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 15 of 54.
“Diversification of our supply sources is a general strategy, especially for food. Take, for example, the most recent increases in the third quarter where we saw a big increase in vegetable prices. This is largely because of the supply conditions in Malaysia and Indonesia. Obviously, if we can widen our sources of vegetable supplies to Thailand and China, this of course would mitigate the local supply disruptions that we face from Malaysia and Indonesia. On the other hand, if there is a worldwide increase in prices, for example, in corn feed, you will expect chicken prices to go up. Even though we are diversifying our sources of frozen chicken, not just from Australia and the US but also from Brazil - it is a very competitive source for chickens - but because of the worldwide increase in corn feed, we will expect even frozen chicken prices to go up. There is a certain extent that we can go in diversifying when it helps to mitigate local disruptions but, if it is a worldwide increase, I am afraid that we do not have that cushion.”
“Mr Speaker, Sir, as I have explained in my answer earlier, our CPI has been low for the first quarter and second quarter this year. The first quarter was 0.5% and the second quarter was 1%. It rose to 2.7% in the third quarter, and we expect the fourth quarter to be around 2.7% or even slightly higher. We expect the first quarter of next year to reach the peak of between 4% and maybe even 5%. This is because of the base effects of the first quarter of 2007 where we had very low transport CPI because of the changes that we made in our transport policies. We had low oil prices because in January/February 2007, oil prices were around US$50. By the end of this year and next year, we expect oil prices to be within US$90 or so and also because the effect of the GST increase continues on, as I mentioned, up to June 2008. We are aware that the headline CPI numbers will show an upward trend for the fourth quarter and also for the first half of next year. But we expect the trends to revert back to more normal conditions in the second half of next year. But even so, we expect the 2008 CPI numbers to be averaging around 3%. It will be higher than what we have been experiencing in the last few years.”
“Whether there is an increase in the cost of living for a particular household depends on that household's spending patterns. Switching to cheaper products can reduce the cost of living despite a rise in the CPI. Second, an increase in the CPI can sometimes reflect technical factors rather than an actual increase in prices faced by consumers. Take, for instance, the revision in annual value of HDB flats announced by IRAS this morning. The adjustment in annual values will translate into a notional increase in imputed rentals of owner-occupied HDB flats, and hence raise the CPI in the coming months. But as HDB flat owners do not pay rentals on the flats they own, they will not experience higher inflation as a result of this revision in annual values. One important way the Government helps to keep inflation low in Singapore is through our monetary policy, ie, the policy on the exchange rate of the Singapore dollar. In recent years, MAS has been maintaining the exchange rate on a modest and gradually appreciating path. This strengthening Singapore dollar has helped to reduce imported inflation. If we had pursued a different exchange rate policy, such as one pegging our Singapore dollar to the US dollar, Singaporeans would have experienced higher inflation. Mr Speaker, Sir, Singapore's overall inflation is rising but is still low by international standards and in the context of the healthy growth in incomes that we have seen in recent years. The Government will continue to keep a tight watch to ensure that inflation remains low.”
“The rise in CPI inflation in Singapore has also reflected the impact of the GST increase. This was a one-off event that occurred when the GST was raised on 1st July 2007. On a month-on-month basis, overall CPI has reverted back within the range recorded in months before the GST increase. It increased by 0.3% in August 2007 and fell 0.3% in September 2007. But because of the way the CPI is calculated, the GST increase will continue to show up in higher CPI inflation figures for 12 months until June 2008, though to diminishing extents. More importantly, unlike food import prices, the GST increase has had only a limited impact on basic food prices as the major supermarket chains have been absorbing the GST increase for basic food items. To mitigate the impact of the GST increase on the cost of living, the Government introduced the GST Offset Package earlier this year. The GST Offset Package will more than offset the impact of the higher GST on lower-income families. Middle-income Singaporeans have also enjoyed substantial benefits such as GST credits, utilities and rental rebates. The pick-up in inflation in Singapore should also be viewed from the perspective of our rapid economic growth over the last three years. GDP has grown by more than 6.0% on average since 2003. Growth has also been broad-based, across all sectors of the economy. Wages have also been growing, especially last year and this year. Against this backdrop, we should not be surprised to see inflation rise above the unusually low levels seen in recent years. We should also be wary of interpreting a rise in the headline CPI as necessarily reflecting an increase in the cost of living. First, the CPI measures average changes in prices across all households.”
“Mr Speaker, Sir, inflation in Singapore is on a slightly rising trend. In the third quarter of 2007, the consumer price index (CPI) rose by 2.7% year-on-year, compared to 1.0% in the second quarter and 0.5% in the first quarter. This reflects mainly higher food prices and the one-off effect of the increase in GST in July this year. The price of food, which is the largest component in the CPI basket, rose by 3.3% year-on-year in the third quarter. However, this third quarter figure does not yet include the most recent increases in the prices of flour and chicken. Food prices have risen mainly due to dearer imports, arising from disruptions in supply in some of our major food import sources. Adverse weather conditions in Australia, Malaysia and Indonesia have reduced crop yield and supply, raising prices of rice and cereals, vegetables and dairy products. These supply disruptions have occurred against a backdrop of increased global demand for agricultural products, fuelled by rising living standards in emerging economies and higher bio-fuel production. Diversifying our food supply sources is one way we can reduce our vulnerability to such supply disruptions and maintain more stable food prices. However, diversification cannot protect us against a worldwide increase in food prices, such as is happening now. The current uptick in inflation is a global phenomenon. In recent months, rapidly growing economies such as China and India as well as the developed economies, such as those in Europe, have experienced higher inflation. This is mostly due to higher food prices and energy costs. Oil prices have reached historical highs in recent months, reflecting strong global demand, a relatively tight supply and low global inventories of oil.”
“Mr Speaker, Sir, may I have your permission to answer Question Nos. 1 and 2 together?”
“When persistent noise nuisance complaints have been received and substantiated, Police is empowered under PEMA to impose additional licensing conditions on the operator, such as the two-door concept mentioned by Dr Fatimah, whereby two separate sets of doors are installed at entrances or exits of nightspots to reduce the sound levels emanating from these premises. Police has also imposed such a requirement on certain pub operators before they are granted licences to operate. PURCHASE OF NEW HDB FLATS (Definition of "family" nucleus) 30. Mr Christopher de Souza asked the Minister for National Development if he will explain why the definition of "family nucleus", for the purpose of buying a new HDB flat, does not include single mothers aged below 35 and their child/children.”
“We will remain vigilant against GST profiteering, and will continue to take action against those who profiteer from GST. * NTUC Fairprice, Sheng Shiong, Shop 'n Save, Cold Storage, and Prime Supermarket. NIGHT ENTERTAINMENT OUTLETS IN RESIDENTIAL AREAS (Enforcement of guidelines) 27. Dr Fatimah Lateef asked the Deputy Prime Minister and Minister for Home Affairs where pubs, bars and night entertainment outlets are adjacent or co-located with residential premises, whether there can be greater enforcement of guidelines pertaining to ad hoc use of space outside the premise in al fresco style, spillover of noisy customers disturbing residents late into the night, and noise pollution which are beyond the allowed decibels, including implementation of the double door concept. Mr Wong Kan Seng: While Police regulates public entertainment outlets under the Public Entertainments and Meetings Act or "PEMA", regulating the use of space outside public entertainment outlets does not come under PEMA. It is under the purview of other Government agencies such as URA. For example, I understand that URA may grant permission for the use of space outside the public entertainment outlets in certain areas which are not adjacent to or co-located with residential premises. I am told that URA may terminate the temporary permission if the use causes disamenity to surrounding residents. One of the objectives in regulating public entertainment outlets is to reduce noise disturbance from such outlets. Towards this end, Police imposes limits on sound levels in licensed entertainment outlets. In addition, operators have to close all doors and windows of their premises during operating hours.”
“The same is also true for rice and many other consumer goods. CASE has supplemented these efforts by releasing a survey of milk product prices to enable consumers to shop wisely. Ultimately, free and intense competition and well-informed consumers are the best deterrence against unreasonable price increases. If price increases are unreasonable, whether linked to the GST increase or otherwise, consumers can exercise their choice to switch to cheaper alternatives. In fact, we know that many businesses have refrained from raising prices for fear of losing customers to competition. Indeed, the CPI has increased by 1.98% between December 2006 (after the GST increase announcement) and July 2007. We have also found that more than 90% of the 1,300 hawkers surveyed by DOS have maintained their prices since June. This implies that by and large, our prices are stable. Most businesses have not used GST as an excuse to raise their prices beyond the 2% adjustments on 1st July. Mr Sam Tan asked whether there is a need for tougher preventive and punitive measures. We do not think that legislation against GST profiteering is necessary at this point in time. Our study of other countries' experience shows that legislation against profiteering is difficult and expensive to implement and the effectiveness inconclusive. We believe therefore that the best way to bring about price stability is to remove impediments to competition, and encourage free competition. When there are many sellers and many buyers, prices will find their own equilibrium. Many countries share this view. This is why few countries have such legislation. CAP's duty does not end with the GST increase on 1st July.”
“CAP's message of responsible behaviour has garnered support from major supermarket chains and stores. More than 10 businesses and industry associations have also pledged to maintain price stability during the transition of the GST increase. For example, all the major supermarket chains* have absorbed the GST increase for basic items for a period of time to help consumers in transition. CAP is not against price increases per se, nor is it its job to interfere with the functioning of a free market and to institute price control. Our role is to ensure that businesses do not use the GST increase as an excuse to raise prices indiscriminately and unreasonably. Not all price increases are due to profiteering. In fact, price movements, both up and down, are important signals in a free market to tell producers how resources should be re-allocated to meet changing market demands. Price movements are happening all the time following local and worldwide supply and demand patterns. Since Singapore imports most of our consumption goods and raw materials, we are usually price takers rather than price setters. Of course, local factors of production, such as manpower costs and rental, will also have a bearing on the final price of the goods and services produced or delivered here. Let us look at the example of condensed milk, which for a while was a concern for many consumers. According to DOS, the price of condensed milk increased by 11% between April and June this year because of the drought in Australia. CAP has highlighted to consumers that they could minimise the impact of price increases by exercising choice. Between house brands and the so-called premium brands, the price of condensed milk can range from $1.00 to $1.90 per can. Consumers can save by switching to cheaper brands.”
“The Government takes a serious view of profiteering using the GST increase as an excuse. This is why we set up the Committee Against GST Profiteering (or CAP) in 1994 when GST (0% to 3%) was introduced. CAP brings together Government and community resources to look into complaints of GST-related profiteering. It has ensured the smooth implementation of GST increases in 2003 (to 4%) and 2004 (to 5%) and minimised instances of GST profiteering. CAP works closely with grassroots organisations and the Consumers Association of Singapore (CASE) to investigate every complaint on GST profiteering. In the case of complaints on stand-alone stalls, the grassroots leaders visit with the stall owners and work with them to resolve the issue. This is a nationwide effort. As at 24th August, we received 115 alleged profiteering cases involving over 35 constituencies. For chain stores, CASE has helped to investigate the 116 complaints we have received. In some cases, CAP wrote directly to the businesses asking them to explain their actions of price increases. We also kept the respective grassroots advisers informed of the cases in their areas. In addition to investigating complaints, CAP undertakes outreach efforts to urge businesses to be responsible and fair, and to encourage consumers to exercise care when making purchases. Over the past few months, we have visited hawker and commercial centres in different parts of Singapore to raise public awareness about GST profiteering. At the same time, CAP has worked with the Department of Statistics (DOS) to release price information on the Consumer Price Index (CPI) and hawker food prices to consumers, while CASE has been publishing the prices of common household items.”
“Ms Indranee Rajah asked the Minister for Foreign Affairs if he will provide an update on the outcome of the recent ASEAN Regional Forum (ARF) including (a) whether there are any specific initiatives or projects to be undertaken by ASEAN or Singapore arising out of the ARF; (b) the current direction of ASEAN-US relations; and (c) the objectives of the proposed first ASEAN-US Summit to be held in Singapore.”
“If you ask me candidly, I would say we have been enjoying practically 16 quarters of growth and, in fact, I am surprised that our inflation numbers are as low as they are. This partly reflects the more benign global inflation rates - Singapore is of course enjoying this - and partly our low inflation in the past was also because of the economic conditions in 2001 up to 2003. But, as I said, in the last 16 quarters, we have been enjoying highly robust growth, the higher end of our potential growth. So one would expect inflation in fact to pick up. And, indeed, it may well pick up. In the first half of this year, our inflation rates were very low, between 0.5% and 1%. I think Dr Lily Neo probably refers to the July numbers which show a blip of 2.6% for the month of July. We are of course watching this closely. We do expect inflation for the second half of this year to go up, partly reflecting the global inflationary trends. If you watch the inflation trends in US and Europe, you will notice that there is a lot of strong pressures on cost, and China recently has also reflected higher inflation numbers. So we expect, generally, cost to go up higher than the first half. Then, of course, we also have the one-off impact of the GST. But our experience shows that in the past when we had similar increases of GST this was a short-term impact and that, over time, the impact on cost would be mitigated. So, overall, we still look at an inflation forecast of between 1% and 2% this year, which is a little higher than our previous years, but definitely still very reasonable considering that this is already more than 16 quarters of growth. ASEAN REGIONAL FORUM (Update) 7.”
“One of the ways we try to mitigate this is to liberalise some of the labour constraints by allowing bigger allocation of foreign worker quota so that the contractors can take that into account and knowing that they can expand the construction capacity, they are then prepared to bid at a more competitive price. These are some of the dialogues that we have with the prospective investors and some of the proactive actions that we take.”
“It depends on which segment of the investor community we are looking at. If you look at the manufacturing sector, we still find a very strong pipeline of investments coming to Singapore and both EDB and the various agencies, like the JTC, are very conscious of cost in their investment promotion activities. They engage actively with the prospective investors to make sure that they understand the situation in Singapore and we take proactive action to mitigate these cost increases. Let me give you an example. We must see these cost increases in the context of what has happened in the last five years. For the last five years, the property rentals and prices and, in fact, cost in general had been kept very low in Singapore. In the construction sector, for example, there has been a shake-out for contractors. As a result, there is a shortage of capacity. So when the economy takes off and there are a lot of construction activities - in part, also because of the global shortage of resources and higher steel prices and other commodity prices, plus the smaller contractor capacity that we have in Singapore - all this adds to the construction cost. So we are very conscious of this and the various agencies and Ministries try to take proactive action. Investments also come in cycles. For example, in recent years, we have been watching a very strong interest in the petrochemical sector and, together with the reduced capacity in the construction sector, it results in the process industry facing higher costs.”
“Mr Speaker, Sir, this is a perennial question, whether our CPI effectively captures the cost of living here. As you know, we follow international standards in working out and monitoring the CPI. We have a basket of goods which reflect the different segments of the population, the top 20%, the middle and the bottom 20%, and this basket of goods which represents the different income levels is regularly updated once every five years. So I would say that the numbers do reflect the spending patterns of the different groups in Singapore.”
“Qimonda will be building its first fully-owned 300 millimetre wafer fabrication facility in Singapore, and estimates that it will invest approximately $4 billion over the next five years. Singapore's tourism industry also hit record highs in the first half of 2007, achieving an estimated $6.4 billion in tourism receipts and welcoming 4.9 million visitor arrivals. These suggest that Singapore is still an attractive location for economic activities for investors, talents and tourists. Having said this, we cannot afford to be complacent. The Government will continue to keep a tight watch on business costs and, most importantly, strengthen our competitive advantage and value creation to investors, for Singapore to remain on its growth path.”
“According to ECA International's comparison of 2006 monthly rentals for 3-bedroom apartments in areas equivalent to Singapore's districts 9, 10, 11 and East Coast, Singapore's rental was less than half that of Hong Kong and Tokyo. In a comparison of global office market rentals by CB Richard Ellis in May 2007, Singapore's office rental was found to be 30% lower than that of Hong Kong and 50%-60% lower than that of Tokyo. More importantly, competitiveness is more than offering lower costs alone. It is about value creation. London, Tokyo and New York are high cost locations, but they are thriving global hubs because they offer good value for businesses. Singapore has many attributes that enhance our value proposition to investors, which are not easily replicated by other regional cities. We have a pool of highly skilled talents that enable us to engage in high value-add activities. We are renowned for our liveability, clean environment, security and, increasingly, vibrancy as well. In June this year, Monocle (European lifestyle magazine) rated Singapore as the most liveable city in Asia outside Japan, and cited Singapore as being "extremely affordable" despite our "first world living standards". Despite increased costs, the World Competitiveness Yearbook ranked Singapore as the second-most competitive economy overall among 55 countries, second only to the US, in May this year. Beyond the multi-billion investment projects such as the two integrated resorts that are being developed, our project pipelines for 2007 remain strong. For example, Mitsui Chemicals has recently announced that it will invest $240 million to expand its elastomer plant in Singapore.”
“On the manpower front, with a near full employment trend, we are looking into ways to help more Singaporeans, such as older workers and women, take advantage of the strong employment market and rejoin the workforce. Reskilling efforts will also continue to allow Singaporeans to obtain better-paying jobs, while we supplement our workforce with foreign workers. Our focus is to create better jobs for Singaporeans and better opportunities to attract global talent. Even as we take concrete steps to alleviate short term tightness in the resource markets, we should distinguish facts from impressions given by media reports of sky-high rentals in selected locations or transactions. For instance, the median prime office rent in the second quarter of 2007 (2Q07) was $9.50 per square foot per month (psf pm). However, median rent in other locations, which account for about 80% of office space in Singapore, was less than half of that, at $4.50 psf pm. Similarly, residential rents are also highly location dependent. In 2Q07, the median rents in 156 private condominium developments across the country published by URA ranged from $1.40 psf pm to $6.30 psf pm. In this regard, MND's recent release of additional information on property prices and rents will facilitate more informed decisions on property purchases or rentals. Our Overall Unit Labour Cost has increased by 5.8% year-on-year in the first half of 2007, although it is still at a level which is 13% lower than 2001. Similarly, Unit Business Cost for Manufacturing has increased by 2.6% year-on-year in the first half of 2007, but remains at a level which is 11% lower than in 2001. Singapore remains cheaper compared to other global cities in the region.”
“Sir, Members have asked about the impact of rising costs on Singapore's competitiveness. The current cost pressures are reflective of our competitiveness and resultant strong economic growth. The economy has grown at above 6% for the past three years, and is projected to grow by 7-8% for the current year. In addition, growth is broad-based across both the manufacturing and services sectors. As a result of continued efforts in restructuring, we are also well positioned to ride on the new growth trends and favourable economic conditions ahead. Despite our sustained strong growth in the recent years, we have been operating in an overall low-inflation environment. In the past three years, our Consumer Price Index increased at an average annual rate of 1.0% while Overall Unit Labour Cost actually declined at an annual average rate of 2.2%. However, in recent quarters, we have seen increases in property prices and rentals, as well as wages. We have to maintain vigilance over our costs, as excessive cost increases would dampen our growth prospects. We have taken a proactive approach so far. To address immediate space constraints, we have introduced some interim office space supply, and HDB flats for rent. The Ministry of National Development has also released additional information on property prices and rents to allow the public and businesses to make more informed decisions on property purchases or rentals. This will increase awareness that attractive housing options remain available for foreign talent beyond the central districts. For longer-term demand, MND has been putting out ample supply of land, with more than 42,000 private residential units and 640,000 square metres of office space to be completed by 2010.”
“Mr Speaker, Sir, may I have your permission to take Question Nos. 3 to 6 together?”
“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; reported without amendment; read a Third time and passed. OPTOMETRISTS AND OPTICIANS BILL Order for Second Reading read. 3.15 pm”
“To this end, the Bill includes consequential amendments to the SFA and the FAA that will empower MAS to prescribe transitional regulations for the transfer of oversight. Regulatory status of over-the-counter commodity derivatives and spot commodity contracts Under present legislation, IE Singapore also has regulatory oversight of over-the- counter (OTC) commodity derivatives and spot commodity contracts under the CTA. These were added to the scope of the CTA in 2001 and a licensing framework was introduced, to keep out bucket shops that defraud the public. The intention was not, however, to impede legitimate dealing in OTC commodity derivatives and commodity spot broking. To this end, IE Singapore has granted exemptions from the licensing requirement to bona fide players operating in institutional markets. As the current regime continues to serve its purpose, we do not propose any changes to the regulatory framework for OTC commodity derivatives and spot commodity contracts under the revised CTA. We will continue to monitor market developments and ensure that our regulatory regime is kept relevant and effective. Conclusion Mr Speaker, Sir, the proposed amendments under the Commodity Trading (Amendment) Bill are necessary to effect the transfer of regulatory oversight of commodities futures from the CTA to the SFA and FAA. This will consolidate regulation of commodities and financial futures trading under MAS. As a result, there will be a more efficient and streamlined regulatory framework under which trading players can operate and conduct their futures trading activities in Singapore. This demonstrates the commitment of the Singapore Government to continually enhance the business operating environment in Singapore. Sir, I beg to move. Question put, and agreed to.”
“Legislative amendments required to effect the transfer This Bill seeks to amend the CTA, SFA and FAA to effect the transfer of regulatory oversight of commodity futures, including the associated markets, clearing facilities, brokers and advisers, from IE Singapore under the CTA, to MAS under the SFA and the FAA. The key amendments include: (1) Removing all provisions in the CTA relating to commodity futures trading; and (2) Amending the definition of "commodity" in the SFA and introducing a definition of "commodity" in the FAA such that commodity futures contracts currently regulated under the CTA will be regulated under the SFA and FAA. The Bill also makes a consequential amendment to the Income Tax Act to clarify that members of commodity futures markets can continue to qualify for tax incentives after the transfer. With these amendments, commodity futures, the associated markets, clearing facilities, brokers and advisers will come within the regulatory ambit of the SFA and the FAA. This will achieve the objective of having a single regulatory framework for commodity futures and financial futures contracts. Transitional arrangements The proposed changes will affect those entities and their representatives currently dealing in commodity futures. These include the Singapore Commodity Exchange Ltd (SICOM), SICOM's broking members and their representatives, as well as futures brokers and their representatives who have licences from both IE Singapore and MAS. Where appropriate, MAS will provide transitional arrangements to facilitate their smooth transfer from regulatory oversight under IE Singapore to MAS.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Objective Commodity futures trading is currently regulated under the Commodity Trading Act (CTA) by IE Singapore, while financial futures trading is regulated by MAS under the Securities and Futures Act (SFA) and the Financial Advisers Act (FAA). Accordingly, commodity futures and the associated markets, clearing facilities, brokers and advisers are regulated under the CTA while their equivalents in respect of financial futures are regulated under the SFA and FAA. As markets converge and institutions participate in both financial and commodity futures markets, the presence of multiple regulators increases regulatory costs. To enhance Singapore's business environment and streamline regulations, we propose that legislative amendments be made to transfer regulatory oversight of commodity futures trading from IE Singapore under the CTA, to MAS under the SFA and FAA. The consolidation of the regulation of financial and commodity futures under a single regulator, the MAS, is a strategic step that will facilitate Singapore's growth as a futures trading hub. This would streamline licensing and compliance procedures. For example, firms broking both commodity futures and financial futures would only need to hold a single licence from MAS, as opposed to the current requirement of obtaining two separate licences from MAS and IE Singapore. IE Singapore and MAS have consulted the public and industry players on the proposed transfer of regulatory oversight. The feedback received indicated support for MAS to be the single regulator for futures trading activities.”
“More than 16 foreign universities have set up operations in Singapore to-date either on their own or in collaboration with our local universities. Of the 16 foreign universities, seven have set up their own campuses or operate on their own premises. The seven universities are: INSEAD, the University of Chicago Graduate School of Business, the Digipen Institute of Technology, the University of Nevada Las Vegas, the New York University Tisch School of the Arts, ESSEC and the SP Jain Institute of Management. Of the seven universities, five have already been operating here for some time. In particular, INSEAD and the Chicago School of Business have been in Singapore since 2000 and continue to steadily expand their operations. The Tisch School of the Arts and the Digipen Institute of Technology will be opening their doors for their first intake of students soon. The total enrolment of the foreign universities that either have their own campuses or operate their own premises is about 1,000 as at June 2007. These universities are doing well here. Together with the wide range of reputable foreign educational institutions that the EDB has attracted here to-date and our public schools, Singapore is now home to 80,000 international students, up from the 50,000 international students in 2001. HOSPITAL BILLS INCURRED BY CITIZENS (Figures) 4. Ms Sylvia Lim asked the Minister for Health if he can provide information on the average size of hospital bills incurred by citizens for each public hospital, segmented by ward and class, both before and after Government subsidies, for each of the years from 2000 to 2006.”
“Mr Zaqy Mohamad asked the Minister for Education whether his Ministry will consider providing tertiary fee subsidies similar to those provided for students at local universities, to those pursuing their degrees at accredited privately-run tertiary institutions as well as those run in collaboration with foreign universities.”
“Mdm Halimah Yacob asked the Minister for Education (a) whether the Ministry was informed in advance of the closure of the University of New South Wales (UNSW) and, if so, whether more could have been done to prepare the affected students; and (b) what assistance has the Ministry extended to the affected students in securing fair compensation from UNSW for their losses and in securing places in local institutions. 12. Mdm Cynthia Phua asked the Minister for Education , in the light of the exit by University of New South Wales (UNSW) from Singapore, (a) what are the safeguards the Government can offer to students enrolled with foreign institutions here from being left in the lurch; (b) whether these institutions are required to post any financial bond with the Ministry to ensure their specific performance; and (c) whether the Ministry is aware of any student taking legal action against UNSW for breach of contract. 13. Mr Christopher de Souza asked the Minister for Education in view of the recent closure of UNSW's campus in Singapore (a) how many schools have closed in the past five years due to financial problems; and (b) what will the Ministry do to ensure that private schools/education institutions have feasible business plans and sufficiently robust financial positions to enable them to meet their education obligations to their students. 14. Dr Lily Neo asked the Minister for Education when will his Ministry set up a national accreditation body to assess and monitor the quality of private schools in Singapore. 15.”
“Mr Speaker, Sir, our strategy to build up Singapore as an education hub covers a wide spectrum. Today, we have about 80,000 foreign students in Singapore. 25,000 are, in fact, enrolled in our primary or secondary schools and junior colleges. Another 25,000 foreign students are in our universities and polytechnics. The third 25,000 are in our private educational organisations - those private schools run by the private companies. Another 5,000 are in the foreign system schools catering for the expatriate children. So, we have a comprehensive approach. We are also marketing and targeting another group, which is really executive training for those in the different professions and careers. So, with this wide range, we will continue to build up on making Singapore attractive, not just in our own public and private schools but also in the foreign universities that may set up niche areas that can be very successful in Singapore in the graduate programmes and in other specialised areas. UNSW came in with a very unique proposition, and that is, a totally private comprehensive university with a big campus. If another university comes in with that plan, with a well-thought out strategy to develop that, I think that would add to the menu of our options in Singapore and we will consider it very seriously. But, at the same time, I do not think our education hub strategy is lacking because of the absence of a private comprehensive university. We will still go for the other areas that we have shown to be very successful and continue to build on these areas. CLOSURE OF UNIVERSITY OF NEW SOUTH WALES ASIA (Assistance to affected students) 11.”
“We are still in the process of discussing with UNSW Asia on the recovery of these grants. So, I cannot give an estimate of how successful we will be. As far as the foundation course and the future admission to our local universities are concerned, I think this can be better answered by Minister Tharman later on.”
“Mr Speaker, Sir, I want to assure the Member that his arithmetic is right. But, in fact, there could be more than three unaccounted for because there could be double counting. In fact, the students have no obligations to report to us. So, even though we try to reach out to the students and collect the statistics, not all the students will tell us what they have been offered. So, our statistics are not complete. Out of the number, there could be double counting and, in fact, there could be more than three not accounted for in the numbers that I have given out.”
“Our plans to promote Singapore as an education hub is a whole-of-government plan. We work very closely between MTI, Ministry of Education, Ministry of Home Affairs and all the other agencies. As Members will hear later from Minister Tharman, we worked very closely in helping UNSW to set up its operations here and, also, we worked very closely when they decided to pull out. There are different roles by the different agencies and this is to be expected. We do have a one-stop coordination of all the various plans involving all the various Ministries and agencies.”
“Mr Speaker, Sir, as I mentioned just now, it is not our job to evaluate the business plan of the investor. In this case, UNSW came to Singapore and they had a very unique and bold plan to set up a private comprehensive university. So, they were not looking for setting up a small niche area. They wanted to set up a comprehensive university, including science, engineering, arts, and social sciences. So, it was a unique proposition. And to make that work, they had to build up a critical mass - because it is an expensive endeavour to build up a comprehensive university, and you need the scale - and, therefore, they proposed an eventual enrolment of 10,000 to 15,000. Of course, we realise this would not be achieved overnight, and the intermediate target was about 5,000 to 6,000 within the first 10 years, and then they build it up gradually. But they must show the commitment, build up the campus, recruit the staff, and meet the milestones, building up to this eventual target of 10,000 to 15,000.”
“They have offered 24 places to the students who meet their admission norms and of these, 17 offers have been accepted to date. Mr Speaker, Sir, the closure of UNSW Asia will not dampen our aspirations to become an educational hub. Not all investment projects will succeed. But that should not stop us from constantly seeking new investment projects that can add value to Singapore. We will continue to bring in new projects and build on the base that we already have. Today, we have more than 16 foreign universities and 41 preparatory and boarding schools (comprising 38 foreign system schools and three privately-funded schools) in Singapore. More recently, we have also successfully attracted a range of reputable foreign educational institutions to set up their campus in Singapore. Recent additions include institutions such as the University of Nevada Las Vegas, the New York University Tisch School of the Arts, Duke Graduate Medical School, and foreign system schools such as the Bhavan Indian International School, the Delhi Public School and the Chinese International School. These institutions are doing well here. In all, there are currently 80,000 international students in Singapore today. The market for international education, especially in Asia, is growing rapidly. Singapore is well placed to seize a strong position in this market: we have high education standards, a secure environment and good quality of life, and a unique East-meets-West cosmopolitan environment. These will stand us in good stead, as EDB seeks to bring in more reputable foreign institutions and enrich the education landscape in Singapore.”
“EDB's support package for UNSW was therefore premised on the basis that UNSW would undertake a long-term commitment to establish a university of significant scale in Singapore that will create new economic value. EDB's grants and loans are conditional on UNSW achieving pre- agreed milestones such as student enrolment, failing which they become recoverable. To date, EDB has disbursed S$15 million in loans and S$17.3 million in grants to UNSW. As UNSW will not be able to meet the performance indicators that it committed to EDB in 2004 and 2006, UNSW is required to return the disbursed loan and grant to EDB. The disbursed loan is backed by a bank guarantee. EDB is currently discussing with UNSW on the recovery of the disbursed grant. The Government does not have any outstanding liabilities to third parties with regard to the UNSW project. We regret UNSW's decision to pull out, but this is their business decision and we will have to respect it. The Government's bigger concern was the impact of UNSW's decision on the students. EDB therefore worked closely with UNSW and the Ministry of Education to assist the affected students. UNSW has assured us that it would mitigate the impact on the students. It has offered scholarships of between S$12,000 and S$22,000 per annum to the students who choose to go to the UNSW Sydney campus to continue their studies. This is to help with the living costs. To date, 116 students out of the 143 students enrolled for Semester 1 at UNSW in Singapore have opted to study in UNSW Sydney campus. For students who wish to remain in Singapore, EDB and the Ministry of Education have been working closely with UNSW to provide alternatives. NUS, NTU and SMU have helped by extending their deadlines for the UNSW Asia students to apply for admission.”
“Third, EDB offered that if and when UNSW should submit its campus proposal, EDB would assess afresh the proposal for a support package, with support commensurate with the benefits of the project to Singapore. In the end, UNSW decided to cease operations because of what it perceived as an unacceptable level of financial and operational risks. UNSW announced its decision on 23rd May 2007. Before we come to any conclusion of the UNSW decision, let us step back and keep in perspective a few fundamental points. First, investors know their business better than the Government. In this case, UNSW - as the investor and the operator - is in the best position to assess the viability of its business plan and to decide whether to start a comprehensive university in Singapore. Second, Government's role is to facilitate and support investors in their decisions, not to second-guess or guide those decisions. In this instance, EDB's job was to facilitate UNSW's investment by providing it a level of support commensurate with the benefits of the project to Singapore and putting in place appropriate safeguards if the agreed milestones are not achieved. Since public funds are being used to support this investment, EDB is mindful that the project creates sufficient benefits to Singapore in terms of jobs and economic value. This is because we want to make every investment dollar count. Mr Speaker, Sir, UNSW's decision is a business decision. While we as Government can play a role in giving support to investors who want to set up operations in Singapore, we cannot issue a blank cheque. We must ensure that public funds are well utilised and yield strong benefits to Singapore.”
“UNSW proceeded to invite and accept student applications to the Singapore campus for its first intake in March 2007. It also continued to build up its staff strength. But in March this year, UNSW found that the first intake for UNSW Asia was far below its expectations. It had enrolled only about 150 students, less than half of its business plans' projected intake of 300. UNSW also expected the second intake to be significantly below earlier projections. UNSW thus reviewed its operations in Singapore again, holding extensive discussions with EDB. UNSW eventually proposed a significantly scaled-down plan of achieving an enrolment of about 2,000 students in 10 years, half of what UNSW had agreed to in the revised package of December 2006. Moreover, UNSW was now unable to provide the assurance that there would be a permanent campus in Singapore, even on a reduced scale. This called into question UNSW's ability to deliver on its original intent of about 10,000 to 15,000 students at the steady state. EDB and UNSW explored various scenarios and options but could not agree on a revised package. On 19th May 2007, EDB informed UNSW that it could not agree to the revised support package proposed by UNSW. However, EDB made several counter-offers to help address UNSW's concerns. First, EDB was willing to give UNSW two years, until April 2009, to decide whether to develop the new campus at Changi. Second, EDB offered not to claw back the grant and loan incentives that it had disbursed to UNSW for the Singapore campus if UNSW agreed to carry on operations and meet a set of interim targets until it made its decision on the new campus in April 2009.”
“Mr Speaker, Sir, I thank Members for their questions and interest in the UNSW project and the broader issue of what this means for Singapore as a global education hub. Let me first give the background of the UNSW project. After one-and-a-half years of feasibility study, UNSW assessed in 2004 that it was viable to establish a private comprehensive university in Singapore. This meant that the university would offer a full range of programmes in Science and Technology, Business, Arts and Social Sciences, and at both the undergraduate and postgraduate levels. UNSW submitted its formal proposal to EDB in July 2004. Following discussions, EDB agreed to support UNSW's proposal. When UNSW accepted EDB's support package in February 2005, it was on the basis that although UNSW would start off at an interim campus, it would eventually set up a new university campus here and enrol 10,000 to 15,000 students at the steady state. EDB saw a new campus as a clear demonstration of UNSW's commitment to the Singapore project, thus providing a good basis for its funding support. The acceptance of the EDB support package was signed off by the then Vice-Chancellor of UNSW, Professor Mark Wainwright. Following the appointment of Professor Fred Hilmer as Vice-Chancellor of UNSW in June 2006, UNSW approached EDB to increase the support package. Professor Hilmer considered as inadequate the previous package which UNSW had agreed to. In August 2006, EDB agreed to increase the support package in return for UNSW's commitment to a ten-year student enrolment target of close to 5,000 students, the acceleration of the development of a new campus at Changi and additional R&D activities. In December 2006, Professor Hilmer signed off on the increased support package.”
“Sir, with your permission, may I take Question Nos. 5 to 10 together?”
“Mr Speaker, Sir, as I mentioned in my answer, we are already producing 30,000 engineering and technical manpower each year. So this is more than sufficient for the projected numbers that I outlined earlier. But we do recognise that there is a lot of seepage. Many people are trained in this science and technical area but they do not continue careers in this area. So we have always to continuously adjust our output projections to actual demands, depending on how the industry develops. "BRING YOUR OWN BAG" CAMPAIGN (Impact) 16. Dr Lim Wee Kiak asked the Minister for the Environment and Water Resources what impact does the "Bring Your Own Bag" campaign have on the plastic bag industry and will the push to reduce plastic bag usage result in potential problems of refuse collection as most residents are encouraged to throw refuse in plastic bags.”
“Mr Speaker, Sir, the requirements for technical and engineering manpower differ from sector to sector. In the manufacturing and info-comms sector, the Economic Development Board (EDB) has projected that about 34,000 new engineering, technical and supervisory jobs would be required over the next four years, from 2007 to 2010. As we seek to transform Singapore into a research and innovation-driven economy by intensifying our national R&D spending to 3% of GDP by 2010, we estimate that an additional 10,000 research scientists and engineers at the Bachelors, Masters and PhD levels would be required to support the higher R&D expenditure. In the construction sector, with the many major developments, like the two Integrated Resorts, Business and Financial Centre, and Sports Hub coming on-stream, the Building Construction Authority (BCA) has projected a requirement of up to 10,000 additional engineering, technical and supervisory personnel over the next four years. MTI and our economic agencies work closely with the Ministry of Manpower and the Ministry of Education to translate these manpower demand projections for the key growth sectors into student recruitment numbers for the different educational institutions, namely, the universities, the polytechnics and the Institutes of Technical Education. These institutions produce, on average, a steady pipeline of 30,000 engineering and technical manpower each year to meet the industry's demand.”
“Let me take all four points quickly. On manpower needs, I think we are trying our best to encourage Singaporeans to work for the best employer, whether it is foreign SMEs or local SMEs. We also work with the various industry associations to increase the attractiveness of the various sectors. For example, you would have noticed that people in the shipyard business are now advertising themselves through a Chinese serial. On green dollars, we are working very hard. We gave the answer just now about bio-fuels, alternative energies, and the various incentives we have. On IDA and the adoption of IT, we adopt a whole-of-Government approach. So SPRING, IE and IDA work with our SMEs to encourage them to adopt IT. On tourism, we look for and we will have performance indicators to guide this. On tourism products, we cover a whole range. We know that we do not have the cultural or historical attractions that other people go to in Paris or elsewhere and, therefore, we must make up for these in other attractions as well.”
“Sir, in fact, JTC workshops are not under this current divestment exercise.”
“Sir, I thank Mr Low Thia Khiang for his comments and his suggestions. I fully agree with him. In SDC's case, obviously, SDC made some lapses. SDC bought over Sentosa Cove land. They took up a bank loan and they procured the entire land parcel. As far as they are concerned, they have bought the land lock, stock and barrel from the Government. So they set up a private company to implement the sale of the land. They did not realise that as a statutory board, they still have to follow statutory board procedures, especially the Instruction Manual. Therefore, when this was raised to them, then, of course, they sought exemptions from MOF. That was the lapse. Similarly, I agree with Mr Low that even when we invite people into our board, there ought to be considerations of limitation period after they resign from the board. This is something that we will definitely consider.”
“But in recent years, we are seeing a revival of investment and I am very confident, over the next two to four years, the contributions from our chemical industry will be more significant and we will see it as another growth sector. Even in our electronics sector, last year, we went through severe readjustment - retrenchments in Maxtor; we had a major restructuring in our hard disk drive sector - but, at the same time, we are attracting new components of the electronics sector and also in the hard disk media sector. So I am confident that in two to three years, as these factories come into operation, we will see the contribution from the electronics sector improve. The best example, of course, is construction - great difficulties over the last few years and now on the threshold of growth. And as long as we are able to continue to get new supplies of sand and granite, as we are confident we will get, our construction sector should do well. Sir, I think we have to deal with these changes as the economy evolves. The economy cannot stand still. We are very open, a very small economy, and we have to continuously evolve to meet with our global changes.”
“As I mentioned, for JTC divestment exercise, we are now in the process of engaging a financial adviser. Our intention, first of all, is to have a separate REITs manager from the REITs. The two will be separated. As for the sale of the REIT, whether it is to be divided into two, three or four separate REITs out of the properties to be divested, this is something that we are working together with our financial advisers. Our objective is quite clear. We want to make sure that we have a competitive industry structure at the end of the divestment exercise. On dual economy, let me apologise for not responding earlier. This is quite a complicated subject. When you look at the Singapore economy, I am sure you can dissect it in many ways and claim that it is a dual economy, tri economy or an economy with four parts. I am not so sure how useful that analysis is. Mr Inderjit Singh explained that the economy can be divided into the small and the big. Mdm Ho Geok Choo had previously argued that the dual economy is because of domestic versus exports. I would say that our economy is evolving. We are confronted by globalisation. We are confronted by technology. The different sectors in the economy that our companies are in have to evolve and innovate and compete based on these globalisation and technological changes. So some sectors which were considered not doing so well in the past, eg, the ship-repair industry, through their rejuvenation and changes, they have done very well in the last few years. Similarly, because of under investment in the refinery and chemical sector, the margins were poor and also under invested for the last five to seven years.”
“2 million which was split into smaller contracts, EDB has followed the procurement procedures for each contract's value rather than on the total project cost. EDB has accepted Auditor-General's recommendation to seek approval based on the total project cost. Finally, there was a finding of over payment of salary totalling some $400,000 for the period from November 2001 to May 2005. The over payments were isolated incidents and not systemic. The amount was promptly recovered through instalments and will be fully recovered by 31st March 2007. EDB has also put in place various monitoring processes to prevent such incidents.”
“There were two findings on board governance structure. Previously, the EDB budget and applications for large incentive loans and grants were submitted directly to MTI HQ and approved by MTI HQ without going through the board. EDB has since accepted Auditor-General's Office recommendation and its operating budget is now approved by the board since FY 2006, and all key decisions and decisions made by the board's sub-committees are now reported back to the board. There were three findings because of differing interpretation of the EDB Act and the accounting treatment. On the wrongful delegation of the board's powers on two of the findings, ie, on the delegation of the board's powers on borrowings and to grant loans, EDB has acted on its legal counsel's advice regarding the interpretation of the EDB Act. AGC has a different interpretation of the Act. EDB and MTI have since adopted AGC's interpretation instead, and EDB has made the necessary changes to comply with the Act. On the under-contribution of its annual surpluses because of different accounting treatment, EDB has relied on the view of two external auditors on the accounting treatment adopted for the Scholarship Fund, which was different from the Auditor-General's Office. EDB has since adopted Auditor-General's Office's recommended accounting treatment and has made the necessary corrections and contributions to the Government. There were two findings on procurement procedures, as highlighted by Mr Low Thia Khiang. One was on expenditure of $5.8 million which was approved 15 months after the completion of the transaction. This was because the project was very complex. The costing was available only much later and the approval was therefore obtained late. On the second case of $9.”
“This was because SCPL decided to go for an approach called "Expression of Interest". This is something that is not in our Instruction Manual but, in the private sector, the developer will invite prospective tenderers through an Expression of Interest. So, in this case, SCPL asked all members of REDAS, the Real Estate Developers' Association of Singapore, whether they were interested in tendering for this particular project. As a result, a smaller group of people expressed interest. From then on, SCPL dealt with this smaller group. So there is nothing wrong in dealing with a smaller group after you have asked the huge membership of REDAS to first see whether they have any interest in the project. On the third case of a former director tendering, this is not unusual. Many times, we invite private sector people on to our boards to make use of their expertise and for them to contribute. It is common corporate governance that when they join the board, they will declare their interest and they will excuse themselves from participation in individual cases, which is what happened in this case. The former director retired and, after his retirement, he participated in the tender. Let me now turn to the second case of EDB. In the EDB's case, the Auditor-General had eight findings. EDB views the Auditor-General's findings very seriously. For the non-systemic findings, EDB has taken swift actions to rectify the lapses highlighted. For areas where the Auditor-General has recommended improvements, EDB has promptly reviewed and implemented the necessary changes. MTI will work closely with EDB to ensure that it continues to strengthen its corporate governance practices and its internal control systems. Let me explain the eight findings.”
“This allows SDC to meet the market needs while fully observing the principles of fair competition, transparency and maximising the returns to Government. Let me now turn to the three specific instances which Mr Low Thia Khiang mentioned. First, the November 2004 case where it was the sole tenderer and the tender was awarded below valuation. The SCPL Board, in fact, had very long and deliberate discussions on whether to award this despite being only a sole tenderer and below valuation. As you know, the market situation at that time, in 2004, was still very fragile. We had just recovered from the 2003 SARS episode. And the Board decided that if they did not award this tender, it would send a signal to the market and cause the market to be more fragile. So they decided that in the interest of pursuing Sentosa Cove's development, to maintain the momentum, they decided to award to this tenderer. Another reason why the tender price came below the valuation is because this was the first time we awarded based on an en-bloc development of the bungalow lots. Previously, we were selling the bungalow lots individually and selling to the highest bidder for each lot. But the target catchment that we are looking for in Sentosa Cove high-end bungalows, many of them did not want to come in and tender individually. And some of these sales are to foreigners. So SCPL thought that en bloc sale through an intermediary, who is more able to respond flexibly to the final home buyer, would be a better approach. Therefore, there is a question of judgment by the valuer on how much to discount when we do an en bloc sale. That explains why there was a difference in the valuation. 2.15 pm In the second case, Mr Low Thia Kiang mentioned that it was a limited tender.”