Lim Hwee Hua
Singapore
“Mr Chairman, Sir, I believe the Minister for Finance has actually addressed that quite adequately in the Budget Statement. I will encourage the Member to read the Hansard. As I recall, he did say that our projections for revenue have been made for the next five years and we do not target a particular source of revenue.”
“Mr Speaker, Sir, I would encourage the Member to file a question for MCYS, if she would like to discuss safeguards further. What I would comment here is that at the outset when we conceived the whole Integrated Resorts idea, there were many business risks: whether it is country risk or the timing of the business cycle and so on.”
“Mr Speaker, Sir, the supplementary questions raised by Ms Denise Phua have actually been debated to some detail under the different heads, in terms of the intended strategy – why we are having Integrated Resorts and casinos in the first place. This has been debated quite extensively by the Ministry of Trade and Industry.”
“Madam, I take the Member's point about the need for checks to be done professionally, and indeed this is the case, and that is why the officers would be sufficiently trained to conduct these checks in a professional manner.”
“The proposed amendments are necessary in order to effect the new financing framework, to allow for greater contestability to be injected into the RTS industry, as well as to ensure security and continuity of the RTS operations. Madam, I beg to move. Question proposed. 4.28 pm”
“Because of the complexity of the issues and the need for us to continue consulting other players who have already been operating in that space, as well as consulting the business community in greater detail, the study would take the better part of this year. OUTCOME OF 50PLUS EXPO 6.”
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“If subsidies, for example, were introduced across the board, then families in real financial need will actually receive less because subsidies will also be received by families who do not need these subsidies. Er Lee Bee Wah (Ang Mo Kio): Mr Speaker, Sir, I would like to ask two supplementary questions. First question: what is the Ministry's stand if bus operators want to pass this cost of installing belts to the parents? I read from some of the response in the newspaper that says that it will increase the bus fares to as much as 50%. Is this increase justifiable, based on $500 per seat belt? Second question: I am quite disturbed by the response from the bus operators that whenever we talk about safety, they talk about cost. Currently, LTA allows them to carry three students on a bench which is meant for two students when they install a seat belt. So, does it compromise the safety aspect?”
“Sir, indeed, the question of seat belts for buses had actually been looked at since the issue was last raised in 2006. As Members can appreciate from the various discussions and debates in the media as well as outside of the House, this is a very complicated issue because it is not simply a question of just imposing the implementation of seat belts on buses. There are many issues to be considered because it has implications in terms of, firstly, the technical feasibility, whether, for example, do we use two-point which is the lap belt, or do we use the three-point belt; secondly, the implications for the buses themselves, because not all buses can be retrofitted with seat belts; and, thirdly, the implications in terms of both the reduction in capacity as well as the need to phase-in the implementation for existing buses. Although the installation cost may sound low, as I have given the numbers, the implications are actually quite tremendous because it relates to whether buses can indeed be fitted out. So, it is not just a straightforward issue of imposing it as an interim measure. Even if we want to do it as an interim measure, we will still have to go through the technical studies of whether all buses can be done so in a straightforward manner. Mr Sin has raised the question of who should essentially pick up the tab of both the installation cost as well as the increase in operating cost per passenger when implemented. While the idea of asking for subsidies may seem to be a rational one, quite apart from the introduction of distortion to what would have been otherwise the correct market pricing for the provision of school bus services with seat belts, there is also the question of equity or the amount of help that families would receive.”
“The other cost element is the reduction in the capacity of the bus. With seat belts, a seat that could previously seat three children can now only seat two. I would like to inform the House that LTA will work with the bus operators and other stakeholders to keep any cost increase to a minimum.”
“These buses must also have a reflective triangular "Children Crossing" sign with red blinking lights at the rear, to alert other motorists that children could be crossing the road. Let me now turn to seat belts. LTA's study has shown that seat belts will enhance the safety of passengers who take small buses. LTA has also studied the effectiveness of seat belts for big buses, but found that big buses, by virtue of their design, size and weight, are better able to absorb the impact of a collision than a small bus. This is why countries that mandate seat-belts for school buses usually impose it on only small buses. Hence, as announced by the Minister for Transport on 17th May 2008, the LTA will mandate that all new small buses must be installed with seat belts. LTA is working out the details with the relevant stakeholders and will announce them soon. As for existing small buses, this is more complicated. They have different designs and seat configurations, and LTA needs to take these into account when working out how best to retrofit effective seat belts in existing small buses. Sir, I would like to reiterate that effectiveness is important as the aim is to enhance safety and not just simply install seat belts. LTA is engaging safety experts and consulting the motor industry, and expects to complete the study in three to six months. Schools, parents and school bus operators will also be consulted before implementation because there will be operational implications. As to the cost of installing seat belts, a set of lap belt costs about $25 each, while a seat integrated with three-point seat belts costs between $250 to $500, excluding the cost of installation. Installation costs vary significantly depending on the design, seat configuration and condition of the bus.”
“Dr Lim Wee Kiak, Mdm Cynthia Phua, Ms Lee Bee Wah and Mr Sin Boon Ann have raised questions relating to safety measures in place for school buses, whether seat belts should be installed in school buses and the cost of installing seat belts in school buses. Let me assure them that we share their concerns about the safety of children travelling in school buses. The Land Transport Authority (LTA) already has in place various safety measures for school buses. Every school bus is required to meet vehicle construction and safety standards before it is allowed to be registered here, and is required to undergo compulsory periodic inspections. Buses are subject to a speed limit of 60 km/hr. School bus drivers are required to attend a training course and take a test in order to be issued a Bus Drivers' Vocational Licence. LTA screens the Driving Licences of bus drivers annually, and will suspend or revoke the Vocational Licence of drivers whose Driving Licences have been suspended or disqualified. When ferrying young children to and from kindergartens or childcare centres, it is compulsory to have a licensed attendant to look after the children, irrespective of the number of children in the bus. As for buses ferrying older children, an attendant is also required if there are more than 30 children being ferried. LTA has reviewed this, and based on its safety assessment, maintains that the current rule is appropriate. To enhance the safety of children during boarding and alighting, all school buses are required to install hazard lights that are automatically activated when the bus stops to pick up or drop off children.”
“Mr Speaker, Sir, I believe I have answered the first part of Mdm Ho's question, but let me just reiterate that this is not a cost-plus formula where the operators can just simply pass on the costs that they have incurred, whether it is by way of imposed penalties or for other reasons. In terms of the safeguards on the use of the fare review mechanism, we have the Return On Total Assets which is really a reality check, and that has been applied to good effect last year. Her other question about inflation is really captured in the formula which is currently all-embracing and which also serves to reflect the actual cost that is being felt throughout the whole economy and not just by the transport operators themselves. BUILDING OF COAL-FIRED POWER PLANT (Impact on environment) 20. Mr Low Thia Khiang asked the Minister for the Environment and Water Resources in view of the announcement by Tuas Power (recently acquired by China Huaneng Group) to consider building a coal-fired power plant in Singapore (a) what is his assessment of the impact of this plan on our environment; and (b) what regulatory measures are currently in place to protect the environment and to ensure that new clean coal technology is efficiently deployed to the advantage of Singapore.”
“Mr Speaker, Sir, LTA imposed a fine of S$387,176 on SMRT for the 7-hour disruption to its train services between Pasir Ris and Tanah Merah MRT stations on 21st January 2008. I would like to assure Members of the House that the cost of the fine is not passed on to commuters. Fare increases are regulated by the Public Transport Council (PTC) and capped by a fare adjustment formula. Any fare increase is determined by macroeconomic factors, such as the overall price inflation and the growth of average wages in the whole economy. It is not a cost-plus formula where any increase in the operator’s costs can be met directly by higher fares.”
“Mr Speaker, Sir, this is what I was referring to in terms of the minimum headway that must be observed. For example, the minimum headway on the North-South Line is about two minutes. So you cannot really pack in more trains. SMRT (Fine for train disruptions) 19. Mdm Ho Geok Choo asked the Minister for Transport how SMRT paid the fine for the train disruptions in January 2008 as there have been concerns from the public that this cost is funnelled down to the commuters.”
“Sir, differential pricing is certainly something which the operators can consider. Right now, what is prescribed by the Public Transport Council is the maximum fare that they can charge.”
“Mr Speaker, Sir, I will agree with the Member that, certainly, a more comfortable ride will induce more motorists to switch to the trains. It is for this reason that we are reviewing the operating standards as far as the passenger loading is concerned. But if I may be allowed to just put in context what some of the international benchmarks look like. The actual loading, for example, in New York, is 4.4, in Tokyo it is 7.1, as compared to our 5.0 – 5.0 as the standard and 4.0 in terms of actual loading. For London, it is 5.0. Hence, our current standard is not too far out of what is being achieved elsewhere. But, nonetheless, we are mindful of the expectations of commuters and we are reviewing that. The other constraint that we would have to bear in mind is actually the signalling system which will determine the minimum headway that must be kept between trains as well.”
“Sir, I thank Ms Irene Ng for her comments. I would just want to reiterate that whilst the experiences of the other cities are extremely helpful in terms of planning, what we do notice is that the culture here is completely different in terms of attitudes of cyclists themselves, and of motorists when it comes to learning to share road space, to be courteous and to be considerate. These are long-term challenges. We will continue to work at it so that we can all share the space with the eventuality of cyclists being able to get to the transport nodes and therefore to be linked up to the rest of the island through the network system. This would continue to be work in progress. 4.30 pm”
“Sir, in reply to Ms Lee, first of all, a typical pair of lifts would cost about $1.8 million in terms of capital cost. But it would only last for about 20 years. On top of that, the running cost is about $90,000 a year, which is way in excess of the $1,400 a year for the maintenance of a typical ramp. Currently, the cost differential is still really very large and, of course, over time, there is a possibility that this could come down and, at that point, certainly we can bear that in mind. As for the actual location and the experience at the Khatib station, I stand corrected and would certainly be happy to go and walk that length with Ms Lee. Certainly, if the distances exceed the benchmark that we have currently between the existing lift and the provision for a second one, the LTA will be quite happy to consider that. So if Ms Lee could provide me with the details, we would be happy to take that up.”
“I would like to inform Dr Lam that we do track these developments very closely in terms of the types of aircraft that have been developed and when they are ready. But, at the same time, we focus a lot more on connectivity, especially in terms of the flow of passengers, investment and business, and so on, vis-a-vis travel patterns as well. And it is a rather complicated and complex combination of different parameters but it is something that we feel at the heart of it sits liberalisation. Therefore, we are going great lengths with open skies, and we are pushing for open skies because we believe that would then ensure flows would come to Singapore, and through Singapore, on a whole variety of aircraft.”
“00 pm MPA also has several initiatives in the area of R&D and innovation and many of these are supported by the MINT Fund, which Mr Foo referred to, which was set up in September 2003 with $100 million. Already $30 million has been committed. As industry and researchers ramp up their maritime research programmes, we expect the Fund to be tapped at a faster pace. Sir, our efforts to catalyse maritime research are already showing results. In December last year, Keppel set up its new Keppel Offshore and Marine Technology Centre, and committed more than $100 million to fund its activities over five years. Through our enhanced maritime incentives and numerous maritime initiatives, we aim to make Singapore an even more compelling location for maritime businesses. At the inaugural Singapore Maritime Lecture last year, Minister Mentor said that the maritime industry was "basic" to Singapore's development. My Ministry intends to make sure that the maritime industry is similarly integral to our future.”
“In 2007, the SGX AsiaClear cleared a total value of more than US$800 million of FFA trades, compared to about US$3 million from May to December 2006. As AsiaClear gains wider acceptance and freight rates remain volatile, we can expect volumes to climb. We are also taking steps to strengthen Singapore as a centre for marine insurance. MAS has announced changes to fine-tune the regulatory requirements on marine mutual insurers, such as a reduction in the minimum paid-up capital requirement from $25 million to $5 million and also reduced fund solvency requirements. With the favourable trends of shipping and trade flows in our favour as the centre of gravity of shipping continues to move east with Asia’s dynamic growth, international maritime service providers are realising the importance of an Asian presence. While we believe we have a very attractive proposition as an IMC, MPA will no doubt be redoubling its efforts to grow the maritime services, and to listen carefully to our customers and our potential customers to continue to improve upon the existing suite of incentives as well as to reduce the regulatory burden. Mr Foo also asked what was being done to promote training, innovation and R&D. With the maritime sector generating more than 7% of GDP and providing about 100,000 jobs, opportunities for job seekers abound. There is generous financing for maritime training through the various funds as mentioned by Mr Foo. Over the years, MPA has also worked with our tertiary institutions to put in place a comprehensive range of maritime courses. We will now reach out to potential recruits, especially through the Maritime Outreach Network, or MaritimeONE, which was launched last year. 4.”
“Singapore is now well-recognised as a major maritime centre, with a critical mass of companies forming a very vibrant community. To add further momentum, for this Budget, we have included foreign exchange gains and gains from risk management activities as qualifying income for tax concessions under Singapore Registry of Ships and the AIS Scheme. We have also extended the concession that gains from sale of vessels will not be subject to income tax for a further five years. These changes will provide greater tax certainty to companies, an attribute which many players place a premium on. We have also made inroads into new segments where we have had less presence traditionally. Ship finance is one example. The Maritime Finance Incentive, or MFI, introduced in 2006 to promote alternative ship finance structures, has attracted five companies with US$1.2 billion in assets under management, three of which are listed on the Singapore Exchange as shipping trusts. This year’s Budget provides further fillip in the form of two new measures to enhance Singapore’s attractiveness. First, we have extended the MFI to include containers as a qualifying asset. Income from the leasing of containers will enjoy a concessionary tax rate of 5% or 10%. This inclusion will attract specialised container funds to Singapore, and add to the growing number of shipping funds here. Second, partnerships will now be included as qualifying entities for the MFI. Hence, shipping funds which are structured as partnerships are now also eligible for the MFI. Once current market uncertainties abate, we can expect more companies to sign up. Trading of forward freight agreements has also witnessed stellar growth since it began in May 2006.”
“Singapore agreed to participate in the US-initiated Secure Freight Initiative, or SFI, to test the feasibility of 100% security scanning of US-bound containers at upstream ports. This trial is scheduled to commence in June 2008 and will last for six months. This is part of our wider effort to work with stakeholders to seek practical approaches and measures so as to enhance the security of maritime trade across the world. Environmental considerations have also been integral to our port and shipping policies. Mr Foo mentioned revisions to the Gate System, which will ensure that new bunker tankers licensed will meet more stringent emissions standards. Today, our port development projects must also undergo independently-conducted environmental impact assessments. Together with Malaysia and Indonesia, we have also launched a Cooperative Mechanism that will involve international users of the Straits of Malacca and Singapore in the environmental protection of the Straits. Singapore has signed up to all key international conventions that regulate air emissions from ships, and we are also participating in international discussions on how to further reduce these emissions to make shipping less pollutive. Sir, I agree with Mr Foo on the importance of the development of a cluster beyond the port. Our IMC promotion efforts also include developing Singapore as a base for shipping and maritime services. I am happy to report that we have made good progress. Over the last three years, ship brokering and chartering grew at an annualised rate of about 12% while the number of international shipping companies under our Approved International Shipping Enterprise Scheme has jumped by 50% to about 100 today.”
“To this end, the tender to develop an additional 16 berths at Pasir Panjang Terminal was awarded last year, which will add a capacity of about 14 million TEUs, equivalent to about half our current container throughput. Plans to cater for growth beyond Pasir Panjang Terminal are also in motion. Secondly, we must ensure that Singapore remains the preferred port of call. To this end, the Maritime and Port Authority (MPA) ensures that port services are efficient and user-friendly. Our port operators have also been responsive to customers’ wish for more operational control and autonomy. So, to date, PSA has entered into four joint ventures with shipping lines. As highlighted by Mr Foo, security and environmental concerns have risen up the agenda and our strategies must therefore take them into account as well. In this regard, we see an opportunity to position our port as a trusted and secure node in the international supply chain. We have already tightened security within the port. We are now broadening our focus to secure the supply chain itself. To this end, the Ministry worked with the Singapore Customs to launch in May last year the “Secure Trade Partnership”, a national supply chain security standard. Some 21 companies have come on board, and more companies are gaining interest. Internationally, as referred to by Mr Foo, Singapore is helping to improve the resilience of the supply chain through the APEC Trade Recovery Programme, or the TRP. Endorsed by the APEC Leaders in September 2007, the TRP aims to help APEC economies resume trade in the event of a major terrorist attack on the global supply chain. Singapore will be organising a workshop later this year to help the APEC economies gain a better understanding of the TRP and its benefits.”
“Sir, I thank Mr Cedric Foo for his interest in the maritime sector. In 2007, Singapore continued to perform well across all sectors of our International Maritime Centre, or IMC. Container throughput grew strongly to almost 28 million TEUs, an increase of 13%, which is faster than the 7% growth that we saw in 2006. Tonnage of vessel arrivals rose by 11% to reach close to 1.5 billion gross tonnes while bunker sales also rose at the same pace to 31.6 million tonnes. On each of these measures, the Singapore Port maintained its key position globally. We will continue to build on Singapore’s role as a leading hub port. Good port connectivity adds to the competitiveness of our economy. With about 90 daily sailings to over 600 ports in more than 120 countries, Singapore-based manufacturers benefit from a level of connectivity second to none in the world. This is critical as the vast majority of our exports and imports go through our port. Frequent sailings mean better inventory management for manufacturers, and more timely and reliable deliveries for their overseas customers. The extensive choice of shipping lines that serve the port helps keep freight rates competitive, which translates to lower shipping and logistics costs for our manufacturers than for those based in competing locations. This connectivity advantage cannot be taken for granted. Japan's Kobe port was once one of the world's top five container ports, yet Japan today no longer has a container port ranked within the top 20. The Ministry therefore remains focused on upholding our connectivity advantage. This means, firstly, that our port capacity must be able to meet growing demand, so that we will always stay “a few steps ahead”, in the words of Mr Foo.”
“One of Changi Airport’s chief assets is its human capital. The smooth opening of Terminal 3 in January this year is reflective of the professionalism and competence of the staff. As such, we must ensure that we plan this corporatisation with their interests at heart.”
“Through corporatisation, a company managing both Changi Airport and its overseas airport projects will realise a lot more synergy and potentially be more successful. In short, we hope that corporatisation will bring about a mindset change that is even more pro-business and that will continually look out for more and new opportunities with a greater commercial outlook. With corporatisation, the new CAAS team could focus their attention on both the regulation of the industry and advancing Singapore's strategic interests, including the air hub development strategy. They will no longer be bogged down by the day-to-day running of the airports. As for the new airport company, it will be 100% owned by the Government. There are no immediate plans to divest the airport company as yet. We should make the changes one step at a time. We are fully aware that our strategic interests as an air hub should not be compromised. As part of the corporatisation exercise, we are designing an economic regulatory framework for the operations of the new airport company to ensure that our hub interests - such as having sufficient infrastructure capacity for future growth - are sustained and promoted. 3.45 pm We started this process in August last year, and expect it to last for 18 to 24 months. We have been working closely with all stakeholders on this. These include the airlines, ground handling companies, the Maintenance, Repair and Overhaul (MRO) companies, as well as the International Air Transport Association (IATA). We have met with them to explain the intent of corporatisation and to gather feedback at an early stage. More importantly, both MOT and CAAS have held dialogue sessions with the most important stakeholder of all, the CAAS staff.”
“To grow inter-modal transhipments, we are looking to encourage more Regional Distribution Centre (RDC) operations to be set up here, to help generate more air cargo volume through Changi. Finally, Sir, let me touch on the corporatisation of Changi Airport and the restructuring of CAAS. Mr Foo has asked for updates to corporatise Changi Airport and whether the corporatised entity would be divested eventually. The Civil Aviation Authority of Singapore (CAAS) as a statutory board has many responsibilities. It manages Changi Airport, provides air traffic services in Singapore, and regulates aviation matters. In addition, it advances Singapore's strategic interests in the international arena such as in the International Civil Aviation Organisation (ICAO). In other words, it is both a regulator and a business combined. Although Changi Airport has been successful thus far, we cannot take it for granted that we will continue to be competitive. We have to think ahead. To meet future challenges and ensure that we strengthen our air hub status, we will have to restructure the existing CAAS into two entities, namely, a new company to run Changi Airport and a new Civil Aviation Authority for the regulatory and strategic functions. We need the entity responsible for running Changi Airport to be nimble and responsive to changes in the aviation market. A corporatised body will be more responsive to competition from other hub airports and customers' needs. It will be more prepared to take risks to stay ahead of the competition. It will also have more flexibility to attract and retain global aviation talents. Today, Changi Airport has several ventures overseas through Changi Airports International, a subsidiary of CAAS.”
“Changi Airport's key message to the airlines is that Singapore is poised to become an even more exciting destination for both business and leisure over the next few years, especially with the impending opening of the two Integrated Resorts and other exciting world-class events such as the Formula 1 night race and Youth Olympic Games. It would make good commercial sense for airlines to place Singapore high on their radar screens. CAAS will collaborate with other agencies, such as the Singapore Tourism Board and EDB, in these developmental efforts. In terms of air cargo carriers, I had noted earlier the slowdown in Changi Airport's air cargo sector. This mirrors the structural shift of our own manufacturing activities towards high value-added output and product miniaturisation. To strengthen the air cargo sector, we are exploring new markets, business segments and customers. Changi Airport's air cargo movement has so far relied heavily on Singapore's exports from the manufacturing sector. Specifically, electronic shipments constitute over 50% of Changi Airport's total air cargo throughput. This reliance means that should the volume of these shipments drop - as they did due to lower output and the trend of 'miniaturisation' - they have a disproportionate impact on our air cargo volume. To address this, we will: First, diversify our air cargo mix; and, second, encourage more inter-modal transhipments. To diversify the mix of air cargo that Changi handles, we will be expanding into goods such as pharmaceutical, biomedical and lifestyle products. One of the ways to do this will be to encourage the development of specialised infrastructure, such as a "Fresh Hub" for handling perishables, and an Air Cargo Express (ACE) hub, for express cargo.”
“We target to commence construction in July this year and to complete the expansion by early 2009. As CAAS had announced on 14th February, we will also be upgrading Terminal 1 at an estimated cost of $500 million. Work will commence in May this year, with a planned completion date of June 2011. The works will be carried out in multiple phases so as to minimise disruption to airport operations. Sir, let me now address Mr Foo's question about air passengers' experience through Changi Airport by assuring Members that, apart from paying attention to hardware, Changi is also mindful of the software aspects of customer service. CAAS has been regularly monitoring key performance indicators such as the amount of time passengers would need to clear through immigration, security screening, and collect their baggage. And thus far, Changi Airport has been meeting the targets set. Mr Foo has mentioned that other airports have provided dedicated lanes for premium passengers. He may be heartened to know that such a premium lane has also been put in place at T3. Changi Airport will continue to look at other ways to improve and keep ahead of our competition. Let me now move on to the third thrust of our air hub development. Mr Foo asked about the number of airlines we are hosting: we gained seven airlines and lost nine. It is clear that we must continue to find ways to enhance Changi Airport's attractiveness as an air hub for airlines, both passenger and cargo. In terms of passenger airlines, one of the means to achieve this is through the Air Hub Development Fund. This fund serves to reduce costs for the airlines and provide incentives for them to grow their traffic out of Changi Airport, to mount more new services, and to make Singapore the hub of choice for their operations.”
“This in turn will greatly facilitate not just intra-ASEAN flow of trade, services, investment and tourism, but also increase ASEAN's attractiveness as an investment and tourism destination. We are therefore looking forward to ASEAN realising the first milestone under the RIATS when there will be unlimited air access between the ASEAN capitals. In terms of building capacity ahead of demand, Terminal 3 (T3) of Changi Air port, started operations on 9th January 2008 and has been performing well. Within the first week, T3 had served a total of 838 flights, and handled a total of 232,000 passengers. With the successful opening of Terminal 3, we are now looking at other aspects of Changi's infrastructure. To continue to ensure that we have sufficient capacity to accommodate growth in the aviation market, the master-planning for Terminal 4 (T4) has started. In the near term, the focus will be on the expansion of the Budget Terminal and the upgrading of Terminal 1. The Low Cost Carrier, or LCC, sector is one of the key growth areas in Changi Airport. Mr Foo has asked how successful we have been in attracting LCCs to come here. In 2006, we have six LCCs operating in Singapore. In 2007, we have eight. At present, with AirAsia starting operation on 1st February on the Singapore-Kuala Lumpur route, we now have nine LCCs operating out of Changi Airport. Indeed, in 2007, LCCs contributed 3.6 million passengers or around 10% of Changi Airport’s total traffic, and half of its overall traffic growth. To keep ahead of this growth, we will be expanding the Budget Terminal, from its current capacity of 2.7 million passengers per annum to 7 million passengers per annum at an estimated cost of $10 million.”
“In the first two months of this year, we have already concluded three OSAs with Denmark, Norway and Sweden, and expanded our Air Services Agreement with the Netherlands and Portugal. In the case of Portugal, we will have full OSA by 2010. Mr Foo also asked about our Air Services Agreement with Australia. Air access between the two countries was last expanded in September 2003, providing unlimited 3rd and 4th freedom rights. The main restriction remaining is the right for carriers to operate passenger services beyond Singapore and Australia. There has been some movement towards liberalisation in the trans-Pacific route between Australia and the United States - when on 15th February, very recently this year, the US and Australia concluded an OSA. We will continue to raise this matter with Australia, reminding them of the mutual benefits of liberalising air travel, amongst which will be more competitive airfares and better services for all consumers. Besides bilateral engagements, there is also a multi-lateral dimension to freeing up our skies. Singapore is supportive of a multi-lateral approach towards liberalisation. Within our immediate region, ASEAN Member States are currently in the final phase of concluding the Roadmap for Integration of Air Travel Sector (RIATS), a set of multilateral agreements, and formulating the implementation framework of the ASEAN Single Aviation Market. It is our hope that ASEAN could eventually enter into air services agreements as a bloc, with key partners such as China and India, and successfully create an open aviation area in Asia similar to that of the EU.”
“7 million tonnes pass through it, with an impressive growth of 11%. Changi Airport is no stranger to competition but it is critical that we are aware of these challenges and that we take decisive steps to strengthen Changi Airport's position as a leading air hub in the region. We will pursue a three-pronged approach: Firstly, we will continue to push for the liberalisation of the aviation regime; Secondly, we build capacity to keep ahead of growing demands; and Thirdly, we will take measures to encourage airlines to come to Singapore and to keep those that are already here. The key to air hub development is connectivity and the starting point to achieving connectivity is for the Government to negotiate maximum air rights with as many countries as possible. A liberal air services framework will allow carriers to respond to changing consumer demands as and when they arise, leading to widespread economic benefits for the countries involved. We believe in open skies and have always pursued air services liberalisation. To this end, last year we expanded our Air Services Agreements with 18 countries, including Open Skies Agreements (OSAs) with five countries. Of significance amongst these is the opening up of the Singapore-Kuala Lumpur route to the low cost airlines as a result of the bilateral air services consultations in November last year. We are in the process of arranging for further meetings to discuss the opening up of other points in Malaysia. In the expansion of Air Services Agreements, we will strive to do even better this year. Our focus will be on Asia, including ASEAN, as well as Europe. We have got off to a good start.”
“Sir, Mr Cedric Foo, Mr Wee Siew Kim and Dr Lam Pin Min have asked about the strategy to enhance Singapore as an air hub in the face of rising competition. Sir, the growth of Changi Airport as an air hub has been healthy. The number of scheduled weekly flights operating out of Changi Airport grew from 3,400 to 4,300 from year 2002 to 2007. In the same period, the number of city links has grown from 140 to 190. The total number of passengers using Changi Airport grew from 29 million in 2002 to 36.7 million last year. While these numbers are good, Changi Airport is facing strong competition from other airports in the region. For example, Kuala Lumpur International Airport grew by almost 10% in 2007, with more than 26 million passengers, including seven million using the new Low-Cost Carrier (LCC) Terminal. The new Bangkok International Airport also did well, serving 42 million passengers in its first full year of operation (from October 2006 to September 2007). And Hong Kong saw a growth of 7.5% in air passenger traffic, with almost 48 million passengers last year. Beyond our immediate region, we are also facing increasing competition from the Middle East. In particular, Dubai International Airport, the largest aviation hub of the Middle East, is expected to overtake Changi's passenger traffic volume this year, crossing the 40 million passenger mark. Dubai is a formidable competitor for the Australia-Europe traffic. It is seeing phenomenal growth in passenger volume, with an almost 20% increase last year. The situation is similar in terms of air cargo. In 2007, Changi Airport saw 1.89 million tonnes of airfreight pass through it, 0.9% less growth than in 2006. However, Hong Kong moved 3.7 million tonnes in air cargo, representing a growth of 4.5%, while Dubai had 1.”
“To further enhance the safety of workers transported on lorries, a work group, to be co-chaired by LTA and the Ministry of Manpower, will be formed to review the safety of workers transported on lorries. Sir, at the end of the day, road safety is a shared responsibility. We cannot depend solely on rules and regulations put in place by the authorities, or build separate lanes and bridges for cars, cyclists and pedestrians. All road users will have to play their part. We all need to be responsible, considerate, and to keep a lookout for the more vulnerable road users like cyclists and pedestrians, the young and the old. Only then, can we ensure that everyone can get to where they need to be safely, and worry-free.”
“To raise awareness and promote their use, the Traffic Police will continue to educate parents through exhibitions and talks conducted at pre-schools and primary schools. But Government agencies can only do so much. At the end of the day, the key point is that parents must take the responsibility to ensure the safety of their children. Likewise, adults must themselves take the responsibility by belting up. As for the safety of workers transported in the rear of lorries, the Land Transport Authority (LTA) has in place a set of rules under the Road Traffic Act. These rules require the workers to be safely seated at a height of not more than 3.2 metres from the ground. The vehicles must not travel faster than 60 km/h. And as part of the safety requirement, drivers must also display a label on the vehicles indicating the maximum number of workers that can be transported on the cargo deck of the vehicles, to facilitate checking by enforcement officers as to whether the lorry is overloaded. According to the Traffic Police, there were two fatal and one serious accidents involving lorries carrying workers on the cargo deck last year. The statistics also show that from 1st January 2000 to 31st December 2007, the annual average fatality rate of workers carried on the cargo decks of lorries was 4.5 per 100,000 vehicles and the annual average injury rate was 202.2 per 100,000 vehicles. Both these rates are about six times lower than the annual corresponding rates of all road accidents over the same period. The LTA and the Traffic Police will continue to monitor the situation closely and conduct strict enforcement against lorry owners or drivers who violate safety rules when they are carrying workers on their vehicles.”
“Where feasible, new paths or expansion of existing walkways will be undertaken to achieve that. As for Ms Irene Ng’s suggestion to look into developments in other cities, yes, certainly LTA will continue to study their experiences. However, it is important, Sir, to remember that we would need to tailor the experience of overseas cities to our local context. In facilitating cycling, safety is always a priority, both for the cyclists as well as for the pedestrians. Following a pilot in Changi, LTA will, from March 2008, install appropriate signs to alert motorists of the presence of cyclists along frequently used recreational cycling routes such as those in the West Coast and the Thomson areas. Apart from this initiative, the Traffic Police will also continue to conduct annual road safety campaigns, talks and exhibitions on how to use our roads safely. Sir, finally on road safety. Mr Arthur Fong and Mdm Halimah who had earlier filed a PQ have raised a few concerns on road safety including the importance of belting up, and the safety of young children sitting in front and of workers transported at the back of lorries. Let me take them in turn. Sir, under the Road Traffic (Motor Vehicles, Wearing of Seat Belts) Rules, a child below the age of eight years has to be properly secured by an approved child restraint. This is because most Singaporean children below that age are not tall enough to use a seat belt safely. Therefore, a young child cannot sit with his parent in the front passenger seat. Any driver who fails to comply with this may be fined $120 and given three demerit points. But I agree with Mr Arthur Fong that the key point is really getting parents to recognise that using a child restraint can save a child’s life.”
“The bicycle parking facilities will be sheltered and more optimally designed for supporting and securing the bicycles. A one-year pilot will be carried out next year at the MRT stations cum bus interchanges at Pasir Ris, Tampines and Yishun. This pilot will allow LTA to gather feedback so as to better understand the usage patterns and needs of the cyclists before extending the facilities to all the other MRT stations. LTA, together with the public transport operators, will also launch a six-month trial from mid-March 2008 to allow cyclists to carry their foldable bikes on board trains and buses. However, we have to recognise that given our land constraints, it is not feasible to provide a comprehensive set of dedicated cycling tracks or cycle lanes island-wide, which is what Mr Teo Ser Luck has suggested. We have to ask ourselves if this is the best way to make full use of our very limited road space. The issue is not whether cyclists have a place in our public transport system, but how do we allocate space amongst competing users that will best make use of our very limited land. Ms Ng would know that in May 2007, the Traffic Police and LTA, together with the Grassroots Organisations at Tampines, started a one-year trial to allow cycling on pedestrian footways in Tampines. The outcome of the trial and the feedback gathered will also help us to determine how best to meet the needs of both cyclists and pedestrians within our land constraints. This would include addressing the enforcement issues and infrastructure needs. The LTA will work with other agencies to leverage on NParks' nation-wide Park Connectors Network to enable cyclists to get to public transport interchanges more easily.”
“Just last month, in response to Dr Lam Pin Min and Mr Lim Biow Chuan’s questions in Parliament, I had explained that, under the rail licensing framework, the train operators are required to adhere to prescribed standards, such as Train Service Availability and Service Adherence under the Operating Performance Standards imposed by the LTA. They are required to meet service attributes on reliability and safety under the Quality of Service standards as well, as stipulated by the Public Transport Council. If they fail to meet these performance standards, LTA and PTC will penalise the operators accordingly. As with any mechanical and electrical systems, service disruptions do occur from time to time. When such disruptions occur, the operators will have to activate their service recovery plans. Just to recap, they have Rail Incident Management Plans (RIMP) and Standing Operating Procedures (SOPs) in place to handle such situations. Following the recent train disruption incident on 21st January 2008, LTA is working with the operators to refine both the management plans as well as the SOPs with a view to tightening the contingency plans where necessary in order to ensure that timely information updates and bus bridging services for affected commuters are provided in the event of a service disruption. Sir, let me now turn to cycling. We recognise that cycling provides an additional, if not alternative, mode of transport, especially for intra-town travel and to key transport nodes, like the MRT stations and the bus interchanges. To promote greater use of public transport, LTA will be implementing several measures to facilitate cycling. Better bicycle parking facilities at the MRT stations and bus interchanges in housing estates will be provided.”
“In the case of Khatib MRT station, which Ms Lee Bee Wah has cited, there is actually a nearby at-grade crossing at the traffic junction of Yishun Ave 2 and Yishun Ring Road, which is some 32 metres away from the station. So far, LTA has connected pedestrian overhead bridges to commercial buildings, such as the Ang Mo Kio Hub, Sengkang Town Centre and Beauty World, but not to HDB blocks, as Mr Wee has suggested. We will need to address privacy and security issues, as most home owners would not want a public thoroughfare to be near their homes. Even for the provision of an overhead bridge near a block of residential flats, LTA has to manage the concerns of affected home owners and put in place screens along sections of the overhead bridge. Nevertheless, I would like to assure Members that LTA will continue to explore and look for innovative and cost-effective solutions to enhance access to public transport and amenities for the less able-bodied and elderly. Sir, let me now move on to the service disruption issue. As more and more Singaporeans rely on the public transport system for their daily commuting trips, the impact of any service disruption has become more severe, and the tolerance for such disruptions is also much lower. I would like to assure Ms Jessica Tan that we take a serious view towards service disruptions. We understand that such disruptions bring about significant inconvenience to commuters and will certainly work with the operators to minimise the occurrence of such incidents.”
“Last year, the LTA conducted a trial in Toa Payoh on a system to lengthen the "green man time" for elderly citizens at pedestrian crossings, by using Radio Frequency Identification (RFID) technology. Elderly pedestrians holding on to a RFID device can activate readers that are mounted on the traffic lights. This will add an extra five seconds to the "green man time". The trial received positive feedback from the participants and LTA is therefore currently reviewing how this scheme can be implemented. However, there are still situations, such as those cited by Mr Wee, where there is a major road with heavy traffic flow and where it is not possible for LTA to provide such at-grade pedestrian crossings. In such situations, we will have to make do with alternatives, such as underpasses or overhead bridges. Both Mr Wee and Ms Lee Bee Wah have asked if lifts or escalators can be installed at pedestrian overhead bridges. First, let me clarify that an escalator is not a barrier-free access facility. That aside, should the staircase be replaced with an escalator, we may encounter other problems when the escalators undergo maintenance or when they break down. Pedestrians might find it more difficult to walk up or down the steps of the escalator as they are steeper and higher than the steps on the ordinary staircase. Furthermore, exposure of escalators to the elements will also add to the maintenance burden. Lifts remain expensive to build and maintain and are not a cost-effective solution. As explained earlier, the needs of the less able-bodied and elderly are best addressed by the provision of at-grade or street level crossings where feasible.”
“All our existing stations have at least one entrance fitted with a lift, a barrier-free route, including tactile guidance systems, and wheelchair accessible toilets. This is not all. By end 2011, more than 70% of our MRT stations will have at least two barrier-free access routes. As part of the initiatives announced with the Land Transport Review, we will also provide additional lifts and ramps at MRT stations, such as Boon Keng, Toa Payoh and Queenstown, where the station entrances are far apart or separated by a major road. This is so that our elderly and wheelchair users can avoid having to make long detours to reach the entrance with a lift. All these initiatives are work-in-progress but the objective is clear, ie, to have an easily accessible and comfortable journey for the entire public transport system. Sir, Mr Wee Siew Kim asked that we look into connectivity to key amenities in estates. I understand his sentiments as he and I happen to share a common corridor along Serangoon North. Our challenge is in assessing the feasibility of the different ways of making our pedestrian overhead bridges more accessible. Where feasible, we can certainly consider, but a more cost-effective approach is really to look at providing at-grade (or at street-level) crossings which are more elderly-friendly. This is something that LTA will be doing - more traffic light crossings at street level at suitable locations, wherever possible. In estates where there is a higher concentration of the elderly, the traffic light timings would also be adjusted to allow the elderly more time to cross safely.”
“Sir, Members would have heard how the Land Transport Review puts the commuter at the centre. As part of our people-centred land transport system, we have to provide for the diverse needs of our society and contribute to a quality, liveable environment. We are mindful of the social and demographic changes to our society and the need for our land transport system to adjust to these changes and better meet the expectations of our people. So, we will be putting in place initiatives to provide better access for our entire community, especially the elderly, wheelchair users, families with young children, pedestrians and cyclists. The number of elderly amongst us will grow over time, as Dr Faishal, Ms Lee Bee Wah, Mr Wee Siew Kim and many others have highlighted. As part of our land transport review, we will try to plug the accessibility gaps in and around our public transport facilities, so that the less mobile segments of our population will be able to gain access to them easily. For example, by 2010, LTA would have completed its $60 million islandwide programme to make pedestrian walkways, access to MRT stations, taxi and bus shelters, and public roads barrier-free. By 2010 too, 40% of our buses will also be low-floor and wheelchair accessible and we intend that, by 2020, the entire fleet will be so. To enhance connectivity to bus stops, bus interchanges and MRT stations and to provide all commuters with a comfortable walking environment, come rain or shine, LTA will provide more covered linkways and pedestrian overhead bridges. By 2010, 86% of our existing overhead bridges will be covered. Sir, I am pleased to say that our entire MRT network is now fully accessible to our elderly and less mobile citizens.”
“Madam, it is useful to recap the many discussions that this House has had, regarding the revelation of the size of our reserves. The Ministry of Finance has carefully considered this and concluded that it does not serve our national interest to disclose the overall size of our financial reserves. That is not what is required. The whole discussion about the Sovereign Wealth Funds actually relates less to the size of the funds and more to the demonstration of commercial orientation. As regards what the MOF is doing with the GIC, we are working on a public document that would further clarify the processes, the investment purposes as well as the corporate governance structures.”
“Madam, the fare review mechanism seeks to strike that balance and, as commercial operators for the transport industry, the operators would know well how to strike that balance in terms of making sure that they have sufficient ridership at affordable prices. That is not usually an easy balance to strike. But it would be wrong for the Government to impose or to regulate the fares in any other way such as dictating a certain level.”
“Giving a concessionary tax rate for owner-occupied commercial or industrial properties will only distort business decisions and unwittingly put SMEs at a disadvantage since they are less likely to buy their own properties. Mr Singh also suggested equalising rules on foreign-sourced income for individuals and companies. Most countries in the world continue to tax worldwide income of corporations. This includes countries like Ireland, the Netherlands and Switzerland. In Singapore, locally-sourced income and only foreign-sourced income remitted from abroad are subject to tax. For foreign-sourced income remitted, active income, which includes branch profits, service income and dividends, are exempted if they are earned in countries where the headline tax rate is at least 15% so as to encourage our companies to venture and operate abroad. However, foreign-sourced income like interest income is generally passive and, therefore, not exempted. So, if we were to do so, this will entail significant revenue loss. However, to make our regime more friendly to the repatriation of foreign-sourced income, the recent Budget 2008 extends unilateral tax credit to all income including interest income earned in non-treaty countries. So companies will not be doubly taxed when they remit such income regardless of whether the income is earned in treaty or non-treaty countries. Mr Singh has also asked if we could review our tax brackets or raise the amount of personal income tax reliefs as a permanent fix for our middle-income groups who face rising cost of living. Madam, our personal income tax system is already very progressive. About two-thirds of our resident labour force do not pay taxes due to our $20,000 income exemption threshold and various reliefs and rebates.”
“For example, Australia fully exempts its not-for-profit public entities from such disclosures as well. The Accountant- General's Department and the Ministry of Finance are discussing this FRS27 issue with PA. Madam, let me now move on quickly to the issues relating to our tax regime. Mr Singh has asked if the Not-Ordinarily-Resident, or NOR, scheme results in unequal tax treatment between Singaporeans and expatriates, and asked if we could accord time apportionment to the Singapore-sourced income of Singaporean employees based on their time spent outside Singapore. Madam, it is important to note that the NOR scheme is not intended to give a protracted tax concession to individuals who newly base themselves in Singapore over those who are permanently resident here, especially our own citizens, for equity reasons. The tax benefit expires after five years as the aim is to encourage individuals to settle down here thereafter. We do not intend to do away with this five-year limit. Mr Singh has also asked the Government to consider granting a concessionary property tax rate for owner-occupied commercial and industrial properties. Madam, the same tax rate of 10% of the Annual Value is applied to all properties irrespective of whether the property is owner-occupied or rented out. We only make the exception for owner-occupied residential properties where a concessionary tax rate of 4% is granted as part of the Government's policy to encourage home ownership. For commercial and industrial properties, it is a business decision whether a business chooses to buy or to rent a property. There is no policy reason to favour one over the other.”
“Neither has there been any move to change the disclosure requirements of statutory boards. Our arrangements are similar to the UK where the Treasury prescribes the standard for public sector entities. As regards PA's non-consolidation of grassroots organisations' accounts, the auditor, PriceWaterhouseCoopers, has qualified the financial statements of People's Association on the basis that the accounts of the grassroots organisations were not consolidated. PA's view is that the accounts of grassroots organisations should not be consolidated for the following reasons. Firstly, the funds in these accounts belong to the grassroots organisations. Secondly, the Government grants and the cost of staff support are already accounted for in PA's financial statements. Thirdly, the grassroots organisations are operationally self-funding through revenues from activities, courses and donations. Fourthly, the grassroots organisations decide on how their money should be spent for the benefit of the residents. And, finally, proper procurement procedures, financial control and good corporate governance practices apply to the grassroots organisations. I would like to clarify that this adverse opinion pays more emphasis to the FRS27, than to the FRS24, which is the general exemption granted to all statutory boards on account of the onerous work that would otherwise be involved in the disclosure of related party transactions. This is because related party transactions are much more onerous for statutory boards compared to private sector entities due to the wide range of Government related entities. I should also add that other countries have similarly found a need to depart from the FRS24.”
“For example, in 2007, the transport operators contributed public transport vouchers to help the lower-income households cope with the fare increase. Likewise, NTUC has also given out $1 million worth of food vouchers to lower-income families. It is encouraging to see such voluntary practices of corporate social responsibility amongst our local companies. Madam, let me now move on to Mr Low's cut on the statutory boards. Mr Low Thia Khiang has asked for the reasons for change in disclosure requirements for statutory boards and comments by auditors on the People's Association's accounts. Before November 2007, MOF, through the Accountant-General's Department, issued finance circulars to prescribe the accounting standards for statutory boards. The key guiding framework used has been the Singapore Financial Reporting Standards, or the SFRS. However, these standards are designed primarily for profit making entities in the private sector. Therefore, the relevance and the appropriateness of each standard to statutory boards has to be examined first before they can be adopted. In November 2007, this House passed the Accounting Standards Bill, and the Act came into effect, empowering the Accountant-General to prescribe accounting standards for statutory boards. A committee of independent members with representatives from the Auditor-General's office, the statutory boards, the academic community and the public accounting firms, has been formed to advise the Accountant-General. New SFRS and amendments to standards will continue to be examined for their relevance and appropriateness to the statutory boards. As such, there has been no change in the substance of preparation and presentation of accounts by statutory boards.”
“They are totally independent of the Government, which maintains strict arms-length relations with them for sound corporate governance reasons. All companies, regardless of ownership, must operate on an economically viable and sustainable basis. In this regard, companies which have the Government or Temasek as their shareholder have to operate on commercial principles and are no different from private sector companies in terms of focusing on the financial bottom line. This is critical for their long-term survival as they do not enjoy any advantages from the Government and are subjected to the same regulations and competitive market forces as any other company. Madam, it would be wrong for the Government to impose any social obligations on the management strategy or operations of any company regardless of ownership. It also places unfair obligations on the company's board of directors who have the fiduciary duty to act in the company's interest, and not in the interest of some other groups. It could, in addition, distort market pricing and affect competition in the marketplace. The way to keep prices of essentials affordable is not for Government to place social obligations on companies but to promote a competitive marketplace, or where there is market failure, to put in place a transparent regulatory framework. For Singaporeans who need help, the Government will provide targeted assistance so that they have access to essential goods and services, eg, the Government has given out U-Save rebates instead of requesting Singapore Power to lower its prices. That said, many companies do discharge their social responsibility voluntarily.”
“It is a useful process. MOF is currently still in touch with the US authorities as they regard us highly and would want us to be intimately involved in setting the guidelines. We will disclose what is in Singapore's interest and what is necessary to assure the markets. 6.30 pm On the specific issue of transparency and public disclosure, I agree with Mr Singh's comments that this must be practical and serve a purpose. In particular, this should be aimed at ensuring that GIC and Temasek continue to be commercially oriented, be professional investors, and be credibly perceived as such. At the same time, the type of disclosure should not compromise the competitiveness of our investment agencies relative to other global market players. Temasek has published an annual Temasek Review since 2004, which gives an overview of their investment strategy and governance framework along with the group's activities and performance. Temasek has also obtained Triple-A credit ratings by Standard & Poor's and Moody's, and has issued a global bond. GIC has already disclosed information on its website relating to its investment process, long-term performance, strategies of the various investment groups and investment highlights. The Ministry of Finance is in discussion with GIC on a public document that will further clarify the processes, governance and purposes for its investments. Madam, let me now move on to Ms Lee Bee Wah's cut. Ms Lee Bee Wah has asked whether the GLCs that provide basic services relating to food, transport, water and power supply should look beyond surplus achievement and shareholders' interest to social obligations. First, let me clarify that Government-linked companies are not in any way "quasi-government".”
“The Elected President is empowered under the Constitution to obtain information to enable him to monitor these reserves and he must concur with the appointment or re-appointment of any person to the Boards of GIC and Temasek. Madam, Mr Singh has asked how we are tackling the sovereign wealth funds debate, or the SWF, which has gained significance recently. We would like to assure him that we are not passive observers in the debate. GIC and Temasek's long-standing and good track records, that are referred to earlier on, have given the markets as well as the recipient countries assurance of their commercial orientation. However, MOF as well as the two agencies are actively engaged in dialogues with the investment recipient countries, including the US which is where the SWF debate is most prominent. The major recipient countries have had a high degree of respect for both GIC and Temasek, and an understanding of the commercial orientation. There is also a consensus to date amongst the major countries on the importance of an open investment environment that does not discriminate against SWF as compared to the other players. Singapore is also viewed by many as being in a good position to advance the development of voluntary best practices for the SWFs. This will ease international concerns about their operations. We are supportive of the IMF's effort to develop a set of voluntary guidelines and are open to sharing of views at the appropriate platforms. In fact, last year, we participated in the SWF Outreach Dinner with the G7 Finance Ministers as well as IMF Roundtable of Sovereign Asset and Reserve Managers. As regards Edwin Truman's Scoreboard that Ms Sylvia Lim referred to, that is actually a work-in-progress and, in fact, Mr Edwin Truman has been seeking our inputs.”
“The Government does not coordinate GIC's and Temasek's investments, but does look at the risks in totality to ensure that, firstly, they are within the Government's overall risk threshold and that, secondly, GIC and Temasek are likely to be able to provide Government with good long-term returns on their overall portfolios. Madam, it is absolutely critical that GIC and Temasek remain strictly independent of each other in their strategies and execution, and that the Government does not get involved in managing the investments. The role of the Government in the investment process is clear – it is to ensure that the right structures, processes, systems and controls are in place to fulfill our objectives. We set our expectations and constraints for the investment agencies; but these agencies make their own independent commercial and operational decisions. Both GIC and Temasek are well regarded in global markets as savvy and reputable long-term investors, and their track records stand as testimony. Both Mr Singh and Ms Sylvia Lim have suggested that our investment agencies work towards more transparency and accountability. We already have a clear accountability framework in place; and one which has worked well thus far. The Government, as shareholder in Temasek's case, and as fund owner in GIC's case, holds the respective Boards of Directors accountable for delivering good overall financial returns. In turn, the Boards oversee the respective management teams which are responsible for each company's investment and operational decisions. There are also constitutional safeguards for the protection of reserves under which GIC and Temasek are additionally accountable to the Elected President. The Elected President serves as a check, independent of the Government.”
“It would give others the mistaken notion that the Government influences the individual investment decisions of GIC and Temasek, and will raise even more concerns. I know Mr Singh, like many others, is understandably curious about the recent high profile investment made by the two agencies. He should be assured that these investments were made after very thorough assessments of the market developments, risks and potential returns including factoring in the opportunities and risks that they can afford to take in a down market. GIC and Temasek are long-term players out to seek long-term returns. Madam, Mr Singh's advice on diversifying their investments would no doubt resonate with GIC and Temasek. GIC already manages a diversified portfolio across a wide range of asset classes in markets worldwide, including publicly-listed equities, fixed income instruments, commodities, real estates, private equities and across different industries and different geographies. Temasek, too, has a substantially diversified portfolio. The recent high profile investments by GIC and Temasek do not signal any shift in their investment strategies. As they have stated, they made these investments because the current financial situation in US and Europe offers unique and unprecedented opportunities for long-term investors. As long-term investors, they are able to take calculated risks in the short to medium term. Mr Singh suggested that the Government has some level of coordination between the investments by GIC and Temasek so as to limit the risks for Singapore as a whole.”
“Mr Inderjit Singh and Ms Sylvia Lim have touched on whether the Government has sufficient oversight of GIC and Temasek. Mr Singh has also asked whether the Government should set some broad guidelines which GIC and Temasek should abide by. Madam, let me explain how the Government relates to GIC and Temasek. GIC and Temasek operate independently of each other and of the Government. Their mandates are to maximise the overall returns of their investments within their respective risk tolerance limits. GIC's and Temasek's performance is assessed and monitored on the basis of the overall returns of the respective portfolios. Up to now, as Members would know, they have done creditably, with GIC averaging an annual return of 9.5% in US dollar terms over a period of 25 years to March 2006; and Temasek's total shareholder return by market cap since 1974 has averaged over 18% annually in Singapore dollar terms. Both have achieved these good returns because they have professional management teams drawn from all over the world and without interference from the Government. They do their jobs with the single objective of maximising the long-term returns on the portfolios, without any political agenda whatsoever. That said, it does not mean that the Government has no responsibility to ensure these institutions continue to be managed well. The Government ensures that both GIC and Temasek have competent boards who oversee their performance and risk management frameworks. The Government regularly reviews reports from GIC and Temasek on the overall investment performance, the portfolio risks profile and risk management. This is the right balance when exercising oversight. The danger of any higher level of oversight is that the Government could end up micro- managing.”
“As Mr Baey has noted, such e-services have recently gained approval of the business community as well; with Singapore being regarded as the most business friendly economy by the World Bank. Accenture has also rated Singapore very favourably in its 2007 e-Government ranking which focuses on leadership in customer service. Mr Baey has asked, however, if many of the elderly, disabled, poor and lowly-educated Singaporeans would face difficulty gaining access through the traditional offline channels. Let me assure Mr Baey that we are mindful that a small segment of the society may be less IT-savvy or not have Internet access, and we have therefore implemented several initiatives to complement the appropriate amount of offline service channels. Firstly, 28 CitizenConnect centres have been set up; conveniently located all across the island at community centres and clubs, and Government agencies such as CPF and IRAS. Trained officers are around to help. In 2007, more than a hundred thousand individuals have used such centres. Eighty per cent of them expressed confidence that they will use the Internet to transact with the public sector in the future. Secondly, beginning November 2007, IDA will be investing some $43 million in programmes to help the elderly, the disabled, the poor and the less educated acquire IT literacy. Apart from basic computer and Internet skills, they are also taught digital lifestyle skills, such as how to make video calls over the Internet, and how to access Wireless@SG. Needy families with school-going children are given help to acquire personal computers and broadband access for the children. Madam, I will now move on to issues related to the financial stewardship of the Government's assets.”