Ong Kian Min
Singapore
“Sir, on the first case, as I said, my resident approached me at the MPS. I wrote to the Traffic Police to appeal for him. I am sure the Traffic Police would look into that appeal and reply to that resident accordingly. The two other cases were not based on hearsay upon hearsay because those were personal encounters by these two friends.”
“My point in raising this is: among the motoring community there is this fear, whether it is real or perceived, that they should not seek medical treatment immediately in case the Police were to issue them with a summons for careless driving.”
“Unless the motorcyclist is so seriously injured that he has no alternative but to be taken to the hospital by ambulance, he would steer clear of the hospital so as to avoid the fate of being reported against and penalised.”
“They are counted as having taken two HDB loans. They are deemed to have had their two bites of the cherry, but is the quantitative number of bites or loans a fair measure of the amount of subsidy enjoyed?”
“Still on the matter of languages, I am of the view that schools should promote more actively the learning of Malay or Bahasa Indonesia by non-Malays, the reason being that Indonesia and Malaysia are our immediate neighbours.”
“And are there more efficient ways of apprehending errant litterbugs? NEA raised the composition fine for first-time minor littering offenders from $200 to $300 last year. I would like to ask: can and do the foreign workers that have been caught littering pay up this fine?”
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“Liberalising the public bus services can help raise service standards and serve commuters better. Maybe even Virgin is interested and wants to bundle with its mobile phones. This would be in line with the liberalisation of services in other sectors. In today's economy, when virtually everything from legal services to telecommunications to banking, and even the provision of basic utilities, are opening up to promote competition and consumer choice, I am not convinced that more players cannot be introduced to provide better public bus services. This must be one of the last bastions of protectionism. There is not even direct competition between TIBS and SBS as they serve different routes.”
“Now, how many passengers actually need to go from one end of the estate to the other end? SBS told me, "actually not many". I think residents are more likely to want to travel to an adjoining precinct if there is something like a neighbourhood centre or school there. Sir, I think this goes to show that it is not one-size-fits-all and we need local operators who are more familiar with the conditions, with the needs of the residents, to be able to provide a better service. I would like to suggest that we reorganise feeder services into smaller geographical regional hubs and allow for more competition so that new methods of running a service for that area can be implemented. If an entrepreneur is convinced that he can find lower cost solutions that can meet the needs of the commuters and is prepared to put his money where his ideas are, why not let him try it? If we worry that he may not be viable and fold up, thus causing disruption to commuters, should not the same worry also apply to electricity suppliers and telecommunication providers? If we worry about him cherry-picking the profitable routes and neglecting the less viable ones, then may I suggest that maybe the incumbent operators can be given a call option to buy over the route at a pre-determined valuation. So if the entrepreneur takes the risk, proves that the route is viable, the commuters would be happy and he would be happy to be rewarded for the risk taken. This is already happening in other industries, where the nimble small boys try it, prove that the idea works, and cash out by selling to the bigger boys. I think we should liberalise and allow new players, with creative ways of running a service to come in to compete.”
“45 am feeder, which will bring him to the station to catch the 8.03 MRT train. Second, I have an RC Zone, whose residents have been complaining, and I have been complaining, for many years that the SBS feeder bus service for that area is bad and inefficient. At times they have to wait 15 minutes for the bus to arrive, and then it goes on this circuitous route before reaching the bus interchange. There has been little improvement over the years. The feeder bus fare is 65 cents. If you take a taxi from that zone to the bus interchange, it costs $3. So, if five persons come together and share a taxi, they would have broken even. Of course, it is difficult for them to get five persons together at the same time. But if you operate a mini-bus and make small loops between the interchange and the zone, picking up, say, 10 passengers at a time, I think you can make money. The math is quite straightforward. Taxis are considered expensive to operate. But if a taxi can charge $3 per trip, and the mini-bus collects more passengers, it should do better. Would not it be better to have buses of a suitable size and making smaller loops, instead of a big bus making a long circuitous route? Third, SBS runs its services in a hub and spokes manner, the hubs being the bus interchanges and MRT stations. This looks good on paper. This assumes that every commuter wants to take a trunk service or the MRT to get out of the estate. But how about intra-town travel? Could not a neighbourhood centre be a hub? Could not there be more mini-hubs within the estate? Fourth, SBS started intra-town feeder services that basically connect two feeder services together. They bring commuters from one end of the estate to the centre and it goes on to the other end of the estate.”
“Sir, I would like to take the 3 cuts together, but to tackle the 2nd one on bus services first as this is more important, in case I get "guillotined". Sir, as MPs, when we do our rounds of block visits and meeting residents, one issue that attracts a lot of complaints is bus service. Currently, there are only two companies, SBS and TIBS, providing scheduled bus services in the housing estates. Whenever there are requests for new routes, the common reason for rejection by SBS is that the proposed route would not be commercially viable. But who determines that the proposed service would not be commercially viable? It is SBS, based on its own, and perhaps inefficient, or archaic method of operations. Is the SBS way the best, or the perfect way of doing things? Surely not. Surely it can be improved. But how do we improve it? Can someone else with a new idea, a different mode of operations or business model, come up with a better way of running that service? I am quite sure it can be done. Please allow me to offer a few suggestions as a layman. First, why should feeder bus services be operated by SBS? I would suggest that the public bus service be restructured into two or more smaller networks. SBS can operate the trunk services, and be like NOL, the main shipping liner calling on hub ports and have smaller vessels feeding to it. In shipping, it does not make commercial sense for a main liner to run feeder services. Smaller feeder vessels can be operated by smaller operators who are more familiar with the local conditions. This can be done without much loss of efficiencies or integration. In any case, there is not such a high degree of integration in the first place between feeder, trunk and MRT services. It is not as if a passenger can time it so precisely to catch the 7.”
“Apart from the imposition of the ERPs, may I know whether the Ministry is considering other options such as constructing double-decker roads or flyovers similar to the one along Telok Blangah Road and Keppel Road, to ease the traffic jam, instead of imposing ERPs.”
“Sir, I share Mr Chay's concerns. With the change in motor vehicle taxes, the PARF rebate is now pegged to the ARF actually paid on each car. I would like to ask if the Minister could clarify whether this new way of calculating the PARF rebate applies to existing motor vehicles which were registered before May 2002. When an existing car registered before May 2002 is scrapped, is the owner entitled to PARF rebate, calculated based on the car's OMV, which was the case at the time when he bought the car, or is it based on the car's ARF? Sir, the move to reduce ARF and excise duties and extend ERP is a double whammy for existing vehicle owners. Apart from having to bear a drop in the value of their cars, they would also be subject to higher usage charges. At least 43 gantry points have been set up, the latest addition is at Dunearn Road. What is the Ministry's plan for the roll-out of ERP and in doing so, will it take into consideration its impact on existing vehicle owners? Encik Yatiman Yusof: Mr Chairman, the car tax structure has been shifted from the burden of tax from ownership to usage. As the vehicle population grows, there is a strong possibility that our roads would be more congested. I could foresee more ERP gantry points being built. Many motorists have discovered that despite the imposition of ERP charges, some highways, eg, the CTE, ECP and the AYE, are still congested at certain times of the day. In addition, some fringe roads have also experienced increase in the volume of traffic. What is the prospect of these fringe roads being imposed with ERP in the next five to ten years? What can be done to reduce the burden of usage on motorists?”
“Sir, the port is Singapore's life line and supports many local businesses. I share my colleagues' concern that any decrease in PSA's local freight volume will have a serious impact on the other related sectors in Singapore. Many people were therefore cheered when they read the headlines on the back page of the Straits Times of 7th May 2002, which states, "PSA stays buoyant, handling 39% more containers in April". This appeared remarkable. But a closer reading of the article revealed that the pronounced jump was, to a large part, due to the 182% surge in traffic handled by PSA's overseas terminals. Although volumes at its Singapore's terminals grew 8.6% in the first four months of this year, PSA handled 15.52 million TEUs for the whole of last year, a fall of 8.9% over the year 2000. Latest figures show that PSA is handling 1.4 million TEUs in Singapore, ie, two thirds of its total, and 740,000 TEUs abroad, representing one third of its total. I would like to ask the Minister whether PSA, by having operations in various parts of the globe, would divert its management's attention away from the local port operations. Overseas volume represents one third of PSA Corp's total, and is growing rapidly. If other ports are more profitable to manage or have more potential for growth, would management focus more on these high growth areas? How do we ensure that PSA is committed to managing its Singapore's port operations well? Would it not be better for PSA to be split into two or more separate companies, like Singapore Power, one to concentrate on international business and the other to focus on management of the local port? Or should we introduce competition like expanding Jurong Port to take over part of the container operations in Singapore?”
“But I would like to ask the Minister whether an expiry date should be imposed on the PR status.”
“Sir, I would like to make two points regarding permanent residence. The first is that I have come across cases where permanent resident status was granted to one spouse and not to the other. This creates a problem for them, as the family unit has no certainty in making Singapore its permanent home. If the wife is working here and the husband is left behind in Shandong province in China, what do you think the most likely outcome would be? One outcome is that they make plans to move on to the United States or some other country, and we lose them eventually. The other possibility is that the husband finds another woman there and divorces his wife. Now, what business do we have in breaking up families? If for some reason, we cannot grant the other immediate family member PR status, then I think we should not grant that applicant PR status in the first place, as he is not likely to be here permanently without his family. In not allowing all the family members to reside here, we force him to use this place as a stepping stone to something else, and this defeats our purpose and our objectives. My second point relates to permanent residents becoming so permanent that they do not want to accept citizenship. Many PRs who have been PR for many years do not actually want to be Singapore citizens, unless and until something terrible happens to their home country. There are many reasons for their decision. The main reason, I suspect, is that they enjoy the best of both worlds, and can always take that step at a later stage. In the meantime, they remain mobile and continue to enjoy the rights of citizenship in their home country and the many benefits of being a PR in Singapore to the envy of Singaporeans. I know permanent residence means they can reside here on a permanent basis.”
“Sir, after we have come up with an innovative idea, the next step is to explore the full commercial benefits of the innovation. We have quite a number of internationally renowned research institutes. Let us say our R&D laboratories come out with a new invention and they are looking to sell this invention to someone who sees the potential and who can realise the full commercial value of the product. If an innovator approaches a Singapore company, even a GLC, how much can a local company, with its limited market reach, offer for it compared to an American or international MNC, who has the marketing clout and international brand to push the sales? If it comes to a bidding war to buy the invention, of course, the MNC, with its access to hundreds of millions, if not billions of consumers worldwide, would be prepared to pay a higher price and it would be in the commercial interest of the local innovators to get the best deal for themselves. Where does that leave our innovation effort? Is it to do research and come out with good ideas only to be taken over by large foreign companies? To complement and support our efforts in innovation, we must also build up or acquire strong marketing companies with strong brand presence in the international marketplace. We should pay more attention to this aspect.”
“Sir, Mrs Lim Hwee Hua mentioned yesterday that unglamorous old economy industries might feel left out of the Government's attention, an issue that the Senior Minister of State has answered. I have a similar concern about new economy sectors in that when Government policies, investment promotion efforts and resources are directed towards certain new growth areas, such as R&D, life sciences, chemicals and infocomm, could we inadvertently let other promising sectors slip by as they are not on our radar screen? For example, where were we when the first wave of Internet companies took off in the US? Innovators and entrepreneurs who are in the ignored sectors feel discouraged because what they do is not fashionable. I do not think our Government agencies actually brush them away. But they do feel that insufficient interest and encouragement are given to their endeavours. While we must remain focused, I would like to ask how our new growth areas are determined and arrived at. And how can we be sure that these darlings of today will achieve their potential in the years ahead? What if we are wrong? Can we have some ways to catch all and nurture creativity and tap bright innovative ideas in as many sectors as possible? Will we be able to catch the next big wave as early as possible? We should develop more creative talents. To start the creativity revolution among Singaporeans, we should set aside more money and put in place an ongoing programme to create just for the sake of creating, and not to be driven initially by business and commercial considerations. The business people can come in later to see how to make use of the innovations and inventions that have been created and make commercial applications out of them.”
“I just want to ask the Minister whether he could look into this matter and encourage more people to take risk and contribute to build up the amenities in Tuas. The Chairman: Order. It is 7.00 pm. Thereupon Mr Speaker left the Chair of the Committee and took the Chair of the House.”
“I understand the Ministry of Finance has a ruling that the maximum term of tenancy with renewal is 9 years. After the limit of 9 years, the tenancy cannot be renewed but must be opened to tender to secure the highest price. This can be very unfair to the first operator who moves in to set up the eating house. He has to take on enormous risk by starting the eating house from scratch with little business initially, as the area is still under-populated. He would probably suffer losses for many years and would not be able to break even, much less to recoup his initial capital investment. He watches the factories ---”
“Sir, my cut is in relation to the working environment at Tuas. I was going to say that compared to Jurong, which has matured over the years, Tuas is even worse than that. But after hearing Mrs Yu-Foo, I want to share her concern and elaborate on the problems faced by residents and workers in Jurong as well as Tuas. I would like to ask the Minister what plans does JTC have to improve the working environment at Tuas, and make Tuas a more attractive workplace. I am on the board of directors of a couple of companies situated in Tuas. Our experience has been that most people are reluctant to work there, even those who have been unemployed for a few months. When people call up in response to job advertisements and hear that the company is in Tuas, they usually give some reasons for not wanting the job, or they simply hang up the phone. There is an urgent need to improve the environment and amenities at Tuas to encourage workers to join companies there. Tuas is inaccessible, except by private transport. Taking a taxi from Boon Lay MRT station costs more than $10. The public bus service is poor and most companies have to engage their own bus service to ferry their workers to and from the MRT station. This discourages overtime work, as once you miss the company transport, the cost involved to get home is pretty high. There is also a dearth of banking facilities, recreational facilities and eating houses in the area. The roads are dusty. And why are palms planted, instead of rain trees? Palms may look good but provide little protection from the sun, which makes the place feel as if it were 1-2 degrees hotter than the rest of Singapore. Sir, while I still have some time, I would like to also talk about eating houses in Tuas.”
“I am not convinced that our land cost and labour cost are that much more expensive compared to Johor Baru, to account for the current price differential. I would like to ask whether there are any indirect costs or inefficient ways of doing things that could and should be reduced.”
“Sir, the General Manager of a US-based retail chain that used to operate in Singapore shared with me that it was expensive to operate in Singapore, not because of the high rental or the high labour cost, which were manageable. According to him, the prices of the merchandise on our supermarket shelves were high because these prices were set by the distributors. From time to time, he would buy in bulk direct from overseas and bring in himself a few container loads of, say, tissue paper, and offer this at a very special price to the customers, and still make profit because his purchase cost was low. But for most of the items on the shelves, he had to rely on local distributors who set the price which could be high, as compared to the price he would be able to pay if bought in bulk direct from overseas. But he could not buy all the items he needed from overseas directly as he did not have a critical mass with just three outlets in Singapore. Further, if he bought too many items on his own, the local distributors would be upset and would boycott him by not supplying the other things that are needed to fill the shelf space. I am not suggesting that the local distributors and importers are making huge profits by controlling the supply and artificially inflating prices. But could there be inefficiencies in the distribution chain or the system which could be reduced to bring about a reduction in prices? Mr Tan Soo Khoon spoke about parallel importers who brought in cars and this brought down car prices on the whole. Can steps be taken to encourage parallel imports of other products and to reduce the cost of distributing these products locally? Many of our necessities can be bought at lower prices in the supermarkets across the Causeway.”
“Sir, under the present economic climate, many larger companies, including GLCs, are refusing or delaying payments to their suppliers and contractors, most of whom are small and medium local enterprises. They use various delaying techniques and cite all sorts of reasons, such as defects and inferior quality of the goods sold. These small suppliers and contractors, in turn, face cash-flow problems as a result of the payments not coming in as anticipated. They cannot afford to take legal action as it can be expensive and long drawn. If they complain, they risk losing that customer forever. I think there is cause for concern, as many of these SMEs are sound and viable long-standing businesses with prudent management. But they are suffering a credit crunch now because their customers are delaying payment. They are not asking for venture capital funding, but would like to seek some help to tide over this period. I would like to ask the Minister whether any Government agency is looking into this and whether steps can be taken to alleviate this problem faced by our SMEs, perhaps to factor their receivables and grant them credit based on the invoices and purchase orders that they have in hand. 6.45 pm”
“Despite the lure of millions of dollars to sell their company and a golden opportunity to move to the US to work with the big boys and their hi-tech equipment, these Singaporean toy makers firmly refused. Relocation out of Singapore was not negotiable. They are firmly rooted in Singapore for now. Mr Ban, the founder, told me he would miss his laksa, char kway teow and his friends too much. Now, this US multinational has secured a licence from our local start-up to jointly develop and market the toy and its derivatives worldwide. This is something quite unheard of - that a Singapore company could license its toy technology to a US MNC. I guess we will be hearing and seeing more of this little guy. But more importantly, whether through remaking Singapore, whether through restructuring our economy, changes to our tax system or financial incentives, we must create a society that can produce, support and nurture winners like this. There are still many who believe in Singapore. Adversity will drive us to seek out new frontiers. We still have many gems, and there will be success stories coming from among us. We must not lose heart. Sir, on that note, I support the Budget Statement.”
“Within one month of launching their sales on the Internet, that was about four months ago, they caught the attention of a major US toy multinational. Even George Lucas of the Star Wars series got to know about this toy and its Singaporean creators because it is a system or platform of toys that would see no end in its potential line-ups. What makes it so special and creative is the ball and cavity joint that allows for many degrees of movement that would see endless possibilities in terms of poseability. The US experts think this toy system can become a legend comparable to Lego. This toy was created in a typical garage-type start-up - in a shophouse in Katong off Mountbatten Road. The ground floor is used as an animal shelter. There were four dogs and nine cats when I last went there. Take a step into the shophouse and the smell of dog food and animal pooh was unmistakeable. But when I ventured up the stairs, the whole of the second floor was a different world. Stacked from wall to wall was a multitude of toys. Thousands of them of all varieties. This is a four-person Singapore start-up, set up with the vision to create toys. Seeing the "Alpha Male" and its potential, the US toy multinational and toy fanatics all over the world were astonished to find a creative toy company in Singapore. To them, the toy universe comprised only of North America and Japan. The American top executives did not know where Singapore was. Singapore was not on their map. Yet, the creation was so good and so enticing that they were prepared to fly half way round the world to come here to meet and work with our local chaps. The Americans even offered to buy the Singaporean start-up. But the founders are staunch Singaporeans.”
“The front page headlines of The Sunday Times of 28th April 2002 stated: "Al-Qaeda `may set up base in South-east Asia'". When I went to a constituency function that morning, some residents were concerned that such headlines would cause alarm to prospective foreign investors. They asked whether foreign investors would be deterred from investing in this region. One of my grassroots leaders told me that he knew of a number of American MNCs who had decided to divert their investment elsewhere and others who had decided not to proceed with subsequent phases of their planned expansion here because of perceived regional security issues. I hope in the course of this debate and the Committee of Supply, we would have an update on how we are doing in attracting foreign direct investments and whether those foreign investors who had committed to invest here had deferred their investment plans. Sir, many Singaporeans, both professional investment analysts and ordinary man-in-the-street, are disheartened that we are losing out while Malaysians generally feel upbeat about their economic performance and prospects because they had scored a number of successes against us recently. We need success stories. We need more of the likes of Creative Technology and Sim Wong Hoo. We need inspiring stories to boost the morale and spirit of Singaporeans that it is not all doom and gloom, and that there are gems among us and we can do it. A couple of months ago, I was introduced to an unknown local company that can be a real gem. First of all, let me declare that I have no pecuniary interest whatsoever in this company. This company, Stikfas, creates and makes toys. And this is "Alpha Male" - created, designed and manufactured in Singapore.”
“After all, their needs are met and they might rather use their time for leisure pursuits. Tax cuts are important. But I share Dr Tan Cheng Bock's concerns that we should also focus on creating the opportunities that encourage the rich to invest their tax savings in Singapore. In the early 1980s when Margaret Thatcher cut British personal tax drastically, instead of investing in local enterprises, high income British earners used their tax savings to buy their second home in Spain and south of France. Third, dividends. Prudent companies generally only distribute 10% to 20% of their annual profits as dividends. But they pay tax at the corporate tax rate on 100% of their profits. I therefore wonder why we should want to tax those who receive dividends, which represent only a small percentage of total profit. Can we make some allowance by granting tax credits for certain categories of people, like retirees whose source of income is the dividends from their investments? The returns on the investment will encourage the retirees to hold on to their investments and not to speculate by trading in stocks. This will also encourage CPF account holders not to put all their money in housing but keep some for investment in equities. Taxing dividends at the corporate tax rate may also convince more companies to have their domicile outside Singapore. Sir, favourable income tax alone is not sufficient to attract expatriates to relocate here. Similarly, tax cuts are only one of the measures to attract local and foreign investments. We must, first of all, have the conducive business environment and opportunities for people to invest in. Security and stability are key considerations for foreign investors.”
“They are therefore disappointed with the Budget which they see as one that focuses on the problems of the rich - their tax bills and car prices. With the 2% increase in GST and income tax reduction, the common grouse is that this Budget is for the higher income group. While the change in fiscal policy is for the good of the economy structurally and in the longer run, how are we meeting the short and medium term problems the average wage earners face? I would like to raise three specific issues about this Budget. First, Electronic Road Pricing. The sudden change in car ownership cost places existing vehicle owners at a disadvantage. The change in scheme benefits those who are buying new cars. Existing owners with cars that are more than five years old suffer a drop in the resale value of their cars because the price of COE is expected to drop with the increase in the number of COEs and the drop in new car prices. The expansion of the ERP scheme will hit all vehicle drivers alike, but the existing owners would not have the benefit of the upfront savings. An expanded ERP will also place a heavy burden on the small time businessmen and the salesmen who have to be on the road a lot of the time. Second, the GST increase. The 2% increase in GST is seen as helping to balance the Budget after giving the rich taxpayers their tax savings. While in absolute terms the higher income group will pay more in GST as they consume more, in relative terms, the indirect tax is regressive. This will widen the economic gap between the top and bottom tiers of our people. High tax rates can be a disincentive for people to work hard. But low tax rates can also give the higher end of the labour supply curve more disposable income, and this may result in people not wanting to work so hard.”
“But unlike Mr Inderjit Singh who called for a general reduction in prices and adjustment in asset values, I believe we have to create an environment that allows for a natural rejuvenation and offers alternatives for varying needs. We still have successful companies that require modern infrastructure, facilities and services and are willing to pay for them, and others who require a lower cost environment to operate in. To cater to these differing demands would require a relaxation of rules, less centralised control, more privatisation and devolution of ownership and responsibility to private hands. Right now, we have a pretty rigid model for the progression of our young. According to the model, they are to study hard, get good grades, go to university, if not, then to polytechnic, and if not, then ITE, and it is not the end. After graduation, they are expected to get a good job, get married, buy a new HDB flat from the Government and have babies. After some years, property prices rise, they sell the flat and use the capital appreciation as down-payment for a larger flat, and so on and so on. But what if this beautiful order gets shaken and goes out of sync? Is there a fall-back position? Sir, we must create some flexibility in the system. In times like these, when jobs are in shortage and acquiring the right skill set is a problem for some, we have to step in to help those who are caught in a bind by the sudden change in economic climate. They have suffered a massive cut in income and have no alternatives to turn to. They look forward to some help, some breathing space to regain their strides and start life anew. Many of those affected are in their middle age, too old to start from the bottom, too young to retire and too weighed down by financial commitments.”
“This has not only led to an increase in the cost of living but also left behind few low-cost alternatives. And this has also led to the problems of high land prices and high cost of doing business in Singapore that Mr Inderjit Singh spoke about yesterday. This strategy worked well in good times when people were earning decent incomes and enjoying increasingly affluent lifestyles. But when they lose their jobs or have to suffer a drastic pay cut, they find it very difficult to make ends meet on a household budget of a few hundred dollars a month. The basic costs are still there. They still need to feed themselves and their children, repay their housing loans, pay for their utilities and service and conservancy charges. There are no low-cost alternatives to many of the things that we need today. There are very limited ways to bring our costs down to a really low level. Even if one retreats to Sembawang, Lim Chu Kang or Pulau Ubin, one cannot lower one's costs substantially. Take another example of Raffles Place. Cheap hawker stalls are now a thing of the past. Lau Pa Sat and Boat Quay have gone up-market. People who work there are left with little choice but to accept the higher cost alternatives, although they may still enjoy the improved ambience and surroundings. In other major cities, including big and infamously expensive ones like Tokyo, I find there are alternatives to meet varying levels of affordability. I remember visiting Tokyo some years back on a shoe-string budget and was able to find very local, relatively inexpensive food stalls in the alleys just off the main thoroughfares of expensive precincts.”
“Mr Speaker, Sir, Singapore is a city state. Unlike other big cities, like New York, London and Shanghai, we do not have a natural hinterland that can act as a buttress or conduit for our city. The cost of living in a city can be very high compared to the more rural areas. But many still want to come into the city to live, work and seek their riches and fortune. And those who cannot make it in the city and find it too expensive to live in, will move out to other areas. There is a natural process of rejuvenation. Take New York, for example. Garments used to be one of its key industries but when it became too expensive for textile companies to remain in Manhattan, they moved out and other industries, such as financial services, took their place. Those who cannot make it have moved out and new industries, new players, have moved in to continue to make the place buzzing. The city rejuvenates itself. Throughout the years, Singapore has been able to restructure its economy. We have transformed from an entrepot trading centre to an international business hub and diversified from labour intensive manufacturing to wafer fab plants and other hi-tech industries. However, this has resulted in some segments of our population finding it difficult to make the adjustments to upgrade. And, in our case, we are uniformly expensive. Over the years, we have relentlessly upgraded our environment, infrastructure and services to make life more comfortable for our people. Our bus companies have introduced air-conditioned buses; road-side stalls are done away with; hawker centres have been replaced by air-conditioned food courts; wet markets replaced by supermarkets, like NTUC Fairprice and Cold Storage.”
“Will the Minister of State not agree with me that the difference between the step-down facility and an acute hospital is one of subsidy, and will the patient not be put in a position where he is forced to take up an alternative provider of care where he does not enjoy any subsidy from the state in a situation like this?”
“Community bonding, mutual understanding and respect are pre-requisite to peace and prosperity. Singaporeans have placed their trust in the Government, just like the patients pinning their hopes on their doctor. In this case, there is no panacea for a quick cure. We have to work together to regain our strength and health, even if it means swallowing the bitter pill, even if it means suffering some short-term pain. We have taken good care of ourselves in the past. Our body constituents are strong. We will find the best prescription to fight this bout of attack. We will develop a greater resilience and emerge stronger. Sir, on this note, I support the motion.”
“Instead of both trying to compete with each other, a strategic partnership can be forged whereby bigger organisations provide the environment for solution deployment while the entrepreneur exercises his innovative spirit and creativity. But, Sir, success cannot be achieved based on economic factors alone. We also need to strengthen the non-economic factors or "soft" infrastructures that support our growth and development. Political and social stability top the list in the factors affecting foreign investments. In our multi-racial, multi-religious society, the underlying social fabric is like a beautiful hand-knitted sweater. Inevitably, there will be a few frays and loose ends. If we keep tugging at the loose thread and continue to pull at it with no regard to the consequences, we run the risk of unravelling the needlework and destroying all that we have built painstakingly over the years. In our own way, we have strived for unity in our cultural and religious diversity. As Singaporeans, we know that regardless of race, language or religion, we share the same destiny. This is particularly so in a small country like ours. In a bigger country, we can stay a lifetime in Chinatown and not interact with the other communities. A prominent Chinese businessman who runs a business that is worth hundreds of millions of dollars in a large neighbouring country told me recently that racial relations in his country are good and will not pose a problem in future. He sends his children to Chinese schools and later to overseas universities. He does not have to do business nor come into contact unnecessarily with the other races. He has enough space to operate, mind his own business and survive. But in our small country, with a closely-knit society, we are one big community.”
“I recall DPM Lee saying our tap water tastes good and he misses drinking our water when he is overseas. But we use the French technology and they use us, our good reputation, our good brand name, to pitch for water projects in China. To convince the Chinese that their technology is superior, this French company told them that the Singapore Government is using it and therefore it must be good. Sir, our good brand name goes a long way. It is like you want to buy this PC. You think this is a good PC? It is 'Intel inside'. You think Nestle has good SCM and ERP? Nestle runs SAP. We do not leverage sufficiently on our top class brand name and we become a showcase for foreign technology. I think it is about time that our local enterprises went out and say to prospective customers that, "Yes, I have a reference site in Singapore. Come and evaluate it." That reference site can be more crucial than the monetary grants and tax incentives that are dished out. Those who love gardening know that to grow a rare bloom, one needs to give special care and attention to the seedling. Sometimes you need to find a space to erect a hothouse and allow the seeds to germinate and grow. Occasionally, grafting and hybrid help to reproduce better quality variables. Creating innovation is like cultivating the rare bloom. Bigger organisations, whether GLCs, statutory boards, Government agencies or bigger local boys, can play a crucial role in partnering smaller local enterprise to enable innovation to take root in Singapore. This can be a win-win proposition for all as they have distinct complementary advantages but share the same global aspirations.”
“Mr Inderjit Singh mentioned yesterday that we should set up a string of technology and research centres around the world where talent is found instead of having just one big centre in Singapore. I would like to disagree with him. I would like Singapore to be an even bigger laboratory where R&D spill out of the confines of R&D centres into the field and the streets - Singapore as one big integrated field laboratory for all ideas from all over the world, a proofing ground for innovation and ideas. Let it be known that whoever in any part of the world who has a bright idea can come to Singapore and we have the environment to let him or her try it out. Tell all the talents out there in the world that this is the place to be in. After all, it has been said that we are a good place to attract pharmaceutical companies to try out their drugs here because we are a cosmopolitan city with many races. The same is true for other industries. We have it all here in a small concentrated place. So if someone has a new idea about using natural gas, we should let him try out on a few of our buses. If he has innovation on how to light up our HDB common corridors more efficiently, let him deploy it in some precincts. Of course, we have to structure a business relationship where we have an equity stake and benefit from the resulting technology and anchor that technology in Singapore for commercial deployment in other parts of the world. Some years back, a water specialist from a French water treatment company told me that we were very particular about certain properties of our water and that made it very expensive to process compared to our treatment processes. But the water is very good. Everyone knows Singapore has very high quality tap water.”
“Cultivating innovative ideas In this regard, the Government has done much in trying to create an environment conducive for innovation. Individual risk-taking is encouraged and failures are not looked down upon. The various economic agencies, the universities and the research institutions are being restructured to meet the new challenges. Local enterprises have tapped various Government sponsored schemes to their benefit. Funding, grants, tax incentives are in general not an issue for those who have a good idea. But for start-ups, what is really lacking here is a first "reference site" where the entrepreneur can use to fine-tune his ideas for commercial deployment. In a larger, more competitive economy like the US, there are hundreds of competitors out there in any industry, each of them willing to try something new, with the hope that it is a killer application and wipe out the competition. It is not a problem knocking on doors and finding someone willing to give a new idea, a new method, a go. But in a small economy like ours, this must be nurtured. The budding talents need a good break in their home ground to build a track record or reference sites before they can hope to debut and achieve success in the competitive global stage. We need to engineer some form of demand-side innovation. Sir, Singapore has been described as clean, efficient, safe, and lately, even a funky place. In the global competition among city states, branding and positioning are crucial to attract the right talents and businesses. In addition to the above mentioned descriptions of Singapore, I think we should put ourselves on the map as "the laboratory", the place to experiment.”
“I know there are a few laudable examples of drop-outs who made it big. Their success stories grab media attention and create an impression that university education is a hindrance to the development of entrepreneurship. Perhaps, when opportunities are aplenty, it is those with less formal education, those who have to take bigger risks, who have found alternative routes to success. But in today's competitive world, one must not disregard the acquisition of knowledge and skills to have a fighting chance. The Managing Director of an MNC told me that the most creative person in his company is the Chief Technology Officer who has doctorates in a number of disciplines and who is willing to think out of the box. With his wealth of technical knowledge and his years of practical experience, he is able to come up with very creative solutions to complex problems, something that a younger person, with less technical know-how and less training, would not be able to do. While we celebrate the success stories of instant entrepreneurs, we must not forget the tens of thousands of scientists, researchers and developers who toil away and churn out patents by the millions and help to sustain the technological development of the largest MNCs of this world and make these successful MNCs what they are today. Sir, there are no short cuts. The days of easy money are gone for now. We must be realistic and go back to the basics, to the virtue of work and enterprise. Developing strong local enterprises Although MNCs have and will continue to play a critical role in our economic development, we have to pay more attention to developing local enterprises. It is time that we developed our own indigenous proprietary technology.”
“A manager of an MNC shared this observation with me. He said that while Singapore workers are hardworking, they do not have an inquiring mind. When a sophisticated high-tech piece of equipment is installed, our workers are generally quite contented to be told how to operate the equipment. They do not have the desire to go beyond that and try to fathom the "whys" and the "hows". They will take instructions on how to operate it and, if something goes wrong, the company has to call in the foreign experts. It is like buying a car and learning how to drive it and not wanting to open the bonnet. If something goes wrong, call the workshop. I know today's automobiles are so sophisticated that there is nothing an amateur mechanic can do if it breaks down, but I hope we know at least how to change the tyre. We do not need to acquire the whole technology. Let me cite this example. I know a Norwegian. He is spending a lot of his time now in Singapore. For many years, he was an engineer in Norway installing and maintaining pumps for oil companies in the North Sea. These pumps are part of a larger system. He just concentrated on the pumps. But he was willing to stick to his area of expertise and, in the course of his many years of experience, he found out which areas in the pump can be improved for better performance. Today, he owns a number of patents and he is here selling his own pumps to our GLCs. As we move up the economic ladder and progress to the more unstructured "innovation" state, we need to be thinkers and not just mere doers. We need people who question the given and seek new ways to improve. We need to breed more risk-takers and foster an entrepreneurial spirit. Sir, there seems to be a misconception that entrepreneurs are necessarily school drop-outs.”
“Whilst it is important for us to build first-class infrastructure and facilities and adopt the world's best practices, we have to be mindful of the cost burden that local businesses have to bear which, in turn, would translate into higher prices for the consumers. Sir, to overcome this, we have to attract and retain good businesses to our shores which will in turn generate the purchasing power to support other local businesses and make this a thriving place. People - the differentiating factor How then do we achieve competitive differentiation in this global environment? Others can import the same technology and talent to build the same or even better factory, airport and seaport. It must be the people factor that is our strategic resource. Responding to the challenges we face means that we, the people, have to change our mindset. Allow me to cite an example. A couple of years ago, I did some renovations to my house and wanted some lighting points fixed up. The main contractor, who drove a Mercedes Benz, asked me to show him where I wanted those lighting points. So I went round the house with him and pointed out the spots. The next day, another man, the electrical sub-contractor, came round in a Honda Accord and told me that he understood I wanted some lights to be put up and he asked me to show him where. I did that. The next day, two men came on a 50cc Honda Cub with Johor number plates and told me that they were there to do the job and asked me to show them where I wanted the lights to be installed. Knowledge acquisition and skill development Sir, the first word in "KBE" is "knowledge". We cannot merely be brokers and middlemen in a knowledge-based economy. Our workers, our people, must change their mindset and their attitudes. We must want to acquire knowledge.”
“We can do with a healthy dose of the "siege mentality". We, like the employees of successful global companies, should be driven with a sense of urgency and purpose. We must not be complacent. Microsoft, the No. 1 PC software company, has been described to behave as if it were No. 2 and trying to play catch-up all the time. Nokia succeeded in overtaking its much larger competitors who had the first-mover advantage. Now that Nokia is No. 1, it fights even harder to stay ahead. These companies all know that once you slip, you can go all the way down and never return to the days of glory. Challenges not unique The challenges Singapore faces are not unique. I would like to add to what Assoc. Prof. Koo Tsai Kee said yesterday about Hong Kong with my own personal observations. I was in Zhuhai, China, last week. I took the ferry to Hong Kong on Good Friday to catch the SQ flight back home. Going the other way were thousands of Hongkongers leaving Hong Kong for mainland China. The ferries were packed and we had to fight through long queues of people waiting to buy tickets. Hongkongers go to Macau, Zhuhai and Shenzhen by the hundreds of thousands everyday for dinner, movies and other forms of entertainment. On a bad day, one has to stand more than one hour to clear immigration at the Hong Kong-Shenzhen border crossing. Things are cheaper across the waters. People go where they find better value for their money, especially in these lean times. When money was aplenty, people found it inconvenient to travel a little distance, just to save some money. But, now, where they do not make thousands of dollars in one day just buying and selling shares, or hundreds of thousands of dollars buying and selling properties, every dollar counts.”
“Mr Speaker, Sir, thank you for allowing me to join in the debate. Today is the fourth day of this debate. As more than 40 speakers have already risen to speak, I would just like to focus on a couple of specific issues. I support the Motion of Thanks to the President moved by Mrs Lim Hwee Hua. Competition is global In his Address, the President has highlighted the immense challenges we face and the impact of global competition. Indeed, competition is global and is coming not just from China and the region. The World Economic Forum recently reported that Singapore's global growth competitiveness has slipped two notches from second to fourth placing. For many years, Singapore has been holding the No. 1 or No. 2 position, and our good rating has been well publicised. But little has been said about the drop in our ranking this time round. For the first time, we have been overtaken by Finland and Canada. Fast closing up behind us include Australia, Norway and Taiwan, whose rankings have improved by three to nine positions within one year. The need to stay ahead What we do to tackle the present challenges determines our future. Do we despair and lose hope, do nothing and allow others to overtake us? Do we dismiss it and be content with the slack, thinking that things must somehow get better when the world economy gets moving again? Or are we content to say there is no need to stay at the top all the time? If our answer to the above questions is yes, we run the risk of being tossed out of the race and get left behind. We have to regain speed, make bold strides to catch up and stay ahead. We must not be daunted by the challenges before us. We must not be disheartened or feel hopeless. On the contrary, we can turn them to our advantage.”
“We can then just begin to imagine how much more is required to rebuild an entire nation if some form of conflict were to occur. The conflict on the other side of the world has only just started. The definition of "war", in this instance, is not clear. The physical arena may not be contained. How it will develop and end, no one can tell. We do not have a Federal government we can look to for aid. I think we should be very prudent before dipping into our protected reserves too early. Sir, on that note, I support the off-Budget measures.”
“But these savings are finite and would soon be depleted unless he is able to replenish them by earning wages and making profits. His old job may never come back again even when times are better. To gain a new income, he must see where the prospects are, reorganise his skills and acquire new ones to fit into those prospects. Sir, this recession is the most severe economic crisis since Independence. The economy shrank a devastating 5.6% in the third quarter. It is estimated that the number of unemployed may hit 80,000, or 4% of the workforce. Our near term prospects are bleak. This has prompted the implementation of this package worth a total of $11.3 billion. I am very relieved to note that the present Government is able to finance this entire package from surpluses accumulated since it took office in 1997. But some people said times are so bad that we should dip into our past reserves. I would like to take a moment here to reflect on this point. Some said things cannot get any worse than this. But is this the worst case that can happen? In recent times, it is hard for us, especially for the young, to fathom the financial cost of armed conflicts. Wars and conflicts occur in far-off places, like Bosnia, Chechnya and Sri Lanka. We see pictures of the dead and the injured and can empathise with the human suffering. But what is the financial cost of the devastation? What is required for repairs and rebuilding? Consider for a moment the damage caused by the recent terrorist attacks on Manhattan and the collapse of the World Trade Centre. The financial cost to New York city runs into more than $100 billion and the city is seeking US$54 billion in Federal aid to help its recovery.”
“I am happy to find in this package measures that many people have been asking for. These include improved access to funds for local enterprises, reduction of business costs through property tax rebates and lower petrol prices, diesel tax and utility charges, extension of HDB loan scheme and S&CC rebates and the New Singapore Shares which are free and pay a guaranteed minimum of 3% per annum. I welcome this scheme which is unlike previous sale of shares in Government companies where people have to pay for those shares and have been disappointed by the inadequate returns or the losses from such investments. Further, the New Singapore Shares pay bonus dividends pegged to the preceding year's GDP growth. This is important, especially in a downturn, as people will find the extra money most useful. [Mr Deputy Speaker in the Chair] 4.35 pm Sir, I cannot disagree more with Mr Chiam's opinion that we should just sit and wait. We cannot afford to simply sit tight and wait for the storm to pass. While cost cutting can reduce our expenditure and income support can alleviate our burden, this must not distract us from the need to take other painful measures, painful decisions to adjust and position ourselves to be more competitive in the future. All businesses and individuals must actively look out for new opportunities and seize them. To be in a better position to achieve that, some may need to reorganise and acquire new capabilities. This package contains important measures on People for Jobs Traineeship Programme, Skills Redevelopment Programme and the SDF funding. To just rely on cost cutting and income support alone is like surviving on your accumulated savings. Someone who has been retrenched may have some savings in cash. He may live on this for a while.”
“They must also be considered together with all the other prudent policies, programmes and measures that the PAP Government has been putting in place all along, both in good times as well as bad times. These measures can be grouped into two main categories: first, those measures that will help affected Singaporeans, both businesses and individuals, to tide over this difficult period by way of cost cutting and income support; second, measures to help Singapore as a nation, and this requires both businesses and individuals to do our part to adjust, restructure and upgrade our skills and capabilities so as to be more competitive in the changed economic environment that will emerge from the present economic downturn. This is the worst recession since Independence. Contrary to Mr Chiam's opinion that it is only cyclical, I think it is a very structural and very fundamental change in the economic environment. It is made worse because many industries and companies have barely started to recover from the last financial and economic crisis when their businesses were hit again early this year. The decline was too quick and devastating. Many people were expecting a recovery, whether described as "V-shape" or "U-shape", as one would normally expect after the downturn. Many did not expect another recession to come so soon after. Many did not expect the severity of this recession. Measures to help affected businesses and individuals in the near term to alleviate some of the pain and hardship are therefore very crucial for their survival. Cost-cutting measures give us some breathing space. Income support schemes lighten our financial burden for the time being to tide us over while we consolidate and wait for the dark clouds to pass.”
“Mr Speaker, Sir, we have just heard from Mr Low that Mr Chiam does not speak for the Opposition in this House and I wonder whether Mr Chiam speaks for his constituents in this House. He has said that we should not give away anything for free. The Deputy Prime Minister has given out a list of the measures just now. Perhaps Mr Chiam would like to tick off what he thinks his constituents should not be getting. I am sure the Deputy Prime Minister would be quite ready to oblige him by taking this off and not making it available to his constituents. On my part, Sir, I rise in support of the Ministerial Statement by the Deputy Prime Minister to tackle the economic downturn. At a recent dialogue, someone asked me in reference to the emergence of China as an economic power to the US as a magnet for talents, and to Singapore for our lack of competitive advantage. He asked me, "Have we gone beyond the limits of our development? Have we over-reached our potential?" He went on to say that Singaporeans have been told time and again that we are, or can be, the best in this and that. Perhaps it is time that we be realistic and teach our young to lower their expectations of the good life and accept being not the best. I told him in no uncertain terms that that was not a viable option for us to build a secure future. That kind of spirit will be the start of the end of Singapore as we know it. We may be a little down for now, but we are certainly not out. As a nation, we have overcome enormous difficulties in the past. We must not lose heart, and we will prevail. Sir, these off-Budget measures are comprehensive, broad-based and touch on the concerns of Singaporeans across-the-board.”
“For financial advisers, I would like to ask DPM to consider having another category of licensee who will be required to have a higher level of competency and skills to which the entire profession can strive towards. I would like to propose that we push the FA Bill to go a little further and differentiate financial advisory and planning activities from the mere selling of investment products. In addition to consolidating existing regulations touching on the selling of insurance and financial products, we should go one step further with this piece of legislation to cover new areas of financial planning so as to bring the entire industry to a higher level of competence and excellence. On that note, Sir, I support the Bill.”
“One does not expect the pharmacist to do all that even though the pharmacist may be very knowledgeable about the medical products. Can the general public make a distinction between a financial planner and a financial adviser? I believe it is hard to change public perception once it is associated with the usage of a certain term; it is easier to change the term to one that is in-line with the public's perception of it. I would therefore like to ask DPM to consider changing the term "financial adviser" as used in the FA Bill. To avoid confusion, the words "financial adviser", "financial consultant", "financial planner", or words to the effect, should be reserved for someone who is able to properly discover and analyse the financial needs of his client and render more comprehensive financial planning advice in a holistic manner customised to the client's needs. Could DPM consider whether other terms, such as "insurance adviser" and "unit trust adviser", that are more descriptive of the skills set, could be adopted for other specialists in the area of insurance and unit trust respectively? An alternative would be to split the licence for "financial adviser" into distinct categories, like perhaps Cat 1, Cat 2 and Cat 3, to denote specialty in the respective regulated financial advisory services and investment products. The danger of putting everyone into a single licence is that people tend to just strive to meet the minimum requirements - enough to be qualified as a "financial adviser representative", enough to sell their products and earn the commission, and will not endeavour to progress further to upgrade their skills and gain competency in financial planning. In legal practice, we are "Senior Counsel".”
“If this is not the case, then many people presently working in the insurance industry and financial industry will not be able to carry on what they have been doing once the FA Bill comes into force. This would be a cause of concern as they will add to the number of retrenched and unemployed. I would like to ask DPM whether the passing of this Bill into law will result in any person presently engaged as an insurance agent, financial analyst or investment adviser representative to be disqualified or prohibited from doing what he has been doing. In this regard, Sir, if everyone in the industry will be migrated over and covered under the term "financial adviser", then this generic term "financial adviser" can potentially be extremely confusing to the public. This, I find, is the big weakness of this Bill. Now, when someone approaches you and represents to you that he is a financial adviser representative licensed by the MAS, what skills and qualifications would you expect him to have? What kind of advice would you think he is competent to give? I think it is reasonable to assume that a financial adviser representative licensed by the MAS is competent to give you advice regarding your financial matters. But, lo and behold, he merely wants to sell you an insurance policy. There is a big difference between someone who can analyse your financial needs and someone who is knowledgeable only about a particular product. It is analogous to the relationship existing between doctors and pharmacists. One would go to a doctor for diagnosis of what sickness he is suffering from. The doctor does the tests, diagnoses the illness and prescribes the medicine to take.”
“Mr Speaker, Sir, I serve as a member of the Executive Committee of the Financial Planning Association of Singapore and while I speak in support of the Financial Advisers Bill in general, I hope certain refinements can be made in the course of implementing this Act. Consultation draft of the Financial Advisers Act (or FAA) has been circulated for some time and some of the points I am raising now are not new, but I think they deserve mention in this debate on the Bill. The FA Bill serves to consolidate and streamline the regulations found in three separate Acts relating to provision of services in respect of securities, futures and life insurance products. While the intention is commendable, I feel that in the process of consolidating and in coming up with the FA Bill in this present form, we have missed a good opportunity to upgrade the entire industry in the area of financial planning and to promote Singapore as a centre of excellence in this field. In essence, by virtue of its origin, the FA Bill is product oriented. It regulates financial advisory activities in respect of a range of investment products, and the distribution and marketing of life insurance policies and unit trusts. Any person presently permitted to carry on his activity under the Securities Industry Act, the Futures Trading Act or the Insurance Intermediaries Act will be able to automatically migrate over to be a licensee under the FAA. So, I presume an insurance agency presently operating under the Insurance Act will automatically qualify to be licensed as a financial adviser under the FAA, and each of its insurance agents can be now called "financial adviser representative" simply based on his present qualifications without having to undergo any additional examinations of his skills and competency.”
“Clause 232(5) provides that nothing in clause 232 shall prevent the Authority from entering into an agreement with any person to pay, with or without admission of liability, a civil penalty. And, clause 236(1) implies that if a consent order is made by the Authority against the contravening person, with or without admission of contravention, the court will not be involved and, therefore, other aggrieved persons will not be invited to file their claims. Under the settlement agreement with the Authority, the civil penalty, if any, imposed by clause 232 will be payable to the Authority. How about the losses of the individual claimants? Would they have to commence proceedings separately against the offender? This may not be easy, as they will be disadvantaged by the difficulty of gathering evidence and by the lack of resources. I would like to ask the DPM, whether in the interest of the investing public, we should set out the types of cases which the Authority should not settle bilaterally but should, if there is sufficient evidence, bring the proceedings into open court. The guidelines on whether the case can be settled by agreement need not be based on the type of offence, but could be based on criteria, such as the number of people aggrieved or the amount involved. Further, in the event the Authority enters into an agreement for civil penalty to be paid, it should disclose to a bona fide claimant the grounds for its decision, the results of its investigation and the evidence collated, so as to assist the potential claimant in deciding whether to pursue the case separately against the contravening person.”
“To a listed company and its shareholders, the cost of a new listing and continuing that listing has gone up, but they are still waiting to enjoy the benefits in terms of better valuations, higher trading volume, closer analyst coverage and more sophisticated investors. Perhaps, the lethargy is due to the present market conditions. Perhaps, the lack of interest is due to inadequate investor relations by the listed company. But, it is certainly hoped that the revamp will not merely be something that looks good for the record, but will translate into real and tangible benefits, whether now or when the economic situation improves. Sir, I would now like to turn to certain provisions of the Bill which relate to "Market Conduct". The SF Bill provides three types of punishment for the person who has acted in contravention of any of the provisions of Part XII of the Bill which relates to "Market Conduct". Offences included in this Part range from false trading, market rigging, disseminating false or misleading information, bucketing to insider trading. The contravening person faces civil penalty under clause 232, civil liability under clause 234 and, of course, criminal penalties. I am happy to note that individual investors who have suffered loss in respect of a contravention need not commence an action, either individually or as a class, to try to recover their loss, but can rely on the outcome of the proceedings commenced by the Authority. The relevant court may, after the conviction or the imposition of the civil penalty, invite all claimants to file and prove their claims for compensation. I would like to ask the DPM: what if the Authority decides to settle the contravention with the contravening person?”
“Disclosure of certain information, such as confidential details about margins and pricing, although nice for the investing public to know, may, in fact, be detrimental to the business of the company. And the people who are most interested to know are usually the competitors. In addition to that, imagine poison-pen letters coming in to the MAS one after another from business rivals or personal rivals. This may lead to even more delays before the prospectus is finally allowed to be registered, and can even derail the entire exercise. I hope the MAS will be firm in deciding what is and what is not reasonable request for clarification, and will dedicate adequate trained and competent resources to carry out the intent of the Act. I would like to ask the DPM whether such a comprehensive revamp of the legal framework is overwhelming, especially at this present time when it is already so difficult for companies to raise funds from the market. Are we too ambitious in trying to do too much now under this present economic environment? Valuations and pricing of new issues have come down drastically. Onerous responsibility imposed on merchant bankers, lawyers, accountants, valuers and other professionals involved in the corporate fund raising exercise has led to a substantial increase in fees. For a small and medium enterprise (SME) to raise $3-4 million, the expenses involved can be in excess of $1 million. My fear is that SMEs can no longer afford to raise funds here and will have no choice but to turn to other regional markets. I mentioned earlier that I hope we get to reap the benefits of this revamp that is intended to increase transparency and improve the quality of the issues. But have these efforts produced rewards?”
“Looking at the provisions of the SF Bill, this consolidation and centralisation of functions should lead to a speedier and more certain timeframe for capital fund raising. Clear time limits for registration of prospectuses, after they are lodged, are set out in the Bill. Situations under which the Authority will refuse registration are also spelt out. This is intended to provide much needed certainty in terms of when an issue can be launched, which is critical in fast-moving capital markets, to capture the window of opportunity. This will be of great help to corporations as they will now have a better idea of when the funds will come in for their business expansion. I hope this outcome will be achieved in practice and its benefits realised. My fear, that it may not turn out this way, stems from a number of factors. Prior to the SF Bill, prospectuses were scrutinised by the SGX. Comments and queries for clarification might have resulted in delays at times. But, ultimately, the issuer can proceed to issue the prospectus once the SGX is satisfied that the investing public is sufficiently protected. If any of its contents is subsequently found to be misleading or untrue, the issuer can be taken to task in a court of law or by the regulators. But, now, the prospectuses will be open for public scrutiny and criticism. Is our investing public sufficiently sophisticated? Members of the public and, probably, competitors who are out to cause trouble, can ask for unnecessary information under the guise that this additional information is required for them to make an informed assessment of the matters.”
“Mr Speaker, Sir, I rise to speak in support of the Bill. Over the years, many important developments have taken place in all the major financial centres of the world, and we must keep pace by supporting progressive changes in our capital markets and the financial industry with laws and regulations that are up-to-date and relevant. With the consolidation of several of the existing legislation into the Securities and Futures Act (SFA), the regulatory roles will, henceforth, be concentrated on and undertaken by the Monetary Authority of Singapore. Until a few years ago, I must say the MAS is a key institution that is little known to the public. Even today, the MAS is regarded with much respect and a fair amount of awe by the industry. It has a solid reputation as a credible and competent financial regulator. It acts decisively and carries a heavy punch, as witnessed by some people who dared to speculate against the Singapore dollar and those who were adventurous in trying to circumvent the rules on mandatory takeovers. But, much has been done over the last few years to soften that image by being more consultative, open and receptive. I know a few market participants who were pleasantly surprised to receive invitations to just drop by the MAS anytime to talk about their future plans and on-going developments. In this respect, I would like to ask DPM whether a Securities and Futures Commission will be set up within the MAS to undertake its new function under the SFA. In this fast-changing world, to maintain our position as a premier financial centre, we must adopt fresh approaches to regulate and develop our financial sector. The SF Bill will be a comprehensive attempt to update our laws relating to securities and futures.”