framework. It is essential for a national pension scheme to have that risk-free framework. In all fairness, we should also recognise that the CPF savings earn a Government-guaranteed risk-free return while the returns from bank deposits tend to be of slightly lower ratings. The comparables would be the Treasury Bills or Singapore Government Securities, which do yield above the 2.5% from time to time. We know the problem of tinkering with the CPF OA rates. Under the current scheme of things, the HDB concessionary loan is pegged to the CPF rate.”
“Mr Deputy Speaker, Sir, I welcome the bold moves by the Government to push ahead with further reforms to improve our retirement adequacy and to encourage our people to work longer. Allow me to first focus on the changes to the CPF interest rate. Under the CPF Act, the CPF Board pays a minimum interest of 2.5% per annum for the Ordinary Account (OA) when the CPF interest formula yields a lower rate, which is the case in the present situation. The formula is based on the 12-month fixed deposit and the month-end saving rates of the major local banks. The SMRA accounts would earn additional interests of 1.5% above the OA rate. There has been extensive debate within and outside this House as to whether this is a fair return. CPF members would obviously want a higher return while the CPF Board would have to satisfy itself whether the interest paid is sustainable in the long run. The 1% bonus interest for the first $60,000 in the CPF combined accounts is certainly welcomed. The targeted approach, with a cap of $60,000, makes sense as we want the extra budget resource to be channelled to the lower and middle-income Singaporeans. But can the Board pay more? It is timely in the midst of this debate that we examine the basis on which the Board pays the interests. This is also the subject of discussion in the dialogue sessions with my grassroots leaders and residents. The Minister for Manpower has said earlier that the Ordinary Account is a withdrawal-on-demand account and therefore interest should be pegged to a fixed deposit and savings rate. It may well be a withdrawal-on-demand account for the purpose of CPFIS or for the purchase of property.”
“The amended Act makes the distribution of assets between two former spouses more equitable and timely, particularly in the many cases where the ex-spouse is the party who makes greater non-monetary contributions to the household. In most cases, they are the women - the wives and the mothers - who have given up their career and financial opportunities in the prime of their lives to take care of the young and the elderly. How do we evaluate their contributions in monetary terms? If we try, I suspect many families may not be able to afford the dedicated services diligently performed by our women. Their work is crucial to our family units and our nation. This amendment is another step in the right direction to acknowledge their contributions, and to support and protect them. However, I would like to voice my concern over the caveat that there is to be no leakage of CPF even as the CPF Act is amended so as not to obstruct the operation of the Women's Charter. Like the saying goes, "All happy families resemble one another, each unhappy family is unhappy in its own way." Likewise, each court-ordered division of matrimonial assets in a divorce is different in its own way. The cases that I have encountered in my meet-the-people sessions have shown how complicated and unique each divorce case can be. There is the possibility of divorce cases which involve some leakage of CPF monies if the division is to be fair to the ex-spouse, for example, in cases where the ex-spouse requires immediate cash to manage the transition period. In my opinion, it is far more important to be equitable than for the CPF Board to be hung up on a technicality. I hope that provisions can be made to provide for some flexibility. We should not be overly concerned with plugging every possible fund leakage.”
“Currently, to top up your family members' CPF Minimum Sum using CPF, your net balances in both the Ordinary and Special Accounts must be more than 1.5 times the prevailing Minimum Sum. The balance above that can then be used for the top-ups. This could also be another reason why the numbers of top-ups are low. Often, members would have a significant portion of their CPF amount used for the purchase of their property. As such, to have another net balance in the CPF account of more than the 1.5 times the prevailing Minimum Sum may be a challenge to most members. May I also suggest that CPF takes into account the amount of CPF funds used for the purchase of property in computing the amounts that are available for the top-ups. I do have one comment on the amendments concerning the division of CPF assets in matrimonial proceedings. I welcome the amendments. Presently, a court order to divide a member's CPF money between the member and the ex-spouse, in most cases, the woman, is enforced only when he is eligible to withdraw his CPF when he turns 55, and has set aside both his Minimum Sums. However, not every case of matrimonial asset division involves the distribution of CPF monies. So far, in most cases, the courts would order such distribution only when the CPF forms the main bulk of the matrimonial assets. We may deduce in such circumstances that the parties are not wealthy people. With the divorce, the ex-spouse's financial situation is usually worsened. The delay in the distribution of CPF monies to the ex-wife may have a negative impact on her financial security and, in addition, prolongs her suffering, preventing a clean break. So, I applaud this improvement to our current legislation.”
“One way the Ministry can look at is to use the contribution cap for the Supplementary Retirement Scheme (SRS) as a reference. The SRS contributions cap is determined by multiplying the appropriate SRS contribution rate and the absolute income base. For members who have not made contributions to SRS and hence have not yet enjoyed the tax relief, we should extend this full quantum of tax benefit to them as well when they top up their family member's Retirement Account or Special Account. These top-ups are in line with SRS' objective, which is to encourage Singaporeans to save more for their old age by means of voluntary contribution, even though it is not for themselves. I understand that the number of such CPF top-ups is low. Perhaps, the current tax reliefs are just not attractive enough to get members to use the CPF as a vehicle to render support to one another. Secondly, I also urge the Ministry to explore additional forms of benefits or incentives for members to use funds from their CPF accounts to top up their family members' Retirement Accounts or Special Accounts. I understand that members already enjoy tax relief from their individual CPF contribution. However, to get members to take the next step of topping up their family members' accounts so as to strengthen their financial security during retirement, we not only need education but also direct incentives. I like the D-bonus and V-bonus announced by PM during the National Day Rally. Perhaps, we could consider a T-bonus, which is a Top-Up bonus, to encourage family members to help their less well-off relatives to enhance their retirement savings. It may work. Thirdly, I hope that the Ministry can also look at lowering the 1.5 times prevailing Minimum Sum amount before such top-ups are allowed.”
“Sir, I rise to support the Bill. First, I would like to address the issue of expanding the Minimum Sum topping-up scheme. I support the idea of allowing CPF members to top up the accounts of their grandparents and siblings. This is consistent with the value system that we have been promoting where family is the next line of support. This amendment is also timely, as the CPF Minimum Sum will be increased from $99,600 in 2007 to $120,000 in 2013. This is clearly a significant increase, especially for members from the lower income group. But truth be told, how many CPF members or their families will do that? Most of us help our family members by giving them cash outright. Neither the giver nor the recipient would be keen to put that money away in a CPF account. It is far more convenient and accessible in a bank account. For those who plan ahead, they will purchase insurance policies for their loved ones. Sir, while the revised CPF rates are looking more attractive for some amounts and still unsure for the balance, I think we need to offer greater incentives, either in the form of tax benefits or higher interest returns, for this scheme to be utilised more widely. I have a few suggestions. Firstly, the tax benefit for cash top-ups. Like it or not, tax can be the most direct and effective way to shape behaviour. Currently, members making cash top-ups under the CPF Minimum Sum topping-up scheme will enjoy tax relief of up to $7,000 per calendar year. In view of the increase in the Minimum Sum as well as to further encourage such cash top-ups, may I suggest to the Minister to not only extend this tax relief to the expanded scheme but also increase the tax relief beyond the $7,000 cap.”
“Sir, the Minister mentioned about the low inflation environment. I would like to ask the Minister whether the CPI numbers have fully captured the rising cost, particularly in those items that reflect our population's now more affluent lifestyle. Secondly, in the Minister's view, will our business cost continue to rise in the coming quarters, given the supply bottlenecks that we are facing, particularly the tight labour market and the office space shortages?”
“Sir, I would like to ask the MOS whether it is a healthy situation to have large numbers of deserving Singaporeans who are not able to make it to the local universities despite their good grades and having to make their own arrangements, at their own expense, for overseas education or a private degree. Will that result in these Singaporeans being less rooted to Singapore?”
“Ms Eunice Elizabeth Olsen asked the Minister for Information, Communications and the Arts (a) what is the cut-off time for outdoor performances in non-residential areas on mainland Singapore and what is the rationale for the timing restrictions under the public entertainment ad-hoc licence; and (b) whether the Ministry will consider easing the timing restrictions for outdoor performances, especially musical performances located in a non-residential area, so as to make Singapore a more vibrant city.”
“Question No. 15, Sir. RAdm [NS] Lui Tuck Yew (for the Minister for Education): Mr Speaker, Sir, the Ministry of Education (MOE) publishes the syllabi of all subjects on the Internet. The Singapore Examinations and Assessment Board also publishes information of all examination subjects on its website. In addition, MOE invites Majlis Ugama Islam Singapura (MUIS) to attend briefings on changes in the ML syllabi and examination formats. For example, MUIS officials were present for the launch of the new Primary One to Four Malay Language Syllabus on 26th April 2007. We understand that MUIS shares the information with the madrasahs, which make use of our ML syllabus and textbooks to prepare their students for PSLE. The new ML curriculum provides for differentiated learning by students with different levels of proficiency in the language. Students with learning difficulties, including dyslexia, are being supported on a holistic basis by Special Needs Officers deployed in our schools and with expertise from relevant organisations like the Dyslexia Association of Singapore. In other words, the support is not limited to a particular subject, or, for example, the Malay Language, but to a whole range of different subjects altogether. Students with severe learning difficulties may also be given exemption from offering mother tongue language at national examinations. OUTDOOR PERFORMANCES IN NON-RESIDENTIAL AREAS (Timing restrictions) 16.”
“Are LNG imports the way to go to strengthen our energy resilience? The economics of importing gas currently still favours the piped natural gas. Hence, the Government has imposed import controls on PNG so as to build up demand for LNG to a sufficient base load for the terminal. Beyond this import moratorium, we should also consider other ways to reduce the investment risks of LNG terminals, including possible tax breaks and even a possible reserve off-take from the Government. My last point on this Bill: with this amendment and in the light of this restructuring in the gas markets as well as the entry of new player, is the divestment of gencos that was talked about some time ago still on the cards? How have all these developments impacted the financial ratings and valuations of these incumbent gencos? Sir, I support the Bill. 4.40 pm”
“When the Authority issues a direction to the owner of a gas infrastructure to provide open access, the directed party will be provided immunity against any legal action, or in relation to any breach of an existing contract as a result of complying with EMA's direction. I am all for open access and for it to be expedited and for EMA to be given the additional powers to rectify some of the legacy problems as it restructures the market. However, existing contractual interests with the incumbent players which were entered into on bona fide commercial basis earlier should not be completely disregarded. Singapore prides itself as a hub of excellence in many fields. Our reputation as a jurisdiction where long-term business commercial agreements will be honoured and the sanctity of contracts will be upheld, should be safeguarded. Businesses and industries look to this certainty and confidence to plan and make long-term investments. EMA should seek to settle these legacy issues amicably with the existing stakeholders and should only use or exercise the new powers as a last resort after exhausting all other avenues. My next point is on the liquefied natural gas (LNG). The decision to import LNG by 2012 as another alternative source of gas import is a reassuring one. Given our recent problems with the import of sand and granite as well as the piped gas dispute we saw between Russia and Ukraine, it makes very good sense to open up another source of gas supply via the LNG. By its nature, LNG imports are less captive than the piped natural gas (PNG) and therefore are also more price flexible. As the PNG contracts with our neighbouring countries will end somewhere around 2022, what would be the Ministry's strategies ahead to secure long-term energy supply for Singapore?”