Michael Lim Chun Leng
Singapore
“Mr Speaker, Sir, I would like to ask the Minister, in the light of scientific evidence to show that as many as half of the people who are presented with a heart attack at a hospital do not have any critical stenosis or narrowing in the heart artery, but actually only have a very minor narrowing in the heart artery, and as a result of tear…”
“My question is: in the light of things evolving, whether for specific high-risk individuals, we should actually look at other means of identifying them. On the second point about AED, if we reach the A&E for a sudden cardiac death, of course, your mortality is more than 90% because it takes a long time to reach it.”
“Clinical practice guidelines help doctors to manage patients in the most optimal way. They do not help doctors manage patients in a most cost-effective manner. Ultimately, most Singaporeans want to have the cake and eat it. Let us not raise the expectations too high. Let us keep healthcare bills in the public sector affordable.”
“The Ministry had spent millions of dollars on IT cost, man-hours and employing new staff. Yet, till this day, few believe that it has translated to any real tangible improvements in the healthcare delivered to the man-in-the-street.”
“Mr Speaker, Sir, I am getting a bit confused here. I am trying to understand the process. Can I check with the Minister? Does it mean that an operator can seek approval from PTC and PTC, based on a certain set of criteria, has approved the routes or what they are supposed to do, and then the operator can decide not to follow what PTC has…”
“Sir, I would like to ask the Minister how can there be more predictability if one took an express bus from point A and reach point B on the same express bus vis-a-vis someone who has to take a bus to the MRT station, drop off at another MRT station and then take another bus to his destination. How can there be more time predictability?”
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Every one of 361 lines we hold for Michael Lim Chun Leng, in date order, each linked to its source. Free to read, in full, without an account. Page 3 of 8.
“Some of the problems that specialists face include, for example, workload. The workload in the restructured hospitals is extremely high. There is also pressure on the doctors from the Ministry to meet certain "lead times"; in other words, the time from when the appointment is made to the time the doctor sees the patient, and also to reduce the waiting time for patients. When placed under pressure, doctors work in very difficult conditions. One surgeon in one of the restructured hospitals told me that it is a norm for his team to see between 40-60 new patients a morning, or at least attempt to see. So you can imagine what sort of quality of care he can deliver. When one tries to impose certain time lines on the doctors, certain things will give. And as the consultants are so busy with delivering the clinical services, there is not much time that can be apportioned to the training of more junior doctors, and these doctors later on in life will become consultants. So this is a vicious cycle. The distribution of specialists in the hospital is not even. For example, some hospitals like NUH will have a higher portion of consultants in a department as compared to junior doctors, whereas some hospitals like Tan Tock Seng Hospital will have comparatively fewer consultants, even though the workload would be comparable. Hence, across-the-board, on paper, it may seem that you may have an acceptable ratio of doctors to patients for different specialties, but there is a significant asymmetry or disparity from hospital to hospital. Perhaps the Ministry or the clusters may want to take a more proactive approach in redistributing the specialists so that the workload is evened out.”
“Sir, my parliamentary colleagues before me have spoken about the healthcare services for the elderly, and the Minister has assured us about the funding policy and the facilities. But the key to any healthcare policy will be the doctors themselves and without good doctors, it will be difficult to deliver any form of quality healthcare. The restructured hospitals have had a large number of their medical officers and specialists leaving the hospitals. I am glad that adjustments have been made to the salaries, and with these adjustments in salaries and also an increasingly saturated private sector, the pull factors have diminished. Also, the administrators that we have now appear to be much more equipped to cope with the changing health environment, and it is time to address some of these push factors. The medical officers work extremely long hours and are the work horses of the department, doing the bidding of their Registrars and the consultants. If they do not intend to specialise, there is no career path for them, and there is no systematic training for them. With such working conditions and no career development opportunities, there can be no job satisfaction. We need to look into this area and what we need is a department that will look after their needs and future. This is not just an administrative department to deploy them in one hospital or in one department, but beyond that, to look after their career plans, to look at their training programmes and to help them seek job satisfaction and job security. Perhaps the Ministry may want to consider setting up a medical officers division in each cluster, which will look at the deployment, career planning and training for medical officers. We also need to retain specialists.”
“The quality of personalised care with time taken, conducted exclusively by consultants, is also not acknowledged. In the private sector, where hospitals' and doctors' bills are separate, how would casemix be able to apportion the fees in a fair and equitable manner? Many issues remain unresolved. I would end by sharing with the Minister the sentiments expressed by a prominent doctor after a recent meeting with the CPO team. He said, "The dialogue was a farce. The team took the view that casemix in private is a fact of life already and they are only looking to see how to tweak it a little bit based on feedback. This is a mockery of the S21 process and openness of Government. In this case, even if very fundamental flaws cannot be solved, casemix will be rammed through regardless of consequences." Unlike him, I have better faith in the Government and the Ministry. The Minister has always been extremely thorough and has a good grasp of issues. I am not looking for answers today as these are complex issues, but rather to place these real concerns across. Casemix is here to stay but let us resolve these issues so that we can have a good system and not a flawed system.”
“No patient should be denied care because they cost more than the average patient. What really matters is that hospitals are adequately subvented. In theory, this sounds statistically acceptable. In reality, there will be pressure on everyone to reduce outliers as this is the purpose of casemix, which brings me to the next question. If we are saying that the level of resources is not capped to each individual patient, how then can one justify a Medisave based system, since Medisave is personal to each and every patient? The CPO has visited private hospitals and has made no bones that they would implement a balanced billing Medisave based casemix system. There are real concerns about a balanced billing system in the private sector. How does balanced billing cater for new treatments as there will be significant time lag for administrative changes? Would there be sufficient flexibility in the proposed system to allow rapid adaptation to increasing costs due to new effective treatments which are necessary to maintain a world-class medical support system? How do we solve the problems of outliers in a balanced billing system for patients in the private sector when the percentage of outliers is even as high as 20% in the restructured hospitals? Casemix may work to some extent in the public sector because it is possible to average out the cost of large numbers of patients. Outliers are, therefore, compensated on a statistical basis. This does not work out in the private sector where each individual specialist has a few patients of a particular DRG and the number is not anywhere large enough for statistical averaging to be meaningful. Casemix does not recognise the difference between public and private medical treatment.”
“It has created a new clinical coding profession and this itself has produced new problems by increasing cost through an additional layer of administration and by a shortfall of well-trained and experienced coders. A shortfall of experience and trained coders can affect data collection and hence interpretation of the casemix data. A central tenet used in our casemix model is flawed. The definition of principal diagnosis (PD) currently being used is that of the Australian definition where the principal diagnosis is a diagnosis of condition established after study to be chiefly responsible for the patient's admission to hospital. Feedback received from hospitals suggest that the present definition of PD may not be fair and equitable. The Casemix Project Office (CPO) has rejected the definition of PD as a diagnosis that requires the most resources, although they stated that it was logical as actual costing would be required to determine each individual condition to compare them with. They considered it too costly and too time-consuming. This would involve getting real cost data and not just historical data. It will be time-consuming to get true cost data and this will require more years than a short period we are taking to implement this. The Australian took years to implement the system but yet we want to do it in such a short time. Are we ready or are we using historical data rather than true cost data because there are implementation timelines to meet? How then can equity of subventions be addressed with a flawed definition? The CPO tries to justify this by saying that the level of resources for patients is not kept to each individual patient, that is, no specific cap at the individual level.”
“Sir, casemix was born out of a desire to increase hospital efficiency through appropriate funding and also as a tool for cost containment which was the Government's major concern in the context of a rapidly aging society. Casemix is here to stay. However, we must be aware of the weaknesses and be cautious of extending it to Medisave based claims. I have spoken to many in the profession and these are some of the expressed concerns on casemix. Firstly, in increasing the efficiency of hospitals, we must be mindful that, given our standard and quality of healthcare, our GDP spending must be one of the lowest, if not the lowest in the world, for comparable healthcare services. Even though casemix is overall subvention neutral, it will increase the impetus for doctors to discharge patients earlier as hospitals will be penalised if patients stay longer than the so-called "appropriate length of stay". I remember that in all my years of service in a restructured hospital, we often had to do an extra discharge round on top of the routine ward to discharge even more patients so that we can create more bed space. If we push the limits further by putting pressure to further limit the hospital stay, the losers are the patients. Casemix puts pressure on hospitals to reduce high outliers, that is, those patients who have exceeded the perceived cut-off point for an appropriate length of stay. The reality of medicine is that you are dealing with human beings who are not only biologically different, but also socially different. In the National Heart Centre, the percentage of cases with high outliers was as high as 20% and the second and third commonest DRG had 12% and 13% of outliers respectively. Casemix has also created new concerns by itself.”
“As blocks of flats in Punggol New Town sprout out quickly, more people will share the nightmare of the Sengkang residents. I am no town planner, but what surprised me is that no one thought much of it. When Sengkang Town grew to half the size of Ang Mo Kio Town, the planners assumed that an old arterial road would not only meet the needs of the new town but would also be sufficient for another new town as well. I think that the Ministry needs to react quickly. New entry and exit roads need to be opened. Building of new expressway entry and exit points for Punggol and Sengkang New Towns need to be accelerated. Additional flyovers linking Punggol New Town to Sengkang New Town across the TPE must be built to give the town a new life line. Living in Punggol New Town is rather precarious presently. Can you imagine this - all it takes is a traffic accident or a vehicular breakdown along Punggol Road to prevent entry or exit from the new town? An entire new town with one single entry and exit, and yes we are talking about Punggol 21. I urge the Minister to consider a comprehensive review of the road network development schedule in Sengkang and Punggol New Towns to ensure that they will measure up to the claims that these are towns with ideal land transport plans.”
“This would be the same if you imagine that all the Ang Mo Kio Town residents could only enter and exit the town via Ang Mo Kio Avenue 6, or if all the residents in Tampines could only enter or exit the town through Avenue 7. 1.30 pm These concerns were raised with the various Ministries, and I must be thankful that with the support of the Ministry of National Development and MCIT, we formed a committee to look at the development of the town. It has been a very enriching experience, not only for us but for all the Government agencies that have been involved in the work of this committee. And it shows that a lot of fine coordination is required for execution of even the best of plans. With the support from the Ministry of National Development and the Ministry of Communications and Information Technology, bus services were added to provide an alternative, and road development was speeded up. In January this year, another major trunk road was opened, one year ahead of time. For this, I have to thank the Minister for responding to our appeals. This has eased the traffic woes but not solved it. The MRT and LRT lines, which are due for completion, will also reduce some of these traffic woes. However, the problem remains. Punggol Road remains the main life line of Sengkang Town. It is also the link to Tampines Expressway. Almost daily, during peak hours, you can see traffic tailing back into the Expressway from the slip roads into Punggol Road. If you think this was bad, the worst is yet to come, as the highly touted town of the future, Punggol 21 or Punggol New Town has also one arterial life line, and no prizes for guessing the right answer. Yes, it is again our old Punggol Road.”
“Sir, thank you for allowing me to join in the debate. Land transportation has an important impact on the everyday life of Singaporeans. Through a combination of control of vehicular growth, managing vehicular usage, provision of public transportation system and a good island-wide network, the land transport situation has generally served Singaporeans well. While we have a good island-wide land transport system, the same cannot be said of the intra-town land transport system, especially in new estates. In new estates, the development of a comprehensive land transport plan is essential to reduce travelling time, prevent traffic congestion and improve road safety. Sengkang New Town was touted as being the first town where the entire road network and the land transport system was pre-planned. It is an example of faultless planning but flawed execution. Planning the land transport system is only the first step. Implementing the plan is a more difficult task. Success requires close coordination between various Government agencies, including the planners, LTA and URA, the builders, HDB and LTA, and the public transport service providers. Although the plan was near faultless, the same cannot be said of the execution. The first year of living in Sengkang Town was a nightmare. What was inconceivable was that the entry and exit to the entire town was via the old Punggol Road with its limited width. As the town grew, I was aghast that the road network fell far behind in its pace of development. With the time taken to leave the town, taking as long as half an hour, it was becoming unbearable.”
“Down on the ground, the Community Development Councils (CDCs) can play a pivotal role in working with the voluntary welfare organisations to help prevent or relieve the social stresses on the Singapore family. It can be a central agency to marshal the resources of the voluntary welfare organisations, and also be a key point for people to go to when they need help in this area. Current CDCs have insufficient manpower and resources to carry out their roles to their full potential. Government should increase funding for CDCs, and also look at increased incentives to encourage both individuals and companies to help provide increased funding for the CDCs in their personal or company capacity. The other key organisation that is important in the heartlands where most people live in will be the town councils. After the Asian economic crisis, the town councils and, more lately, the CDCs have been looking for alternative financial instruments to place their funds. With the lowering of interest rates, bonds have become attractive alternatives. In line with the Government's effort to grow the bond market, town councils have also been active in participating in the bond market. In the 1998 Budget statement, a 10% concessionary rate of tax on interest income derived from qualifying debt securities was announced. However, the concessionary tax rate for bonds has not been extended to town councils and the CDCs. Both these organisations are organisations that work not for themselves but for the people on the ground and the people in the heartlands. I think it is time that the Ministry of Finance considered extending this concessionary tax rate to these organisations.”
“Mr Deputy Speaker, Sir, the Budget this year has been generous, yet crafted carefully to propel the economy forward. It has measures to help Singapore stay competitive and has also eased the pain of restructuring. While the Budget has focused on the big picture, I am glad that the Budget has also catered for the needs of the individual Singaporeans. Most importantly, I am concerned that the unskilled or lowly skilled Singaporeans will have difficulty in finding a niche for themselves in the new era economy. Many of them are also sole breadwinners. I am glad that we have announced increased funding for several schemes, like investment in education and technology, CPF top-up, utility rebates, SC&CC rebates, ElderCare Fund and the Medical Endowment Fund. These are some measures that have been put in place to help the lower income, but I think more needs to be done. As we push ahead to help propel the economy forward, there will be stresses on the social fabric of society. For the unskilled or poorly skilled, structural unemployment will be a major social stress on the family, and many of them find that even though there are opportunities for training, they may not have the ability to adapt to the new environment. For the skilled workers or even the professionals, they face a different type of stress. The increasing trend of families with both parents working long hours will also stress the family unit. It is important that as we work towards increasing productivity and restructuring the economy, we must be mindful of the family unit and the stresses it faces. Having more children see psychiatrist and increasing divorces are signs of strain on the Singapore family unit.”
“These accounts by these patients remind me that I have to count my blessings. I do not take this for granted. I am happy that I have a home, I do not have to worry for my safety of my family, and I have a job and stable income. And all this has been made possible because we have a strong political climate and a strong economy. I do not take this for granted, but I am thankful that we have a good Government that has made all this possible for all Singaporeans to have a safe home and a prosperous nation. I believe that we should invest in our future, and really our future depends on attracting and retaining top talent in the Government and in the civil service so that these talented people can continue to make Singapore the best home for every Singaporean.”
“Should we stop paying our top political leaders and our civil servants high salaries because there are low income families who will not understand the quantum of the pay? Or should we pay top political leaders and civil servants a remuneration that is close to the market so that we have good people who will lead the country and will be able to help these low income families improve their standard of living? I think the answer is obvious. Finally, there are those who believe that, yes, politicians are here on a calling and to be altruistic and therefore they should sacrifice for the nation. This sort of statement will find favour with many people. But we must ask ourselves, how many of our top talents in the private sector will be willing to step out of their high paying private sector jobs with corporate benefits and go into the political arena. Do we sincerely believe that altruism alone can attract the best to come forward and to run our country? If we believe that, we must be mistaken. I think to many Singaporeans, the concerns and worries that were present during the Asian economic crisis appear to have been an issue of the past. In my day-to-day practice as a doctor, I continue to meet people from other countries, including Indonesia, and they are still significantly affected by the social and economic consequences of the crisis. Just this week alone, I met one who said that he had to relocate from his home in Indonesia because of the social unrest. He has got to move somewhere else out of Indonesia to live with his daughter. I have got another patient who came to me and said that he was very worried because his land had been occupied by other people, and he feared for the safety of his family.”
“Another emotive concern of many people is, I think there is not a small minority of Singapore households that have incomes at a low income range, and they will never be able to get even one year's remuneration of the top earners in their whole life time. Hence, some people will argue, "Yes, there will be too great an income divide between the top and the low income families." This is a very emotive issue that will find favour with many people. It will pull at our heart strings. Yes, there are low income families that will certainly continue to require assistance. If we look at it in a more rational way, we must ask ourselves whether the savings that can be obtained by not having a pay increase, what will it do to help them compared to having a good Government and a first class civil service that can attract high quality investments and help workers upgrade their skills. That is a better solution to helping the lower income families. Another emotive issue that the absolute amounts that the Ministers and top civil servants will get in their remuneration package are so large compared to the average household that it will be very difficult for them to accept these numbers. These are million dollar numbers and some of them in their whole life time will never see these numbers. I do not disagree that these numbers may be mind-boggling or seem very excessive for the average families in Singapore. Again, we have to try to put aside our emotions. Five or 10 years down the road, there will always be low income families. But there will always be top corporate leaders in the private sector that will earn salaries beyond the imagination of the average Singapore families.”
“Some Members must have read in the last few weeks that there was a report in the Straits Times that said that a drop in the share price of several electronic and manufacturing companies on the Stock Exchange had resulted in a paper loss of tens of millions of dollars for these individuals. I am also aware of companies where employees have stock options worth millions of dollars. If we take the perspective that our top Government leaders are the key drivers of Singapore Inc., then certainly they should deserve to get a remuneration comparable, if not better than those given to the top management of these companies. I am especially pleased that even though the benchmarks and the formulas have been decided upon, the Government has been transparent enough to come forward to bring the issue to the forefront and debate this again and put this up for comments by other Members of Parliament. If we look at it logically and rationally, these moves are good moves but there are many emotional issues at hand and we cannot escape from these emotional concerns that will be expressed or have been expressed. As I have said earlier, economic recovery is patchy and there are sectors of the economy that have yet to recover fully from the crisis. Would it be a rational argument to say that the pay of Ministers and civil servants should only be adjusted after all sectors of the economy have been restored or recovered? I do not think so. In fact, we should ensure that we continue to attract good talent into Government and civil service so that we can drive the economy to greater heights and restructure the economy to meet the challenges ahead. This would be a solution in helping those sectors of the economy that have been weak.”
“With the recovery in the economy, there have been several pull factors which have made it more difficult to retain good leaders in the civil service and in other areas of the civil service as well. I think there will be this global pull for talents which DPM has mentioned, and we cannot escape the fact that this pull will increase when stock options become a part of life in the private sector. It will be increasingly more difficult to attract top quality leaders to join the political leadership. We need to make these adjustments to market changes to retain the talents and to attract new talents. The second question that will bother many people is whether the degree of pay rise is justifiable. DPM has explained that the percentage of pay rise across-the- board has been tailored to meet different segments in the civil service according to the type of professions or departments that they are in. I support the move to moderate the increase in the base pay and instead move towards variable and performance linked bonus system. I think it is very heart warming that, for the Ministers especially, the base pay increase has only been 0.3%. That is a good message to send across and that a significant part of the adjustments will be through a performance related system. This is a move that should be lauded. The next question that many people will ask is not just the percentage of increment but the absolute amounts in the salary increase. Is it justified? Yes, the sums are large and we must look at this in perspective. We must be able to compare apples with apples and pears with pears.”
“Sir, I thank you for allowing me to make some comments on the measures. The last time when the salaries and benchmarkings were commented upon, it was in a different environment where the economy was doing well and many of the salaries have not gone up to the million dollar ranges. This time round the issues will probably be more emotive because there are many other issues at hand, for example, the economic recovery has been patchy and certain sectors have not fully recovered. There is still a significant minority of the households in Singapore who are low income families. Many of these will find these million dollar salaries, especially for the high office holders, very mind-boggling numbers which they cannot quite fathom and understand. Of course, there will be some people who believe that political leaders should always be altruistic. I am here not to defend anybody but to try to take a level headed approach to some of these issues and try to dissect the emotive issues from the logical and rational thinking. The first question we want to ask ourselves is whether there are any grounds for salary adjustment. The economic crisis has seen either a freeze or a downward adjustment in remuneration for senior Government leaders and civil servants. A strong and far-sighted political leadership that we have and an efficient civil service have helped Singapore to steer ourselves through the crisis with minimal damage to the economy. Our political leaders have formulated policies that have allowed Singapore to have a speedy recovery. The upswing in the economy has been fast and, as Members have read in the recent PERC report, our Singapore Government has been rated No. 1 in this region.”
“Those in Sengkang range from $25 - $34 per sq ft. So if we compare them to Ang Mo Kio, it is almost 10 times. For shops or market units in comparison, in Ang Mo Kio, the going rate for a flower stall is about $250-$468 per month. Comparatively, in Sengkang, it is $2,500, which is more than five times. A fish stall is about $350-$650 per month. Comparatively, in Sengkang, it is about $3,000-$4,000. So it is about six times. For meat and poultry, it is about $288-$850 in Ang Mo Kio. In Sengkang, it is about $3,000-$3,500. This is about four times, and so on and so forth. I think it is not unexpected sometimes in new estates to expect an increase in prices. But I think what has happened is that the scarcity of amenities and facilities has resulted in these high rents. The unnecessary increase in consumer prices made things very difficult for the residents. I would first like to thank the Minister for the support given to the grassroots organisations with the formation of the Sengkang Town Development Steering Committee. We have given various recommendations to the Ministry to improve the quality of life in Sengkang Town. We would be grateful if the Minister can kindly enlighten us on some of the development projects, so that my residents will be able to see that Sengkang Town is the town that they would want to live in.”
“Sir, building new housing estates is one of the key priorities of HDB. The usual reaction of a potential house owner would be one of eager anticipation. Upon receiving his keys, the reaction is one of joy. Upon moving into the new estate, his joy is tempered and harsh realities set in. Soon, the inconveniences of a new estate will dawn upon him. Sengkang New Town is a case in point. It was touted as the new town to live in. It was a town where the conveniences of a new estate are to be matched by a superb transportation system. However, residents who have moved in over the past few years have faced the harsh realities. Conveniences are far and few in between, and inconveniences abound. 3.00 pm Firstly, much can be done to improve the design of future flats in Sengkang. Covered linkways are aesthetically appealing to the eye, but often do not shelter you from the rain. I have walked there at night and even in a light drizzle, you get wet. Block signs are so small that it is extremely difficult to find your way around, not only when you drive around the parameter but even when you are within a cluster itself. Amenities are few and therefore prices of goods, including market produce, are significantly higher than other places. Although there are at least about 20,000 housing units, there are only two clinics tucked away in one corner. The scarcity of amenities has resulted in outrageous rents. This has been passed back to the consumer as an increase in consumer prices. As an example, in terms of the comparison of rental prices of clinic space, in Ang Mo Kio estate, existing rentals for a precinct are about $3 per sq ft. Hougang estate is about $4 per sq ft. These are for HDB rental units. For those which have been sold by HDB and sub-let, it is about $9-$15 per sq ft.”
“Sir, the North-East Line that is due to be completed in 2002-2003 will, of course, bring great relief to the residents of Sengkang, Punggol and Cheng San GRC in general. We very much appreciate that MCIT has helped to speed up the work. Unfortunately, the residents do face significant traffic problems because, as part of the MRT construction, there are significant road diversions. There are a few points that we would like to raise with the Minister. Firstly, we would appreciate it if LTA can look beyond just the local diversion, because some of these local diversions prevent the opening of major arterial roads. This means that even though they do divert a small bypass but, for the estate as a whole, the roads are choked. For example, in Sengkang town, the main arterial road now is Punggol Road, which is an old road and, unfortunately, it cannot be widened significantly. So this causes significant problems and time wastage for the residents. We are looking at whether other arterial roads like Sengkang East Way or some other bypass could be opened. My second point is on transport problems on a larger scale, like what my colleague has just mentioned. If we look carefully at how the town is growing, we are having about 1,000 new households moving in every month or so. At this rate of increase in the population, we do face traffic problems, not just locally, but also when going to town, congestion on CTE and other bypass roads. The ERP has helped to some extent but, in the longer term, we should really look at other expressways or semi-expressways to provide alternatives for the residents there.”
“The ERP has been in existence for some time and it has been used to optimise road usage and control traffic usage. Since its initial success in the CBD, it has been extended to various other areas in Phase 2. I remember, of course, that when Phase 2A was actually imposed in CTE, it took a bit of adjustment before the traffic improved. Initially, even though you paid the charges, you had long jams. But after they tweaked the charges, traffic flow is very much better. I think there is no doubt that the ERP has served its purpose. However, Phase 2B is on the horizon and I think what we want to be assured is that, firstly, like what my colleague has just said, there are viable alternatives and that MCIT will not be too ready to place up the new gantries even though they have already placed the footings, and that there should be adequate buses and other alternative modes of transport before we do that. One of the problems is that if you start putting gantries up in the new cordons in Phase 2B, one needs to be reassured that you are not just shifting traffic to other possible gantry areas where you have not put the gantries. Because if you do that, and if you keep on shifting traffic from one place to another place, eventually you will be able to justify that Phase 2B should be fully implemented. I am not affected in Phase 2B; it is not within my constituency. But I am sure many other MPs are also concerned that Phase 2B will not be implemented in a hurry. So perhaps the Minister would like to enlighten us.”
“Only then can Singapore be a global player in the virtual world. Assoc. Prof. Toh See Kiat: Sir, may I take my two cuts together?”
“We should reduce prices to the level that will be competitive to places like Hong Kong. Current wholesale prices for broadband access by service providers such as SingTel to other ISPs are high, and make it commercially non-viable for other ISPs. The Ministry must mandate open access to broadband infrastructure currently owned by SCV and SingTel and reduce the pricing for these services, so that they can be offered to ISPs. With more competition through lower wholesale prices, more ISPs can offer these services to the public at more affordable prices. The provision of good policies and excellent infrastructure by themselves cannot propel us to be first movers in the Internet revolution. We must create the right mindsets and an understanding of the fast moving world of the Internet. For senior and middle management staff in the civil service and statutory boards, yes, there are many who are already in tune like those in the MinCom, MCIT and IDA, but there are also many who are not in tune. The Ministry should take the lead to organise Internet and e-commerce seminars for senior and middle management to help them keep up with the Internet revolution. Experts and technopreneurs from the virtual world of Internet can bring virtual reality to the real world management. One of the key areas that one must look at is administrative procedures and legislation. They must be able to keep up with the pace of the Internet. As these span across different Ministries, there will still be a need for a coordinating body. Perhaps MCIT may be the best body to coordinate this. The Ministry must be congratulated for several initiatives to help Singaporeans join the Internet revolution. We must do more if we are serious in being a global player, and we must move fast and we must move now.”
“Singapore is uniquely positioned to become an e-commerce virtual global hub. However, we must recognise these trends and prepare ourselves to meet the challenges of an interconnected world. We must change our mindset and adjust to the speed of the Internet world. Hence, we must groom and train people constantly to meet these new demands. We must also adjust our policies to position ourselves to meet these challenges. Liberalisation of the telecoms sector is a move in the right direction. With full liberalisation of the telecoms market in New Zealand, Australia and Hong Kong, Singapore must speed up its liberalisation process to remain competitive. And I support the Ministry's plan on this. We have seen how the introduction of competition in the form of M1 has made the entire handphone market more competitive. It has resulted in better quality services and more affordable prices and also the introduction of new services such as wireless applications (WAP). Increasingly, the Internet world will move from the narrow to broadband applications. Although Singapore has Singapore One and 98% of all homes are already connected, only 14% are subscribers. If Singapore wants to become a serious broadband application provider in the region, we will need to increase broadband access and reduce the cost of broadband access. To encourage the industry and Singaporeans to increasingly move into the broadband applications area, I think it is imperative that the cost be reduced. Current ADSL prices of SingTel Magix are significantly higher than that of Hong Kong Telecoms. Current cable prices of SCV are about three times higher than that of Hong Kong. It is time for the Ministry to put pressure on service providers to lower the pricing of broadband access.”
“Sir, the Internet revolution will be one of the major milestones of this century. It will have a major impact on business and also on the life of the ordinary person. The emerging importance of the Internet cannot be ignored, and Internet companies are now able to buy over established brick-and-mortar companies with traditional business models. A major trend in the horizon is the emergence of e-commerce communities. The rise of the Internet will lead to the inevitable strengthening of e-commerce as a challenge to conventional businesses. The exponential growth of e-commerce procurement and supply chain, management systems will increase efficiency in the system and reduce cost to businesses. The end-to-end situation of the entire procurement and supply chain will also mean reduction of product and process costs. E-commerce business can make traditional companies obsolete within a few years. The rise of the Internet has also created yet another trend. Increasingly, traditional companies will lose top quality staff to Internet companies. The migration of top quality talent to the virtual world will only strengthen the world of e-commerce. This is a trend that is already happening in the USA and we are beginning to see this in Singapore. The success of e-commerce is not only dependent on business concepts but also on strong management skills. Being an entrepreneur is only one of the ingredients for success. It does not substitute for strong management skills. Internet companies grow rapidly and can become globalised within a short period of time. The speed and pace at which Internet companies move far outpaces conventional businesses. If traditional businesses do not evolve, they will be overtaken.”
“The other major issue that will have a major impact on Singapore is the issue of an ageing population. The smaller families that have resulted from our earlier successful family planning programmes have meant that each family will have more difficulty in supporting the elderly, both financially and socially. The small working families, for example, will find it extremely difficult to look after the elderly, especially if any one of their parents has a disabling disease, such as a stroke or in a terminally-ill condition. Hence, I support the move to increase the promotion of CDC as a social anchor in our community. The CDCs must be equipped with the infrastructure as they take upon more responsibilities that were previously administered by the different Government agencies. The CDC will be the most appropriate body to coordinate the provision of social services and facilities for the aged and be the link between the Ministries and the voluntary welfare organisations. It should be a one-stop centre for the coordination of services for the elderly. The volunteers who help the CDCs and VWOs are a special breed of people and though they do it selflessly, we must never take their effort for granted. I think more must be done to recognise their effort and time. Mr Speaker, as we move into the next millennium, we have to recognise these trends and act with more speed at the fastest pace if we want to succeed in building a successful virtual Singapore that is as successful, if not more successful, than the real world Singapore.”
“The Community Clubs have the potential to become a natural foci to start this Internet revolution for the uninitiated, as it is visited by a wide spectrum of our society, be it men or women, young or old. The virtual world is also where the Singapore Government needs to engage its citizens. If we do not do so, we will have an increasingly larger segment of Singaporeans spending more time in the virtual world oblivious to the realities of the real world Singapore. The virtual world will be a place where the Singapore Government will find it more difficult to reach out to the virtual citizens. Hence, Government Ministries must take the lead in engaging Singaporeans in this virtual world and move towards having websites that are not merely static information portals but truly interactive portals. I must commend HDB, for example, which has an extremely comprehensive site, and it would be made complete if it was truly interactive and in more than one language. There is a very impressive list of e-mails which you can actually send to the different branches and even to the headquarters. But feedback from people who have seen me is that often you do not get much of a reply. So I think if we want it to be a truly active and interactive site and promote active citizenship, this is one step that we have to take. The Internet revolution has provided Singapore with an opportunity to become a top service and financial hub centre in the world. It will create an e-commerce entity that will one day rival and perhaps even exceed the size of the real world economy. We have to have the right recipe to succeed - we have the entrepreneurs, we have the people who are Web trained; what we need now is a bureaucracy that is Net literate and perhaps even Net savvy.”
“The Internet will make the world a giant information hub. Information cannot be hidden as Internet allows us to harness the wealth of information on the Net. For example, health and medical information sites in the USA provide equal access to all users, regardless of whether he is a medical doctor or a lay person. However, many Singapore sites tend to bar the lay public from the restricted areas which are only accessible to professionals. The irony of it is that the same information, or even better information, is available on the US sites and accessible to the lay public. Singaporeans must learn to understand that the Internet world is a borderless world. Instead of hiding information, we can play an important role in optimising the use of information available. We can help Net users distinguish the good sites from those with poor quality information. If the Singapore Government wants to fulfill its dream of becoming a world-class virtual hub, Government Ministries and bodies must be bold enough to make the changes that can help technopreneurs and entrepreneurs blaze their way into the realm of the Internet and stand on the pedestal of success. In this case, it is not a case of more speed, less haste; but rather more speed is the best pace. Through the key elements of entrepreneurship and the creation of the right milieu for Singapore to succeed in the new era, we need to add the element of a trained IT workforce. A strong focus on IT in the educational system will prepare a new generation for the IT era. However, we must not forget that there is also a significant segment of the population that is not Internet-savvy. I am glad that the PA (People's Association), has stated that it wants to change its image.”
“Interactive video on demand, music on the Internet and the broadband revolution are shaking up the entertainment industry. No business will be spared. For Singapore to be relevant in the next century, we must become a top class Internet and technological hub. We must have the right ingredients to succeed. The essential ingredient we have to add to ignite any significant revolutionary development in the information technology industry is the entrepreneur or technopreneur. A rare species, they are imbued with clear vision, great foresight, utmost determination, inexhaustible drive, extreme passion, immense resourcefulness and perhaps a foolhardy love for risk. The spirit of the entrepreneurs exudes boundless and infective optimism that drives the belief that they can achieve the most wonderful things in the face of gargantuan obstacles. For any market or economy to prosper, entrepreneuers are indispensable. They are the agents of change. As the economist Lester Thurow observes in his latest book, Building Wealth, "Change requires individuals who recognize that new things can be done and who take the initiative to get them done. The existing bureaucracies, public and private, will not take on the job of changing what is." Our bureaucracies will have to constantly modify the rules to create a conducive environment that will ensure that the entrepreneur will thrive. We have taken some concrete measures but more needs to be done. I have been told by companies that have taken grants from NSTB that they lament about the bureaucracy. Perhaps it is time to review the administration of such grants to IT companies to establish a comfortable balance between protecting the interest of NSTB and the non-hindrance of company efficiency. Mindsets have to be changed.”
“In the mid-70s when this American Charles Schwab decided to transform his full-service brokerage into a discount brokerage firm, he insisted, against a trend, that he would develop in-house technology. He placed his bet on technology and signed a cheque that was equal to the entire net worth of his company. By 1996 it had begun offering Web training. In January 1998, it weaved all its electronic services into one integrated service. Now, according to the IT research firm company, IDC, Charles Schwab & Company commands more than 70% of the assets traded online, and its trading volume is that of its nearest three competitors combined. Worth US$36.5 billion, Charles Schwab & Company is widely acknowledged as the only traditional retail operation, financial services or otherwise, to have successfully adapted its business to the Web. Charles Schwab has become bigger than established financial institutions, like Merryl Lynch. The success story is not only confined to USA. Despite a non-supportive environment in Japan, Mr Mikitani, a 1988 graduate in Japan, launched his Internet site in 1997, and since then he has developed Rakuten into the most popular online business-to-consumer e-commerce designation in Japan, averaging approximately US$3.5 million in transactions every month and more than 400,000 visits per day. He said, "In Japan, everyone was pessimistic about e-commerce, and I wanted to do something that everyone was pessimistic about." Two-and-a-half years later, Rakuten has become Japan's largest on-line shopping mall, providing auction, hosting and transaction-processing services and market-analysis tools to more than 750 of Japan's largest companies. The Internet will affect every industry.”
“Mr Speaker, Sir, thank you for allowing me to join in the debate on the motion to thank the President. The next millennium will be a different era from this century. Two major trends will have a major impact on Singapore in the next century. The socio-economic landscape of Singapore will be transformed by the Internet and information technology revolution and the small modern Singapore family will face the challenges of managing an increasingly aging population. The emphasis on people development, active citizenship and development of heartware will take a different dimension with the explosion of the Internet, broadband technology, wireless technology and other developments in the IT revolution. The IT revolution will change the social and economic landscape of the world. As we prepare the younger generation in our educational institutions for the future, we must also prepare ourselves for the consequences of the IT explosion, especially the Internet. The Internet will have far-reaching implications for Singapore. In the Internet world, speed is everything, and the extremely fast pace of development has opened an entirely new social and economic virtual world that only the Internet-savvy can keep pace with. Entirely new businesses have sprouted out that have grown rapidly to challenge established institutions. Many virtual Internet companies are now worth more than their competitors and are increasingly eating into the economic pie of the real world competitors. Those who have the vision to understand the power of the Internet and harness its power will be leaders in the next economic revolution.”
“As health was the main reason why the Cabinet rejected, and also at the point in time, like what the Prime Minister said, we had supported the President even though he had lymphoma, as a doctor, we have always been taught that low grade lymphoma would be difficult to cure, but it generally runs a fairly long course. In this instance, what I want to know, and I think it is also public interest, unless the course of the disease has taken a drastic change to become a high grade disease, or the disease cannot go into total remission, there would be little reason for Cabinet not to support him, if the lymphoma remains as it was in the past. Perhaps the Prime Minister would like to clarify this.”
“I remember that in my days, the teacher was always right, and teachers did not take too kindly to students who pointed out their mistakes or took a different view. The educational institutions must create the right environment for our young to be active citizens. Singaporeans must learn that the future of Singapore lies in the citizenship that is able to look beyond the individual and the family. We must build a citizenship that is able to contribute to the nation and believe that their future is invariably tied to the future of the nation. Finally, in promoting active citizenship, we must not forget that access is also important. People wishing to participate in giving feedback or being involved in community projects must be able to find access easily. Although many Ministries or organisations have tended to promote high-tech access via the Internet, we must not forget that there are many Singaporeans who are not Internet savvy. A simple toll-free phone line will probably be an easier alternative. If we want to promote and make active citizenship a reality, it has to start from the two key sectors that have a major impact on all Singaporeans and all Singapore families. Firstly, the public sector, which every Singaporean will have to come into contact with, and secondly, educational institutions which will nurture our young and mould their minds. If we can succeed in these two areas, we will have planted the seeds for active citizenship. May it one day grow like a mighty oak and spread its branches so that it will touch the hearts and minds of all Singaporeans. The day this happens, I think we will have succeeded in creating a Singapore tribe.”
“If you had a valid point that they could not rebut, they will use a different approach; they will send your report to a committee which will just sit on your report and not make any decisions on it. If I, as a Member of Parliament, could feel the frustration of being an active citizen, what more the man-in-the-street. Making active citizenship a reality requires a major change in the mindset. The first thing to do is to have an active response to opinion. The public sector must take the lead in promoting active citizenship as invariably all Singaporeans will come into contact with Government agencies. And where should we begin? I think this House should lead by example. If good suggestions are thrown up, let Ministries be bold enough to say yes. It is often easier to say no than to say yes. Sometimes, the reply is no, but the suggestion resurfaces later as a new policy of the Ministry. I am glad that the Singapore 21 report states that a difference of views should be seen as an opportunity to benefit from the diversity of ideas, and there should be no loss of face if good ideas come from the people. This active response to opinion must filter down to the public sector. We must go beyond the service quality committees to people sector committees, comprising of individuals in the public, private and people sectors, whose role is to ensure that the public sector is promoting active citizenship in a positive manner. I believe that the task ahead is a gargantuan one and changing this mindset will require tremendous political will. Creating an active citizenship culture goes beyond just creating an active response to opinion. We have to start from the very young, right from the kindergartens, the schools and the universities. We have to change the entire mindset.”
“Sir, thank you for allowomg me to join in the debate on the motion. Firstly, I would like to congratulate Minister Teo and his team for a very good report which contains simple yet meaningful messages which all Singaporeans can relate to. It is extremely difficult to crystallize abstract ideas into simple messages, and I think the committee has done an excellent job. Singapore is a country with very little resource, and the main resource we have is manpower, and hence people are its most important asset. For Singapore's future to be bright, Singaporeans must take an active interest in Singapore's future. I remember why I first got involved in politics in the mid-80s. I have always believed that Singaporeans must take an active interest in Singapore if Singapore was to have a future. At that time in the 80s, I have felt that many in the younger generation had a different viewpoint from the views espoused by Government. I had two choices. I could have either been an armchair critic or joined the party to make different views known. I chose the latter. While in politics, I was not a yes man, but more often than not, I was willing to express a different view whenever I thought that the different view I expressed was a viable alternative. I am a firm believer of active citizenship where every Singaporean is encouraged to take an active role in making Singapore a better place to live in. However, the reality is that it is tougher than what it seems. I remember that when I was working in a Government-related institution, it was amazing that sometimes, senior officers act contrary to what the Government preaches. The policies formulated within the institution ran against the grain of the principles that we have been taught to believe in.”
“Therefore, I would like to urge the Minister to optimise the use of hardware available by ensuring that our teachers are confident, conversant and comfortable in the use of IT, and be in the position to lead our students into the IT era.”
“I think we have to teach the students how to crawl before they can walk, and how to walk before they can run. As we expose our students to computers at a young age, there must be a systematic way to teach them. We must not stifle their enthusiasm or give them so much pressure that they want to stay away from computers. If the teachers expect the students to use a certain software for presentation, they must teach the students how to use it or even make sure that there is access to computers for the children to use it, especially since many parents are not familiar with the software. However, teaching IT is not just the teaching of application of software or the use of Internet. I think another very important area in the teaching of IT is also the proper use of IT. Let me give you an example. A parent complained to me that he noticed that the grades of his daughter were dropping and getting worse. So the first thing he did was to remove the telephone. But that did not solve the problem because the daughter was still plugged on the line via the Internet and was spending several hours on the computer. So the next thing he did was to remove the computer and the grades got better. So my point is that, yes, we do want to encourage the use of IT and computers, but again if these tools are not used properly, they may not sometimes help our children but actually make them worse, because they use them for not very useful purposes. I think it is likely that our younger teachers will probably be more familiar with computers. However, I believe that many of our older teachers do face difficulties and they find it very difficult to cope with the changes in IT and computer software. The Ministry must do more to help the teachers help the children.”
“Sir, information technology appears to be the buzzword now. The Ministry of Education has taken great effort to promote IT in schools. I support and believe that the Ministry is moving in the right direction. The Ministry has also invested significantly in the provision of IT infrastructure in the schools and has also sent teachers for training in IT courses. On the surface, the IT plan appears to be flawless, but, in reality, we have to ask ourselves whether there are weaknesses in our attempt to promote IT in schools. I believe that the key to success is to develop an IT culture in the schools and also to have IT-trained teachers who are able to nurture our students. Nowadays, it is not surprising that even primary school students have to do presentations, and many of these presentations require the use of information technology, including the knowledge of computer software. It appears to be the in-thing that the teachers will not just ask the school children to do their projects but also to present their projects in perhaps PowerPoint, MS Office software, or some other software. This puts tremendous pressure on our school children. If the school children who have parents who are familiar and conversant with the Internet and computer software, the parents may teach them the use of these softwares for their presentation. This, of course, will be ideal. However, we have to ask ourselves: how many of our school children have parents who use the computers and are conversant with computer software? If these children do not have computers or do not present their projects in the proposed software format, they will feel very, very stressed and will be under tremendous pressure, because many of these projects do count towards their final assessment of the year.”
“Sir, the range of social and welfare services provided by many well meaning voluntary welfare organisations is commendable. The allocation of these resources is currently performed by the Ministry of Community Development. The question we have to ask ourselves is whether the availability and the demand matches. The question is all the more important as it is more difficult to get funding in this current economic climate. Are we allocating scarce resources efficiently? I am of the view that this is not always so. Look at the Before-and-After-School-Care Centres (BASC) that have closed down, day care centres that are underutilised and the long queues and waiting period for childcare centres, and one will begin to understand why such resources are not optimally allocated. It is the norm that the GRO advisors get a letter from MCD informing them that they have decided to set up a certain service at a location without asking the advisor whether the service is required and whether the location is appropriate. It is frustrating to VWOs that having spent considerable effort raising funds, time and energy developing the centre, only to find that the service is not required. It is not only a waste of resources but also very disheartening to VWOs. It is time for MCD to work more closely with the GROs. The advisor of the GROs will be familiar with the needs of the people in his estate and will be able to advise on not only the type of service required, but also the quantity of services required and where the optimal site will be. I would urge the Minister to look at the way that such resources are allocated and perhaps work more closely with the advisors of the GROs to have optimal allocation of these scarce resources. 5.15 pm”
“I would like to assure Members that the Government will carefully consider all the possible pitfalls of the open bidding system before we go ahead with it. As Dr Toh See Kiat mentioned, there are many reservations or possible pitfalls in such a system. In the meantime, we will stick with the current closed system, based on the lowest successful bid price. We will not change that. As far as information is concerned, Mr Ang Mong Seng asked for more information. We will gladly give members of the public all the information that is already available at LTA. We will try to put them onto the LTA web-site. In fact, many members of the public who were involved in the dialogue sessions with the GPC were not even aware that information of the tender results, including their own tenders, with their IC numbers and their tender price, were available at LTA. Such information was available to members of the public but they were not aware. So we will make this information more available on the LTA web-site. Sir, let me conclude by saying that the review of the VQS has been a worthwhile exercise. There is a general consensus that the VQS should be retained. It is serving its purpose. Nevertheless, there are several recommendations to improve the system. The Government has accepted most of the recommendations. Others would be considered for possible implementation at a later date, such as open bidding. I am confident that these changes will result in a system which is fairer and more efficient and which, hopefully, we do not need to tinker with for quite a long while.”
“Some Members including Mr Ong Kian Min have asked: why change, why not stick to the same thing, why introduce uncertainty? The answer is, if we can have something better, why not? So is it better? I think that is a key question. Is it better than what we have today? Is it really a new system? People are anxious because they say this is something new. I think Mr Chay did point out that this is not a new system. Share markets, currency markets trade daily on stock and monetary exchanges on an open bidding system. There are many, many sites on the Internet where open electronic bids are quite common. E-bay is one that comes to mind. I think there are many others, both overseas and in Singapore. Cars are now being sold on an open bidding system electronically. Traders in New Zealand buy second-hand cars from Japan, and they bid for them on an open electronic bidding system, a system which incidentally is managed and operated out of Singapore. Second-hand motor traders in Singapore, I know, are now thinking of using a similar system to allow people to buy and sell second-hand cars, again using an on-line auction system. So I do not think there is really that much to fear about an open bidding system transacted on-line. However, I do agree that there are many technical issues that need to be settled before we go ahead with this system. We need to settle things like how to prevent last minute bidding, how to prevent manipulation, and so on. My Ministry will study the mechanics of this open bidding system in greater detail. And we hope to introduce a trial of this system within a year. While the Government is accepting in-principle the trial, we have not finalised whether this will be held in the Open Category, and we are open to suggestions on how to implement the trial.”
“Nobody twisted his arm to bid for it, but he was happy. So it is with COEs. In an open bidding system, people who value or who want that COE in that particular month will go for it. They will bid high for it. That is what an auction system is all about. And the revenues from COEs also go towards a good cause, whether it is for roads, MRT, schools, or other public projects. So I think we should not get carried away. The bidding system, whether it is a closed system or an open system, is essentially an auction for a scarce commodity. In itself, any auction system, whether it is an open or closed bidding system, should not lead to higher prices. The price, in this case the COE premium, ultimately will be decided by the bidders, based on information that are available to them, the supply of COEs, the market economy, or their own situation, as Dr Wang pointed out. In a closed bid, such information is not readily available. So there is that element of luck involved. You put your bid in. If you are more informed, you tend to have a higher probability of success. If you are less informed, chances are that you would not get your COE. But in an open system, the bidders will be fully aware of what the prevailing bids are. Their own bid will also be a deliberate one. Every one will have easy access to the same amount of information. So in that respect, I support the view of the GPC that an open bidding system will result in better informed and, hence, more rational and more responsible bidding. I think this is a worthwhile objective which every vehicle buyer will support. I understand and it is natural that there will be some anxiety and apprehension about new systems.”
“In fact, they are released to members of the press. Anybody who is interested can go to the LTA and get all these details. My Ministry has analysed the numbers and we do not see any evidence that there is this very irresponsible bidding pattern that people have attributed to the lowest successful bid system. So the Government agrees with the GPC's recommendation that we do not implement the pay-as-you-bid in the closed bidding system. There is no evidence to suggest that the pay-as-you-bid system is superior to the lowest successful bid system. On the other hand, there are several disadvantages of the pay-as-you-bid system. These are cited in the GPC report and I will not repeat them here, except to say that I agree with the reasons. The Government also agrees with the GPC that the open bidding system merits serious consideration. With greater transparency and more information, individuals will be able to make more informed and rational decisions based on the full knowledge of the prevailing market situation. Many Members in this House, including Dr Toh See Kiat and Mr Chew Heng Ching, as well as many others outside, have expressed fears that an open bidding system will irrationally drive up prices, leading to higher premiums. I think all of us attend Seventh Moon auctions. Most of us do anyway. We all cheer when the prices go up. The organisers are happy. The beneficiaries, whether a charity or a grassroots organisation, are also happy. The successful bidders are also happy. Because he is a willing buyer of a product that is being sold to him. It is a scarce commodity. Whether it is "or kim", a piece of black gold, or whether it is an engraved plaque that somebody has put up for auction, this scarce commodity has been sold to the highest bidder.”
“We will monitor the situation and, if necessary, inject additional COEs after the implementation of the ERP Phase 2 later this year. I come now to the auction method, again another relatively controversial subject. The current system used is the lowest successful bid (LSB) method. The GPC recommended that this method be retained but also recommended that an open bidding system be considered to give more responsive information and greater transparency. And it recommended that we try this out in the Open Category. As Members are aware, there are many, many different auction systems in the world and in Singapore. Some are used to auction hogs, some are used to auction cars, some flowers, others stocks and shares, which is a very common example. Each of these systems has its strength and weakness. So we need to look for a system that can suit our specific situation, a system that people generally accept to be fair and transparent. There have been many calls from Members in this House as well as members of the public to implement a pay-as-you-bid system. The main reason behind such calls is the belief that a pay-as-you-bid system will result in lower premiums. The thinking is that with the lowest successful bid, people are encouraged to bid high because they do not have to pay. In the pay-as-you-bid system, everybody is more responsible and therefore you bid responsibly. However, if you take a closer scrutiny of the results of the tenders for the last months, if not years, I think you will find that this is not the case, that actually in the current lowest successful bid system, people do not generally bid irresponsibly. Dr Tan Cheng Bock had given some details earlier about some of the bidding patterns. These results are available to members of the public.”
“In fact, in recent months, and last year especially, about 40% of Open Category COEs were used to register smaller cars. And in the past, these COEs had also been used to register commercial vehicles. So it is not clear cut. It is not preordained that Open Category COEs are used for the larger cars. Things do change as the market changes. In conjunction with the review of the quota distribution mechanism, my Ministry will review the proportion of COEs to be allocated to the Open Category. At the moment, it is 25%. We will continue with the 25%, but in the review, we will see whether this figure should be changed. 2.00 pm Sir, taking all these factors into account, the GPC report, the Government's response, and based on this new quota formula, I would like to announce that the total number of COEs available for the next quota year from 1st May 1999 to 30th April 2000 is 68,191. This quota is about 42% higher than the quota for 1998. As there is unlikely to be much change in the month-to-month quota, there is no need to announce the quota every six months, as the GPC suggested in its report. Details of the distribution will be announced by LTA shortly. I just want to further add that with the merger of the car COEs, the five categories of COEs will be renamed Categories A to E. Sir, if we had used the existing formula, the COE quota for this year would have been slightly over 70,000. This is about 4% higher than the quota based on the new formula that we are going to use. In its report, the GPC had suggested that we do a one-time adjustment, that means, we add the difference to the quota to make up this difference. I have considered this. But since this year's quota is already significantly higher than the 1998 quota, I have decided not to make this adjustment.”
“If you look at Categories 1 and 2, you will see that the quota premiums have in recent months started to converge. There is still a difference but the difference has come down very sharply. In fact, there was even one occasion when, as Mr Chew Heng Ching pointed out, Category 1 COEs were actually higher than Category 2 COEs. One of the reasons for this was because there was a mismatch of supply and demand, and the supply of Category 1 COEs is very small every month. In that particular month, when there was a surge of buyers for very small cars, Category 1 COEs went up sharply. Having a larger category for small cars, whether it is below 1,000 cc or between 1,000 cc and 1,600 cc, will help to moderate upward pressure on the COE price for the small cars. For Categories 3 and 4, I think it is much less controversial because the two COE premiums are generally similar and so the merging of these two categories makes sense. Next, I come to the Open Category. The Government agrees with the GPC that the Open Category should be retained. This mechanism of the Open Category was implemented when we segmented all the car categories into various compartments. Ideally, as I said earlier, they should all be one. But because of various considerations, we split them up into six. The COE Open Category is a mechanism to cater for changes in the market place. If there is a change in demand for different types of vehicles, the Open Category can cater for this because it can be used to register any type of vehicle. As several Members have pointed out, including Dr Wang, the Open Category COEs have been used mainly for the bigger cars. But this has not always been the case.”
“With regard to Mr Ong's and Dr Wang's suggestion to introduce scaling factors, I think this suggestion was also considered by the GPC, but it was not accepted after the Government gave its view that the VQS is not intended to be a progressive tax measure. Progressivity is already built into the cost of owning a vehicle, especially into our motor car tax structure. For example, when you buy a big car, you pay a higher ARF and more customs duty because these two elements are based on the Open Market Value of the car. So we are already charging a wealth tax on the large car owners via the ARF and the customs duty mechanism. Furthermore, we charge higher road taxes when these cars are put on the road. So the Government feels that there is really no need for us to introduce another progressivity element into another aspect of the land transport tax structure or cost structure, which is in this case the COE. This is a deliberate decision that we have taken. Yes, I agree that people would not mind if Government were to say, "Okay, we are going to have a progressivity element into the COE structure as well." But is it necessary? After all, when we first mooted the COE system, we said that this is to tackle traffic congestion. Let us just leave it at that. Yet, having said all that, it is true that a single car category will result in buyers of big cars squeezing out small cars. So as an interim measure, the Government accepts the GPC's recommendations to reduce the number of car categories from four to two. We merge Categories 1 and 2 together, and then we merge Categories 3 and 4 together. Buyers of small cars, by which I refer to Categories 1 and 2, will not have to compete with buyers of bigger cars, those in Categories 3 and 4.”
“The GPC recommended that the number of categories for cars be reduced to two while the commercial vehicles and motorcycles remain in their separate categories. Mr Ong Kian Min and Dr Wang Kai Yuen, among others, have expressed concern that this merger will result in the buyers of smaller cars in each category being squeezed out by the buyers of the larger cars. Both Members have also recommended in one form or another, some kind of a scaling factor so that big car owners will pay more than small car owners. I think there is no question that when the COE system was first formulated there was this need to address some of the social equity considerations. But from the land transport point of view, it is also clear that there should only be one category of COEs from which all vehicle buyers will bid. The reason is very simple. As far as congestion is concerned, it is the same whether you have a large car or a small car, so the COE as a proxy for the cost of causing that congestion should be the same. Having a single category will also provide maximum flexibility to cater to the changing preference for different types of vehicles. Having a large category, as Dr Wang pointed out, would also reduce price fluctuations. But there are compelling social and business considerations to suggest that we are not ready to implement a single quota category system. So the recommendation to keep, for example, commercial vehicles and motorcycles separate is an acceptable one. The reason is because they have different tax platforms from cars and they also cater to different groups of motorists.”
“So the 1999 quota will be based on projected deregistration this year plus 3% growth of the vehicle population as at 31st December 1998. LTA will estimate the deregistrations for each year based on the trends of the last few years. If there is any discrepancy between estimate and actual, this will be accounted for in the following year. Next, smoothening out the peaks in COE supply. The Government agrees in principle with the recommendation to smoothen out the surge in COE supply in the year 2000 and the troughs that would take place before and after. Major fluctuations in the year to year COE supply is likely to lead to instability in COE prices, if not matched by corresponding demand. The actual figures will be announced when the LTA determines the quota for the year 2000 and 2001. Next, distribution among categories. The GPC recommended that the Government consider a more dynamic and responsive mechanism to distribute COEs to the different categories. The aim is a laudable one which is to reflect the changing preference of motorists for different kinds of vehicles. We agree that the current system is not flexible enough for this purpose, but some of the projections that we have made suggest that any such proposed mechanism will have a major impact on the vehicle mix. So my Ministry would like to study the implications of this proposed mechanism and other alternatives, if possible, to the current distribution method with the objective of making sure that it is more responsive. In the meantime, we will retain the current distribution method. Merging of quota categories. I think this is a recommendation that has generated quite a lot of interest.”
“We should not over-price COEs but, on the other hand, neither should we accept a price which is below the fair market price of the COEs, because COEs belong to Singapore and Singaporeans ultimately. Members will recall that the $50 COEs occurred in December 1997. Did that reflect the true value of COEs in that month? Obviously not. If that were the case, then that would have been the benchmark price for the next few months. But the next month, the price bounced back to its original level. If people knew that $50 would be the price for COEs in that category that month, I can bet my bottom dollar that everybody would be rushing to the nearest ATM to put in their bid. But this $50 COE did happen. It is a weakness of the system. This weakness is something that needs to be addressed. This is the reason why I set for the GPC the other objective of seeing whether the VQS can be improved to make it fairer and more objective. Sir, let me now respond to the specific recommendations made by the GPC to improve the mechanics of the VQS system. First, the quota system. The existing quota formula is based on the number of vehicles deregistered in the previous year. The GPC has proposed to change the formula to base it on estimated deregistrations for the current year instead of the previous year. This will remove the one year lag between deregistration and recycling of replacement COEs. What this means effectively is that it will better match the supply with the demand of those who are scrapping their vehicles. This is a sensible suggestion. The Government accepts this recommendation and will implement the new quota formula for this quota year, beginning May 1999.”