Olivia Lum Ooi Lin
Singapore
“Sir, may I ask the Minister of State what is the value of these works and services that are planned to be farmed out to the local SMEs? Because of this Best Sourcing exercise, I am sure that the local Government agencies would be able to farm out as much of these services as possible to the local SMEs.”
“Mr Deputy Speaker, Sir, from the business community, we certainly welcome this increased security measure. I would just want to find out from the Government if there are certain ways of looking how best to lessen the burden for the business community, because I am sure there will be more procedures like the security checks at the port, la…”
“When they do fall in love and apply for marriage approval, first of all, we tell them to be very careful because their application might not get approved, so, understand this. But, if they do, what we want to ensure is that they are able to take care of themselves and not become a burden to society or the state.”
“Wealthy foreigners, many of whom are founders of successful companies, would also be more willing to invest and take up citizenship in Singapore with their families. And when they settle here with their families, they will bring with them a host of connections that will further add to the economy.”
“I understand that the vesting contract price is used to protect the consumers, because 90% of the power is being generated by the four generation companies (gencos). But, at the same time, it is also used to protect the gencos because these vesting contracts are calculated based on their minimum cost of operation.”
“Sir, in the new energy market, contestable consumers are faced with the challenge of electricity planning around their variable electricity consumption, and budget their forecast expenditure on electricity.”
The complete record
Every one of 44 lines we hold for Olivia Lum Ooi Lin, in date order, each linked to its source. Free to read, in full, without an account.
“Sir, may I ask the Minister of State what is the value of these works and services that are planned to be farmed out to the local SMEs? Because of this Best Sourcing exercise, I am sure that the local Government agencies would be able to farm out as much of these services as possible to the local SMEs.”
“Mr Deputy Speaker, Sir, from the business community, we certainly welcome this increased security measure. I would just want to find out from the Government if there are certain ways of looking how best to lessen the burden for the business community, because I am sure there will be more procedures like the security checks at the port, land, air and sea. Ms Braema Mathiaparanam: Mr Deputy Speaker, I have just one point of reflection for the Deputy Prime Minister. I was looking at his theme for 2004 - "It's not complete without you". Our discussion is that everyone has to play a part. The structures seem, if you would be patient with me, a little bit too defensive. I think the best way to go about security issues is to bring the citizenry in and, at the same time, not to throw the baby out with the bath-water. We have strong community bonding. My fear is that as we go on in this way, the alienation might set in if we are not careful. From that perspective, I would like to suggest that perhaps the theme could be "It's only complete with you", which is more positive and inclusive.”
“When they do fall in love and apply for marriage approval, first of all, we tell them to be very careful because their application might not get approved, so, understand this. But, if they do, what we want to ensure is that they are able to take care of themselves and not become a burden to society or the state. And this is the rationale for this policy. I will tell you that we approved over 85%, although I am not sure I want that widely known. We are still restrictive. It is hard to be transparent. Ultimately, whether it is a foreign worker policy or training, the issue is that we are doing all these for Singaporeans, and, yes, we will reclaim sectors, we will upgrade. Foreign workers help our economy grow. At the same time we will upgrade Singaporeans to upgrade sectors. There were some questions asked on foreign domestic workers by Mr Yeo Guat Kwang. With his indulgence, I will take that later when other questions would be asked.”
“But, together with BCA and MND, we will review the MYE system to best meet the long-term manpower needs. Mr Low Thia Khiang asks if we can allocate MYEs directly to subcontractors. It is complex. The main contractor is ultimately accountable when he bids for completing the project on time and within budget, and he is in a better position to allocate. Mr Low says the main contractor is renting out these MYEs. That is an offence. If he knows of anyone who does it, let us know and we will prosecute. What I am trying to say is that it is difficult for any agency to take over this responsibility and micro-manage. However, I am not closed to the idea. We have been exploring how we can facilitate this. We understand it does cause problems on the ground, and we will discuss this with the relevant agencies and industry associations to see if we can improve this. Dr Maliki says that we are too restrictive in our marriage restriction policies. He said explicitly that we tell foreign workers with work permits here that they come here to work and not to marry. I am sympathetic. But I have a problem of numbers. I have more than 500,000 work permit holders. I can meet each one individually to say, "Well, you are here to work, but if you fall in love then, maybe, on a case-by-case basis, I might consider allowing the marriage." But that means potentially 500,000 applicants. When people on the ground work, they meet, they socialise and they fall in love. Well, in Singapore, we wish they fall in love, get married and have babies, but that is what happens on the ground. So the signalling device needs to be strong upfront.”
“Mr Yeo Guat Kwang wants assurances that we will go after errant employers who do not pay their foreign domestic workers. We do. We debar them and sometimes jail them. We are serious about it. He also says we should not be too dependent, especially for foreign domestic workers from source countries. We actually allow households to get maids from various countries - Malaysia, Philippines, India, Thailand, Myanmar, Sri Lanka, India and Bangladesh. Setting distinct quotas for countries is a delicate aspect. Countries might object. And also the market place, ie, certain households just go for certain countries. So, I think it is better just to watch it and see what other levers we can pull before we do that, as they will invite other problems. Questions have been asked about man-year entitlements for construction. I will tell you that the construction industry is very complicated, as you well know. But, by and large, the Man Year Entitlement (MYE) system has achieved the objective of reducing the industry's reliance on foreign workers. Let me give you the figures. In 1998, we had 200,000 construction workers. The current figure is 135,000. And, no, we did not reduce this number because MOM wanted to reduce the amount of work, as Mr Low Thia Khiang suggests. He says if we have more foreign workers, then we have more work and, therefore, we are trying to reduce the number of foreign workers. That was not the driver. The driver was really just the volume of work in construction. At the peak of the construction boom, it was worth about $24 billion per year. It has now gone down to $10 billion. And, just by sheer economics, the number of contractors will have to go down. It is the market place that is responding.”
“" In the next moment, Ms Olivia Lum stands up in the Budget debate and says, "Hang on. This will raise wage expectations of these young school leavers." Ms Olivia Lum says it is too high and Mdm Halimah says it is too low. Between the two, I have got the salary figure right, because, even with the inclusion of employer's CPF contribution, the cost of employing a fresh local polytechnic graduate today is only $1,750, including CPF, and $1,500 for an ITE graduate. This is still lower than the $1,850, inclusive of levy, the cost of employing an S Pass foreign worker with equivalent qualifications but longer work experience. So, I think the balance is there. As I said, it is a delicate balancing act. We will adjust all these levers, when and if we need to. Mr Yeo Guat Kwang said that we should reclassify foreign workers' needs and entitlements by job requirements in individual industries. Theoretically, he is correct. But, as I said, it is difficult to do. Sometimes, we just know after the fact. We never knew a job existed. So, I get many requests, as Acting Minister for Manpower, of particular restaurants who want to start new cuisines - Middle Eastern, Central Asia, some places that I have never heard of - and they say there is no one in Singapore that can cook those dishes. So, I think about it, and I say that is true. If you want a cook for a Kazakhstan restaurant, you cannot find that person. But should I allow a S Pass holder? It is difficult. So, we better just set the levers and then decide later on what we want to do. In other words, if you want to start a Middle Eastern restaurant, you go and hire 13 Singaporeans, and then perhaps I will let you have that cook and then you can have the restaurant.”
“The second aspect - I have circulated the chart, and it explains in terms of what the services sector does - for manufacturing, we have acceded to Ms Olivia Lum's requirement that it is higher. It is a 50% quota. But the 5% quota exists for both services and manufacturing. For construction and the marine industry, I have subsumed it under the overall quota. The other control is the 50% levy, and I would like to remind Members that the 50% levy is not only just to S Pass holders, but all skilled work permit holders. It helps to moderate the demand for such workers. It is not a big sum, but it is a lever, in case I need to bring it up or bring it down when economic conditions are difficult. 11.30 am I am not keen, as proposed by Dr Ong Seh Hong, to waive this for VWOs. Why? Because I am also trying to reclaim with VWOs for jobs. Why should I not? It is one of our fastest growing sectors. When I was previously supervising special education in MOE, one of the things I lamented was that the special schools that I went down to, the VWOs and the principals said: "I cannot get enough Singaporeans to do these jobs." Dr Ong says that with the many-helping-hands approach, the Government must take the lead. But Singaporeans must respond to these needs as well. They must go into these sectors, because they are meaningful occupations - physiotherapists, speech therapists. Why should I not see this area as a possible area for jobs for Singaporeans? The financial aspect of allowing VWOs to meet that 50% levy can be met by other means, but I will hold it, if only just for a signalling device. The third criterion is a minimum salary of $1,800. When we set it at $1,000, Mdm Halimah says, "Look, this level will push fresh polytechnic and ITE graduates out of the market.”
“But I also want to take into account MPs' concerns - Mr Yeo Guat Kwang, Mr Seng Han Thong, Mdm Halimah, Dr Ong Seh Hong and Mr Low Thia Khiang - on the impact of S Pass on local workers. I agree we need to balance industry growth with local manpower development. That is a fundamental assertion. I want to assure Members that we want to minimise the impact and we will monitor this impact. Controls for S Pass We have in place three main controls: firstly, the 5% quota; secondly, the skilled levy; and, thirdly, minimum salary criterion and other qualifications. Of all, the 5% quota is actually the most restrictive. In other words, you can talk all you want, if I draw the line, then that is it. You cannot go above it. I want to explain what this 5% quota means, because I do not think it is well understood. Actually, on how onerous it is for businesses, it is onerous. I accept that. The 5% quota means that a company must hire X number of Singaporeans before it can hire foreign workers. In America, recently in Netherlands, it is not so onerous. What they say is that the employer must show that it cannot get other US citizens or Dutch citizens, so companies resort to putting their advertisements, I suppose sometimes in an obscure newspaper, three times, and that is considered that it cannot get locals. In our case, we say, "Nothing doing. You can try as hard as you can and if you do not fill up the positions of Singaporeans, we just would not allow you to hire foreign workers." For a 5% quota, what does it mean? It means that you must hire at least 13 Singaporeans to hire one S pass worker, or 100 to hire eight. If you do not hire 100, you cannot hire eight. If you do not hire 13, you cannot hire a single one.”
“This particular restaurant brought in a chef, I presume he was from the PRC, whose skill was in slicing a loaf of wheat, and he was able to slice it such that each slice would hop about three metres and end up in the boiling pot. This is innovative. But could MOM have devised an occupational sector-specific scheme to see whether we can evaluate them? It is just not possible. It extends to many other companies. The need for a S Pass addresses this more flexible requirement which is less prone to micro management. Members may say that it is an anecdotal experience. Let us take IT, for example. IBM, a large MNC, has a workforce in Singapore that includes foreign talents from some 25 nationalities now. Their areas of specialisation include managing large complex customer projects that extend way beyond Singapore into regional and global regions. They bring in staff from these various countries with in-depth expertise and they perform functions, ranging from business consultancy, project management, solution architecture to contract negotiations. And because they are able to tap on the resources of a global team, IBM is able to deliver solutions to clients in Singapore as well as to the region. That process strengthens our position as an info-communications regional hub. I doubt that MOM, or indeed any other agency, can guess what skills they need for their clients before they know it. If we did, then we should take over their business. It is better for us to create a system, a systemic solution like the S Pass, with some checks in place, and let companies bring in the type of talents they need. It is a smart way to generate growth.”
“Ms Olivia Lum said that the competition is in China, but her factory is in Singapore. If we do not allow businesses like hers to respond, they will do their calculations. We can say all we want, but they will look at their books and do their calculations. On the other hand, if we do not focus on training Singaporeans and loosen the tap to access of foreign workers, and companies use that as a cost averaging at the expense of skills, they will lose their competitive edge. In the near term, Singaporeans will find it more difficult and, in the longer term, our companies will lose their competitive edge. That is why MOM has introduced the S Pass, and I thank some Members who supported this. It allows businesses to grow and upgrade with more skilled workers. As I have explained, we are short of skilled workers. I want to highlight why we need a S Pass and why it is different from the previous Q2 passes. Under the Q2 Pass scheme previously, MOM considered on a case-by-case basis workers who did not meet our Employment Pass salary criterion of $2,500 and acceptable qualifications. The business community has said: "You need to make these more transparent, so that we know what you require." So, we introduced the Q2, so that people who do not qualify for the Employment Pass could be allowed in on a case-by-case basis. But in an increasingly fast-paced and changing economic landscape, new types of jobs are needed, some of which we have not thought about before. This old system of reacting to applications is too slow, and we are always one step behind the curve. Let me give you an example. Recently, my family and I dined at a restaurant. I suppose restaurants have to use various means to attract clients.”
“He rightly pointed out that we have one million people to train, and a shortage of 350,000. It is an easy solution - why not train more? He is right. But I must explain to him that it costs to train. For each person that we enrol in a mid-career change, to train for a healthcare profession, for example, nursing, it is an expensive programme. It is $20,000 for course fees alone and another $20,000 for allowances and subsidies, ie, $40,000 to train one mid-career switch. We will do what we can and do more when we can, but there are limitations. Other MPs like Dr Ong, Mdm Halimah, Mr Seng Han Thong and Mr Low Thia Khiang have asked why not just continue and intensify this effort to upgrade Singaporeans. In other words, do not loosen the tap for foreign workers, so that we can force businesses to look to Singaporeans. It is a valid perspective. While I was listening to Mdm Halimah yesterday and Ms Olivia Lum today, they are only seated one row apart, but their positions are poles apart. What is the reason? This is because of different perspectives. My approach is that we need not take extreme positions. Training locals, upgrade them to get jobs, and allowing foreign manpower into our workforce are not mutually exclusive options. We can strike a productive and sustainable balance through the use of our dependency ceilings and levies, which are macro-economic levers. In other words, this policy, where a company must hire a certain number of Singaporeans before it can hire some foreign workers, and, on top of that, with an added levy imposed, has enabled companies to get their manpower and afforded some protection to Singaporeans at the same time. Yes, it is a delicate balancing act. If we squeeze companies too much too quickly, they will relocate or close down.”
“I hope to rid us of this mindset that it is "one foreign worker in, one local Singaporean out." Instead, in many companies, like Ms Olivia Lum has exemplified through that of her company, that it could very well be "one foreign worker out, two locals out." It is an indivisible package. I want to emphasise that, thus far, at the overall level, foreign workers have helped augment our local workforce. They have helped our economy to grow, as they do jobs that Singaporeans do not want to do. An access to this transient pool of foreign workers allows companies to scale up and down quickly. Let us take aerospace, for example. Aerospace engineering companies tell me that during SARS, their hangers were empty, in terms of maintenance, repairs and overhaul. But after SARS, there was such a ramp up and their hangers are full to the third quarter of this year. They are trying to turn around aircraft as quickly as possible - not an easy thing to do because the aircraft are quite big. How do they ramp up suddenly? Having access to a transient pool of foreign workers gives them that flexibility. Who knows, when another Asian flu hits, they will have to adjust. Because companies can recruit from a larger pool, they can bring in workers with specific experience and skills they need. We will all end up as losers if we see this issue as locals against foreigners, because the economic reality is, from the numbers that I showed the House yesterday, we will always need foreign manpower. So if we always need foreign manpower, the strategy must be how do we maximise this. Ms Olivia Lum has argued why businesses like hers could not survive without foreigners. Dr Ong Seh Hong asked whether we have done enough in terms of healthcare.”
“We need to make Singapore a conducive place to attract foreign talents, and what better time to start them than when they are young. Let us make it easier for the mothers to feel secure financially. The Acting Minister for Manpower (Dr Ng Eng Hen): Sir, Members have asked a number of questions about our foreign labour policy. Let me address them. Local and Foreign Manpower - an indivisible package Yesterday, I explicitly articulated that one of the pillars of our competitive edge was to allow companies in Singapore access to foreign workers. In other words, it is a strategic asset. It is not something we can do without. I have given the House the numbers, in terms of the jobs that are required by our economy and the way that our local workforce is headed. DPM Lee showed earlier in his Budget round-up speech how foreigners helped to meet manpower demand when the economy did well and, yes, as Dr Ong Seh Hong said, buffered the losses when we are not doing so well. I looked at the figures last year to see whether this was true as well, because it was a year where there was turbulence in the first half, and we recovered in the second half. For last year alone, because it was more acute, we understand it, and I want to press this point. Singaporeans gained 15,000 jobs. There was an employment gain of 15,000 jobs for locals. Foreign workers lost 28,000 jobs. It again shows that our policies are suitably calibrated, so that when there is an upside, when the economy goes up, we gain because of the addition. But when the economy turns bad, foreign workers exit in larger numbers. But there is another point why having access to foreign workers is a strategic asset. Our companies become less competitive if we uncouple this local-foreign worker package.”
“Without clear and transparent approval criteria for S Pass workers, the industries will waste much time and cost in sourcing for foreign workers, submitting applications for approval and only to end up with rejections. I seek the Ministry to be upfront on the approval criteria, such as qualifications, skill sets, experiences, age limits and limitation of duration of employment. In addition, I would also like to know whether the dependants of S Pass holders will be allowed to stay in Singapore for the period of employment. 11.15 am Lastly, I would like to urge the Ministry to review the guidelines on revised work permits for employment of accompanying mothers. Under the guidelines, accompanying mothers are not allowed to work during their first year here. The reason given is that the mothers should spend time with their children to supervise them. However, we know that the cost of living here is relatively high and these mothers will find it difficult to have sufficient savings to live reasonably without any income for an entire year. As a result, some will resort to illegal means out of desperation and, in fact, there were already such cases. It would be better if we were to allow them to work during their first year here, so that it is a win-win situation for all. They can work as chambermaids in hotels and in industries, such as the textile industry, where there are difficulties in employing locals. It is presumptuous to think that their children will do badly if they were left alone unsupervised. When I was young, I had no one to supervise me in my schoolwork but I did not do too badly in life. These children from the PRC are mostly high achievers and they know that the money used to send them over is all hard-earned or borrowed.”
“Sir, some Members in this House have already touched on the subject of the S Pass system. Mdm Halimah Yacob also expressed concerns that some employers may ask for a high quota, thus further reducing the job vacancies for Singaporeans. Coming from the private sector, I would like to present the other side of the story. Take my company as an example, and here I declare my interest. We have always found it hard to attract skilled Singaporeans who are willing to roll up their sleeves and get their hands dirty working in the water and waste water treatment industry. Some will give it a try, but will quit once other job opportunities are available. This has wasted the effort and money we have invested in them. This is a reality. I am sure many other companies in Singapore face the same problem. We have no choice but to turn to foreign workers to remain competitive. We employ about 300 staff in Singapore. Half of them are either Singaporeans or PR holders. Some of them are in R&D, and others in sales and product development. Over half of our profits from last year was from our China market. China is our chief focus, and if we do not find all ways to remain competitive, our company will suffer and the 150 locals that we employ may lose their jobs. Though the private sector welcomes the S Pass system, we still feel that the 5% quota allocated is insufficient. I urge the Ministry to be more flexible and generous in granting the quota for S Pass holder, and evaluate each industry on its own merits. I also urge the Government to be more transparent in the criteria for approval of S Pass applications.”
“Sir, the Government has spent much funds, time and resources on R&D work by public agencies such as A*STAR. A*STAR has the right people to tap on their R&D work and it remains the best centre for technological advancement. Some of these R&D works hold great potential for commercial viability. However, they remain largely untapped and our local enterprises who often lack fund for R&D work have found much difficulties in gaining access to technologies developed from the R&D work. There are several reasons for this. It seems that the administrators could not sort out the IP rights for the R&D work to facilitate a better use of technologies by the private sector. The researchers also lack the commitment and the business sense to work in partnership with the local enterprises to convert the R&D work into business ventures. Hence, no one is seriously looking into relaxing access rights to the R&D work. In addition, projects selected for funding are usually decided solely by the public agencies or the research institutes and not championed or led by the private sector. This has resulted in a lot of wastage, not only in terms of funds, personnel and time, but also wastage in terms of investments in hardware, such as laboratory equipment, which are not fully utilised to maximise their value. Many of our local enterprises would love to be able to afford many of these equipment, but they can only hope that public agencies could share some of the results of their R&D work with them. I urge the Ministry to look into this as it is high time we reaped some returns from the billions we have sunk into public-funded R&D work. Economic Policy”
“Wealthy foreigners, many of whom are founders of successful companies, would also be more willing to invest and take up citizenship in Singapore with their families. And when they settle here with their families, they will bring with them a host of connections that will further add to the economy. I liken them to anchor tenants in a shopping centre. The returns they bring will certainly be more than the amount we collect under estate duty each year. Mr Speaker, Sir, with this, I support the Budget.”
“They will be retrenched and add further to the unemployment problem. For best sourcing to work, the private company must be able to recruit public officers whose jobs have been outsourced at competitive rates and not be encumbered with the public sector's pay structure. My last point is on estate duty. Singapore has to constantly attract MNCs to invest here so that more jobs will be created. However, these MNCs will come and go, depending on changes in the economic climate. One of the ways for sustainable wealth creation is to attract wealthy foreigners to settle in Singapore, become Singaporeans and retire here with their wealth. In this regard, I would like to touch on the topic of estate duty. This topic has been raised many times in past parliamentary debates. So far, the Government's move has been in small incremental steps to provide more opportunities for foreigners to keep their moveables in Singapore without fear of being subject to estate duty. For the locals, the Government has taken measures to provide a wider margin for estate duty exemption. Why not take a bold step forward and do away with estate duty for Singaporeans altogether? By doing so, we will provide another key incentive for wealthy foreigners to take up citizenship here without fear of losing their millions or even billions to estate duty. Last year, the amount of estate duty collected was only about $70 million. This amount will move up or down depending on the number of rich who will pass on each year. This is not a huge sum and removing the estate duty altogether will not make a big dent in our pockets. In fact, I firmly believe that more wealth will be generated for the country if we do away with the estate duty.”
“To be competitive as a nation, there is a need for a change in mindset, not just for the private sector, but also for the public sector. This is essentially so as we move closer to greater private sector involvement in functions traditionally held by the public sector. I am very encouraged to see that the Government is placing emphasis on best sourcing, tapping into the private sector's capabilities for benchmarking, cost-competitiveness and greater service efficiency. In preparation for the move towards greater public-private partnership, the Government must take quick actions to prepare the public officers for the inevitable change. The private sector focuses on efficiency, accountability and, most importantly, the bottomline. Salaries are also pegged to performance and accountability, but certainly not the length of service or seniority. For example, in my company, some of my key sales managers earn more than the VPs. Why? It is because they are the ones who bring in business for the company and they hold greater accountability. They are paid for the results they show. I do not mind if my sales managers take home a higher monthly salary than I, if they are able to excel in bringing in the business for the company. I am glad to note that one of the key focuses of wage restructuring is to moderate the system of seniority-based pay structure. But I understand that in the current civil service pay structure, it is not uncommon to have subordinates drawing higher salaries than younger senior officers by virtue of age and length of service. If this trend is not corrected quickly in the public sector, it will be extremely difficult for this group of officers to accept the private sector's pay structure as more functions are best sourced.”
“So instead, I will recommend that the allowable percentage of skilled workers be pegged to the nature of the industries, for example, an export-oriented company should be allowed a higher percentage quota as compared to a non export-based company. This is because companies that are export-oriented will have to compete globally. Their cost has to be competitive in order to survive. Hence, having a higher number of foreign workers will ensure better survival chances and profitability. These companies will in turn add to the economy and create jobs for Singaporeans. My third point is on flexi-wage. I am fully supportive of the flexi-wage system as it allows us to be nimble and to react to varying economic situations quickly. Coming from the private sector, I certainly see this as a positive move. With such a system, employers will be more likely to retain their staff during hard times. The Government has taken the first step to put all public officers under the flexi-wage system for some years now. This is an excellent example for the private sector to look upon. I am convinced that all employers are supportive of this scheme. However, for companies that are profitable, the workers will feel discouraged by such a system as it appears that their wages are cut unfairly when the company is performing well. This has also happened to my company. This is a short-sighted view by many Singaporeans and I believe this is also due to the lack of understanding for the flexi-wage system. In this regard, I urge the Government to do more to convince the workers to support this flexi-wage system. My fourth point touches on preparing the grounds for best sourcing.”
“In Singapore, with our limited resources, we must take a different approach to R&D in that the direction of research and priorities should be dictated by enterprises and not by the scientists. My second point is the issue of "S" pass for skilled workers. I am fully supportive of the good intention by the Government to allow the private sector to recruit middle-tier skilled workers by replacing the "Q2" pass with the "S" pass. This will definitely ease current restrictions on the employment of foreign diploma holders. However, I would like to urge the Government to be mindful of possible pitfalls of such a scheme. Let me elaborate. Firstly, the average starting pay for a local polytechnic graduate is only $1,500. The minimum salary of $1,800 set for the "S" pass holders may raise the expectations of our local polytechnic graduates. This is certainly counter-productive to the drive by the Government for Singapore to be cost-competitive. Moreover, current skilled foreign workers, who are diploma holders, will certainly want to apply for the "S" pass and this will unavoidably put pressure on the industries as the employers will either have to pay higher cost of wages or risk losing the workers. Secondly, the 5% quota set for the "S" pass holders may be too low to be beneficial to many companies. The number of middle-level skilled workers in any company is usually much higher than the senior management level. Such a low quota allocated for "S" pass holders is highly inadequate. While the local enterprises are waiting for Singaporean workers to change their mindset, they have to fight for survival in this competitive world.”
“We need to exploit the new technology while it is hot. Nothing is worse than a technology that is past its shelf life and is overtaken even before it is launched. Moving quickly and acting fast means that we do not run at a pace dictated by the researchers based on their priorities or academic interests. We must also not be dictated by rigid rules set by the agencies, as they very often discourage participation by local SMEs or local enterprises. Technology is not like antiques, which may appreciate in value over time. Technology is of no use if it is kept in a safe. To reap greater value out of what we spend on R&D, and to create more value-added entrepreneurship, I have two suggestions. The Government must make a decisive effort to allow easier access by local enterprises to the numerous good patented technologies tagged by some public agencies and institutions. The value of patented technologies would only be realised when they can be commercially applied. The private sector has often encountered difficulties in gaining access to these technologies due to bureaucracy and rigid rules set by the administrators. Adding to the problems faced by the local enterprise, researchers are often not in touch with the real world and most times, their performance is measured by the number of research papers they can churn out yearly. Second, in going forward, the Government should encourage partnership between the agencies and the private sector to identify technologies available in the market that are already on the verge of commercialisaton. This would save us much time and R&D cost. With research and industrial orientation, coupled with business-savvy, appropriate technologies can be identified and commercial results can be reaped almost instantaneously.”
“Of this, 80% was allocated for public sector research work in science, engineering and biomedical sciences. Only 20% was set aside to promote private sector R&D investment in Singapore under RISC which provides project-based grants to companies to support the building of R&D capabilities. In the context of extracting maximum value in what we spend, it would be of interest to know how many of the R&D projects undertaken by the public sector have actually borne fruits. What are the innovations that have taken place and what have been shared with the industry? How many start-ups or spin-offs did we produce that have resulted in bringing benefits to the society and the economy? What maximum value have we derived from spending some S$800 million each year by the public sector? We all know that R&D is a long-drawn and expensive process. Apart from developing human capital for the future, R&D must in the short and medium term serve the industry well so that the economy will become more vibrant. To be precise, R&D must give rise to commercially improved or new products and services so that the money invested is well spent. This can only happen when there is strong industrial orientation and active participation by the private sector. In Singapore, we have both the hardware and software, but we seem to be getting nowhere as far as R&D results are concerned. For example, we understand that R&D works by A*STAR have resulted in many patents but, in reality, there are only a few successful industrial applications. As our resources are very precious, we must be mindful and be selective of the type of research programmes that we want to accord priority for, and their potential for industrial application. We also need to be able to move quickly and act fast.”
“Mr Speaker, Sir, thank you for allowing me to speak on this Budget debate. I must say that this year's Budget is indeed encouraging, as it provides support on all fronts, covering the interests of both the business and the domestic sectors. It also addresses the way forward to ensure sound public finance. From the Budget, it is clear that we have a Government which is very determined to reinvent Singapore into a more competitive and entrepreneurial economy. However, coming from a local SME background, I feel that there are still areas where the Government could explore to bring about more value for money. These initiatives or changes need not necessarily result in higher spending by the Government. In fact, with a more engineered approach, we will be able to extract greater value for money. With this, I would like to raise the following five topics. As most of these topics are related to the private sector, I would like to declare my interest as CEO of Hyflux Ltd. One, research and development initiatives in Singapore. I would like to touch on the subject of R&D because the local industries and SMEs are in need of a more supportive and conducive environment to allow them to tap into R&D initiatives by the Government. Senior Minister Lee once said that we must apply technology to capture new opportunities. I would also like to quote from DPM Lee's Budget principle and I quote: "We must also extract maximum value for money in what we spend." The Government has spent many billions of dollars over the years to boost our R&D capability in Singapore. For example, in FY2003, a budget of some S$1 billion was provided for Singapore to build up R&D human capital and foster world-class research.”
“From the website, we can only find the formula. With regard to my third question, I would like to know whether EMA can publish the data showing how these vesting price formulas are derived.”
“I understand that the vesting contract price is used to protect the consumers, because 90% of the power is being generated by the four generation companies (gencos). But, at the same time, it is also used to protect the gencos because these vesting contracts are calculated based on their minimum cost of operation. I would like to ask the Minister of State whether, under this regime, there will be more incentives for the gencos to further improve their operations so that they can bring down these operating costs.”
“I declare my interest as the CEO of Hyflux. Question No. 7, Sir.”
“Sir, in the new energy market, contestable consumers are faced with the challenge of electricity planning around their variable electricity consumption, and budget their forecast expenditure on electricity. So, therefore, in balancing resources committed to the electricity market, it appears that off-peak consumers may be unfairly penalised rather than incentivised. Can the Minister of State further comment on this?”
“Thus, they also, for example, provide good business for the financial sector. I would like to know how WDA can help such companies in their workforce problems. I hope that the WDA would not only focus on the interests of the local workers and partnership with MNCs and services industries, but also consider the business interest of some local SME companies, such as this. If we do not take care of this type of business, there is no employment to talk about in the first place and the continuing retraining effort would be irrelevant. Often, my friends in the private sector complain that the Singapore Government is overly-protective of the Singapore workers and hence, we have cultivated a population that is picky and spoilt when it comes to working conditions and environment. I hope that the WDA would seek inputs from the private sector when it comes to recommending policies that would affect not just the Singapore workforce, but also the business sector. I also hope that WDA would put some of these old industries in their radar screen.”
“The boss told me that when they tried to employ those retrenched workers from the hi-tech industries, such as the electronics industry, many were not interested to join them and often, the reason cited was that these Singaporeans felt that working in a textile company is just not the "in" thing. I was told that their workers earn wages ranging from $1,500 to $3,000 a month per worker, with 8-10 working hours per day on the average. They are facing a major problem in recruiting workers, while they continue to receive good orders from the USA and Europe. This company is earning money from overseas and bringing this money back to Singapore. To remain competitive and maintain profitability, they need a minimum workforce. Unfortunately, over the past few years, the number of workers employed here has fallen from 1,200 to 900 due to an ageing local workforce. The alternative is for the firm to wrap up here and move elsewhere totally. However, the boss has not pulled out altogether, because he is considerate for his long-time local employees and he knows that once he closes down his factory here, these 600 workers would be out of job. Hence, while he expands his business overseas, he hopes to continue to operate his factory here for as long as possible. One may think that such companies belong to the sunset industry, but we must recognise that they do play a role here in providing employment, as well as inject into the economy. For example, the company ships all their textiles overseas. Hence, they need transportation and shipping companies to handle their goods. This creates business opportunities for these associated business partners and, in turn, it also provides employment opportunities. In addition, the annual revenue is more than S$100 million.”
“Mdm Deputy Speaker, I will make this speech as short as I can. Firstly, I support the SWDA Bill, and I believe that it will allow better focus to be placed on training of our workforce so that they remain relevant. As an Agency solely dedicated to oversee the welfare of our workforce, it will definitely be in a better position to facilitate employment and implement measures to protect the interests of Singaporeans, both in terms of employment as well as business sustainability. Over yesterday's session, we had heard many Members voice concerns that foreigners are taking away jobs from the locals. However, I would like to present another view, ie, the view as seen from the business sector. In this regard, I would like to quote the example of local textile companies. I know that this is an unpleasant taboo subject, but I feel the need to speak up on their behalf because they do play a part in our economy as well as provide employment opportunities. In Singapore, the textile industry is viewed as a sunset industry. It is not glamorous, and certainly not hip. Most Singaporeans would not want to work in such companies. However, some of these firms are profitable, and whatever employment policy we implement, we should make an effort to make sure that such companies stay afloat. I personally know of one local textile company which employs about 900 workers. Of these, 600 are locals and the remaining 300 are Malaysians. This company has been operating in Singapore for more than 20 years now. Many of these 600 local workers have been with the firm for a long time now and most are close to retirement. When these workers retire, younger ones need to be recruited. This is where the firm has been facing an uphill task in recruiting locals.”
“While such skills are necessary for construction workers, they are not relevant to this group of skilled workers. As a result, the workers would choose courses, such as painting or brick laying, just to satisfy this requirement, though they have no need for such a skill in their jobs. And companies would also have to incur unnecessary business cost, just to qualify for lower levy for the renewal of permit. I recognise that it is difficult for institutions to structure specific courses to suit the needs of a small niche market. In this regard, I want to ask if MOM would accept on-the-job training in place of the set skills test for such qualification. Of course, one may argue that we will train our local workers, instead of depending on foreign workers. Yes, we can. But changing the mindset of the locals will take time and business cannot wait. Such skills also need time to develop. If these businesses cannot survive because of a lack of workers here, these companies will relocate and more Singaporean jobs will be lost. In view of the above, I would like to further ask if the Ministry of Manpower would review the foreign workers classification and terms of engagement so as to keep pace with changing times and industrial needs.”
“Sir, I declare my interest as the CEO of Hyflux Limited. Yes, we do need to focus on creating jobs for the locals. However, this should not be at the expense of enterprise. We must also protect the interests of some promising SMEs. One of the sunrise sectors, for example, is in the environmental technology sector. Some of these companies require workers with specific skills, such as manufacturing of membranes, and assisting in research and pilot plant trials for reclamation of waste water. Locals with such skills are very hard to find because the demand for membrane-based treatment facilities in Singapore has taken a quantum jump only in recent years. If we succeed in grooming a group of people in Singapore, then in that case this might become a very viable alternative for Singapore being an environmental hub for the region. Foreign workers with the necessary skills for such jobs often do not have professional paper qualifications. Instead, they acquire their skills through years of on-the-job training and experiences in overseas projects. At the moment, the Ministry of Manpower does not have the appropriate classification for this group of workers. Hence, this group of workers is normally brought in under the classification of construction industry and they are subject to rules relating to this classification, which can be quite irrelevant. With effect from next year, MOM requires new foreign workers to obtain two trade certificates before they can qualify for lower levy. Since there is no appropriate classification for this group of skilled workers, and for the fact that they are brought in under the classification of construction industry, the trade certificate must be from construction related subjects, such as tiling, water proofing, painting, piling, etc.”
“My experience is that most officers in the top management of the various Ministries and statutory boards are willing to make changes. However, this is often not so for lower rank officers. Most are not willing to take on the added responsibility of making a change, even if it is a change for the better. As most officers are happy to religiously follow set rules, initiative from the top management is often needed to institute changes in the rules and regulations. This is unfortunate as the frontline officers and officers from the middle management are often the ones in direct contact with the public. They are aware of the problems created by some rules and regulations and they are in the best position to recommend and facilitate changes. To be effective, perhaps each Ministry should set up its own Rules Review Committee, apart from the Rules Review Panel proposed. The Committee should include representatives from both the public and private sectors. The people who have suffered under unnecessary rules and regulations would be in the best position to make recommendations for the better. Officers from different levels within the Ministry should also be represented, as they are the ones who know best the grouses from the ground. The Government is making fundamental changes to promote entrepreneurship. This is encouraging and I am confident with these changes, we are making progressive steps in the right direction. Mr Speaker, Sir, I support the motion.”
“Some are also confused by the policy changes over the years. I propose that the Government play a more active role in communicating with the general public and especially the SMEs, through more regular dialogue sessions. Different Ministries could hold separate dialogue sessions to make clear the opportunities that are available. Availability of opportunities is always the gateway sought by entrepreneurs. Throughout my life, I have sought opportunities rather than handouts. Since the late seventies when I first arrived here, Singapore has offered me many opportunities to make it on my own, and for this I am grateful. It is time that we moved on and adopted measures that are sustainable in the long term and create more opportunities for individuals who are willing to take risks and make it on their own. Government should play strong leadership in providing opportunities. For example, Mrs Yu-Foo has recently proposed an initiative to allow residents who are unemployed to showcase and sell their homemade products. The start-up cost for such initiative is very low as participants pay very low rent. This will allow people to be proud of self help. I was also taught when I was young to be independent, instead of depending on handouts. Another example. The Government, being such a big buyer, and the Ministries and agencies can be more open to new ideas and new innovations. And this leads me to touch on a second issue. I feel that there is a need for constant review of the Government's rules and regulations, in line with changing times. I am glad that the Government has adopted the ERC's recommendations pertaining to this. However, this calls for a change in mindset amongst officers at every level of the public sector.”
“Mr Speaker, Sir, I have heard many say that this year's Budget is a non-event. Personally, I am glad to note that the Government has attempted to create more opportunities and a level playing field for all, particularly in promoting entrepreneurship. I just wish to make two observations. Firstly, there is obviously a more deliberate move by the Government to encourage self-help and make life easier for the entrepreneurs. This is encouraging. However, Singaporeans have enjoyed many good years and the Government has been playing the role of giver and provider. Most people are used to this. In bad times, such as now, I notice the emergence of two categories of people, each with different expectations. The first category consists of those who are not willing to lower their expectations in salary or in status when they seek employment. I have witnessed this when I interviewed applicants for jobs in my company, and the problem is real. These people have been retrenched and yet they are not willing to forgo their level of material comfort and status when they seek new employment. The other category consists of those who are willing to have a go and wish it on their own but they lack the knowledge on how to make a headstart. It is this category of people that we must place more focus on. I notice that many are still unaware of the incentives and opportunities that the Government had instituted over the years. This could be due to a lack of clear communication between the Government, the people and the business communities, especially the SMEs. As what Mr Inderjit Singh said earlier, many GLCs are already well aware of the incentives and opportunities available. However, many SMEs are not that well connected and most are not familiar with Government policies.”
“Because of the heightened security in the port, especially in the United States, and the transportation of goods, I would like to ask the Senior Minister of State what impact it will have on the local businesses and what measures the Ministry has taken, or is going to take, to help alleviate the higher cost of business.”
“The Singapore business community is urging the Government to implement the recommendations of the EISC speedily in order to help quench the dry ground. The community surely does not want thunder without the promise of rain. The rain which comes needs to be in sufficient volumes to penetrate the dry earth. It cannot be a passing drizzle. It must be sustainable and must last long enough for the ground to absorb it, and for new seeds of enterprise to germinate. Therefore, I urge the Government to implement the measures recommended fast. I believe that if the rain comes, we will all look back at this milestone and, in its place, find an oasis that has moved us along in our nation's journey to success.”
“Even major foreign players such as Dell and Compaq have to reckon with Hai'er as a keen competitor in the huge Chinese PC market. Traditional household appliance manufacturers such as General Electric and Ariston now have to sit up and take heed of a once unheard of brand, even in their home markets of the USA and Europe. In Singapore, we have a very limited base of enterprises. Besides having to compete with established names, we now have to even compete with fast rising newcomers such as Hai'er. In Singapore, we have always done things the Singapore way, and rightly so, simply because every country's journey on the road to success is different and unique. Singaporeans share an unusual heritage as a nation. We always trust the Government to look after us, do the best things for us and at the right time. Many have criticised this over dependency on the Government. Though most would not readily admit to it, we know that it is this relationship between the Government and the people that has made Singapore what it is today. It is precisely because of this that the business community has overwhelmingly come forward to work with the Government on the remaking of our economic future. What they are looking for is not simply hand-outs but for the Government to create more opportunities. I believe that the time has come for the private sector to take on a more significant role in building corporate Singapore. I believe we are ready and we have to be, not only because private enterprise in Singapore needs this but perhaps, more importantly, corporate Singapore urgently needs to be relevant in the global business arena. More than ever before, the private sector needs the space to grow and, in return, I believe the private sector will not disappoint in taking up the challenge.”
“The truth is that in whatever global business you are involved in, you must be either number 1, 2 or 3, by sheer size and strength, or through agility and superior knowledge, failing which you have to redefine your niche in that sector and then strive to become number 1, 2 or 3 again. Failing this, you have to redefine or create a new sector in which you can excel. Failing all of the above, you need to admit defeat and bow out. Your guess is probably as good as mine how many and which Singapore companies will eventually emerge as global winners. We honestly cannot predict whether it will be the GLCs, SMEs or larger private corporations that will emerge as champions. But we do need winners urgently, and I believe we should cast our net as wide as possible. Let the GLCs try, let the SMEs try, and let everyone try. We do know that market forces dictate that enterprises which respond the fastest to change, which can continue to renew themselves, will survive and thrive in this knowledge-based economy. We have to move fast or we will be left behind. We cannot afford to lose these few good years as we either capture our share of the market or risk losing our position. As aptly put by journalist, Mr Lee Han Shih, "Time is a luxury Singapore can't afford." Take the city of Shanghai, for example. Anyone who has been to Shanghai over the last 3-5 years will see how rapid the development there has been. Private Chinese enterprises are moving with equal speed and resolve. A prime example is China's Hai'er Group. One of the largest household domestic appliance vendors in China, Hai'er is something of a local hero among economic reformers. It is known for its dramatic revenue growth and market-driven approach through its strong service network.”
“And I dare say, even bring some of this water in their journeys far and wide, searching out new lands of promise. I have often heard the following: "If you have a good idea, a good product, or a good technology that can surely make money, do not let the GLCs and statutory boards find out about it. Or they will try to get hold of your technology or idea and compete with you in Singapore. And how to compete with them?" Recently, I spoke to a friend to encourage him to start his own business. But his father discouraged him saying that in Singapore, he would lose to the GLCs. It would be better for him to either be employed by them or join an MNC. The above views reflect the general perception among some Singaporeans, even though they are unjustified in many cases. In Singapore's drive to encourage entrepreneurship, this perception is counter productive but, unfortunately, real. In a rapidly changing global environment, the private sector has a much bigger role to play in reacting to innovation and rapidly changing market trends. The Temasek Charter has refocused the role of our GLCs. It encourages the GLCs to focus on their core business, and expand globally. This is a much awaited move. This move will help convince the SMEs that GLCs would not encroach into the already highly crowded domestic market. I endorse the Yellow Pages rule that Government agencies should not set up enterprises in areas where private sector players are able to play a part. Instead, the Government agencies should see these as opportunities to provide business for the private sector. An equally compelling reason for the speedy implementation of the EISC recommendations is the urgent need to groom and grow our own local global champions.”
“The economic downturn has hit many enterprises in an unprecedented manner, especially among local SMEs and many are still hurting. If I were to describe to you the Singapore business landscape through the eyes of the business community, particularly the private sector, you will see a desert - a parched and dried up desert in which many are now thirsting for something real, something concrete, something to believe in again, and then to move forward. Taking my analogy further, the desert has been caused by a multitude of factors, including MNCs following the exodus to greener pastures in low-cost manufacturing countries such as China. It has been worsened by global cost cutting and consolidation. Let us move on to thunder before the rain. I would really describe the recommendations of the EISC as thunder before the long-awaited rainfall on our parched and drying desert of private enterprises. To the weary businessman and to the budding entrepreneur, these recommendations are indeed like thunder. I choose the word "thunder" with much deliberation. Thunder announces the onset of much needed rainfall to refresh and rejuvenate parched soil. Let us move on to the rain. Unfortunately, to the sceptics and cynics, thunder may not always lead to rainfall where it is needed. Winds of change could indeed sweep away the clouds of promise to other areas. Local SMEs and the private sector in general are hoping and waiting for the rain. The rain that they are longing for is the implementation of the recommended measures. That is all that is needed - this window of opportunity - speaking as an entrepreneur, speaking for the private business community. All true blue business persons know how to capture the rain and to use it, store it and harness its productivity, and maybe recycle it.”
“If we sincerely believe that one of the most significant engines of growth in a new age economy is budding entrepreneurship and private enterprise, we need to examine whether our GLCs in various instances, are indeed crowding out and stifling these engines we need to support and grow. The fact of the matter is that if truly provided with a level playing field, and Singapore entrepreneurs still cannot fight and beat the GLCs at contracts on home ground, and in their own field of expertise, it is unlikely that they would succeed against far more aggressive foreign players in a global market and vice versa. This same rule applies to our GLCs as well. With that in mind, we must still always remember the war is out there, not here in Singapore. We need the Government to provide a level playing field and a good business platform for all, not only SMEs but also MNCs, GLCs, TLCs and NLCs. This is why I would like to congratulate the EISC for having thoroughly considered and completed the excellent report on Government in business. The recommendations are as comprehensive as they are diverse, and they have left almost no stone unturned. At the same time, they reflect a very serious grasp of the issues at stake, and propose solutions that are both practical and responsible. As such, I fully endorse the motion to implement the recommendations of the EISC. I would like to offer my compelling reasons why I fully support the motion, particularly at this time in Singapore's history. First of all, there is an urgent need to quench the thirst of the local SMEs and private enterprises. Let me elaborate on my first point with an analogy of the desert, thunder and rain. We have just been through one of the worst patches in our economic history.”
“Mr Speaker, Sir, thank you for allowing me to join in the debate today. I would like to declare my interests. I am the Group CEO and President of the Hyflux Group of companies, established in 1989 as Hydrochem (S) Pte Ltd. Hyflux has progressed from being a small establishment providing integrated water treatment systems to a membrane specialist company, listed on SESDAQ in January 2001. From this perspective, I would like to share my thoughts as a Singaporean, as an entrepreneur and as a business person. This debate, I feel, has focused a lot on GLCs' predominance in the Singapore business scene. I would like to offer some business perspectives of GLCs. Compared with the average stated-owned enterprise worldwide, our GLCs are amongst the finest and best-run in the world. They are highly organised, transparent, accountable and profitable. From our nation's founding years, our GLCs were part and parcel of what made Singapore the success it is today. Indeed, our GLCs were originally the main engines of growth and development in many sectors, including infrastructure and industry. They provided the much needed employment and stability for our country and our citizens. For all these reasons, we, as Singaporeans should and must always be appreciative and grateful. The big question is not whether our GLCs were the right engines of Singapore's original growth which, in many ways, I personally believe they were, but whether they are still the right engines for Singapore's future economic success in an increasingly competitive global arena. If they are, we need to define in which areas. If they are not, again, we need to define which particular areas and how we should move forward.”