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.”
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“Mdm Speaker, I beg to move, "That the Bill be now read a Second time." The Jurong Town Corporation (Amendment) Bill 2013 comprises three sets of amendments to the Jurong Town Corporation Act (JTC Act). The first set of amendments provides a new function and powers for JTC Corporation (JTC) to obtain statistical information relating to industrial properties from members of the public, private establishments and selected Government agencies. Today, the Urban Redevelopment Authority (URA) collects, compiles, analyses and disseminates a wide range of statistics on the residential, commercial and industrial property sectors. As the industrial property market grows more diverse and complex, we need to channel more dedicated efforts and resources to gathering and analysing statistics in this sector to improve market transparency and stability. As such, JTC, as the main Government agency overseeing the industrial property market, has been tasked to undertake the statistics function for the industrial property sector. The proposed amendments will bring about two key benefits. First, with access to timely and comprehensive data, JTC will be better able to ensure sufficient supply and stability in the industrial property market. Second, JTC will be able to release public information on the industrial property market which will be more comprehensive and representative of the various industrial segments, for example, statistics on different industrial zones. Through the REACH website, the public has provided other suggestions to improve the comprehensiveness of the industrial property market data published. The Government appreciates this constructive feedback. JTC will take in these suggestions in coming up with its industrial property market reports.”
“Nevertheless, the Government notes public feedback and recognises that more can be done to improve the visitor experience. A multiagency effort will embark on the following first, make Gillman Barracks more accessible and convenient for visitors, through covered walkways to transport nodes and between galleries, as well as more food, beverage and retail spaces in the vicinity; second, work with partners to anchor events and activities that add vibrancy and complement the galleries; and lastly, increase public outreach through publicising events on social and traditional media. To complement the Government's efforts, the galleries have also formed a Gillman Barrack Galleries Association to collectively drive initiatives. For example, to increase the outreach to tourists, the association has recently hosted hotel concierges to share more with them on Gillman Barracks as the destination for contemporary art in Singapore. Gillman Barracks is also moving into its next phase of development with the opening of the Centre for Contemporary Art (CCA) by NTU later this year. The CCA aims to bolster the visual arts landscape through creation, presentation and interpretation of contemporary art, while fostering research, discourse and cultural exchange. Singapore-based artists have always been an integral part of the Gillman Barracks. Singaporeans, such as Ian Woo, Herman Chong and Robert Zhao, have been featured by the art galleries. In the near future, the CCA will also host non-selling exhibitions, research activities and artist studios as part of an Artist Residency Programme. Artists can apply for the programme when it is launched.”
“Gillman Barracks is a new arts cluster jointly developed by EDB, JTC Corp and the National Arts Council (NAC). Gillman Barracks was launched about a year ago, and improvements are continually being made and development monitored by the Government agencies. Visitorship and sales at Gillman Barracks vary across galleries and events, and the Government agencies do not track aggregated visitorship and sales at Gillman Barracks. Since its launch, the art galleries at Gillman Barracks have held more than 90 new exhibitions showcasing artists and works that have attracted international buyer interest. Exhibitions featuring top artists such as Yoshitaka Amano (Mizuma Gallery) and Yang Fudong (ShanghART Gallery) have attracted good crowds of up to 200 people each. Besides exhibitions, visitors have also been attracted to other activities at the Gillman Barracks such as school visits hosted by galleries; tours organised by Art Outreach, a non-profit arts organisation; and community activities like sketch walks organised by Urban Sketches Singapore, a group of sketch hobbyists. Gillman Barracks' first year has helped the galleries understand and develop their markets in Asia. Some galleries have also given indications of Page: 122 their sales in media reports from time to time. For example, the Business Times reported that Partners & Mucciaccia sold a third of the 54 works by established Italian artist Luciano Ventrone at the start of his show. The Straits Times also recently reported that the Michael Janssen Gallery broke even over the past year, and remains confident in the outlook for its Singapore gallery. It will take time for Gillman Barracks to mature and realise its vision as Asia's up-and-coming destination for contemporary art.”
“Trainees are sent to leading companies overseas to learn new skills. Since 2008, 485 locals have been trained through STRAT in areas such as cell therapy, medical technology, biologics manufacturing, digital media and nanotechnology. EDB also works closely with education institutions to develop their curriculum to equip young Singaporeans with the relevant skills for these new sectors.”
“Restructuring and moving our economy up the value chain is an integral part of our economic development strategy. The Government undertakes regular reviews and studies at both the whole-of-economy and industry levels to identify future growth opportunities. One past example is the Report of the Economic Strategies Committee in 2011. Economic agencies, such as EDB, also constantly monitor global macro and industry trends to identify new growth opportunities. In recent years, EDB has seeded new growth areas such as data analytics and biologics. As announced in Budget 2013, EDB is currently developing a Future of Manufacturing plan taking into account global manufacturing trends and emerging technologies to identify new growth areas with the potential to create a range of new jobs for Singaporeans. To ensure that Singaporeans have the capabilities and skills to take up jobs created in new growth areas, the Government invests heavily in our Continuing Education and Training (CET) system. The Government has put in place dedicated training programmes aimed at meeting the different upgrading needs of specific segments of the workforce, such as the Skills Training for Excellence Programme (STEP) for professionals, managers and executives, and Workfare Training Support (WTS) for lower wage workers. In developing new industries or growth areas, our economic agencies also partner companies and education institutions to develop specific training curriculum and development opportunities to up-skill Singaporeans for the new sectors. An example is the Strategic Training and Attachment (STRAT) Page: 121 Programme under EDB which focuses on building new functional expertise and skill sets for new growth areas through on-the-job training.”
“MTI believes that it is important that we assist our SMEs to internationalise and capture opportunities beyond Singapore. IE Singapore works closely with companies to understand their business needs, growth potential and projects at hand in order to provide customised assistance. We provide both broad-based and focused programmes which aim to facilitate business activities of internationally-oriented companies. However, our schemes are not aimed at increasing firm-level export intensity. Singapore is signatory to the WTO Agreement on Subsidies and Page: 120 Countervailing Measures (SCM), and therefore subject to the principles that govern subsidies and incentives given to companies. Incentives that are "conditional on export performance" are prohibited.”
“Mdm Speaker, the monetary policies of the major developed countries will differ slightly but, overall, the global conditions point to a tightening of monetary policies. That is the gist of my answer – that our SMEs have to be prepared for this normalisation of the interest rate environment.”
“However, when global monetary conditions start to return to normalcy with the QE tapering and the subsequent rise in US interest rates, domestic interest rates will also rise in tandem. This will, in turn, translate into Page: 63 higher borrowing costs for businesses, especially our SMEs. Businesses should be prepared for the eventual rise in our interest rates, as it will not be prudent for the Government to lower borrowing costs for businesses artificially. Instead, the Government will continue to support our SMEs by helping them to raise their capabilities and productivity so that they can grow their revenue and cope with higher borrowing costs. In addition, to ensure that credit remains accessible to our SMEs, SPRING has schemes, such as the Micro Loan Programme, the Local Enterprise Finance Scheme and the Loan Insurance Scheme.”
“Mdm Speaker, the tapering of the quantitative easing (QE) programme in the US and subsequent normalisation of interest rates is likely to take place gradually, in tandem with a strengthening of the underlying economic conditions in the US. This is in line with the Federal Reserve's position that the QE tapering will take place only when the economic and labour market outlook in the US has improved. In this situation, financial markets are likely to adjust to the QE tapering in an orderly manner. The impact on our exports to the US will therefore be small, as US economic growth is not expected to be significantly affected by the tapering. Accordingly, the overall impact of the QE tapering on the Singapore economy is likely to be limited. Nevertheless, the Government is mindful of the risks of a more disorderly process of QE tapering. In particular, if the QE tapering is done prematurely or if financial markets overreact to the QE tapering leading to a sharp spike in interest rates, the US economy could stall. In this scenario, our exports to the US will be adversely affected. There will also be a sharp pullback in financial markets, which will affect the sentiment-sensitive cluster of our finance sector, including stock broking and fund management activities. These will, in turn, significantly affect our economic growth. However, our assessment is that the risk of such a scenario is low. Barring the materialisation of downside risks, the main challenge that the eventual QE tapering will pose for businesses in Singapore is the normalisation of the interest rate environment. Due to unprecedented loose global monetary conditions, our domestic interest rates have remained unusually low for the past few years.”
“Since 1999, EDB has disbursed $73 million in grants and $172 million in loans to 11 foreign educational institutions to establish and expand their presence in Singapore. The level of support provided is calibrated to be commensurate with the benefits which they are expected to bring to Singapore. EDB closely monitors the progress of the foreign educational institutions it supports through regular reviews of incentive milestones progress and annual audited financial statements of the institutions. Should an institution decide to terminate its operations in Singapore, EDB will assess the institution's progress towards meeting its pre-agreed deliverables and its past economic contributions to Singapore, before deciding on the amount of grant monies that should be returned to EDB. EDB also requires all loans to be repaid, regardless of whether an institution decides to remain in or leave Singapore.”
“The aerospace industry in Singapore has been performing well and provides many good jobs for Singaporeans. In 2012, the industry had a record high output of S$8.7 billion and employed 19,900 people. Four out of five people employed within the industry are locals and 90% of the jobs are skilled jobs9. Since the start of 2012, aerospace MNCs have begun operations at eight new facilities and are building another six facilities. These MNCs include leading brands, such as Bell Helicopter & Cessna Aircraft, Bombardier, Pratt & Whitney and Rolls-Royce. At steady state, these 14 investments will create over 1,500 new jobs in Singapore. Page: 158”
“In 2012, we supported over 1,800 companies covering S$670 million in loans and about $1.2 billion in insured turnover. The Government will continue to monitor and review the effectiveness of these schemes in addressing the trade and internationalisation needs of our companies.”
“The Government had studied various options to meet the gaps in trade and project financing identified by the Economic Strategies Committee (ESC). One of the options studied was the establishment of an EXIM bank. The study had concluded that the gaps in trade financing could be addressed by expanding the suite of trade and internationalisation finance schemes under IE Singapore, without the attendant financial and implementation risks that setting up an EXIM bank would entail. In October 2012, IE launched the Political Risk Insurance Scheme (PRIS) to enable companies to take up Political Risk Insurance for their overseas investments and projects. With this cover, banks are more willing to extend financing to companies undertaking projects in emerging markets. In addition, as announced at Budget 2013, IE Singapore is working with the Asian Development Bank (ADB) and private insurers to expand the ADB's Trade Finance Programme for Singapore-based companies. Many companies already benefit from the programme, which currently supports over US$1 billion of trade capacity. This credit enhancement tool will further encourage financial institutions to support Singapore companies that trade in less familiar markets. We expect to launch this by the end of 2013. These new schemes go above and beyond IE's existing schemes, such as the Loan Insurance Scheme (LIS/LIS+), the Internationalisation Finance (IF) Scheme and the Trade Credit Insurance Scheme (TCIS). Under these schemes, the Government takes on the major share of the risk of up to 75%, with the banks taking up the remainder. This ensures that companies at the margins are more effectively supported. Page: 137 These schemes have benefited many SMEs.”
“Since the start of 2012, our economic agencies and trade associations have organised 16 business missions to Myanmar. As Myanmar continues to reform and open up its economy, the Government will continue to help businesses to deepen our economic and trade relationship. Page: 136”
“Myanmar has embarked on a series of economic reforms in recent years, including implementing a new Foreign Investment Law and unifying its exchange rate system. These measures have helped to boost trade and investment activities in Myanmar. To signal their support for Myanmar's reform process, members of the international community, including the European Union (EU) and the US, have lifted economic sanctions on Myanmar. These developments will help businesses interested to set up operations in Myanmar, including Singapore companies. For example, the EU decision on 22 April 2013 to lift economic sanctions and to reinstate the Generalised Scheme of Preferences (GSP) to Myanmar will grant duty-free and quota-free access to the European market for most products6. Singapore companies seeking to base their manufacturing operations in Myanmar can then enjoy greater market access and decreased tariffs for exports destined for the European market. Over the long term, Myanmar has considerable growth potential, given its strategic location between India and China, 60-million strong domestic consumer market and an abundant young workforce. Singapore is a significant investor in Myanmar, with investments amounting to S$4.4 billion as at the end of 20117. To facilitate Singapore companies in exploring business opportunities in Myanmar, IE Singapore has organised investment seminars and also recently established an Overseas Centre in Yangon. The business community has also developed business-to-business (B-to-B) relationships with their Myanmar counterparts. For instance, the Singapore Business Federation (SBF) has tied up with the Union of Myanmar Federation of Chamber of Commerce and Industry (UMFCCI) to facilitate collaborations between companies, especially SMEs, from both sides.”
“Our agencies, IE Singapore, EDB and STB will continue to assist Singapore-based companies to internationalise in China and anchor Singapore's position as a gateway for Chinese companies and tourists.”
“There is potential for the services sector to further drive growth in China. Under China's 12th Five-Year Plan, China's GDP share of the services sector is poised to increase from 43% in 2010 to 47% by 2015. We see three broad trends supporting this growth and how Singapore’s services sector can ride on it. First, Chinese government is widely expected to pump in more resources in urbanisation. There will be greater demand for Singapore companies' expertise in housing, transport, water and waste management solutions. Second, the fast growing affluent and middle-class Chinese population will spur demand for consumption of goods and services. According to a report by McKinsey2, China will become the second largest consumer market in the world by 2020. This will provide a large consumer base for Singapore players in Food & Beverage, retail, logistics, healthcare and education services. Third, more Chinese companies may use Singapore as a springboard to Southeast Asia, as they seek new markets to expand their operations. Many Chinese companies have already set up their regional Page: 110 headquarters, R&D and manufacturing operations in Singapore. To date, more than 4,500 Chinese companies, such as Sinopec and Baidu, operate in Singapore. Professional services companies in legal, tax advisory and financial and banking can tap on this wave to expand its clientele base. The Government will continue to do its part to help Singapore industries benefit from China's growth. We will do this through regular reviews of FTAs involving China, such as our bilateral China-Singapore Free Trade Agreement (CSFTA) to help improve market access. We will also work closely with the business community and trade associations to profile Singapore's products and services at trade fairs in China.”
“Growth in the Chinese economy slowed from 9.3% in 2011 to 7.8% in 2012, and further to 7.6% in the first half of 2013. Thus far, the slowdown in the Chinese economy has had a limited impact on Singapore's Page: 109 exports to and tourist arrivals from China. Singapore's non-oil domestic exports (NODX) to China have continued to increase, while tourist arrivals have remained resilient. While the Chinese economy has slowed, most analysts do not expect it to have a "hard landing". For 2013, the International Monetary Fund expects growth in the Chinese economy to be around 7.8%, similar to the pace of growth in 2012, while the July Consensus Forecast has China's growth coming in slightly lower at 7.5%. If the Chinese economy slows down gradually as expected, the impact on our exports and tourist arrivals should remain limited. Moreover, as our export and tourist source markets are fairly diversified, a gradual pick-up in the growth of other markets, such as the United States, would help to cushion the impact of a gradual slowdown of the Chinese economy on the Singapore economy. However, should the Chinese economy slow down sharply, the impact on Singapore's growth is likely to be more significant. First, a sharp contraction in China's demand is less likely to be offset by a pick-up in demand from other markets in the short term. Second, to the extent that other regional economies will be adversely affected by a sharp slowdown in China, our exports to these economies may also be affected. At this juncture, a China "hard landing" is not our central scenario. We will continue to monitor the situation carefully. China is re-balancing its economy from an export-led and investment-oriented growth model to one that is driven by consumption.”
“The Department of Statistics compiles and disseminates quarterly estimates on the exports of services in Singapore's balance of payments accounts. These estimates are compiled according to international statistical standards set out by the International Monetary Fund and are published in MTI's Quarterly and Annual Economic Surveys. Services exports in the balance of payments are classified into major services categories, such as transport, travel, financial and other business services, which include business management services.”
“Mdm Speaker, the AFAS packages involve, in the jargon of the trade negotiators, Mode 1, 2 and 3. Mode 1 means providing services across borders; Mode 2 means you partake of services overseas; Mode 3 is opening up of markets, whether it is foreign equity participation, market access or national treatment; Mode 4 is what we call movement of natural persons, meaning allowing people to enter your country to provide services. Under AFAS, we have taken out Mode 4 for separate negotiations. Currently, ASEAN is negotiating an agreement on the movement of natural persons. Therefore, when we talk about Mutual Recognition Agreements (MRAs) to recognise professional and people in different sectors, that come under Mode 4. So far, we have been very careful in granting MRAs for very selective professional groups. The future negotiations will then come under this ambit, Mode 4 or the agreement for the movement of natural persons, and under which we will then have MRAs for different professions. This is on-going and it is not covered under the AFAS currently.”
“Mdm Speaker, to date, Member States of the Association of Southeast Asia Nations (ASEAN) have completed eight out of 10 packages of services liberalisation under the ASEAN Framework Agreement on Services (AFAS). The eighth package was completed in August 2012, and ASEAN Member States are currently working to finalise the ninth package by the end of 2013 and the tenth package by 2015. ASEAN Member States remain fully committed to meet the eventual level of liberalisation that they have pledged to meet by 2015. As of the eighth AFAS package of services liberalisation, Singapore has committed to open 71 sub-sectors under 10 services sectors for complete Page: 34 foreign equity participation.”
“This outpaced the labour productivity growth in developed economies, such as the United Kingdom, Germany and the United States. The growth in the real median gross monthly income of full-time employed resident workers in Singapore was 2.6% per annum over the period of 2007 to 20116. This was faster than the real median income growth for workers in developed economies, such as the United Kingdom, United States, Germany and Hong Kong. Page: 131 Page: 132”
“Between 2007 and 2011, Singapore's wage share of GDP averaged at 41.5%. This was lower than the wage shares of many developed economies, which were, typically, at 50% or more (see table below). Page: 129 Over the same period, the PPP-adjusted real median gross monthly income of full-time employed residents in Singapore was $2,7204, higher than the median income of workers in developed economies, such as Germany and the United Kingdom, but lower than that of workers in economies, like the United States. Between 2007 and 2011, the PPP-adjusted real average monthly wages of workers in Singapore in the biomedical cluster, general manufacturing cluster and the accommodation and food services sectors were $4,880, $2,840 and $1,640 respectively (see table below)5. The corresponding wage shares were 6.8%, 52.3% and 56% respectively. Page: 130 While the average wage and wage share in Singapore's general manufacturing cluster tended to be lower than those of developed economies, our average wage and wage share in the accommodation and food services sectors were comparable with those of other economies. A similar comparison for the biomedical cluster could not be made as comparable wage and wage share data for this cluster were not available for the other economies. Singapore's labour productivity growth from 2007 to 2011 was 0.2% per annum, slower than that in many developed economies, such as the United States, Germany and Hong Kong, but comparable with the United Kingdom, Italy and Spain (see table below). Productivity can be affected by economic cycles and should be viewed over a longer period of time. Our labour productivity growth from 2002 to 2011 was 2.4% per annum.”
“The Government has various channels for the public to provide feedback on issues and concerns. The Retail Price Watch Group, or RPWG, keeps a watch-out for excessive price increases of daily essential goods and anti-competitive behaviour. The RPWG website (www.retailpricewatch.sg) was set up as an information and feedback platform to reach out to the public. RPWG members are from both the private and public sectors, and include Mayors, business leaders from the retail sector, as well as officials from the Agri-Food and Veterinary Authority of Singapore (AVA), Competition Commission of Singapore (CCS) and Consumers Association of Singapore (CASE). Consumers who come across unfair trading practices can report them to CASE. Any substantiated reports of anti-competitive practice that come to Government's attention will also be referred to CCS for investigation.”
“According to a 2010 survey by the Frontier Strategy Group, 44% of MNCs with an Asia Pacific headquarters have chosen to site their regional headquarters in Singapore, ahead of Hong Kong and Shanghai at 17% and 13% respectively. Using Singapore as a base to train key executives is only one of the reasons why MNCs locate their regional headquarters here. Many MNCs have chosen Singapore to access opportunities in Asia because we have an open economy, a world-renowned business infrastructure and a talented workforce. Moreover, we enjoy strong business and cultural links to many Asian markets, which enables companies to tap Asia's growth potential more effectively. Changes to our domestic policies will affect companies in Singapore. For example, tightening our foreign worker policy may make it more difficult for companies to bring in executives for training and exposure. However, it is unlikely that MNCs will choose to relocate their regional headquarters purely because their international training programmes are affected. To maintain our well-established advantages, we continually engage executives from MNCs to help them understand and accept our policy direction. These engagements also enable us to address concerns and obtain feedback on our policies. Thus far, MNCs remain confident of the value of siting their regional functions in Singapore due to our innovation capacity, strategic reach and connectivity with the pan-Asian region. This confidence is also reflected in Page: 113 EDB's investment forecast of $11-$13 billion in fixed asset investments for 2013.”
“3 billion Transition Support Package which comprises the Wage Credit Scheme, Productivity and Innovation Credit bonuses and Corporate Income Tax rebates. The Government stays fully committed to ensuring the success of our restructuring efforts. By working closely with businesses and unions, we will be able to transform our economy and improve productivity and competitiveness. This will, in turn, ensure healthy job creation and wage growth for Page: 112 Singaporeans over the long term.”
“In sum, Singapore's overall competitiveness position in the WCY had deteriorated in large part because of the weak growth we experienced last year, and also because of the tight domestic labour market. However, notwithstanding the fall in our position, indications are that Singapore remains an attractive place for business, while job creation for Singaporeans remains healthy. For instance, in the WCY, Singapore retained its strong rankings in the areas of institutional framework and business legislation, which are important areas of consideration for businesses deciding where to invest. A separate EIU competitiveness report also forecasts Singapore to be the most competitive city in Asia in 2025. Moreover, investor interest in Singapore has remained strong, with Fixed Asset Investments (FAI) commitments rising to S$16 billion in 2012, the highest level since the recession in 2009. More jobs were also created for Singaporeans in 2012, with the increase in resident employment accelerating from 37,900 in 2011 to 58,700. To enhance Singapore's competitiveness over the longer term, the Government will press on with on-going efforts to restructure the economy to one that is productivity-driven. To-date, the Government has committed about $1 billion from the National Productivity Fund (NPF) to support the various sectoral plans and horizontal programmes endorsed by the National Productivity and Continuing Education Council (NPCEC). In recognition of the difficulties that some firms may face during the restructuring process, the Government also introduced the Quality Growth Programme in Budget 2013 to help companies upgrade and cope with the costs of restructuring. The Programme includes a three-year $5.”
“In the World Competitiveness Yearbook (WCY) 2013, Singapore slipped by one position to come in fifth, behind the USA, Switzerland, Hong Kong and Sweden. The fall in position was largely due to our weaker performance in two categories of the WCY competitiveness framework – Economic Performance and Business Efficiency. In the Economic Performance category, our competitiveness ranking was adversely affected by our weak GDP growth last year, which was 1.3% compared to 5.2% in 2011. Our weak GDP growth was, in turn, mainly due to lacklustre global economic conditions which had dampened the growth of externally-oriented sectors. Other externally-oriented economies like Taiwan and Hong Kong similarly saw their competitiveness rankings in this category deteriorate in the latest WCY. In the Business Efficiency category, our competitiveness ranking fell primarily because of three factors. First, our weak productivity performance in 2012, which was partly due to the slowdown in GDP growth last year. Second, the rise in unit labour cost (ULC) in the manufacturing sector. As the ULC is a ratio of total labour costs to real value-added (VA), this was largely due to the Page: 111 sharp pullback in the VA growth of the manufacturing sector last year, from 7.8% in 2011 to 0.1%, arising from weak global demand. However, rising remuneration costs in a tight labour market were also a contributor to the increase in ULC. Third, a less positive perception of the executives surveyed regarding the availability of skilled labour in Singapore, possibly because of the implementation of labour tightening measures.”
“We will continue to facilitate and support projects where there are benefits for Singapore, while ensuring that public monies are used judiciously. The Legal and Intellectual Property Programme Office, a joint initiative between EDB and MinLaw, will continue to work on developing Singapore into an International Legal Services and Intellectual Property hub in Asia, including talent development for the legal services sector.”
“About 15% of these graduates have chosen to stay and work in Singapore following their graduation, contributing to the legal talent pool in Singapore. Besides the grants provided by EDB to support the operations of the programme, the Government does not provide additional funding for scholarships. Like any academic institution, the programme administers and offers scholarships to deserving students. The NYU@NUS programme has added to the scope and diversity of Singapore's legal education landscape. The programme has also contributed to NUS' vision to be Asia's global law school. It has provided a platform for knowledge sharing between the NYU and NUS law faculties, which, in turn, helped NUS to further strengthen its other graduate law programmes. However, while the NYU@NUS programme has been largely able to attract the desired number of students, the high cost of the programme in comparison to alternative graduate law programmes here meant that the take-up of the programme depended on the availability of scholarships provided by the school. In addition, anticipated changes in regulatory policies in the US introduced the risk that students of the NYU@NUS programme would no longer have the opportunity to take the New York bar examinations beyond 2014. As a result, NUS and NYU decided to allow the programme to conclude following the graduation of its class of 2014. This arrangement ensures that no existing students will have their Master's programme disrupted. While we regret the conclusion of this collaboration, we respect the decision which NYU and NUS have made after careful consideration of the Page: 106 viability of the programme. The Government remains committed to developing the legal services and legal education sector.”
“The NYU@NUS Dual Degree Master of Laws Programme is a collaboration between the National University of Singapore (NUS) and the New York University School of Law (NYU). Students in the programme are cross-trained in Singapore and New York laws. Upon graduation, they will obtain both the NYU Master of Laws in Global Business Law and the NUS Master of Laws degrees, and are given the opportunity to sit for the New York bar examinations. The Singapore Economic Development Board (EDB) had supported the NYU@NUS programme based on the recommendations of the Legal Services Inter-Agency Committee in 2003, to help develop Singapore into a regional hub for legal training and research, with capabilities to cross-train lawyers in other national laws. The aim was also to deepen the talent pool of lawyers in Singapore with expertise in other legal jurisdictions to support the growth and Page: 105 development of our legal industry, which has been dealing with more international legal work. The NYU@NUS programme was established with the aim of becoming financially self-sustaining after a few years. To support the programme during its initial phase, EDB provided $5.3 million in grants to NUS to date, equivalent to about 35% of the cost of the programme. EDB estimates that an additional $2.2 million in grants will be disbursed to NUS, bringing the total grant amount to $7.5 million for the programme. EDB's grant complements other sources of funding for the NYU@NUS programme, namely corporate sponsorships, student fees and NYU and NUS' internal funds. To date, the NYU@NUS programme has produced 237 graduates who are cross-trained in Singapore and New York laws, of which nine are Singaporeans and three are PRs.”
“Thus far, DOS has not had to do so for household surveys.”
“The Department of Statistics (DOS)'s statistical activities are governed by the Statistics Act. Surveys conducted by DOS are usually carried out on a sample of firms or households that is representative of the entire population. Obtaining accurate returns from this representative sample is critical to ensure that the statistics compiled are reliable, as they are widely used by the Government, academics and the general public. Accuracy of returns includes not only ensuring that data captured on individual firms or households are correct and consistent, but also that there is no selection and response bias in terms of respondents to the survey. The penalties provided under section 9(1) of the Statistics Act are thus intended to deter non-response and wilful provision of false information to DOS. The Statistics Act also sets out strict requirements to protect the confidentiality of individual data collected. The penalties and safeguards in the Statistics Act are similar to statistical legislations governing national surveys in many other developed and regional countries. In carrying out its surveys, DOS proactively engages the respondents to seek their cooperation and also provides relevant assistance to help them complete the surveys. For example, trained survey officers who can speak the languages and dialects that the respondents are conversant in will make arrangements to visit at dates and timings convenient to the respondents. In the case of the Household Expenditure Survey, which takes place every five years and is currently being conducted, survey officers will assist households with the recording of their daily expenditure if necessary, and also accept receipts with sufficient details. DOS will only impose penalties for non-compliance as a last resort.”
“The nature of business risk varies across sectors as well as within each sector. For example, externally-oriented sectors such as Wholesale Trade and Transportation and Storage will be significantly affected by external developments via the trade and financial channels. On the other hand, domestically-oriented sectors such as Construction and Food and Beverage (F&B) will be more affected by domestic developments such as infrastructural demand and income growth. Within each sector, the risk faced by individual firms can also vary depending on their specific circumstances. Overall, net company formation in all sectors has remained healthy, with a greater number of companies entering than exiting in 2012. The proportion of firms making losses in key services sectors has also remained stable over the years. In particular, for the F&B segment, 877 companies ceased operations in 2012, a 2.7% decline as compared to the preceding year6. Operating receipts of the F&B segment continue to be healthy, rising by 12% to reach $7 billion in 20117. Gross operating surplus reached $526 million in 2011, a 6.4% increase from the preceding year. Furthermore, 67% of F&B companies recorded positive gross operating surplus in 2011. The Government remains committed to ensuring that Singapore remains conducive for businesses. For instance, Singapore retained its position as the easiest place to do business for the seventh consecutive year in the 2013 World Bank Doing Business report. The Government will also continue to help companies restructure, improve their productivity and move up the value chain. Businesses that tap on the various Government schemes available will be well-placed to make the transition to productivity-driven growth and remain competitive.”
“In line with the eGov Masterplan (eGov2015), we will continue to move towards a whole-of-Government approach in the delivery of accessible, integrated and value-added e-services to business sectors.”
“Singapore has consistently ranked well in the World Bank’s Ease of Doing Business Survey, taking the number one spot for the past seven years. The Government is committed to making its application processes efficient and simple. We have introduced the Online Business Licensing Service (OBLS), which is a one-stop licensing portal for more than 80 business licences from 17 Government agencies. Businesses can apply for or renew licences, check application statuses, update licences, and terminate their licences online, in one online transaction. In addition, we have also introduced various other platforms to streamline the interactions between the Government and businesses. For example, local and international suppliers can search for procurement opportunities and submit bids online through the Government's one-stop e-procurement portal, known as GeBiz (Government Electronic Business). Government agencies work closely with one another to enhance the quality and user-friendliness of Government websites and e-services. For instance, a set of Web Interface Standards (WIS) guide agencies in developing websites and e-services that are easy for customers to use, and provide a more consistent, intuitive and smooth experience for Government websites. Specifically, the WIS requires agencies to list and describe their e-services and forms prominently on their websites, to help users find the relevant e-services quickly, understand what is required in the submission and get all relevant information ready before proceeding with the e-services. The Public Service will continue to improve the user-friendliness of Government websites and streamline Government e-services, including applications for business licences and permits.”
“The Micro Loan Programme (MLP) is a fixed interest rate working capital financing programme for micro-enterprises with no more than 10 employees. The total value of loans approved under MLP in 2010, 2011 and 2012 were S$144.1 million, S$94.6 million and S$120.7 million respectively, with the corresponding median interest rates being 5.5%, 5.5% and 5.75%. The dip in 2011 was due to the retraction of the enhancements to government loan schemes under the Special Risk-Sharing Initiative (SRI) Package. Loan levels have since risen. Of the approved MLP loans between 2010 and 2012, 14% by value went to the construction sector, 12% to the manufacturing sector, 37% to the services sector, and the remaining 37% to the wholesale and retail trade sector. The wholesale and retail trade sector takes up a significant share of MLP due to the sector's comparatively higher working capital requirements than other sectors. Interested applicants will first consult their relationship managers (RMs) at the participating financial institutions (PFIs), whereupon the RM will conduct a preliminary screening, before advising the interested applicant whether or not Page: 145 to submit an application. The RMs do not maintain a record of the number of cases where they have advised potential applicants against submitting an application.”
“Of the approved LIS and LIS+ loans, 14% by value went to the construction sector, 13% went to the manufacturing sector, 11% to the services sector and the remaining 62% to the wholesale and retail trade sector. Interested applicants will first consult their relationship managers (RMs) at the participating financial institutions (PFIs), whereupon the RM will conduct a preliminary screening, before advising the interested applicant whether or not to submit an application. The RMs do not maintain a record of the number of cases where they have advised potential applicants against submitting an application.”
“The Internationalisation Finance Scheme (IFS) assists Singapore-based companies to expand overseas, by supporting companies to acquire fixed assets for use overseas, or financing the working capital expenses of their overseas projects. The total value of loans approved under IFS in 2010, 2011 and 2012 were S$378 million, S$195 million and S$121 million respectively, and the average annual turnover of successful applicant companies is around S$40 million. The decline in approved IFS loan quantum over this period was due to the scaling back in 2010 and withdrawal in 2011 of enhancements made to IFS as part of the Special Risk-Sharing Initiative (SRI) in 2009. The 2012 levels, therefore, are more representative of the steady-state runrate for our schemes. Of the approved IFS loans, 41% by value went to the infrastructure services sector, 26% to the electronics and precision engineering sector, 12% to the lifestyle services sector, 7% to the information communications technology sector, 6% each to the commodities and environmental services sectors, 2% to the transport and logistics sector, and the remaining 1% to the business services sector. The Loan Insurance Scheme (LIS and LIS+) enables SMEs and Singapore-based internationalising companies to have better access to working capital financing and trade financing, by supporting insurance against default. The total value of loans approved under LIS and LIS+ in 2010, 2011 and 2012 were S$2.3 billion, S$1.6 billion and S$1.3 billion respectively, and the average annual turnover of successful applicant companies is around S$15 million. As with IFS, the decline in approved LIS loan quantum over this period was a result of the scaling back and withdrawal of the SRI enhancements in 2010 and 2011 Page: 144 respectively.”
“The Government will co-fund the programme, which will amount to more than $70 million over five years. Mdm Chair, let me summarise the key thrusts of our work ahead. First, we must stay open and flexible in order to tap global and regional opportunities that are still opening up around us. Second, we must persevere in our restructuring to achieve higher productivity and quality growth for all Singaporeans. We all know that there are no quick fixes in addressing our challenges. The path of restructuring will not be easy but the Government is committed to help our companies face the challenges ahead.”
“We will continue to do so. On PEP, I think this is a useful suggestion. The PEP has been very effective in the past. We will continue to reactivate it to provide leadership within Government agencies and Ministries to cut red tape, and to reduce compliance cost. Mr Teo Siong Seng also asked us to adopt a more flexible approach in each sector. I hope I have illustrated that with the example of the Marine and Offshore sector. In fact, we do so for the other sectors too. Page: 67 Let me just elaborate on our measures to help the SMEs. In fact, we have embarked on this in a deliberate attempt last year. Last April, Minister of State Teo Ser Luck led a committee of representatives from MTI, SPRING, IE Singapore as well as key industry partners to comprehensively review our schemes in helping the SMEs. Arising from this review, we will be implementing eight strategies to help the SMEs. Minister of State Teo Ser Luck will elaborate on them later on. Let me just highlight one of these schemes. This is the SME Talent Programme, which was earlier announced in the Budget Statement. The aim of this programme is to create a pipeline of local talent for SMEs. Under the programme, SPRING will match over 3,000 promising Polytechnic and ITE students with SMEs over the next five years. Upon graduation, these students will start their careers with SMEs that can offer them good jobs as well as training. We will work through the trade associations and chambers (TACs) for this programme, since they know the industry best and will be able to identify progressive SMEs that can work and absorb these students. We hope that this will attract more local talent to join SMEs and encourage the entrepreneurial spirit in Singapore.”
“And we will also allow the shipyards to ride the current upturn in the offshore sector and undertake the necessary changes to maintain their Page: 66 leadership position in the long run. Collectively, we believe these restructuring efforts will result in a 4%-6% Compounded Annual Growth Rate (CAGR) in Value Added per worker between 2011 and 2020. But we will continue to monitor the sector's progress because we believe that the Marine and Offshore sector can continue to play a key role in Singapore's economy. What we have done in the Marine and Offshore sector, we have also systematically done so for the other sectors particularly in the more challenging sectors such as retail and the F&B sectors. And beyond each sector, we will also find cross-cutting methods to strengthen the linkages between our various sectors. 1.45 pm Members have also raised concerns about how SMEs and micro-enterprises could cope with the restructuring. As Members have heard from Deputy Prime Minister Tharman, we pay particular attention to our SMEs, because they are an important part of our economy. They provide good jobs for some 1.3 million Singaporeans. The Government continues to be committed to help SMEs to go through this difficult transition period, and many of the assistance measures introduced this year, in fact, have been weighted to benefit SMEs more. This was done consciously and deliberately because we want to help our SMEs. Minister of State Teo Ser Luck will elaborate on the measures later on when he talks about the measures to help our SMEs. Let me now address Mr Teo Siong Seng's point about industrial properties. As I have mentioned several times in this House, JTC remains committed to provide industrial land competitively, compared to our benchmark range of competing locations.”
“Our shipyards command 70% of global market share in offshore drilling rigs and conversion of tankers to production vessels. However, we believe that there is still room to improve, particularly in the land and labour productivity as well as to move the sector up the value chain. Therefore, transforming this sector will take place in several ways. First, we will improve land and labour productivity through automation and enhancing process workflows. An example is Sembcorp Marine's Integrated New Yard which will be ready by the second half of this year. And with the improved logistics, the redesigned workflows and process automation, manpower requirements will be reduced in the long term for this New Yard. Second, we have worked with the shipyards to strengthen their supplier base. ST Marine, for example, is one of the largest local shipyards involved in shipbuilding and ship repair, and it procures ship repair services from many of its sub-contractors. With SPRING's support, ST Marine partnered two of its sub-contractors, Glenn Marine Services and Comila Marine Services, to adopt a new method of using wet abrasives to remove paint or rust from a ship's surface. This increased efficiency has resulted in time savings of between 5%-10%. Third, companies are also encouraged to enhance their design and engineering capabilities, which will allow them to differentiate themselves from their global competitors in the long term. Keppel Offshore & Marine Technology Centre presently has a team of 86 researchers who do upstream R&D on new product designs to augment Keppel's design and engineering capabilities. Finally, we are also tightening the Dependency Ratio Ceiling (DRC) but will phase these changes over five years. This is to ensure the companies have time to adjust.”
“But over the long term, productivity improvements arising from our current restructuring should help to prevent higher costs from fuelling strong price increases. The Government has therefore adopted a multi-pronged approach to manage inflation and will continue to watch the developments very closely. But the key to managing the whole process is to make sure that we continue to pace and calibrate the changes carefully as we restructure. I acknowledge several Members' observations that productivity changes need time and this is precisely how we have structured our strategy. Our restructuring strategies are also structured for each sector because we know that we cannot have one-size-fits-all. And therefore, we have taken a sectoral approach in developing plans together with the private sector. Over the last three years, in fact, the National Productivity and Continuing Education Council (NPCEC) has worked and endorsed productivity roadmaps for 12 Page: 65 sectors, including the retail, the food manufacturing, electronics and precision engineering sectors. Roadmaps for the remaining four priority sectors will be endorsed soon. For each sector, we engaged the industry closely to study their productivity challenges before recommending specific initiatives and targets. And even with the roadmaps, we continue to maintain this under regular review, and continue to engage with the industry players to make sure that the roadmaps continue to remain relevant. Let me give you an example for illustration so that you can understand the comprehensive way in which we go about developing this strategy. This is the Marine and Offshore sector. As you all know, Singapore is a global leader in the Marine and Offshore sector.”
“And in answer to Mr Vikram Nair's query, we have a system by which IE Singapore tracks companies that can benefit from the FTA and make Page: 64 sure they have outreach programmes to reach out to these companies as a cluster as well as individually. We recently concluded the FTA with EU, our second largest trading partner and largest foreign investor. Once the EU-Singapore FTA (EUSFTA) enters into force, the EU will eliminate its tariffs for imports originating from Singapore, over a period of five years. Therefore, exporters of electronics, machinery or chemicals, including our SMEs, will enjoy improved market access into the EU. As the EU has relatively high tariff rates for processed foods, the elimination of tariffs under the EUSFTA will benefit our food manufacturing companies, many of which are SMEs. Let me now turn to our second strategic thrust and that is to restructure for productivity and for quality growth. We recognise that there are certain downside risks to this strategy and we must be aware of this. For example, in a tight labour market with limited resources, there will, of course, be some opportunities that we may have to forgo. The second downside risk is the risk of rising structural inflation and rising business cost, given the very tight labour market. We are very mindful of all these risks, especially not to allow runaway inflation or a wage-price spiral to gain traction. Therefore, the Wage Credit Scheme which was announced during the Budget Statement will help the companies defray some of these wage increases, and which will then prevent them from being entirely passed on to the consumer. In addition, we expect the subdued state of the global economy to weigh on overall demand and this may help contain inflation in the near term.”
“Senior Minister of State Lee Yi Shyan will elaborate in greater detail, but let me touch on financing, something that Ms Jessica Tan raised. Last year, IE Singapore launched the Political Risk Insurance Scheme (PRIS) to help Singapore-based companies protect their projects and investments from political risks when they internationalise. Political risk insurance is a useful risk mitigation tool and this scheme will help cover up to S$2 billion in overseas investments over the next three years. This year, we will work with the Asian Development Bank (ADB) and private insurers to expand the ADB's Trade Finance Programme to enhance trade flows for Singapore-based companies. Many companies already benefit from this programme which currently supports over US$1 billion of trade capacity. Given that our companies are exporting to Asia's emerging markets, demand for such trade financing programmes will continue to be high. IE Singapore will release more details of this scheme later. Mr Vikram Nair asked about the effectiveness in our use of our FTAs. As we know, over the years, we have developed growing trade linkages with a successful network of FTAs. We have FTAs with all our major trading partners and these FTAs improve market access for our companies particularly our SMEs as they expand overseas. In 2012, more than 1,700 companies benefited from our FTAs, and we expect this number to increase as we expand our FTA networks and make them more user-friendly. Our companies, including our SMEs, also benefit by having tariff savings from our FTA.”
“It uses data analytics capabilities to add value to logistics services. Such services rely on strategic planning as well as solutions development to better manage the supply chain in the whole of Asia. The rise in demand for services in Asia has led top global third party logistics players (3PLs ) such as DHL, UPS and Nippon Express to establish their regional or global functions in Singapore. In particular, the world's No. 1 air express and 3PL company DHL has established its global Services Logistics Centre of Excellence here to develop innovative and specialised logistics solutions for its clients worldwide. Our Singapore logistics companies are also growing. Pacific Integrated Logistics (PIL) Pte Ltd started out as a traditional freight forwarder and is now a fully integrated logistics solutions provider. PIL first established its international Page: 63 presence in Shanghai and Suzhou. With IE Singapore's help, PIL ventured into Chengdu, where rapid infrastructural investments have created a strong demand for logistics services. PIL is also well connected to the South East Asian market, and uses Singapore as its headquarters to serve their customers in Malaysia, Indonesia, Thailand, the Philippines and Vietnam. And by the second half of this year, PIL will also be in Myanmar. Singapore will strengthen our value proposition as an open and connected economy, so that we can continue to attract companies like PIL to site their high value-added functions here and expand regionally. Ms Jessica Tan asked about the types of assistance available to help our companies to internationalise. The Government offers a wide suite of initiatives to holistically support companies in this area.”
“This is a growth segment highlighted by Mr Chen Show Mao. We agree with him that Singapore can serve as a platform for us to test out products and then to replicate this wider afield in Asia. As we know, Asia is ageing and there is a growing demand for products and services for the elderly. Singapore is therefore well placed to tap into this market. In fact, we have local entrepreneurs who are seeking to tap this growing market. Sofshell, for example, is a local spin-off from the Institute of Materials Research and Engineering. It has pioneered a responsive soft-shell armour that hardens upon sudden impact and dissipates the force. Sofshell has obtained grant funding from A*STAR and SPRING to develop prototypes for elderly hip protectors. When the elderly falls, the armour will become hardened and that will protect the elderly from hip injuries. Sofshell is also working with IE Singapore to establish its manufacturing supply chain as well as its overseas distribution channels. Global companies too are using Singapore to innovate products and services for the silver industry. We have Siemens Medical Instruments' manufacturing and R&D facility here, where it developed and launched its Ace hearing aid. This is the most discreet product in its hearing aid range. And Procter & Gamble (P&G) and the University of Cincinnati have also partnered Singapore Polytechnic to set up the Live Well Collaborative-Singapore project. This non-profit and independent innovation research centre uses consumer insights to co-create products and services with the industry players. And the fourth area that I would like to highlight is high-end logistics services, to illustrate the big data that Ms Tan Su Shan talked about. High-end logistics services now extend beyond the physical flow of goods.”
“Ms Jessica Tan asked about our Global-Asia Hub strategy and, in particular, specific high-growth sectors that Singapore companies could focus on here in Singapore as well as when internationalising. The good news is that the Asia growth story is largely intact, and our Global-Asia Hub strategy continues to resonate with global and regional investors. We also see opportunities for Singapore companies seeking to tap Asia's growth and the continuing economic integration of our region. Let me highlight four sectors as examples. First, the high-value pharmaceutical sector offers high wages and employs more than 5,700 people, where 80% perform skilled jobs. In 2012, the pharmaceutical value-add grew by 14% to S$13 billion. Biologics is one niche area within the industry that has been gaining momentum. The first biologics facility was set up in 2007; we now have eight, including two first-in-Asia biologics manufacturing investments from Novartis and Amgen. Over the next three to five years, the biologics sector will create at least 500 jobs – highly skilled jobs for chemists, microbiologists, biotechnologists, engineers and technicians. The second sector is baby nutrition and baby care. This is another growing segment, fuelled mainly by the population boom in Asia and the rising middle class. Singapore has become an established hub for commercial and innovative activities in baby nutrition and baby care. The world's top infant nutrition players, like Nestle Nutrition, Danone, Mead Johnson, Abbott Nutrition and Friesland Campina, have all located themselves here. More recently, Proctor & Gamble relocated its global HQ for Baby Care, including its Pampers brand, to Singapore. Page: 62 1.30 pm At the other end of the spectrum from infant nutrition is the silver industry.”
“Mdm Chair, let me first thank Members for their comments and suggestions. Ms Jessica Tan asked about MTI's strategies to grow the economy amidst global uncertainties and our domestic constraints. Given the weak external environment and the tighter labour situation domestically, we expect a modest 1%-3% growth for Singapore in 2013, and a 3%-4% average growth for the rest of this decade. For a country that has enjoyed twice the rate of growth since 2003, this slowdown will be a significant change. The slowdown would be most acutely felt in our workforce as our population ages and our citizen workforce shrinks over time. Foreign manpower, as a complement to our Singaporean core, must be managed judiciously. To deal with this slowdown, our companies must restructure and aim for higher productivity. Restructuring is painful, but it is unavoidable. Both Ms Jessica Tan and Ms Foo Mee Har asked whether we can stay globally competitive amidst our restructuring, and whether Singapore can Page: 61 retain its high value-added activities. The outcome of our efforts will, in fact, have a major impact on our future – what the economy will look like, and what kinds of jobs Singaporeans will have. We are, therefore, restructuring to stay more competitive, not less. But to do so successfully, we must carefully pace and calibrate the changes. While we accept a slower growth trajectory, we aim to create quality growth and higher value jobs for Singaporeans. MTI's strategies for achieving quality growth are, therefore, two-fold: first, to stay open and flexible to tap global and regional opportunities; and second, to restructure the economy so that our companies and workers can achieve higher productivity and sustainability. Let me first turn to the strategy of staying open.”