Lim Hng Kiang
Singapore
“The company has made commitments to recycle the ash, and as for renewable energy, the gasification project is not an energy project, it is not a generation company (genco). It is to produce hydrogen and carbon monoxide or, essentially, carbon. Because as feedstock to the petrochemical sector, you need more C and more H2.”
“The Government will continue to recover the IIA awarded if the company fails any conditions or breaches the legislative amendments. I would like to highlight that there are no errant cases in the last five years for IIA and the current amendments are, therefore, not reactionary in nature, but are being made for legislative clarity.”
“In addition, the IIA scheme will be extended till 31 December 2022. Clauses 10 to 13 give legislative effect to this change. The remaining legislative changes arising from our periodic review of the income tax system are either administrative or technical in nature.”
“Data on household and individual savings rates by income groups are not available. However, data on the aggregate level of household financial assets can be obtained from the Household Sector balance sheet compiled by the Department of Statistics.”
“The aggregate level of financial assets owned by Singapore’s household sector6 in each of the past five years is provided in Table 1 below. Data on the amount of financial assets owned by households and individuals in the different income percentiles is not available.”
“The Second Review of the Comprehensive Economic Cooperation Agreement (Second CECA Review) is ongoing. The review is taking some time as both countries have our respective interests to work through, such as in the area of labour mobility. Our agencies regularly engage Indian counterparts to work through issues collaboratively.”
The complete record
Every one of 2,677 lines we hold for Lim Hng Kiang, in date order, each linked to its source. Free to read, in full, without an account. Page 10 of 54.
“Mr Speaker, Sir, we are still monitoring the default rates. As Members can well imagine, the loans that were taken up in end 2008 and 2009, ought not to be going bad so soon. So I think it is still too early to tell. We are still tracking the default rates. Suffice to say the rates so far still reflect pre-crisis levels but, nonetheless, we should expect the rates to go up as the loans progress. On the trade insurance premium rates – we recognise that the trade financing markets are still rather weak and that is the reason why we kept most of the terms intact. We have not changed the terms. The only thing that we have adjusted is the premium rate and this is to raise the premium rate from 15 basis points to 45 basis points. But Members must see this in context of the pre-crisis rate which was 75 basis points. So we are still very supportive but we must make that transition. We cannot keep the rate at the previous 15 basis points. PRIVATISATION OF POWER GENERATION COMPANIES (Benefits to Singaporeans) 2. Mr Viswa Sadasivan asked the Minister for Trade and Industry (a) how Singaporeans have benefited from the liberalisation and privatisation of power generation companies; and (b) whether competition in this sector has helped to reduce costs on a sustainable basis through the desired efficiency gains.”
“They are meant to facilitate viable companies, but with higher risk profiles, access credit. Companies with lower risk profiles should be able to access commercial lending to meet their needs, especially amidst the recovering commercial credit market. The scale back in the SRI and the various business and trade financing schemes have been primarily in the Government’s risk share, rather than to the eligibility criteria or type of loan facility supported. Based on the current profile of loans, the scaled backed business and trade financing schemes will still be sufficient to meet the needs of the vast majority of SMEs, for instance, the revised BLP loan quantum cap of $2 million is still sufficient for more than 95% of past SME loans. After the discontinuation of the SRI in 2011, SMEs will still be able to tap on the mainstay Government financing schemes, which were in place before the recession.”
“Mr Speaker, Sir, during the global financial crisis, financial institutions became more risk-adverse. To ensure that local enterprises have sufficient financial resources to continue to operate, invest, trade and internationalise, existing business and trade financing schemes were enhanced significantly in December 2008 and the Special Risk-Sharing Initiative (SRI) was launched during Budget 2009. These measures have been successful in alleviating the credit tightness. Since December 2008, more than 14,000 loans worth about $8 billion have been catalysed under both the SRI and enhanced business and trade financing schemes. More than 13,000 companies, of which more than 90% were SMEs, benefited from the schemes. The total amount of loans given was more than five-and-a-half times the loan amount given out under Government-assisted schemes over the one year period prior to the changes. With the improvement in economic conditions, credit conditions have eased. The major economies worldwide have stabilised and appear on the way to recovery. Nonetheless, we are cognisant that smaller companies, especially those in badly affected sectors, may still face difficulty accessing commercial credit. At the same time, there remain challenges in the credit insurance markets as well as in cross-border financing. We therefore decided to extend the SRI and enhancements to the business and trade financing schemes for another year until end January 2011, with some scaling back on lending terms. The one year extension will help companies adjust as the economy makes the transition from recession to growth. In the steady state, Government loan schemes are not intended to replace the commercial lending markets.”
“Nevertheless, Statistics Department will review these quality guidelines and formalise this set of guidelines for the various RSUs. Second, on informed consent and ethical issues raised – again, because we are involving the agencies, both the policy agencies as well as the statistical agencies, in the microdata panel, if requests for such data compromises the informed consent or ethical issues, then the agencies involved in collecting the data, can veto and not release the information. So that is the check and balance. Third point about how we can inculcate a conducive culture of evidence-based research – this is indeed our objective and we are taking these initial steps to release anonymised microdata in order to facilitate this culture of evidence-based research. But we do so in a careful calibrated manner. I think eventually we hope to have it extended to all important research agencies. For a start, we are extending this only to these agencies and the researchers appointed by these agencies. But once people gain confidence that even though we are releasing anonymised microdata, this is done very carefully and that confidentiality is safeguarded, then I think we can extend this to more researchers. I agree with her suggestion that there ought to be a good feedback mechanism, so that people feel that the data which they provided for various statistical purposes, are put to good use and that policies are increasingly based on proper research and proper evidence. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. – [Mr Lim Hng Kiang]. Bill considered in Committee. [Mr Speaker in the Chair]”
“Mr Speaker, Sir, first let me thank Mdm Ho and Prof. Straughan for their support of the Bill, and also to Ms Lim for raising some very important clarifications. Let me respond to the issues raised. First, on the microdata review panel. This will be chaired by Chief Statistician and will include all the relevant members from the various agencies providing the source as well as the policy agencies. This panel will evolve, and depending on the requests put up to the mircodata review panel, we will have the composition of the relevant people to review the requests, and also to scrutinise the mircodata that will be released. Ms Sylvia Lim asked whether by amending the Act, we have reduced the safeguards. The answer is "No". The amendment essentially formalises the current arrangement and, as I mentioned in my Second Reading speech, the Ministers who are responsible for the agencies that collect the data or that are in possession of the data, will have the power to exempt the sensitive information from being provided to the Chief Statistician. So the gatekeeper remains the agencies that collect the data, and the Ministers responsible for these agencies. So in the six agencies that she mentioned – CPF, IRAS, etc, – if the data is considered sensitive, the agencies and the Ministers can still exempt these data from being given to the Chief Statistician. Sir, let me next answer the three comments raised by Prof. Straughan. First, on the quality of the data, I agree with her that this is very important. I think the various statistical agencies are very concerned and they have international standards to abide by when they collect the statistics.”
“As a safeguard, the Ministers responsible for the agencies that collect, or are in possession of the data will have the power to exempt sensitive information from being provided to the Chief Statistician. Sir, I beg to move. Question proposed. 3.18 pm”
“DOS will set up two committees to implement these changes. A Microdata Review Panel will look at the technical issues on anonymisation and subject matter sensitivities and will scrutinize each request for microdata. An additional Microdata Advisory Committee will advise the Microdata Review Panel on policy issues and processes relating to anonymised microdata access. The proposed amendment will also increase the maximum fine for breaches of confidentiality, from $5,000 to $10,000, besides the existing provision for imprisonment for a term of up to 12 months. This serves as an additional deterrent to prevent abuse or misuse of anonymised microdata. Obtaining information from public agencies Mr Speaker, Sir, let me now turn to the second amendment and explain the rationale to explicitly allow DOS to obtain information from public agencies. DOS was established to collect, compile, analyse and disseminate key official statistics. To minimise the burden on respondents, DOS has been using administrative data already collected by other agencies, instead of requesting the same information anew directly from members of the public or private establishments. This is a common practice among the many National Statistical Offices. The proposed amendment makes it explicit that the Chief Statistician is allowed to obtain data from public agencies for statistical purposes. The data obtained will be protected under the provisions of the Statistics Act. This amendment will further strengthen DOS’ role as Singapore’s National Statistical Authority and will enhance DOS’ ability to provide more timely and relevant statistics to the Government and to members of the public.”
“In Singapore’s case, income and expenditure microdata from the Household Expenditure Surveys could be used to study the consumption behaviour of different household types. Such studies will complement analyses based on aggregated data, and provide greater insights to aid policy formulation. The proposed amendments will allow the Department of Statistics and gazetted RSUs to provide access to anonymised microdata for research purposes. We will however adopt a calibrated approach in opening up access to such data. To start off, only public agencies that require anonymised microdata for policy research will be allowed access to such data. These agencies can, on their own, engage consultants to undertake research using the anonymised microdata. To protect the confidentiality of individual data, all researchers, including consultants, will be subject to stringent security protocols. We will monitor this carefully. Access to a wider group, such as other research institutions, will be considered at a later stage. Protection of confidentiality Mr Speaker, Sir, I will now elaborate on the various safeguards to protect the confidentiality of individual data. DOS will anonymise the microdata before access is provided. In instances where it may not be possible to completely mask the identity of the individual party, such as in the case of industries with only a small number of firms, then DOS will not provide access to this information. To guard against any leaks, users will have to come to an on-site Data Lab at DOS or the gazetted RSUs to use the anonymised microdata. All data will be examined prior to removal from the Data Lab to ensure that only statistical tables and output without any anonymised microdata are taken out.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Sir, the Bill proposes two key amendments to the Statistics Act. The first set of amendments allow the Department of Statistics (DOS) and Research and Statistical Units (RSUs) which are gazetted under the Statistics Act to provide researchers access to anonymised microdata. The second set of amendments clarifies DOS’ legislative powers to obtain information from public sector agencies. Providing anonymised microdata access Today, DOS and the gazetted RSUs, collect, analyse and disseminate a wide range of socio-economic and demographic statistics. Under the existing Statistics Act, such statistics can only be provided in aggregated form. However, to undertake more sophisticated analysis of behaviour across different types of firms or households, researchers need access to microdata. Microdata refers to data on a person, household or establishment at an individual level. Many advanced National Statistical Offices (NSOs) like the US, the UK, Netherlands, Finland and Australia provide microdata in anonymised form, often masking the identity of the individual party by applying appropriate statistical techniques. Microdata analysis will help us better understand the impact of public policies or external factors on firms and households with different characteristics. In countries where microdata are available, researchers have used it for a variety of valuable and useful research. For example, researchers used anonymised microdata from the Canadian Labour Force Survey of Statistics to investigate whether the government’s mandated maternity leave had any impact on the labour force behaviour of mothers.”
“The low interest rates experienced in Singapore is a reflection of the overall global conditions. With most central banks and governments putting in fiscal support policies and looser monetary policies in order to address the recession and to aid in the recovery, I think it is a well-known fact that the world right now is currently facing fairly accommodative monetary conditions. I think that applies to us too. One consequence of this global liquidity is of course that the funds are looking for ways to be deployed, and assets in strong, regulated markets are very attractive. So it is not a secret that the property market and other asset markets in Singapore have more than its fair share of attracting such funds. EARLY CHILDHOOD EDUCATION (Making it compulsory) 5. Mrs Josephine Teo asked the Minister for Education whether there are plans to nationalise early childhood education and to make pre-primary education compulsory for all.”
“Mr Speaker, Sir, the gist of my answer was to reiterate that our overall regulatory posture has been proven to be appropriate. We started off more conservative than the other regulators and it turns out to be the right positioning. As a member of the international financial community, we have to recognise that the international rules will change over the next few months and years, and Singapore will have to position itself again within this new set of international regulations. There is a balance to be met in encouraging innovation, where innovation helps in the effectiveness and in reducing the cost of the financial system and, at the same time, not putting in place forces or measures which cause risk-taking to be taken to extremes. So there is a need for balance. But at the same time, we believe we are in a fairly good position to steer ourselves in this new environment.”
“Mr Speaker, Sir, our previous forecast that inflation will come in at between 2.5% and 3.5% this year, remains the same. On the contribution of the two IRs, they are only beginning their operations. We have to watch it carefully. When they submitted their proposals earlier, the estimate was that they would contribute between 0.5% and 1% of the GDP but this contribution would come about only when the two IRs are fully operational. So for this year, when they are only beginning operations, we can see that the contribution will be slower at the beginning.”
“These include enhancing customs clear ance efficiency, improving coordination among border agencies, forging greater multi-modal transport linkages and developing common technical standards such as in logistics safety. These practical measures will help businesses in a tangible way, and thereby boost growth and development in the region over the medium term.”
“There are many jobs available for Singaporeans, at the rank-and-file and PMET (Professional, Managerial, Executive and Technician) level. These jobs can be found across a diverse span of industries such as pharmaceuticals, clean energy, retail, food and beverage, hospitality, healthcare, aerospace, IT and finance. The Integrated Resorts coming up this year will also be recruiting. Let me now address the question of how APEC can help to spur growth and development in the region. As Chair of APEC last year, Singapore played a key role in practical initiatives to promote growth, boost trade, and reduce business costs. To improve the business environment in the Asia-Pacific, APEC economies agreed to make it 25% cheaper, faster, and easier to do business in the region by 2015, with an interim target of 5% improvement by 2011. APEC will focus their efforts on five priority areas identified by the business community, namely, Starting a Business, Getting Credit, Enforcing Contracts, Trading Across Borders and Dealing with Permits. The announced targets will translate into concrete gains for businesses. For example, it could cost on average up to US$450 less to import and export a container of goods in and out of APEC economies. The time taken to start a business within APEC economies could be reduced by one week on average. The Asia-Pacific is already one of the most economically open regions in the world. Gains will come not just from being more open, but being more connected. Hence the focus on improving supply chain connectivity. We started by identifying eight critical chokepoints impeding the smooth flow of goods, services and business travellers in the Asia-Pacific. We are now in the process of developing measures to address these chokepoints.”
“In addition, weak household balance sheets and persistently high unemployment, especially in the US, will weigh down on consumer demand in our key export markets. Growth in 2010 may also be derailed if "creeping" trade protectionism becomes more prevalent and causes global trade flows to contract again. But the likelihood of this scenario is low. Thanks to the public commitments and exhortations by forums such as the G20 and APEC, protectionism has been largely kept in check. The threat today is lower than it was at the start of last year. At the recently concluded APEC Summit, economies around the table reaffirmed their commitment to keep markets open and refrain from raising new barriers to investment or to trade in goods and services. Everyone understands the dangers of protectionism at a time like this. Peer pressure through APEC and other forums should help to keep under control domestic pressures for protectionism. Let me now turn to the outlook for the labour market. As we emerge from the recession, our labour market has stabilised. Overall employment expanded in the third quarter of 2009, a reversal from the preceding two quarters. Business and hiring sentiments have picked up in recent months with a greater proportion of companies expecting to increase their headcounts in the last quarter of 2009, compared to the earlier quarters. The number of redundancies has also dropped significantly in the third quarter compared to the first two quarters of 2009. The unemployment rate however is likely to stay up for some time, as it typically lags economic recovery. More updated information will be available when the Ministry of Manpower releases preliminary labour market statistics for the fourth quarter of 2009 at the end of this month.”
“Mr Speaker, Sir, my Ministry released the 2010 economic growth forecasts on 19 November 2009. We also released the advance GDP estimates for the fourth quarter of 2009 last week (4th January 2010). Based on the advance estimates, the Singapore economy contracted by 2.1% in 2009. This is in line with MTI’s forecast of a contraction of 2% to 2.5% for the year. The global economy is turning around. This has contributed to the upturn in our economy in the second and third quarters of 2009. In the fourth quarter, our economy saw a moderate dip as compared to the preceding quarter, due to a pull-back in the manufacturing sector. This, however, does not imply a return to recessionary conditions. Instead, it largely reflects a moderation in the pace of recovery after the exceptionally strong expansion in the previous two quarters. Compared to the fourth quarter of 2008, the economy registered positive growth, at 3.5%, in the last quarter of 2009. For 2010, my Ministry expects that the economy will grow by 3% to 5%. External demand will continue to grow, but at a sluggish pace. There will be some support from continued inventory restocking and a resumption in global trade. Domestically, the opening of new facilities for the chemicals and biomedical manufacturing clusters as well as the opening of the Integrated Resorts (IRs) will also provide a boost in 2010. The recovery in 2010 is expected to be uneven. The risk of a return to recession is low in the absence of further financial shocks. But growth momentum in the second half of 2010 may slow down as the effects of global fiscal stimulus measures and inventory restocking wane.”
“29 billion for IE’s loan schemes Column No : 1763 FUEL PROMOTIONS BY RETAILERS (Impact of traffic congestsions) 18. Dr Lim Wee Kiak asked the Minister for Transport in view of the traffic jams caused by Shell's fuel promotion on 24th October 2009 (a) what was the impact of the jams on the smooth flow of the public transport system; (b) how will the jams affect the Public Transport Council's assessment of the performance of the public transport system; and (c) who will bear the cost of penalties if they are imposed by the Public Transport Council. 19. Dr Muhammad Faishal Ibrahim asked the Minister for Transport in view of the fuel promotions by Shell on 9th August 2009 and 24th October 2009 which caused traffic congestion (a) whether there are any studies done on the impact of such promotional events on traffic flow; (b) whether the Ministry was consulted before the launch of the promotional event on 24th October 2009; and (c) whether the previous impact assessment was taken into consideration. 20. Mr Seah Kian Peng asked the Minister for Transport (a) whether measures were in place to ensure smooth traffic flows during the fuel promotion run by a major petrol retailing chain on 24th October 2009; (b) whether there were any contingency plans in place to avert the traffic jams that occurred at various parts of the island besides the deployment of auxiliary police officers; and (c) whether the Ministry considered the danger posed to bus commuters when bus lanes were taken up by cars queueing to get into the petrol stations.”
“IE Singapore’s International Partners Programme also helps companies form consortiums to complement each other’s product offerings and achieve economies of scale. Assistance is also given to industry associations through LEAD to augment the ability of SMEs to venture overseas. IE Singapore also assists individual SMEs in their internationalisation plans through its network of offices in 37 cities (1) across 21 countries. IE Singapore organises frequent industry and market-specific awareness seminars, fairs and missions to help SME identify opportunities for exports, overseas investments and joint ventures. On the whole, our assistance to SMEs has had a significant impact. To date this year, nearly $6.7 billion (2) of Government-backed loans, including those for internationalisation were extended to over 12,000 local enterprises, of which over 90% were SMEs. In addition, SPRING supported about 3,800 SMEs with $100 million worth of grants while IE Singapore supported about 2,000 SMEs with $27.3 million of capability and market access grants. To help SMEs grow, compete and expand overseas, the Government will continue to tailor its suite of assistance schemes to meet the needs of our SMEs. (1) Southeast Asia: Bangkok, Hanoi, Ho Chi Minh City, Jakarta, Kuala Lumpur. China: Beijing, Chengdu, Chongqing, Dalian, Guangzhou, Hong Kong, Qingdao, Shanghai, Xi’an. Asia Pacific: Taipei, Seoul, Sydney, Tokyo. Middle East: Abu Dhabi, Doha, Dubai, Jeddah, Riyadh. India: Chennai, Mumbai, New Delhi. Americas: Los Angeles, Mexico City, Miami, New York, Panama, Santiago, Sao Paulo. Europe: Frankfurt, London, Moscow, Stockholm. (2) $5.4 billion for SPRING’s loan schemes and $1.”
“SPRING Singapore is the agency in charge of SME and Enterprise development. It works together with IE Singapore to promote the growth of Singapore-based SMEs overseas. There are a host of assistance schemes to address the needs of SMEs from access to financing, to developing capabilities, and facilitating ventures overseas. Local enterprises can find detailed information on the assistance schemes on the EnterpriseOne website. Let me highlight just a few examples of the SME assistance schemes that are available. For SMEs that have difficulty obtaining loans from the commercial market, the Government works with the banks to provide working capital and secured loans through the Bridging Loan Programme (BLP) and the Local Enterprise Financing Scheme (LEFS). There is also the Micro Loan Programme, which provides working capital for micro-enterprises. SPRING and IE Singapore also run a comprehensive suite of capability programmes to help SMEs build up key competencies for long-term growth. For example, the Customer Centric Initiative (CCI) and Business Leaders Initiative support individual companies in developing and upgrading capabilities in service excellence and business management respectively. SPRING also works with industry associations, through the Local Enterprise and Association Development (LEAD) Programme, to improve industry-wide SME capabilities, such as technology and infrastructure improvements. The Government also supports companies venturing overseas through schemes such as the Loan Insurance Scheme (LIS) and Export Coverage Scheme (ECS) which provide secured loans for trade financing and insurance against buyer defaults, respectively. SMEs can also apply for loans under the Internationalisation Financing Scheme (IFS) to fund overseas projects.”
“Customers also play an important part in our overall pursuit of service excellence. A culture of service excellence requires active feedback and timely recognition. GEMS Up will encourage customers to play their part by showing their appreciation of service providers who have delivered good service. Collectively, with Government in partnership with the businesses and customers, our tourism industry will made a concerted drive towards increased customer satisfaction. Column No : 1761 SCHEMES FOR SMES (Financial assistance and Government incentives) 17. Mdm Ho Geok Choo asked the Minister for Trade and Industry (a) what are the schemes, financial assistance and incentives available for local SMEs and which agencies are involved or responsible for these schemes; (b) how many trade offices does Singapore have overseas and how have they performed vis-à-vis assistance rendered to SMEs seeking business opportunities in the countries concerned; and (c) what kinds of help and support are provided for SMEs in the human resource and training industry and for them to venture overseas.”
“Members will recall that we launched the "Go the Extra Mile for Service" (GEMS) movement in 2005, to encourage all Singaporeans to play their part and take the initiative to improve service levels, to work towards achieving an excellent service culture in Singapore. We recently launched Phase 2 of the GEMS national movement. Called "GEMS Up", Phase 2 aims to take customer satisfaction and service excellence in Singapore to the next level over the next three years. There are three areas worth noting in Singapore’s national pursuit of customer satisfaction and service excellence. First, we will promote the importance of good service and recognise good service providers as role models. STB launched the Singapore Service Star accreditation scheme in 2008 and, more recently, the Singapore Experience Awards to recognise the efforts of individuals and organisations that have contributed to making Singapore a distinctive and compelling experience to visitors. Second, we will develop and upgrade the service capabilities and skills in key service sectors. For instance, the Customer-Centric Initiative (CCI) launched in 2005, has assisted about 214 companies (representing 6,200 establishments and 172,000 workers) in their service excellence journeys through co-funding service improvement projects. SPRING is also developing a customer service toolkit to help companies develop new service systems and revamp their current processes. Third, we will continue to invest in human capital development across all levels. WDA will expand the Workforce Skills Qualifications (WSQ) programmes, develop more managerial level training programmes and introduce seminars and forums on service effectiveness management for business leaders.”
“In today’s competitive environment, it is important for businesses to understand the link between service excellence and customer satisfaction. Recognising the importance of this, STB, WDA and SPRING have developed the Customer Satisfaction Index of Singapore (CSISG) together with SMU, as to help businesses better understand their customers. According to the CSISG framework, firms should pay attention to factors such as the changing expectations of customers, product quality, service delivery and pricing, as these are all important factors that influence overall customer satisfaction. Based on this methodology, it is possible that while our firms improve on service delivery level, customer satisfaction may still drop because of changes in the other factors. Findings from the most recent CSISG survey released in October showed that despite improvements in service delivery and product quality levels, customer satisfaction levels in the surveyed sectors had fallen by a margin of up to 2.3 points in 2009 compared with 2008. This is a timely reminder for companies to pay more attention to the spectrum of factors that govern customer satisfaction, and our agencies will be sharing the CSISG survey findings with companies to help them understand the issues that drive customer satisfaction and possible measures to address the gaps. I wish to assure the House that the Government takes the issue of improving customer satisfaction seriously. We recognise its importance in maintaining Singapore’s competitiveness in the region, particularly in our tourism sectors, and we have taken active steps to support businesses in their drive towards customer satisfaction and service excellence.”
“Beauty pageants are run as businesses. The Miss Singapore World pageant for example, is a franchise of the Miss World Limited. Such events are essentially funded by sponsorships. An event that is badly run or whose prestige is affected will have difficulties securing sponsorship. One example is the 2008 Miss Singapore Universe. It received many brickbats for the Merlion-inspired dress. The negative feedback resulted in a number of sponsors withdrawing from the pageant. ERM World Marketing, the organiser for this year’s Miss Singapore World pageant, has reportedly faced similar negative reactions from its sponsors following a string of incidents related to its initial pageant winner. With the market discipline imposed by sponsors, there is no need for the Government to regulate such pageant. The Government, of course, cares about Singapore's branding. And events where there is international exposure can add or subtract from this branding. But how the world perceives us is not determined by a beauty contest representative. Instead international opinion is shaped over time, as a result of events of significance, by what we do as a country. HIRING OF FOREIGN COACHES (Governance) 33. Ms Joscelin Yeo asked the Minister for Community Development, Youth and Sports (a) whether his Ministry plays a part in governing the hiring process of foreign coaches at the national sporting level; (b) if so, what processes are in place to safeguard such coaches from being dismissed by national sports associations shortly after arrival and athletes from being affected by their new coach's dismissal; and (c) if not, what are the considerations for not stepping in to govern this process.”
“As a business location, Singapore offers a superior quality of living, world-class infrastructure, conducive business environment, and a flexible, high-skilled and open labour market. Global companies locate here because Singapore is their entry point into the growing Asian market. Singapore has been able to attract companies from different industries and geographies to establish substantive activities here in manufacturing, research and development, supply chain management and control tower functions. EDB continues to see a healthy pipeline of new projects and expansion of existing operations in Singapore from companies from all over the world, including the US. The Government will continue to monitor tax developments in the US. We will also continue to improve Singapore’s attractiveness as a business hub and a gateway to the region for both US and non-US companies. SPECIAL RISK-SHARING INITIATIVE (Effectiveness) 24. Mdm Ho Geok Choo asked the Minister for Finance whether the measures funded by drawing on the national reserves, such as the Special Risk-sharing Initiative, have been effective in shoring up our economy.”
“The proposed changes to the US tax regime, if implemented, is likely to result in an increased tax burden for US companies with overseas operations. But these changes will affect US companies’ operations not only in Singapore, but also in other countries. The exact nature of the tax changes is still being worked out in the US, and MTI, MOF and EDB are monitoring the developments closely. The proposals have led to a fair amount of debate within the US, and US companies have been active in giving feedback to the administration regarding the proposed tax changes. The eventual impact on US companies operating in Singapore will depend on whether the proposals pass through, and if so, in what form. The US companies themselves are also watching closely and studying the potential impact of the proposed changes on their operations. We are also in close touch with US companies in Singapore and relevant industry groups to hear their feedback. This is important as the impact of the proposed changes will likely vary across different industries, and will also depend on the specific situation of each company, including its corporate structure and the kinds of substantive activities it conducts in Singapore. We are concerned, but not unduly so. A competitive corporate tax regime is an important strength for Singapore but is not the only one. Businessmen, tax professionals, and industry analysts have repeatedly stressed that multinationals choose Singapore for a variety of reasons beyond tax considerations – including market access, cost effectiveness, collaboration opportunities, infrastructure, regional connectivity, access to talent, and political and economic stability.”
“But I would take Ms Sylvia Lim's point that in this episode, the financial institutions bear responsibility, but in some specific cases where the relationship managers have been responsible for the mis-selling, then this should also be investigated. INFLUENZA A (H1N1-2009) OUTBREAK 3. Mdm Cynthia Phua asked the Minister for Health in light of the current outbreak of Influenza A (H1N1-2009) (a) what is the charge for calling the designated ambulance service 993; (b) what can the Ministry do to lower the related charges including the cost of testing for Influenza A (H1N1-2009) and the cost of Tamiflu; (c) whether the Ministry has a recommended guideline for fees charged by neighbourhood Pandemic Preparedness Clinics; and (d) how can the Ministry help lower income families affected by Influenza A (H1N1-2009).”
“Mr Speaker, Sir, as I mentioned in my reply, the situation is more complicated. First of all, it is not the same situation in all the financial institutions. In some of the financial institutions, they assessed the risk of the product and they assessed it correctly. They had proper training for the relationship managers. They also had proper advisory process, for example, they had risk-profile taking and they did proper matching between the investment needs and the products. So we should not take a single approach to all of them because the institutions behaved differently, and some of the lapses are in the due diligence and in the implementation of the processes and regulations. Having said that, of course this is not an episode that we are very happy with. Having done investigation, MAS found fit to go beyond a reprimand and in fact banned the financial institutions involved from selling the structured products from a minimum of six months to a minimum of two years. Ms Sylvia Lim asked whether this punishment is appropriate because the market for such structured products has collapsed. Again, as I mentioned in my reply, the impact on the financial institutions goes beyond just the financial implications on the banks, it is also a big impact on their reputation. This move by MAS is unprecedented, as many analysts and commentators have observed, and I think the banks and the financial institutions take this very seriously. Having been given this report, and the shortcomings in the due diligence and implementation of the regulations pointed out to them, I think they will take all steps to restore their reputation. As to the actions against the relationship managers, this is under investigation, and it is premature for me at this point to say what the results are.”
“Mr Speaker, Sir, structured products like these started to be in the market around 2005 and then took off soon after that. MAS has done several surveys, for example, to monitor customer service, particularly in the sale of such products. In October 2005 to early 2006, for example, MAS conducted a mystery shopper survey of the financial institutions marketing investment products and MAS announced the results in 2006. In the mystery shopper survey, there were not many complaints that MAS uncovered. Similarly, in 2007, MAS conducted a survey of customers' responses to the service standards provided by banks and the financial institutions, and in that survey, the number complaining was not very significant. So MAS does regularly monitor the situation conducted over the counter, on the ground. During that period of 2006 to 2008, there were some complaints, but not a significantly large number of complaints in relation to structured products. But having said that, let me reiterate the context of this structured products episode in its entirety. As I mentioned earlier in my reply, when these products were marketed, many of the underlying institutions and the underlying securities were all well-rated, and this is an unprecedented event. If there was mis-selling, this was uncovered during the investigations. This was uncovered and dealt with on a case-by-case basis, and as a result, one-quarter of the complaints were refunded in full, another one-quarter had compensation of more than 50% of their underlying investments and another 17% had less than 50%. So two-thirds of the complainants (for the three banks and one finance company) had compensation given to them.”
“I am very conscious that I stand between Members and their going home, so I did not want to load them with too many charts, but that is a very important question the Member has raised. If you look at the share of employment – I will just read it out – local SMEs is about 45% share of local offered employment; local non-SMEs – meaning local big companies – is about 26%; foreign SMEs is about 12%; and foreign big companies is 16%. So Mr Seah Kian Peng is absolutely right, our local SMEs employ far more workers but remember, if they employ far more workers but they contribute the same value-add (VA), it means their productivity is much lower and, therefore, their wages are much lower correspondingly. And that is the key point that I want to emphasise – the VA of our manufacturing sector jobs are much higher than many of our service sector jobs. The VA of the big foreign companies and the foreign SMEs are much higher and if we curtail those jobs, in fact, we are not doing Singaporeans any favour at all. Column No : 669 Column No : 669 ADJOURNMENT OF DEBATE”
“As we are all aware, the buy-American provision was implemented on 17th February 2009 when they brought in the American Recovery and Reinvestment Act. Because of the very adverse reaction from the international community and from some of the US business groups, the buy-American provision itself went through several changes. The final formulation requires that it be applied in a manner consistent with the US obligations under international agreements, both under the Agreement on Government Procurement under World Trade Organization (WTO), as well as bilateral agreements. But as you know, agreements are only as good as you are able to enforce them. Recently, we already have reports from some of the states in the US which are implementing buy-American policies in their state procurement actions and this has caused Canada to be very concerned, and Canada and other countries are now taking action against some of these states. With regard to the proposal to tax US multinational companies' offshore income, I think, again, this proposal has raised a lot of concern, particularly from the US multinational companies. This is under review, so we will continue to work together with our partners in the US business community to make sure or to try and get the message across that changes like these will put the US companies at a great disadvantage. But it is still in the early days and we have to monitor this very closely.”
“But, more importantly, we need to understand the structure of our economy, the opportunities and also the constraints that we face if we want to develop a pragmatic and positive strategy for Singapore. I just want to end with a bit of caution that when we hear calls on Government extending assistance to local companies to help them compete and grow, that we do so in a way that do not make us appear protectionist ourselves. Members of Parliament here have warned or alerted the risks of protectionist actions by other countries, so let us not indulge in such protectionist policies ourselves. As we all know, some countries have argued for national champions and, under that guise, they have adopted protectionist policies. Singapore clearly cannot win in such a strategy. In addition, we have Free Trade Agreement (FTA) obligations. Whenever we sign an FTA, we fight very hard for our companies to be given most-favoured-nation treatment or national treatment. By national treatment, it means our companies are treated the same as the local companies in the countries that they operate. By most-favoured-nation treatment means that our companies are given the same treatment as other companies from other countries, so if they extend privileges to other companies from other countries, we get the same privileges. When we sign such FTAs, we are expected, in fact, to have the obligation to reciprocate accordingly. So, similarly, let us make sure that we do not end up out-of-bounds with our agreements. Finally, let me take the opportunity to respond to Mr Low Thia Khiang's question yesterday about the buy-American provision and also on the American tax measures.”
“The vast majority of our companies are small and, at the base, what we need is a very benign, very conducive, eco-system that allows new companies to be started up and how we can nurture them in the early building stages. In the middle of the pyramid, you have about 20,000 SMEs and for the SMEs, if you look at them in the different sectors, we have about 30 to 40 industrial sectors. Each industrial association or each sector has about 300 to 500 members. When we approach them sectorally, we are able to develop the strategy and we plan to develop the sector across the items, whether it is the money in financing support, whether it is marketing in promoting the products overseas, whether it is in training their management, their leaders, or whether it is in building up the technology, the know-how in making available our research and development efforts so that they can take full advantage of new technology in their development. At the peak of the pyramid, we have around 700 very big companies and these are the ones that we want to continue to help them grow and contribute to the economy. And I guess what many MPs would want us to do in Government is to see how we can target some of the companies in the middle range of the pyramid and try to grow them into bigger companies and we do have a strategy or plan for that, we call them Growth Opportunity Enterprises (GOEs) and how do we provide for and facilitate their growth. So this, in a nutshell, is our strategy and, of course, I have explained this several times, I thought it is useful to explain the challenges facing us. We have a big task ahead of us with ESC and we have to set the objectives.”
“It shows better representation of Singapore companies in the upper half, so it shows more Singapore companies participating in our services sector. Let me just highlight the two which are in the bottom half, wholesale and retail trade, we have seen a lot of Singapore companies. But in the wholesale sector, we have been very successful in the last 20 years in building up offshore trading, and this is the sector where, through the Global Traders Programme, we have now got a trading community of about 260 companies of which about one quarter are local and three quarters are foreign companies. But because of the three quarters foreign companies that we have, we have built up a critical mass, a very competitive trading community that other countries will find it very hard to replicate and is in fact very sticky, and we are able to retain that capability in Singapore. But to do that, you need to bring in foreign companies to build up the critical mass. You just cannot depend on the Singapore companies alone. Similarly, you look at the financial sector. Despite our very traditional role as the commercial and financial hub for this region and with strong presence of local players, we still need significant foreign banks and financial insitutions. Because of the liberalisation since 1998, we have been able to do so and, today, financial services contribute 11% to our GDP and has very strong potential and good prospects, again, through the combination of both local and foreign players. The final slide I have is to show, it is a rather crowded slide. It shows, in a nutshell, the challenges facing us and how MTI tackles them. Basically, we have about 120,000 local companies.”
“Here, the question that we have to ask ourselves is, if we want to promote the diversification of our manufacturing sector and if we are not prepared to embrace foreign MNCs in our strategy, then we must be prepared to lose out in very important competitive sectors such as biomedical sciences or petrochemical where our local companies do not have a strong presence. If we think about the future of the strategy that we want to adopt going forward, and we think of the new sectors that Singapore can compete well in, for example, renewal energy, I am afraid we do not have that many good Singapore companies building up in scale to play in that arena. So, we have been able to attract companies such as REC from Norway in solar panel manufacturing. We have been able to attract Neste Oil from Finland to build a 800,000-ton biofuel facility in Singapore. And these will be the queen bees that can allow us to build up a new sector, a very competitive sector in renewable energy. But if we are to wait for our own local companies to build up to scale, to size, then we may lose out in the opportunities of this sector over the next few years. The other sector that we are hoping to build up is environmental engineering. We do have significant Singapore companies in that sector. So we are working with them to develop this sector. And the third sector that we are targeting is interactive digital media. Again, we have Singapore companies, but they are fairly small, at this juncture, we need to bring in bigger foreign companies to add capability in that sector. The next slide I would like to show is on the services sector. In the services sector, I think you see Singapore companies being better represented, being more active.”
“It shows the role of the different companies that we have for the different sectors. So we are trying to drill down on sectoral basis. The first slide I want to show is on manufacturing. Essentially, if the sector is in the upper half, it shows that Singapore companies play a bigger role. If it is on the right hand half, it shows that SMEs play a bigger role. So if you are on the top right quadrum, then it means that the sector is largely dominated by local SMEs. Similarly, if it is on the top left quadrum, then it is the local big companies. If it is at the bottom left quadrum, it is the large foreign companies. If it is at the bottom right quadrum, then it is foreign SMEs. So in the manufacturing sector, as you can well imagine, the general manufacturing is dominated by our local companies, particularly the SMEs. So, here, you have the food manufacturing, furniture, printing, textile garments, and our local companies are able to hold their own in that sector. If you look at the top right hand column, in the transport engineering, we also have a very strong participation from our local companies, particularly, some of our bigger companies, whether it is the shipyards, like the Keppel and SembMarine, or in the aerospace sector, in the maintenance, repair and overhaul of aircraft, we have SIA Engineering and ST Aerospace, supported by a whole cluster of local SMEs. So that is on the top left hand quadrum. Precision engineering has a combination of both foreign and local SMEs. I guess what some MPs referred to will be the three other sectors like electronics, chemicals or biomedical sciences where the sectors are dominated by foreign MNCs.”
“You find that the economy has grown, as you have seen, to about $250 billion. In 2007, half of the contributions came from small companies and half came from big companies. Also, half of the economy, the contribution on the value-add came from foreign companies and half came from local companies. What is more remarkable in this breakdown is that, in fact, it is almost equal contribution. Among the SMEs, half of it is local and half of it is foreign; and among the larger companies, half of it is foreign and half of it is local. So our economy, in fact, is diversified as it can be. One quarter of the value-added comes from foreign MNCs; one quarter comes from local big companies, one quarter comes from foreign SMEs; and one quarter comes from local SMEs. This is a huge coincidence. It may not represent the ideal combination but, clearly, for some of the MPs who harp about the role of the MNCs, I just wanted to present this slide to show that conditions have changed quite significantly and that we should not hold on to the old stereotype picture that the economy, and particularly the manufacturing sector, is dominated by foreign MNCs. When you delve deeper into the data, you find that the increased foreign share of the GDP is largely due to our very successful efforts in attracting more foreign companies, particularly, SMEs or subsidiaries of big companies, to set up operations in Singapore. More importantly, these foreign companies do not just come from our traditional sources of the G3 economies, but they now come from a wider range of countries, from other parts of Europe, China, India and the Middle East. So Singapore now has an increasingly diverse and richer corporate landscape. The next slide requires a bit of explanation.”
“It drew experience from the success that we had in building up the petrochemical sector and, in fact, this is the approach that we take. We build up the cluster, we put in place a strategy and, within the strategy, we embrace both local firms as well as foreign firms to come and participate in that sector. The next slide addresses some of the points which Members have raised and it shows that by hitching on to external demand, it has, in fact, allowed us to enjoy a higher income growth over the last eight years. We have a small domestic economy, and we do external demand to build up our economy. In the last eight years, we have been very fortunate that the global conditions have been very benign. There was very strong global growth and, in fact, external demand has grown twice as fast as domestic demand, 10.6% compared to 5%, and we have benefited from this growth. If we had not pursued an export-led growth model, in fact, we would have foregone a significant amount of the growth over the past eight years Unlike other countries, domestic demand cannot replace external demand in our small economy. This means that we are more reliant on the health of the global economy. Our growth strategy may be more volatile but it also means that it can be higher on average than if we rely entirely on our domestic demand. So our strategy has been to try and capture the growth opportunities when the growth is good so that we have enough resources to ride through more difficult times. Let me now turn to the fourth slide, which is probably the most interesting slide, showing the changes over the last eight years. It shows that our growth has been driven by both foreign and local enterprises, and by both SMEs and the large companies.”
“In the next chart, I would like to highlight what happened in the manufacturing sector. The ERC highlighted the importance of keeping manufacturing and services as the twin engines of growth. We made a very conscious decision to keep manufacturing as a key sector of our economy. Unlike some developed countries which have experienced a hollowing out of their manufacturing sector, we have in fact successfully retained manufacturing at between 20% and 25% of our economy. I think Members will realise that Singapore is not a naturally manufacturing country. It requires a lot of effort to keep manufacturing as a key sector in our economy. We have made long-term investments in training, skilled science and technology manpower in our schools, in our universities, in our research institutes. We have also devoted resources to developing infrastructure in research and development and we are able to maintain manufacturing. The reason why we have done so, I think many of you are familiar – we do not just see manufacturing as an important sector in itself but also for its spillover effects and its linkages to the other sectors. I do not have to go through that with you. But I would like to highlight the changes between 2001 and 2008 is the very significant expansion of the bio-medical service sector. This was in line with ERC's assessment that we should diversify the manufacturing sector, reduce the reliance of electronics and build up other sectors, and that we have done. We have grown the bio-medical sector to contribute to a very significant part of the economy. The ERC recommended that we do not pick winners or losers, but adopt a cluster approach towards developing our industries.”
“I am afraid I am going to disappoint Members. There will not be any poetry in what I have to say. Yesterday, we heard the Prime Minister announced the setting up of the Economic Strategies Committee (ESC). This is a timely move because the last time we did a very indepth strategic review of the economy was in 2001 during the Economic Review Committee (ERC). It has been eight years since then. More importantly, the future environment that we are facing would be vastly different. The Prime Minister has outlined the tasks for ESC and has identified five areas for us to take a closer look. What I would like to do this evening is to review what has happened since ERC and, in so doing, I will like to address some of the key issues raised by some Members regarding the structure of our economy as well as the roles play by the different players, the multi-national companies, our local companies and the SMEs. I have asked the Clerk to distribute a set of charts. The first chart shows the performance of our economy in the last eight years, from 2001 to 2008. As you can see, Singapore has in fact grown faster than other developed economies as well as regional economies, while at the same time enjoying lower inflation. The ERC assessed that the Singapore economy has the potential to grow by an average of between 3% and 5%. Indeed, we have enjoyed better growth than that, about 6% per annum between 2001 to 2008. If you include the performance that we expect this year, even so the growth rate will be between 4% and 5% per annum over that period. Our GDP was $153 billion in 2001; now it is $257 billion. Even though we have enjoyed good growth, let me remind Members that we are still a very small economy, and this is a very important fact which I will refer to later on.”
“The investment promotion loans made by EDB, such as the Micron loan, are different: they are made under a standing scheme and subject to having in place satisfactory guarantee and collateral, rigorous cost-benefit analysis, and conditions designed to maximise economic benefits to Singapore. EDB’s use of a variety of tools for investment promotion has been instrumental in helping to anchor a range of manufacturing and services industries which have provided good jobs for Singaporeans over the years. CPF LIFE SCHEME (Administering the scheme) 21. Mr Siew Kum Hong asked the Acting Minister for Manpower (a) who will administer the CPF LIFE scheme; (b) how will the Government ensure that the payouts from the CPF LIFE scheme will be adequate for Singaporeans' old age, given that the actual payouts will depend on actual interest rates; and (c) what are the estimated refund amounts at ages 75 and 80 under the LIFE Balanced, LIFE Plus and LIFE Basic Plans.”
“Micron Technology Inc was awarded a S$300 million loan to facilitate further investment into TECH Semiconductor, its Singapore-based Joint Venture wafer fabrication plant for memory chips. The loan is a three-year loan, to be drawn down over one year and repaid in entirety at the three-year mark. The loan was made conditional on Micron investing in TECH an amount that is significantly larger than the loan quantum and Micron providing leading edge technology to upgrade TECH. The new technology will help TECH maintain its position as one of the most cost-efficient memory chip plants in the world. Micron’s investment will also generate significant economic spin-offs to the rest of the semiconductor industry in Singapore, and to other supporting industries such as semiconductor equipment and chemicals. The loan to Micron is backed by collateral that is worth much more than the loan. The risk of diminution in collateral value through action by Micron or TECH has been mitigated through appropriate financial covenants in the loan terms. The Micron loan was made under EDB’s existing scheme for targeted investment promotion, and was hence not disbursed through a bank. This loan is not a financial assistance measure for the economic downturn nor should it be compared to the Government’s risk-sharing facilities for loans made to local companies through the banking system under the Special Risk-sharing Initiative, or SRI. The SRI facilities are temporary and intended to facilitate the flow of credit to deserving companies facing a credit crunch in the current economic climate.”
“The national financial education pro gramme, MoneySENSE, continues to work with industry associations such as the Association of Banks in Singapore (ABS) to educate consumers on the importance of saving and prudent borrowing. ELECTORAL BOUNDARIES REVIEW COMMITTEE 12. Ms Sylvia Lim asked the Prime Minister whether he has appointed the Electoral Boundaries Review Committee and, if not, whether he intends to do so within the next three months.”
“This follows similar restrictions on unsolicited offers of credit cards that are already in place. This means that, with effect from 1st March 2009, financial institutions are prohibited from sending any articles – such as cheques – that an individual can use to draw down on an unsecured credit facility, unless he has requested for the facility in writing, or unless the unsecured credit facility has previously been granted to that individual. To date, the level of credit card debt level has also not deviated much from the historical average. The charge-off rate, which measures credit card debt written off by banks and card issuers, as a percentage of the rollover balance, has kept within the range of 3% to 4% over 2007 and 2008. There was a modest increase from 3.7% in Q3 of 2008 to 4% in Q4 2008. This compares with over above 8% during the SARS period. Credit card balances rolled over for a month or longer, which may indicate that some cardholders need longer than one month after due date to pay their credit card bills, averaged 15% in 2008. There was no noticeable increase in Q4 2008 from this full-year average. The 15% average for 2008 is comparable with the five-year average of 17% between 2004 and 2008, and below the 20% to 25% range recorded during the peak period between 1999 and 2003. Despite a slight increase in the ratio in January 2009, it is still too early to draw firm conclusions. MAS will continue to monitor these indicators. Mr Speaker, Sir, lenders and borrowers both have a role to play in ensuring the use of unsecured credit and credit cards is responsible, sustainable and within the means of the borrower.”
“Both Mdm Phua and Miss Low asked about the measures in place to regulate the credit card and unsecured credit lending practices of financial institutions (FIs). The unsecured credit rules are now applied in a consistent manner to both moneylenders and FIs. This is not a loosening of the rules. For the moneylenders, in fact, the new rules reflect a tightening. Overall, the new rules which set the annual income threshold for access to unsecured credit at $20,000 and the credit limit for this group of borrowers at two months their income, allow these Singaporeans modest levels of unsecured credit which they may need from time to time. They may also reduce the risk of such individuals turning to unlicensed moneylenders. Consistent with this objective, MAS has not lowered the minimum annual income threshold for credit cards, which remains at $30,000, as these are typically used to finance consumption expenses. MAS has introduced several measures to mitigate the risks of over-borrowing by individuals from all income groups. These include more explicit requirements on disclosure to customers of charges, rates of computation, and consequences of late payment with regard to these cards and facilities. Banks and card issuers are also required to conduct comprehensive checks with the Credit Bureau before granting each new credit or charge card, or unsecured credit facility. The credit report sets out the number of credit lines the applicant already has and his repayment record. FIs are expected to take these into account in deciding whether to extend further credit. Under the new rules, FIs are not allowed to make offers of unsecured credit facilities to customers, unless the customer has requested for these in writing.”
“Mr Speaker, Sir, may I have your permission to take Question Nos. 10 and 11 together?”
“Miss Penny Low asked the Senior Minister in view of the lowering of the minimum annual income threshold for unsecured credit facilities from $30,000 to $20,000 (a) what measures are in place to help ensure financial prudence on the part of both the creditor and debtor; and (b) whether there will be a danger of a sub-prime loans situation that affects heartlanders, especially given the downturn situation. Er Lee Bee Wah (Ang Mo Kio): Question No. 10, Sir.”
“Sir, as I mentioned in my reply, there is a due process and MAS is giving the financial institutions a chance to respond to its investigations. The final investigations should be completed soon. MAS will make a press release as necessary. On the consultation paper, as I mentioned in my earlier clarifications to Parliament, our approach to regulation of financial products remains the same. I think we want to be able to give Singaporean investors the choice that is available because there is a wide range of investors. It is not possible for us to be overly prescriptive, so we need to strike a balance. Overall, regulatory authorities all over the world have looked at what is happening and they have made changes to their regulations. MAS, being a responsible regulator, has also done so. It has collected views from all the stakeholders, put up the paper for consultation and we are now in the process of receiving feedback. This does not mean that MAS has been lax in its regulations. We do recognise that structured products have become more complex, the environment has changed, and, therefore, as a responsible regulator, MAS also has to make the adjustments. CREDIT FACILITIES The following Question stood in the name of Mdm Cynthia Phua – 10. To ask the Senior Minister (a) whether he will give an update on the number of credit card defaults in the past six months; and (b) whether MAS will ask credit card companies to refrain from using various gimmicks, such as giving out crossed cheques when they are in fact debit notes, to lure cardholders to spend. 11.”
“Sir, in our discussions with the banks, I think the banks understand the objective of the Government schemes. We do have a close audit of all the loans. We also have a general rule which we extend to the banks – that we do not expect to see more than 30% of refinancing loans. So 70% will be new loans extended to our companies. This is in the spirit of why the Government has these credit schemes in the first place – to be able to generate new credit facilities for our companies. It is with this understanding that we work closely with all the financial institutions. RETURNS ON RESERVES AND GOVERNMENT SPENDING 3. Mr Gautam Banerjee asked the Minister for Finance what are the additional amounts available for Government spending included in the revised estimates for the year ended 31st March 2009 and the budget for the year ending 31st March 2010 as a result of the constitutional amendment in October 2008 that now allows the Government to spend on the basis of total returns on relevant assets. 4. Mr Gautam Banerjee asked the Minister for Finance with regard to investment returns on our reserves (a) what are the key assumptions in computing the expected long-term real rate of return on relevant assets for the purpose of determining the total returns on these assets; and (b) how does the "expected long-term real rate of return" compare with the actual historical long-term real rate of return. 5. Mr Gautam Banerjee asked the Minister for Finance with regard to investment returns on our reserves, how he has satisfied himself with the reasonableness and fairness of the assumptions inherent in the computation of the expected long-term real rate of return on the relevant assets.”
“Mr Speaker, Sir, I think we have to go back to the fundamentals. The Government set up this Special Risk Initiative in order to help our companies and, therefore, we want to be as facilitative as possible. At the same time, of course, we cannot be granting blank cheques to all our companies. So there has to be a balance. On balance, I think we have taken a more facilitative approach. Sir, I do not have the specific number of the bank transfer loans because the banks, in evaluating the credit needs of the companies, may just extend part and may supplement with the Government loans or may terminate the loans. So there is no clear basis for collecting the data. What I can say is that from the indication that we had previously, the Government loan schemes that we extended were less than $100 million per month in 2008, so that over the year we extended about $1 billion. For the first three months of this year, our average loan approval rate exceeds $300 million. So it is already more than three times what we approved and disbursed. It shows that we are trying to be helpful and we are extending the loans. Of course, we have to be careful that the banks do not just transfer all their bad loans to the Government schemes. And here, we are in constant dialogue with the banks. Both MAS and IE Singapore follow the banks' classification of loans closely. And if the loan is already a non-performing loan, then, of course, the bank cannot transfer the loan to the Government schemes. But, on the whole, our attitude is that we try to be as facilitative as possible, and we need to strike this balance.”
“Mr Speaker, Sir, can I have your permission to take Question Nos. 1 and 2 together?”