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PARLIAMENT OF SINGAPORE · FORMER

Ong Chin Guan Noris

Singapore

IN THEIR OWN WORDS

After all, a typical agreement for consumer transaction, such as property and cars, is usually very lengthy and couched in terms that would test one's patience in trying to understand it fully. It is possible for these property buyers to miss the fine print in the agreement that expressly takes away third party rights.

OFFICIAL REPORT - 2001-10-05 · READ THE OFFICIAL RECORD

To this end, I wish to seek the Minister's assurance that there are measures taken to ensure that the CONNECT Plan does not breed a pension mentality among our teachers. After all, the principal aim of this plan is not merely to attract and retain more teachers but to enlarge the pool of dedicated and experienced teachers.

OFFICIAL REPORT - 2001-10-05 · READ THE OFFICIAL RECORD

I would like to ask the Minister whether the proposals his Ministry is working on would incorporate the speeding up of infrastructural projects. BG George Yong-Boon Yeo: Yes, that is the natural course of action to take. But we have speeded up infrastructure projects as a result of the last Asian financial crisis.

OFFICIAL REPORT - 2001-07-11 · READ THE OFFICIAL RECORD

Sir, as Singapore is an air transit point for many global travellers, could I ask the Minister whether his Ministry is looking at the ban and confiscation of food and produce brought in by travellers for their personal consumption, eg, meats and dairy products? This is a likely loophole to be plugged.

OFFICIAL REPORT - 2001-04-19 · READ THE OFFICIAL RECORD

Sir, I hope that the Energy Market Authority of Singapore will adopt a pro-active watchdog role to ensure that the interests of consumers, especially those from the lower income group, continue to be protected in terms of pricing and service quality.

OFFICIAL REPORT - 2001-03-16 · READ THE OFFICIAL RECORD

What is the average waiting time for taxis in Singapore and how do they fare as compared to other cities? I understand that the supply of taxis is a fine balancing act and that an increase in the number of taxis to cater for the peak hours may result in excess capacity during the off-peak hours and therefore lower income for taxi drivers.…

OFFICIAL REPORT - 2001-03-09 · READ THE OFFICIAL RECORD

The complete record

Every one of 118 lines we hold for Ong Chin Guan Noris, in date order, each linked to its source. Free to read, in full, without an account. Page 1 of 3.

  1. To this end, I wish to seek the Minister's assurance that there are measures taken to ensure that the CONNECT Plan does not breed a pension mentality among our teachers. After all, the principal aim of this plan is not merely to attract and retain more teachers but to enlarge the pool of dedicated and experienced teachers. We should not merely be looking at numbers but also the quality of teachers. Sir, with these concerns that I hope the Minister can clarify, I support the Bill.

    OFFICIAL REPORT - 2001-10-05 · READ THE OFFICIAL RECORD

  2. Our older teachers, those in the late 40s and 50s, are on the old pension scheme and their retirement needs taken care of. But the teachers who have served five, 10 or 15 years and so on are not likely to be on any incentive payment scheme. To start them with the same year as newly graduate teachers is no incentive for them. I am not suggesting that the past years of service of teachers not on the pension scheme should be recognised in full. I acknowledge that these teachers are on different remuneration schemes altogether. As a gesture of goodwill and recognition towards the long service of these teachers, I propose that MOE consider their past years of service partially. I do not think that the CONNECT Plan should be so clinical in its starting date for these teachers as it may send the wrong signals to our older teachers not on the pension scheme. Secondly, Sir, I would like to ask the Minister to clarify how his Ministry intends to implement the scheme without a concomitant pension scheme mentality. By this term, I refer to the mindset of teachers who have lost their interest and passion for teaching but are still staying on the job for the sake of the incentive payment scheme. Having lost their interest and passion for teaching, these teachers also exhibit none of the innovative and creative quality that I feel are the necessary qualifications for our new millennium teachers. Going forward would witness even more rapid changes to our environment and the use of technology in the teaching syllabus and in the methods of teaching. Instead of accelerating the learning journeys of our students, these pension mentality teachers may instead put the brakes on the learning journeys because they themselves are finding it difficult to cope with the changes.

    OFFICIAL REPORT - 2001-10-05 · READ THE OFFICIAL RECORD

  3. Education is ultimately human enterprise requiring committed teachers to reach out and touch the lives of our students. To do this, we need more experienced teachers. We need to both attract and retain our teachers. For this purpose, I commend MOE for their Edu-Pac strategy to help to attract and retain our teachers. The salary revisions are in the right direction. The creation of Senior and Master Teachers, appointments under the Teaching Track Scheme, is in the right direction. I understand that some of our teachers, including contract teachers, are very bright and can go far if they are prepared to commit themselves to the teaching career, which is to seek to incentivise both current teachers and teachers-to-be to remain in service through longer term measures such as the CONNECT Plan. We must ensure that their future is properly taken care of and we must ensure that our teachers get their due respect and reward. After all, we do not want a situation where teachers join the profession by the hordes only to leave a couple of years later when the economy rebounds. This would defeat the purpose. Our schools are not a dumping ground for those who are only interested in seeking shelter from the current economic storm. The teaching profession is for professionals committed to the mission of preparing our next generation for new millennium changes and not for fair-weather job seekers. To this end, I support the Bill. I would also, however, like to raise two concerns which I hope the Minister can clarify. My fellow MPs have asked the Minister to consider ways in which the CONNECT Plan can recognise in part the past services of teachers. As it is, the teachers' past years of service are not recognised to any extent in the CONNECT Plan, as specified in the Bill.

    OFFICIAL REPORT - 2001-10-05 · READ THE OFFICIAL RECORD

  4. Mr Deputy Speaker, Sir, I rise to speak in support of the Bill. Too often, we tend to associate economic downturn with gloom and doom. We tend to miss out on the silver linings. There are opportunities even in downturns, sometimes in unexpected forms. For example, I see the introduction of this Bill as opportune to incentivise both prospective teachers and current teachers to join and remain in the teaching profession. After all, the current economic downturn has caused many mid-career professionals to look for alternatives and possibly making teaching their second career. The current economic climate has also helped to transform our universities and polytechnics into favourable hunting grounds to recruit more teachers for our schools. I believe that many schools are finding it easier to engage contract teachers as compared to last year. In the midst of the current economic uncertainty, one thing remains certain - our people are the best resources and that we should continue to invest in our people, especially in educating and equipping our next generation to face the challenges ahead. To succeed in educating our children for the new millennium, we need to retain and enlarge our pool of dedicated teachers over time. Too often, due to the resignations of teachers, our students' learning journey is disrupted. I understand that in some of our neighbourhood schools, some students have to endure up to four different teachers for the same subject during the year owing to resignations, contract teachers leaving to study in NIE, and so on. Our students' learning journey requires experienced teachers who are committed to teach and impart the right value to our students.

    OFFICIAL REPORT - 2001-10-05 · READ THE OFFICIAL RECORD

  5. After all, a typical agreement for consumer transaction, such as property and cars, is usually very lengthy and couched in terms that would test one's patience in trying to understand it fully. It is possible for these property buyers to miss the fine print in the agreement that expressly takes away third party rights. Hence, I suggest that for transactions involving a substantial amount, we should protect consumers who are ignorant of third party rights by making third party rights compulsory. My concern is that no matter how we try to educate the public on third party rights, there will still be some who may not be aware of it. The law should still seek to protect those unsuspecting consumers from promisors who delete the third party rights from the contract, especially if the transaction involves a substantial amount of money. With these two clarifications which I would like the Minister to respond to us, I support the Bill.

    OFFICIAL REPORT - 2001-10-05 · READ THE OFFICIAL RECORD

  6. I also would have thought that it would be more confusing to have a provision to allow, by exception, contracts made within six months of the commencement of the Bill to grant third party rights where the term of contract provides for the Bill to apply. Does this mean that during the six-month period, the law grants certain people who have knowledge of it the right of third parties and disadvantaging others? May I seek the Minister's further clarification on this point, please? Sir, secondly, under clause 2(2) of the Bill, third party rights shall not apply if, on a proper construction of the contract, it appears that the parties did not intend the term to be enforceable by third party. This clause gives some flexibility for the promisor and promisee not to confer third party rights. I believe that this proviso may be valid under certain circumstances. But it can be a loophole for the promisor to include as a fine print in the contract, especially if the promisee is ignorant of the relevance of third party rights. Hence, I would like the Minister to consider whether third party rights can be enforced at all times for some transactions, making it irrelevant for contracts to expressly state otherwise. These transactions that will grant compulsory third party rights should be contracts involving substantial value, such as property and cars. The basis for my suggestion is that, too often, consumers are ignorant of what is in the agreement. For example, for most first-hand property buyers, their main concern would be the location, the value, the finishing, and so on. Whether the contract conferred the right to third party or not is likely to be of a much lesser concern to them. It may not be something that they would pay particular attention to.

    OFFICIAL REPORT - 2001-10-05 · READ THE OFFICIAL RECORD

  7. Mr Speaker, Sir, I rise to speak in support of this Bill. The nature of some business and consumer transactions can be quite complicated involving several parties. Some of these transactions involve significant amounts of money and long-term warranties on the product. It is fair that we grant protection to third parties in a transaction, and not just to the original parties who signed the contract. All this while, promisors have been shielded by the rule of privity of contracts when the issue involves a third party. For example, property developers have been shielded by this rule from resale property buyers. And certain household appliance suppliers have been shielded by this rule from third party consumers. In the interest of making business and consumer transactions fairer, it is therefore appropriate that we enact this Bill. In the interest of bringing our law to be in line with developments in other advanced economies and leading financial centres, it is appropriate that we enact this Bill. However, there are two clarifications that I would like the Minister to respond. The Minister has clarified the rationale for allowing a time lag in applying the Bill, as stated in clause 1(2). The Bill applies to contracts made more than six months after the commencement of the Bill, with the exception of contracts made within six months of the commencement of the Bill, which expressly provides for the application of the Bill. However, if we agree to the merit of this Bill, I would have thought that it would be preferable to apply it straightaway, rather than wait for six months for it to take effect.

    OFFICIAL REPORT - 2001-10-05 · READ THE OFFICIAL RECORD

  8. If we define "election advertising" and "publish" so broadly in the Bill, we may unwittingly send a wrong message to our already politically apathetic younger generation of Singaporeans that they cannot communicate anything with a political flavour, especially during the election period. Sir, the concern in this regard is whether we have defined the terms "election advertising" and "publish" too broadly that they become catch-all tools that cover too extensively non-political party activists who may want to express their views on the election. For example, someone attends an election rally and becomes a converted follower of that political party, be it the ruling or the opposition parties. He sends an e-mail to ask all his friends and relatives to vote for that particular political party. On the basis of his personal conviction, he proceeds to ask all his friends and relatives to canvass their friends to vote likewise. He even includes in his e-mail that out of the 50 friends that he has asked and polled, 40 of them have decided to vote for that political party. Does the Bill prohibit him to carry out the above actions, even though he may be acting on his personal conviction? If it does, I would suggest that we review the definition of these terms, as they are deemed to be too broad. Sir, with these concerns, which I hope that the Minister can clarify, I support the Bill.

    OFFICIAL REPORT - 2001-08-13 · READ THE OFFICIAL RECORD

  9. The requirements in the Bill can also help to ensure greater accountability on the part of the political parties, candidates and third parties engaged in election advertising. The Government should also be commended for its alertness to the potential dangers that advancements in info-communications technology can present. In this regard, I also applaud the Government for its courage to make tough decisions to deal with them. There is another school of thought on this Bill. Some purists of democracy will readily cite these prohibitions to substantiate their perception of Singapore as veering towards a police state, that the Bill impinges on the freedom of the individuals and political parties to contest freely in an election. These people would consider the prohibition of the publication of election opinion polls as an affront to the individual's freedom of speech and expression. They would consider the prohibitions on the Internet as unnecessarily authoritarian and even dictatorial. This group of people will ask why do the United States of America, widely regarded as the epitome of a democratic nation, allows election opinion polls to be freely conducted and yet the Singapore Government wants to ban it. Surely our citizens would be sophisticated enough to make the correct choice of electing their political leaders, regardless of what the opinion polls may suggest. Surely those who are IT savvy enough to surf the Internet would be able to discern and brandish the gimmicks and electioneering ploys on the Internet. If we place limits to the freedom of expression on the Internet, we appear to go against the grain of Prof. Michael Porter's recent advice for us to loosen up.

    OFFICIAL REPORT - 2001-08-13 · READ THE OFFICIAL RECORD

  10. Singaporeans may have the right to information but it is the duty of the Government to ensure that our citizens are entitled to information from responsible persons. In this IT age, we are flooded with all kinds of information. On issues affecting the future of the nation, we want to have information generated by persons with a strong regard for the well-being of our citizens rather than opinions generated by third parties with no personal stake in the nation. Sir, the greatest irony of our age is that having more knowledge does not necessarily make one any wiser. Giving a man too many options does not lead him to make a better choice. At the end of the day, voting is something personal and sacrosanct to the voter. The choice of the voter should be based on his knowledge of the political party or candidate rather than knowledge of how other voters choose. Voting should be based on the political platform and confidence that the voter has for the party or candidate, not on the opinion of other voters. We do not want a situation where materials are circulated during the election period without any names on it. We do not want a situation where candidates and political parties go beyond their means and limits in election advertising. We do not want to have our political parties and candidates to be dependent on the purse of third parties who may have their own private agendas in supporting their election advertising. This can lead to money politics. Where possible, we must remove any danger and possibility of money politics taking place in Singapore. Sir, I believe that the Bill can help to minimise the manipulation of public opinions prior to and during an election.

    OFFICIAL REPORT - 2001-08-13 · READ THE OFFICIAL RECORD

  11. Mr Speaker, Sir, I rise to speak in support of this Bill. There are two main schools of thought on the prohibitions imposed by this Bill. On the one hand, some people regard unbridled democracy as a sheer form of tyranny, as it imposes upon the will of others. Hence, we need to balance the right to be democratic with the need to be responsible. We need to balance the right to information with the need to discern the person supplying the information, whether they have a personal stake in the well-being of Singapore or they are acting on their personal agenda. We need to balance the right and freedom of the individuals to express themselves freely with the need for those opinions to be expressed in a responsible manner. In a way, it is like parenting. I like to give my teenager sons as much freedom as possible to access information. But as a responsible father, I will restrict pornography, violence and the like. And if I know that drugs and smoking are bad for them, why would I even want to consider letting my children try them out? In the same way, if I know that misinformation and manipulating of information by persons with their own selfish agenda is against the well-being of Singapore, why would I want Singaporeans to be exposed to such information without safeguards, especially on a matter as important as electing leaders of the nation? Sir, in our age of live broadcast, we do not want opinion polls to be conducted by third parties or foreign broadcasters who may misrepresent or manipulate public opinions. In this regard, I agree that we should not allow decisions regarding our future to be influenced by persons who may have their own private agendas.

    OFFICIAL REPORT - 2001-08-13 · READ THE OFFICIAL RECORD

  12. I would like to ask the Minister whether the proposals his Ministry is working on would incorporate the speeding up of infrastructural projects. BG George Yong-Boon Yeo: Yes, that is the natural course of action to take. But we have speeded up infrastructure projects as a result of the last Asian financial crisis. So if you look at the latest numbers, even though the construction industry has not gone negative, the reason is that it is being propped up by public sector spending. In fact, private sector construction spending has gone down into the negative. We are now reviewing in various Ministries whether we can bring forward some projects in a sensible way. We should not be doing what repeated Japanese administrations have done, which is just to pump prime and, in the end, waste resources. I do not think we should do that.

    OFFICIAL REPORT - 2001-07-11 · READ THE OFFICIAL RECORD

  13. Sir, as Singapore is an air transit point for many global travellers, could I ask the Minister whether his Ministry is looking at the ban and confiscation of food and produce brought in by travellers for their personal consumption, eg, meats and dairy products? This is a likely loophole to be plugged.

    OFFICIAL REPORT - 2001-04-19 · READ THE OFFICIAL RECORD

  14. This is because having more children is a question of choice for the couple, and the choice of having the mother stay at home to be assisted by the maid should not result in a financial penalty. My seventh proposal is for the Minister to consider allowing more creches and day care centres for children. Again, this would ease the concerns of double income working parents. In order to encourage more childcare centres near the workplace of working parents, the Minister may wish to consider giving a higher subsidy for the operators of childcare centres in the Central Business District and industrial areas where the rental of office space can be rather prohibitive. This would enable parents to send their children to childcare centres near their working place and it would be more convenient to fetch their children from the centre after work. In conclusion, Sir, besides using financial carrots to encourage working mothers in Singapore to have more children, I hope the Government will also consider other measures to address the concerns of young families. This issue has to be considered in its totality. Parents simply do not opt for more children on the basis of co-savings scheme or third child maternity leave. Sir, with these comments, I support the Bill.

    OFFICIAL REPORT - 2001-03-16 · READ THE OFFICIAL RECORD

  15. Fourthly, by the same token, I would like to propose that we allow working mothers with new-borns to be able to take no pay leave for up to six months on top of their paid maternity leave. This is to help the working mothers in the settling in of their new-borns in the family. The working mother after her maternity leave may decide to take up to six months' no-pay leave or she may not. If her financial position requires her to return to work after her maternity leave, it is her decision to go back. If her financial position allows her to stay at home to look after her new-born for up to six months, she can do so without the hassle of applying for it and the uncertainty of whether that leave will be approved or not. I know of some mothers who returned to work after their maternity leave and were unable to cope with the demands of work and their new-borns' attention. Consequently, they decided to leave because they were not granted no-pay leave. This situation could have been avoided. But, more importantly, by allowing them no-pay leave as a right will give parents the flexibility and therefore encourage working couples to consider having more children seriously. Fifthly, in line with most private sector practices, may I also propose that the Government consider a five-day working week to allow civil servants to spend more time with their families. Many civil servants have benefited from the current arrangement of allowing alternate Saturday off. Perhaps the Government can take a further step by considering a five-day working week. My sixth proposal concerns the tax deductibility of the foreign maid levy which only a married woman who is working gets. In line with encouraging more children and bigger families, the tax deduction should be extended to the father's income.

    OFFICIAL REPORT - 2001-03-16 · READ THE OFFICIAL RECORD

  16. This is because mothers who are not in the workforce are equally doing the country a great national service by looking after their children in the crucial early formative years of children. I know of many professional women who stop working so as to be able to spend some time with their children during their formative years. We should not forget their contributions to the society when they bring up their children well. They are also the heroines of the country. Thirdly, I would like to propose that the Bill provide for special family leave of, say, up to five days each for married employees with children. This is to enable them to use it to spend time to look after their children, to coach them during the examination period, to look after them when they are sick, to enjoy parenthood and not to treat it as a big hassle that they have to balance with the demands of work. Sir, we have to understand that the values in our society are changing. We have to understand that our younger generation are willing to go out to make a mark for themselves in the office to actualise their potential. At the same time, they are faced with the ever pressures at home of having to raise their children. Added to that is the fact that in the case of most young families, both parents are working. It is not easy to raise three children well nowadays based on a single income. Our society has become competitive. Having to raise a third child with a much lesser measure of comfort, most young parents in Singapore will opt for having two children. Hence, we should recognise this and go about to help them in this regard, by giving them time to spend with their children.

    OFFICIAL REPORT - 2001-03-16 · READ THE OFFICIAL RECORD

  17. Increasingly, we are seeing more fathers wanting to play a more instrumental role in raising up children, in tutoring their children, in chauffeuring their children to piano and other special classes during the weekends. In a sense, the modern-day father has no choice as the wife is often also a working mother. In a sense, the modern-day father has become less chauvinistic. And I know of many fathers who can whip up excellent dishes in the kitchen. So the modern-day father has to assume his share of duty in getting the house in order and his share of responsibility in raising up the children. Given the changing role of fathers in our society, should not paternity leave be granted? Paternity leave can be a shorter period of, say, up to five working days for the first and second child. For the third child, the reimbursement from the Government can then be on the same basis as the third child maternity leave, as proposed in the Bill for mothers. The paternity leave will enable the father to help ensure that the house and children are in order when the mother is still in the hospital and in the first few days of convalescence at home. Having a new child in the family can result in a major upheaval in the family and the father has a crucial role in helping the family to adjust to the changes, especially in the initial stages. To my mind, granting paternity leave would be a fair recognition of the father's role in the family and, in a sense, encourage him to have more children. Secondly, Sir, we should extend enhanced tax relief and rebates to either parents and not just for working mothers.

    OFFICIAL REPORT - 2001-03-16 · READ THE OFFICIAL RECORD

  18. This is a sensible policy because it is generally better for less well-to-do families to have lesser children, so that the parents can have the time and means to raise their children up properly. If the parents want to have many children but do not have the time and means to bring up the children well, it can be counter-productive to the family and society. Hence, it is sensible for the Government to adopt a family planning policy of having three children or more if the families can afford it. Not surprisingly then, the co-savings or "baby bonus" scheme tends to benefit the families with the means. It tends to favour families that can afford it because not all families can afford $1,000 or $2,000 annual matching contribution for the second and third child respectively. The flip side to this policy is that families from the lower income group may not be able to benefit fully from the scheme. But we should ensure that families from the lower income group are also properly taken care of. We should ensure that they are not significantly disadvantaged as a result of the scheme. For this purpose, I hope that the Minister can enlighten us on how the scheme will operate. In particular, I wish to learn whether this scheme can be extended to cover other than "baby bonus". Sir, let me now move on to some proposals I have for the Minister. Firstly, the Bill should not focus on mothers. It should not just encourage married women in Singapore to have more children. It should encourage married men and women in Singapore to have more children. Notwithstanding the sacrifices made by mothers, we must not forget the changing role of fathers in a modern family. The modern-day father is not just a breadwinner enslaved at the workplace.

    OFFICIAL REPORT - 2001-03-16 · READ THE OFFICIAL RECORD

  19. Sir, I rise to speak in support of the Bill. I would like to urge the Minister to consider further measures to encourage married couples in Singapore to have more children. The Bill has addressed only to a certain extent the concerns young families have in regard to having more children. The Children Development Co-Savings Scheme will alleviate their concern regarding the escalating costs of bringing up children. Such costs are very real for the new generation of Singaporeans. Not only has the cost of living gone up, the standard of living has also gone up in Singapore. For example, during our time, it was quite a rarity for families to engage tuition teachers for their school-going children. This is now quite a prevalent practice for most young families and it is often a matter of how many private tutors the children have. The third child maternity leave is an overdue recognition of the sacrifices and national service performed by young mothers. It is a sacrifice because in the past, they had to accumulate their annual leave to offset their absence from work after delivery of her third child. It is a sacrifice because some employers and bosses do not take too kindly to the mother's absence as this means that they have to arrange for someone else to cover duties. In extreme cases, it may even affect the promotion and prospect of the mother. But there is more to it than just the financial concerns of raising a third child and of maternity leave. The Bill can go much further to encourage young families to have more children. I have the following comments and suggestions for the Minister to consider. The Government's policy is to have three children or more if you can afford it.

    OFFICIAL REPORT - 2001-03-16 · READ THE OFFICIAL RECORD

  20. Sir, I hope that the Energy Market Authority of Singapore will adopt a pro-active watchdog role to ensure that the interests of consumers, especially those from the lower income group, continue to be protected in terms of pricing and service quality. The last thing that we want to see out of this privatisation exercise is another post-POSBank debacle emerging. With that, Sir, I support the Bill.

    OFFICIAL REPORT - 2001-03-16 · READ THE OFFICIAL RECORD

  21. They must be proactive about ensuring the best service quality and competitive pricing, rather than take a passive approach of slapping the penalties after the problem has occurred. This is a role that I hope our regulatory authorities will adopt. We must learn from the recent experience of the Californians. We must ensure that energy utility companies coming into the local market must be willing to commit themselves to make sufficient infrastructural investments. I hope that the Energy Market Authority of Singapore does not assume that, by having more players in the market, it will result in competition and, therefore, naturally benefit the consumers. That is not always the case. After all, it was only quite recently that our motorists were quite unhappy that when oil prices were falling, the petroleum companies in Singapore maintained a cartel-like grip on the local petroleum market, and were reluctant to lower petrol prices until an issue was made out of it. Should we still allow market forces to prevail, even if there is collusion between the key service providers or suppliers in the market? Is the Energy Market Authority of Singapore empowered to intervene and regulate prices? In the long run, consumers may exercise their discretion and rights by switching to another service provider. But, in the initial transitional stage of privatisation, before more players come in and establish themselves in the market, what choice do consumers have? How can the consumers' rights be protected from a privatised monopoly, duopoly or oligopoly?

    OFFICIAL REPORT - 2001-03-16 · READ THE OFFICIAL RECORD

  22. We may not plunge into a post-liberalisation scenario similar to the recent experiences of Californians. But we have had minor disruptions that warrant some concerns. For example, we know from experience that an upsurge of power disrupt automated banking service, wafer fab production and so on. What we must prevent at all cost is a post-liberalisation scenario where frequent glitches by energy companies lead to a crippling of investors' confidence. Glitches in energy supply should be exceptional. But when they do happen, people will start to ask why did the Government want to opt for privatisation? For example, ask any man-in-the-street or those from the lower income group for their views on their experiences following the sale of POSBank, they will lament to us that it was more convenient in the past, as there used to be more POSBank branches. They will complain to us about the long queues and waiting time that they are now subject to. They will remember the administrative charges that were waived by the people's bank. In short, Sir, some people are wary that privatised entities would be too focused on getting the best bottom line, to the extent that the basic and fundamental interests of the common people are sacrificed in the process. They are concerned that privatised entities might be too profit-driven, becoming more interested in striking up strategic alliances to be a key regional energy utilities player and forget about the average Singaporean, especially those from the lower income group. The lower income families are concerned that they may no longer be able to enjoy subsidies for energy utilities in future. Hence the regulatory body has been given a huge responsibility.

    OFFICIAL REPORT - 2001-03-16 · READ THE OFFICIAL RECORD

  23. Sir, I rise to speak in support of the Government's privatisation plans to set up a regulatory authority for the energy utilities market. By injecting competition in the energy market, we are in fact allowing market forces to help ensure that the utilisation of resources will be better maximised. This is important for Singapore, as our resources are scarce. In the long run, having more players in the energy market should also benefit customers. Consumers will be given more choices. The competition should lead to better service and new products. Pricing for the use of energy utilities should also become more competitive. Notwithstanding this, Sir, the road to privatisation is not without obstacles. There are some lessons that we can learn from our past privatisation experiences. There is a transitional period that needs to be managed before multiple players establish themselves in the energy market, before the market is fully liberalised, before free market forces can operate to the benefit of consumers. There are some issues I would like the Minister to consider. We all know that energy utility is an essential service. By this, I mean that it is a service that is required by everyone. Residents of all income groups need the supply of electricity and gas to their homes. The level of consumption may be different, but energy utility is needed by the rich, the poor and the man-in-the-street. Sir, if the prices of energy utilities are not properly regulated, it will contribute to inflationary pressures and raise business costs. If services by energy companies are not up to the mark, if their infrastructural and capital investment in Singapore is inadequate, it can lead to unnecessary blackouts, inconvenience to households, and major disruptions to the economy.

    OFFICIAL REPORT - 2001-03-16 · READ THE OFFICIAL RECORD

  24. What is the average waiting time for taxis in Singapore and how do they fare as compared to other cities? I understand that the supply of taxis is a fine balancing act and that an increase in the number of taxis to cater for the peak hours may result in excess capacity during the off-peak hours and therefore lower income for taxi drivers. This, however, may be partially addressed by raising taxi fares so that fringe commuters would decide to use other means of public transport, or use the taxis merely for connection to MRT stations or bus routes. I would like the Minister to elaborate whether there are plans on hand to deal with this predicament, and whether the solution is to introduce more taxi operators.

    OFFICIAL REPORT - 2001-03-09 · READ THE OFFICIAL RECORD

  25. Sir, I would like the Minister to review how taxi fares can be made better as well as to reduce the waiting time for taxis. First, the taxi fares. There are currently many types of supplementary taxi charges. These are charges for dialing in to make reservations, charges for waiting time, charges for entering the CBD, charges for going to the airport, charges for hailing the cab at certain hours, and so on. These can be quite confusing for taxi passengers when the supplementary charges are kicked in. While the meter indicates one reading, the passenger may be asked to pay another amount. This amount may be correct when the various supplementary charges are taken into consideration. But short of reasoning it out with the taxi driver, it is not easy on your own trying to account for the higher taxi fares than what is indicated in the taxi meter. Sir, if our taxis are using the GPS system, I do not see why they cannot harness technology to provide clearer reading of taxi fares. Our taxis should be equipped to provide printouts so that if the taxi fare is different from the meter reading, the printout will give a breakdown of the various supplementary charges. This will avoid giving tourists and visitors, who are unfamiliar with the various supplementary taxi charges, the wrong impression that our taxi drivers may be over-charging. Secondly, the waiting time for taxis. It is extremely difficult to hail a taxi during certain hours and at certain locations, for example, just before midnight, during the peak period, in the CBD, Orchard Road area, Turf Club, etc. Can the Minister enlighten us on whether his Ministry considers the waiting time for taxis in deciding the number of taxi licences?

    OFFICIAL REPORT - 2001-03-09 · READ THE OFFICIAL RECORD

  26. In the meantime, Sir, I would like the Minister to consider a few proposals in respect of the COE system. Firstly, can the small car categories in the bidding system be reinstated, as the experiment to date is not conclusive that buyers of below 1,000 cc cars are better off? Secondly, can the Minister consider allowing COE renewals for a five-year period without having to scrap the car thereafter? This will make it cheaper for car owners to continue owning their cars and for low-budget buyers in the second-hand market.

    OFFICIAL REPORT - 2001-03-09 · READ THE OFFICIAL RECORD

  27. I believe that we can find a creative answer to help them achieve this. After all, notwithstanding the great improvements in public transportation, the MRT and buses do not take the elderly and the children right to their homes. And at certain times, at certain places, and peak hours in Singapore, to catch a taxi would mean an intolerable waiting time. Our main concern is to control the number of cars on the roads, especially during peak hours, owing to the economic opportunity cost of road congestion. Viewing from this standpoint, it becomes less relevant to consider the number of cars owned by Singaporeans at any one time. If the number of cars on the roads during peak hours does matter, then we should implement measures to deal with this rather than curtail car ownership. Let the family buy cheaper cars and use them over the weekend. Let the retirees buy cheaper cars with lesser COE renewal fuss, and let them use the cars during off-peak hours or periods. Through the ERP system, we are harnessing technology to better control the flow of road traffic using the pay-as-you-drive principle. Let there be less artificially injected costs so that more people can own cars and make those who drive during peak periods pay more for the use of the roads. Sir, we have implemented, modified and fine-tuned the COE system over many years. With the advent and use of technology that allows us to better control the flow of road traffic using the pay-as-you-drive principle, I suggest that it is time for us to review the COE system. Hence, I would like the Minister to enlighten us on how useful is the ERP system as a means to regulate the number of vehicles on the road and whether his Ministry intends to gradually phase out the COE system, thereby making car ownership more affordable.

    OFFICIAL REPORT - 2001-03-09 · READ THE OFFICIAL RECORD

  28. Sir, I would like the Minister to review the effectiveness of using the COE system to regulate traffic flow on our roads. The cost of owning cars in Singapore is extremely high as compared to the cost of owning cars in most other countries. Singaporeans travel quite frequently nowadays and they are conscious of how costly it is to own cars in Singapore vis-a-vis other countries. This can be attributed, in a large measure, to the artificial cost of having to pay for a certificate to entitle them to own a car. COE prices fluctuate every month, sometimes, with huge pendulum swings. Such fluctuations impact buyers of new cars and second-hand car sales. Those who bought brand new cars at a higher COE will find it financially not viable to sell their cars when the COE prices have dipped. Second-hand cars that are of a cheaper range are usually those at the tail end of the 10-year COE period. In no time, such buyers will face a dilemma of having to fork out a large sum, ie, the prevailing premium to renew the COE for another 10 years, or renew it for five years, and scrapping the car thereafter. In essence, therefore, a car owner's COE dilemma continues even after he has owned a car. Consequently, Sir, many Singaporeans, including our aspiring younger generation, find it extremely difficult and complicated to own a car in an island that we want them to call our home. Singaporeans, especially those with young children and elderly parents, would like a more convenient and effective means of driving their infants, children and elderly about in their own cars during off-peak hours. Cheaper cars would also benefit retirees who are looking for cheaper or second-hand cars without the fuss of having to fork out another sum of money for COE renewal.

    OFFICIAL REPORT - 2001-03-09 · READ THE OFFICIAL RECORD

  29. My second concern deals with the personal reliefs generally. Such reliefs do not appear to have kept up with the time. For instance, the personal income threshold of $2,000 for the wife relief does not appear realistic given the financial pattern of today's family. I suggest we look closely at the current programme of personal reliefs to determine where improvements can be made. One area of concern among the growing number of Singaporeans is the cost of medical treatment for the ageing parents. To encourage three generation households and to ensure that retirees continue to enjoy a certain quality of life, medical costs incurred for geriatric treatment and for other serious illnesses should be given relief up to a certain monetary capping. Perhaps, the personal tax system can be used to help alleviate some of these concerns. Finally, I would like to propose a topping up of the student's Edusave account to encourage PC ownership. We should encourage our students to be more IT-savvy. But not every student can afford a PC. While there are PCs in the schools, the IT exposure of students without PCs at home is very much restricted. For this purpose, we should consider topping up the student's Edusave account to subsidise or pay for the purchase of a PC or IT-related accessory or software. The top-up can be renewed five years later to keep up with the changes in computer technology. The post-Budget wish-list that I have just described should not taint the bold and positive aspects of the Budget, as announced by the Minister. But who knows Santa Claus may still be accepting late orders. Sir, with this, I support the motion.

    OFFICIAL REPORT - 2001-03-07 · READ THE OFFICIAL RECORD

  30. However, I also like to draw attention to the fact that free share awards should also be given the same treatment provided similar parameters are met. For instance, there does not appear to be any reason why share awards that are granted to more than 50% of a company's employees should not be covered by the scheme. On the topic of stock options, I would however like to draw attention to the manner in which stock options obtained by expatriate employees before they came to Singapore, but which are exercised while they are employed in Singapore, are taxed. The exercise of such stock options is subject to Singapore's tax notwithstanding that they were granted and earned during their expatriate years of service outside Singapore. If Singapore is to attract top foreign talent, we need to relook at this issue to ensure that there are no undue issues that may act as a disincentive to such individuals. Finally, Sir, I would also like to very briefly comment on a few other tax issues, some of which I have raised previously. The first is the need to review the threshold parameters for estate duty, in particular the use of $600,000 as the threshold for non-property exemption is inadequate. The $600,000 is inclusive of CPF which is nowadays easier to achieve. The current exemption scheme appears to favour those with significant property ownership in their investment portfolio. We should revise upwards the non-property exemption allowed, or even abolish estate duty on all non-property assets and allow for estate duty to be levied only on real property passing in excess of the present $9 million. This would encourage Singaporeans to adopt a wider investment strategy rather than to be overly tied down and exposed in the property market.

    OFFICIAL REPORT - 2001-03-07 · READ THE OFFICIAL RECORD

  31. Speculative tax on capital gains on properties Sir, the tax on speculative gains on sale of real estates was introduced at a time when the Government deemed it necessary to prevent a speculative bubble from forming in Singapore's property market. Aside from the common argument that the current market does not require such measures, I would also like to raise a more fundamental albeit technical issue. Singapore's tax system does not tax capital gains, only income. The imposition of tax on the gain, that is in all respect the capital gain, merely because the subject matter of the gain is real property, would appear to be contrary to Singapore's fundamental tax policy. For this reason, I would encourage the Government to reconsider the rationale for the property speculation tax. With Singapore's population ageing, an issue is whether retiring persons would have enough to see them through their retirement years, I would suggest that retirement gratuities not be taxed. The taxation of such amounts inherently imposes a larger than usual tax burden as the amount is typically received in one lump sum at the end of the individual's career. Therefore, the individual may be pushed into a higher tax bracket than usual due to the receipt of such an amount, notwithstanding that such amount is intended to provide for his future years. I would like to point out that retirement gratuities were exempt from tax before 1st January 1993. But with concerns that CPF savings may not be adequate for retirees in today's environment, the reinstatement of such an exemption may be opportune. I would like to take this opportunity to applaud the Government's introduction of the CSOP scheme which I believe will benefit employees and employers alike.

    OFFICIAL REPORT - 2001-03-07 · READ THE OFFICIAL RECORD

  32. But the current tax rules do not allow funding cost to be deducted if investments do not produce income. This acts as a disincentive to local companies from seeking regional expansion opportunities. They should be allowed to accumulate expenses in periods when no income is earned and deduct expenses when their investments start to produce income. Such expenses can be restricted to cost incurred in regional expansion activities, such as funding and legal costs. Such an incentive would merely be an extension of the Inland Revenue's current liberal treatment of expenses incurred which have generated foreign income. Presently, expenses incurred which generate foreign income that are not repatriated can be accumulated and carried forward to be used to offset such foreign income when repatriated in the future. Sir, we should also help successful local enterprises to reinvest their overseas profit. Currently, foreign taxes paid by second or third-tier foreign company is not recognised in Singapore when the local parent company receives dividends from its overseas subsidiaries through an offshore intermediate holding company. Since credit is not given for such foreign taxes suffered at the second and third-tier levels, the overseas income brought back to Singapore is effectively taxed twice, by the foreign country and by Singapore. This acts as a disincentive to local enterprises from reinvesting in Singapore even if the best opportunities are available at home. Instead, we should allow local companies to look through intermediate holding companies in foreign countries and receive credit for foreign taxes paid. I will now turn to issues affecting individuals.

    OFFICIAL REPORT - 2001-03-07 · READ THE OFFICIAL RECORD

  33. This ability to carry back losses would generally benefit SMEs facing cashflow problem and financial difficulties now. The current tax rules on the carrying forward of losses benefit companies that survive a recession. But the ability to carry back losses would assist companies to ride out rough patches where their fundamental business proposition is sound. Related to this, I would like to also raise the issue of corporate group relief for losses. Businesses may be organised in separate companies for various reasons. This corporate separation, while real in the legal sense, is artificial in the business sense from the owner's perspective. But our tax rules do not permit losses in one company to be offset against profits in another company, even if one person owns both. If the two businesses were run out of the same company, the losses would implicitly be used against the profits resulting in less tax. In effect, by disallowing inter-corporate losses, the effective tax rate is higher than 24.5% for the above companies taken together. This should not be the case. We should seriously look into the concept of group loss relief. Where local companies are seeking to expand into other jurisdictions that permit group relief, our companies would be at a disadvantage compared to companies that can take advantage of group relief. In fact, the effective tax rate on such companies can actually be lower than Singapore's statutory rates, notwithstanding that our rate is amongst the lowest of all developed countries. Globalisation I will now consider the tax measures to boost our regionalisation drive. Sir, we should provide incentives to local companies to go regional by helping them to build up their reserves.

    OFFICIAL REPORT - 2001-03-07 · READ THE OFFICIAL RECORD

  34. Many of them have not overcome the effects of last year's recession. Before they can come out of the woods, they are already greeted by the news of possibly another slowdown. I am glad that the Minister has considered their plight in this year's Budget. I am glad that PSB is helping to raise the performance of local enterprises, and I look earnestly forward to learning more regarding Retail 21. Sir, I suggest that we adopt further fiscal measures to help our SMEs. If we want to grow our local SMEs into world-class corporations, we need to create a conducive fiscal environment to nurture them. Instead of a flat corporate income tax rates for all companies and partial exemption for income of up to a certain level, we might consider implementing a lower rate of income tax for local SMEs. The Budget's measure of introducing a tiered rate system for the first $100,000 of chargeable income is a step in the right direction. However, this can be improved upon. SMEs that are wholly owned by Singaporeans and whose turnover or total assets do not exceed a certain amount could be subject to a lower rate of tax, say, 16% on the first half a million dollars worth of income which is ploughed back into the business, and not distributed as dividends. Low rate would act as an incentive to allow the SMEs to build up their reserves to better weather economic downturn. Furthermore, reduction of tax rates would only be of benefit to companies which make profits. But what if they make losses? As a tax rule for SMEs, we should allow SMEs to use losses incurred during a downturn against income earned in, say, of the preceding two years. If taxes were paid in the preceding two years, such taxes could be refunded to the company.

    OFFICIAL REPORT - 2001-03-07 · READ THE OFFICIAL RECORD

  35. Mr Speaker, Sir, I rise to speak in support of the Budget. Last year the Minister introduced a measured Budget using measured fiscal responses to address the millennium challenges. We have just emerged from a recession the year before and there was a need to remain circumspect and yet be bold enough to seize the new opportunities in our knowledge-based economy. Hence, in last year's budget, the withdrawal of each rebate appeared to be followed by a concomitant new tax initiative. This year, Christmas seems to have come early. With the advent of greater uncertainty over the economic situation for the rest of the year, many are pleasantly surprised by the Minister's generosity. It is therefore not surprising that many people are lauding this year's Budget as an "Election Year Budget" because it is very pro-business and pro-individual. Political overtones aside, I think that it is more appropriate to term this year's Budget as a "Pay Back Budget" in view of the concessions that Singaporeans have to bear with during the recession period. A Different Scenario I would now like the Minister to consider other possibilities that require an even bolder fiscal approach this year. Sir, what if the economy becomes less rosy, thereby requiring a stronger fiscal response? What other tax initiatives can help our regionalisation drive? What other tax measures can encourage our promising local enterprises to think bigger, enter into new markets and invest more boldly? What other tax boosts can we give to our SMEs to ride over the current economic uncertainty? How else can we help individuals face the economic uncertainties ahead? We ought to visit these issues and attempt to answer these questions. Small and medium-sized Enterprises Firstly, on our SMEs.

    OFFICIAL REPORT - 2001-03-07 · READ THE OFFICIAL RECORD

  36. I will come back to the point made by Mr Simon Tay that the number of employers arrested appears very disproportionate to the number of harbourers of illegal immigrants arrested. If so, if your Ministry agrees to this fact, whether tougher action will be taken against employers of illegal immigrants? Assoc. Prof. Ho Peng Kee: Sir, I think it must be so because Singapore is porous, so immigration offenders come. So the numbers are large. It must be so that more immigration offenders are caught than the employers because the places where they work in Singapore would be more limited. But, as I have said, the focus of the law is also on the employers and the law is already very harsh. MEDIA WATCH COUNCIL (Formation) 3. Mr Simon S. C. Tay asked the Minister for Information and the Arts if it is appropriate to foster a media watch council to monitor and review newspapers in Singapore, given their recent proliferation. The Minister for Information and the Arts (Mr Lee Yock Suan): Mr Speaker, Sir, there is already a Publications Advisory Committee (PAC), which provides advice on content in local publications, including newspapers. The Committee was set up in 1982 and now comprises a Chairman and 73 members drawn from a cross section of society. MITA consults the PAC on publication content that may have breached our guidelines. The PAC reflects the views of the public and helps MITA to maintain the quality of publications in Singapore. There is no necessity for a separate media watch council to monitor and review the newspapers.

    OFFICIAL REPORT - 2001-02-23 · READ THE OFFICIAL RECORD

  37. Sir, recently it was reported in the press that a few illegal immigrants, including a newly-born baby, were arrested in a makeshift shelter, actually a storm drain. I would like to ask the Minister of State whether such developments, ie, illegal immigrants going literally underground, are as a result of the tougher stance taken by the Ministry on harbourers of illegal immigrants and whether such developments were anticipated by the authority. Although we understand the rationale for the Government's action, I would like to know whether the Ministry has considered the hardship befallen such economic refugees as a result of the tougher action. Assoc. Prof. Ho Peng Kee: Sir, I think we should be careful about this because it is a serious problem. So when we look at the whole situation and make it more onerous for harbourers to harbour illegal offenders, one consequence will be the fact that it would be more difficult for them to find accommodation. That actually explains why in the months after the enhanced publicity, more were caught. More Singaporeans were also reporting them. This is an extreme case where this immigration offender was found with a child. In other cases, yes, they will have some difficulties in finding accommodation and finding employment. But that is the purpose of the law. So that also sends a deterrent message to other people who will know that if they come in illegally, they face difficulties. And at the same time, the fact that they have to come out from their quarters, and some will hide in the forest, that will also enable the Police, together with MOM and other agencies, to catch them.

    OFFICIAL REPORT - 2001-02-23 · READ THE OFFICIAL RECORD

  38. BG George Yong-Boon Yeo: Sir, MTI monitors regularly the index of Government fees and levies. Even though this forms only a small proportion of total cost, it is important for us to monitor these prices because we are responsible for them. There are statutory boards which have a direct responsibility to look at these prices like PUB, LTA, the Public Transport Council. It is their job. Over and above them, we have Ministries. And the Ministers are accountable to Parliament.

    OFFICIAL REPORT - 2001-02-22 · READ THE OFFICIAL RECORD

  39. Sir, would the Minister consider the setting up of a price commission or Government watchdog committee to review prices set for products and services consumed by the masses where the suppliers enjoy a monopoly or cartel advantage? CASE has been very active recently, but could be likened to a toothless bulldog. BG George Yong-Boon Yeo: Sir, it is always a popular idea to control prices to make sure that increases are ameliorated. But we operate a market system and, to the maximum extent possible, we should allow the market to operate. Where there are monopoly powers, then the regulators involved must make sure that either the monopolies are regulated or broken up or the sector made contestable. CASE has performed a very useful role being a consumer watchdog. I do not think it is toothless at all. And it has been lobbying MTI very hard for us to establish a Fair Trading Act. We are now working with CASE to look at how such an Act can be legislated. It should be done in a way which does not make the market operate less efficiently or less flexibly. Many MPs in this House, including Mr Chiam See Tong on many occasions, have raised the need for such an Act. MTI has not been very enthusiastic about it because it creates other problems. But we are prepared to look at an Act which is minimalist and which allows the small consumer to seek redress at low cost, and we can make use of the Small Claims Tribunal for this purpose. Mr Jeyaretnam: Mr Speaker, Sir, very early in this Parliament, I proposed the appointment of a parliamentary committee to check on price increases. May I know from the Minister what is the objection to an independent committee looking into price increases of utilities, like transport, water, light and other utility services?

    OFFICIAL REPORT - 2001-02-22 · READ THE OFFICIAL RECORD

  40. Sir, could I ask the Senior Parliamentary Secretary, if it is difficult to get shareholders to purchase insurance for products lost through fire, whether it is possible for the town council to contract with the insurance company in order to obtain the best rate and cover and, maybe, incorporate the premium in the conservancy charges that are currently levied? Assoc. Prof. Koo Tsai Kee: Mr Speaker, Sir, the Government cannot speak on behalf of the town councils. This is for the town councils' chairmen and the councillors to decide. Assoc. Prof. Toh See Kiat: Mr Speaker, Sir, can I ask the Senior Parliamentary Secretary, since the Ministry is not making insurance compulsory for the stallholders, whether the Ministry would embark on an education programme because too many stallholders feel that they have nothing to lose and therefore they do not need to insure, forgetting that they have loss of profits and business to face if they do not insure themselves? Assoc. Prof. Koo Tsai Kee: Mr Speaker, Sir, that was what the Government did when the first market in Eunos was burnt down. Many advisors, including myself, went to visit the market and advised the stallholders to take up fire insurance to insure their personal effects. And I am glad to report that the insurance coverage rate has gone up substantially. But we have not reached 100% and certainly not in all markets.

    OFFICIAL REPORT - 2001-02-22 · READ THE OFFICIAL RECORD

  41. Hence, I am of the view that the capping of liability will not affect professional standards and substance. On this basis, can the Minister please clarify whether a capping on the liability for professionals, particularly public accountants in the PAC, will be considered? Sir, the second point concerns exempt private status. I wish to seek clarification on whether a wholly-owned subsidiary of the PAC can be deemed to be an exempt private company. According to the Bill, PACs will be granted exempt private status. A PAC may decide to give some of its departments more autonomy to manage their own finances and operations. The PAC directors may decide that in the interest of growing the business, these departments should be restructured as wholly owned subsidiaries of the PAC, so that they can be more autonomous in operations. Also, different HR policies and salary structures may give rise to a need for a line of business to be hived off under a separate legal entity. A PAC should be given the freedom to structure its business in this way, with its subsidiaries similarly enjoying exempt private status. But this should be on the basis that the subsidiaries must be wholly owned by the PAC. So long as the PAC is not disqualified and continues to be an exempt private company, can the Minister clarify whether wholly owned subsidiaries of a PAC will similarly be considered exempt private companies. Sir, with these two points which I hope the Minister can consider, I support the Bill.

    OFFICIAL REPORT - 2000-11-13 · READ THE OFFICIAL RECORD

  42. Instead, a single successful claim can easily and completely wipe out the life-time earnings of individual public accountants. If there is a threshold for reasonable claims, the current sky-high amount of claims against professionals has crossed the threshold many times over. In reality, professionals are caught in a vicious indemnity cycle. For genuine fear of the impact of escalating claims, the professionals are usually left with little option, but to take up a high level of indemnity insurance coverage that renders them more prone to law suits and claims. Sir, there should be a capping on the amount of claims against professionals, so that the amount of claims bears a fairer resemblance to the fees charged. For example, the claims could be capped based on a fixed multiple of the amount of fees charged. When I first proposed the capping of liability for professionals in the debate on law corporations earlier this year, the Minister of State was concerned that the capping may lead a lawyer to lower his guard, and hence lower professional standards. This should not be a concern, as the capping can be at a reasonably high but not astronomical level. In any case, the Bill has provided adequate safeguards in respect of the PAC. A PAC must provide adequate insurance cover of between $1 million and $50 million, depending on the size of the practice. Negligent practitioners can be struck off the Register of Public Accountants and lose their livelihood through the practice. More significantly, as an individual public accountant will be liable under the law of tort, whilst his partners are not jointly liable in their personal capacity for claims, we can expect individual accountants to be more circumspect in their statutory roles.

    OFFICIAL REPORT - 2000-11-13 · READ THE OFFICIAL RECORD

  43. They are not fair, as the claims made against accountants are many manifold times the amount of fees charged. They are not equitable, as the claims made against the auditors are usually more excessive than that pursued against the management at fault. Because, unlike the PACs, the management do not need to take up mandatory professional indemnity insurance cover under the Companies Act. Sir, it is absurd to expect an auditor, who clearly did not connive to bring down a company, to be sued more excessively than the management directly responsible for the company's collapse. There is no question that if at fault, the auditor must be personally liable. But it is clearly unreasonable to penalise the PAC and auditor more severely than the management for a failure that the auditor did not directly bring to bear upon the company. If the accountant's exposure to claims remains unlimited under the law of tort, there is little incentive for a sole proprietor or a small accounting practice to convert to a PAC. As I have mentioned to the House in January this year, the tendency for escalating claims made against professionals, including lawyers and accountants, is due to the "deep pocket" syndrome. Claimants are somehow erroneously led to believe that accountants and other professionals can afford grossly disproportionate claims due to their extensive insurance cover. In reality, the indemnity pockets of the professionals may not be deep enough. This is because, on the one hand, the capacity of the professional indemnity insurance market is shrinking. On the other hand, the quantum of claims has been escalating to such astonishing levels that it has become really impossible for individual accountants or accounting firms to recover from large claims.

    OFFICIAL REPORT - 2000-11-13 · READ THE OFFICIAL RECORD

  44. By offering more flexible remuneration packages, including employee stock options, PACs will be better positioned to be the employer of choice in the marketplace. Incorporation will also facilitate PACs to raise more capital to gain a wider reach for their services. The leeway to allow one-third of the PAC's shareholders to be non-practitioners will breed a more multi-disciplinary business orientation within the PAC, greatly enhancing its capacity and capability to provide clients with seamless service delivery, whilst still maintaining the PAC's audit independence. Hence, incorporation can provide our professionals with the critical structural support to elevate them to a platform to compete with the world's best. But I must qualify that incorporation is not a panacea for business woes. It is not a pill prescribed to resurrect failing sole proprietorships or partnerships. Instead, this Bill is meant to enable the accounting profession, as a whole, to move forward with the times, keep pace with world-wide development in the profession and meet the growing needs of the business community. It will create an environment that is more conducive for the development and better practice of the accounting profession in Singapore. The introduction of this Bill is therefore appropriate. I would like, however, to raise two points for the Minister's consideration. Sir, my first point is on the capping of liability. We should make a clear distinction between the PACs and other companies under the Companies Act. This is because the claims against professionals in general and accountants in particular are grossly disproportionate to the fees that they earn. Such claims are neither fair nor equitable.

    OFFICIAL REPORT - 2000-11-13 · READ THE OFFICIAL RECORD

  45. If the firm's asset is inadequate to meet a claim, the personal assets of all the partners in the firm are liable for the claim. Given today's incredulously massive amount of claims, all it takes is for just one partner's deficiency to annihilate the entire lifetime earnings of the other partners in the firm. This unlimited liability factor can act as a deterrent to the growth of the accounting firm and the profession as a whole. In a PAC, an accountant's liability will no longer be unlimited in respect of his partner's shortcomings. This, it must be noted, does not mean that the clients of a PAC will not be protected. In this regard, ample safeguards have been provided for in the Bill. A minimum capital of $50,000 is required to form a PAC. A PAC is also required to have an adequate level of professional indemnity insurance cover, ranging from $1 million to $50 million, depending on the number of corporate practitioners and the gross income of the PAC. As with the legal profession, limited liability will not affect the professional standards of accountants in Singapore. Sir, my other reason for supporting the Bill is because incorporation will allow professionals to reposition themselves in the New Economy business landscape. The digital transformation has attached a high premium to the application of human know-how. In our knowledge-based economy, intellectual asset has become critical and highly valued. Incorporation will lend a hand to accounting firms seeking to counter the fierce clamouring for limited knowledge resources. It will render it easier for PACs to recruit and retain valued staff against the ardent rivalry for talents from other corporations and institutions, both locally and internationally.

    OFFICIAL REPORT - 2000-11-13 · READ THE OFFICIAL RECORD

  46. Sir, before I proceed to comment on the Bill, I wish to declare my interest as a partner in a Big 5 public accounting firm and as the Vice-President of the Institute of Certified Public Accountants. I was also a member of the sub-committee established by the Public Accountants Board to study the incorporation of the accounting profession which led to the introduction of this Bill. Having heard this House engaged in a lively debate earlier this year to allow legal practitioners to set up law corporations, members of the accounting profession in Singapore generally expect that the option to incorporate will be extended to accountants. The introduction of this Bill to allow public accountants to establish Public Accounting Corporations (PACs) has therefore been widely anticipated. Sir, I support the Government's adoption of the principle for professionals in Singapore to incorporate. Right now, the engineering, architectural, medical and legal professions can opt to adopt the incorporation route in Singapore. The passing of this Bill will enable public accountants to similarly elect to embrace a corporate model. I applaud the Government for recognising the need to grant the professions in Singapore the option to incorporate. It is imperative that members of all professions in Singapore, including public accountants, are given the opportunity to incorporate. After all, accounting firms in jurisidictions, such as the United States of America, the United Kingdom, Australia, Canada, New Zealand and Hong Kong can opt to incorporate. At the moment in Singapore, however, accounting firms can only operate as sole proprietors or partnerships based on unlimited joint and several liability.

    OFFICIAL REPORT - 2000-11-13 · READ THE OFFICIAL RECORD

  47. I would like to thank Members for their interest in the subject, for their support and the many suggestions that they have made that will help us to implement Compulsory Education smoothly. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [RAdm Teo Chee Hean]. Bill considered in Committee; reported without amendment; read a Third time and passed. ADJOURNMENT TO A DATE TO BE FIXED Resolved, "That, at its rising today, Parliament do stand adjourned to a date to be fixed." - [Mr Wong Kan Seng]. ADJOURNMENT MOTION

    OFFICIAL REPORT - 2000-10-09 · READ THE OFFICIAL RECORD

  48. The Bill has made it clear that parents are responsible for enrolling their children in school and ensuring that they attend school. The responsibility of sending children to school still rests firmly on parents, and Compulsory Education will continue to uphold the tenet of parental responsibility. The Bill reinforces this position by making it clear that parents have this responsibility under the law. All the opportunities are there. The Government provides opportunities for children to get up to 10 years of primary and secondary education, and indeed well beyond that. And most children go on to do so: 85% to 90% of every cohort go on to post-secondary education in our ITEs, polytechnics and the universities, one of the highest percentages in the world. Fortunately, in Singapore, most parents recognise their responsibility to ensure their children receive a good education. Singaporeans do want the best possible future for their children and know that this is best secured through quality education. Compulsory Education builds on this sense of parental responsibility by setting out the minimum educational foundation, and I stress minimum educational foundation - and on this matter I agree with Members of this House - that every Singaporean child needs, and overlaying this with a formal set of procedures to reach out to parents of children who have not enrolled their children in primary schools. This sends out a strong signal to everyone, especially parents, that education is critical for their children to do well in the knowledge age. It also lends force to Government's commitment that as many young children as possible have an education to equip them for the future.

    OFFICIAL REPORT - 2000-10-09 · READ THE OFFICIAL RECORD

  49. At every stage, we have provided for counselling and assistance, so that parents have every opportunity to be given the necessary advice and assistance to register their children for school. Only parents who persistently refuse to send their children to school, despite elaborate and exhaustive efforts to counsel and help them, will be referred to the Director-General of Education to consider taking action under the proposed Act. Even at this stage, the Director-General can decide to compound the offence and impose fines of up to $2000. Only as a last resort, will the Director-General refer the case to the courts. I am sure that the courts will mete out penalties in a judicious manner so as to strike a balance between sending a clear signal to parents about this House's seriousness in wanting to enforce Compulsory Education, and the long term interests of the affected children and their families. So, the tools to give effect to the law have to be put in place. Enforcement using legal means is exercised only as a last resort when all else fails - when the Compulsory Education Board is of the opinion that the case has to be referred to the Director-General of Education. And even then, there is a gradation of legal measures. The Director-General can compound the offences and impose a fine, or refer to the courts which have a range of options in the penalties to be meted out. But I hope that we do not have to use these tools. The Ministry of Education has all along taken the position that parental responsibility in the education of their children must not be undermined. The recommendations of the Committee on Compulsory Education are consistent with this position.

    OFFICIAL REPORT - 2000-10-09 · READ THE OFFICIAL RECORD

  50. As Mr Simon Tay has said, despite our reputation for being a nanny state, we do not really know where everybody is all the time, and I think most Singaporeans will be glad to know that. The Ministry of Education will advise the parents to register their child for a place in a national school. If the advice is not heeded, these cases will be referred to the relevant organisations, such as Family Service Centres run by voluntary welfare organisations, for counselling and assistance. They will follow up to counsel families, help them deal with their root problems and persuade the parents to send their children to school. If all counselling and assistance efforts to convince these parents to register their children for schooling fail, the cases will be referred to counselling officers who had not handled the cases previously, to bring to the parents' attention the legal consequences of non-compliance, and to persuade them to enrol their children. If the parents still refuse to send their children to school, the Compulsory Education Board will examine their case and, if necessary, call them up for a formal hearing to determine what further action should be taken. The Board may then decide whether to refer the cases back for further counselling or to the Director-General of Education. It is not intended for the Board to be heavily staffed for the occasional case that may arise and which it may have to deal with. Instead, the Compulsory Education Board will be able to call upon the resources of the Ministry of Education, the Ministry of Community Development and Sports, voluntary welfare organisations and other organisations which will be able to provide counselling services.

    OFFICIAL REPORT - 2000-10-09 · READ THE OFFICIAL RECORD