S Iswaran
Singapore
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“I had addressed similar Parliamentary Questions by Mr Gerald Giam on 29 November 2022 and 10 January 2023, as well as in my Ministerial Statement on 8 May 2023. The Member can refer to these past answers and statement as there has been no material change in the allocation of Certificates of Entitlement.”
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“And I think if this debate can set that mindset for us, so that we have a new way of thinking of a relationship between all the elements of our enterprise ecosystem, then it would have been a positive exercise. EXEMPTED BUSINESS (Motion) Resolved, That the proceedings on the business set down on the Order Paper for today be exempted at this day's sitting from the provisions of Standing Order No. 1. - [Mr Mah Bow Tan]. NEW CHARTER OF GOVERNMENT-LINKED COMPANIES Debate resumed. 3.51 pm”
“Sir, in all these questions, I think the key point is ultimately, who should be the judge of a company's business strategy, its approach to divestment or any of the other commercial decisions. Should it be the Government? Should it be the employees? Should it be this House? I would submit that whilst all these groups have got an element of interest as stakeholders, ultimately the only real point of decision, the only court of opinion, for listed companies is the community of shareholders. Why? Because they have skin in the game, and they are the ones who will make the decision whether to put money in, take it out, and so on. So we have to be mindful of that. And I think Government, no matter how large or small shareholder it is, in any enterprise, cannot ride roughshod over the interest of other shareholders. As a final point, I just want to say that the debate has been perhaps cast as a zero sum if not negative sum game. In other words, if the GLCs grow, the SMEs are deprived. And if we cut down on the GLCs, the SMEs will grow. I think this is a little bit different to the spirit of the Motion which, when I first read it, I thought it was very conciliatory and positive. But the debate itself has had a slightly different tone, in my view. What we ultimately want is an enterprise ecosystem that affords the space and opportunity for all species of companies. If you take a rain forest, for example, you want the giants who will reach for the sky and they will compete with the other giants. We also want other companies who will look at the slivers of sunlight and other possible advantages in order to carve themselves a niche and grow. And then you will have others who will be on the forest bed, who will find their own area of operation and flourish.”
“If you look at the comparison with, say, UK, a lot of the privatisation was because the state-run enterprises were not performing. So we need to keep that in balance. Who else can we divest to? Strategic partners? And I think that is a good idea, but it would take time, and it needs to be calibrated because you need to choose and work out the issues, before it is done. Finally, management. I thought this deserves particular comment because this issue of MBOs was raised by several Members. I thought it was interesting because it came from two points of view. Some Members, like Mr Sin Boon Ann, said that MBO is perhaps not a very good idea, and he cited the fact that MBOs mean that management, which has got an information advantage, would be able to prevail and take advantage of the situation. In other words, there is information asymmetry which works to the disadvantage of shareholders. The question to ask: is this not true of all MBOs? So, do we then say that all MBOs as a class of transactions are a bad thing? Another group of our Members here have pointed out that the MBOs should be encouraged because it is a way to entrust some of these assets to local management in order to kick-start the local entrepreneurship drive. Is that really the basis on which we want to consider MBOs? The right approach really ought to be that an MBO is one way of divesting, just as there are numerous other ways. And what we ought to be looking at, if we are going to debate such issues in this House, is how we can realise the best value for the shareholders and act in the best interest of the company. I think that really ought to be the governing principle for these issues and as a result, there would be a rigorous evaluation of alternatives.”
“Sir, I also wanted to make some comments on the issue of divestment. There have been repeated calls by several Members that there should be a specific timeframe for the Government to announce how it is going to release or divest its interests in various companies. I was thinking about this. From whose point of view is it desirable for the Government to commit to such a specific timeframe? From the point of view of the employees of the company, who would then be filled with uncertainty about their future? From the point of view of the customers of these companies, who will then need to know what is going to happen to their supplier or service provider? Or from the point of view of its shareholders, who will then have to wonder whether this company they have shares in is in play, and what they would do about it? The other aspect of divestment is who to divest to. There were some comments that maybe we should divest it to private equity houses or large pension funds. I think there may be some merits in that, but certainly not as a way to argue a case that this is superior necessarily to Government shareholding. I think that remains to be proven. Yesterday, Minister of State, Mr Raymond Lim, made an eloquent point on this, and I do not wish to repeat that, other than to make the point that it is not an axiom that when you privatise entirely a company, its performance necessarily improves unambiguously. If you look at the history of privatisation, in Singapore's case, privatisation was not the result of under-performing state-owned enterprises which were put into the private domain, in order to subject them to greater disciplines and, therefore, higher performance.”
“Yes. Section Name MISCELLANEOUS;Title;Clause; ;Mr Chew Heng Ching(Mr Deputy Speaker); VISIT OF SENATOR HON DATO GHAZI H. RAMLI OF THE PARLIAMENT OF MALAYSIA (Presence in Gallery)”
“To grow, they have to do one of two things. They have to either grow organically or they have to make acquisitions, locally or internationally. If we look at the electronic manufacturing services sector in Singapore, for example, many of our companies have been acquired by international players, precisely because of the scale. Solectron acquired NatSteel Electronics about two years ago. Celestica acquired JIT about a year ago. All of these are driven by the same factors. They needed scale in order to be able to leverage on the mass orders they get and keep their overheads down to a bare minimum. All I ask is that when we think about these issues, we talk about level playing field, but let us give the GLCs or TLCs a level playing field as well. Let me give an example. The local banking sector has seen consolidation. UOB acquired OUB. That would be cited as a good example of private sector market forces consolidating in response to forces that are changing the industry. If the same transaction had occurred where DBS had acquired OUB, would that be seen as a positive example of consolidation or a bad example of crowding out? Let me take another example. Mr Inderjit Singh pointed out SingTel failed in its attempt to acquire HK Tel, and he said that SingTel moved too slow. Who moved faster? PCCW, and where are they today? So, is that an example of the winner's curse? If they had done it, they would be damned. If they had not done it, which is the case, they are being damned. Let us give them a level playing field. Let us treat this fairly. Subsequently, SingTel goes on to buy Optus. Then the acquisitions are different. I think we ought to take a fair line on these matters, and not just take the line that is most convenient to our point of view.”
“But, at the same time, both of these pose immense new challenges, because what it means now is that companies have to invest quite a lot in technology in building up their infrastructure to deal with global challenges, and therefore they need the economies of scale in order to achieve reasonable returns on their outlay. How big are our companies really? In Japan, an SME would have a turnover that is in billions of not Yens but US dollars. That is an SME in Japan. And comparing our GLCs or TLCs to local SMEs is a convenient way of invoking the David and Goliath imagery. But I am not sure it is actually a fair representation of the facts. Talking about 21% of the market capitalisation in SGX, yes, but let us look at the broader picture. If we take SingTel, its market capitalisation is US$16 billion. This is based on last week's numbers. And if we compare SingTel with Deutsche Telecom, $48.3 billion. That is more than three times the size. If we compare it with, say, Verizon, which is a relatively more recent player, $88.2 billion. That is 5-6 times. The scale factors are immense, but they are playing in the same field. When we talk about SIA, we are very proud of the company because of its international success. But if we want to compare SIA, its turnover is about $5.1 billion. Compare that with, say, Lufthansa or British Airways. Lufthansa is about $11 billion and British Airways about $10 billion. So the order of magnitude is two times or more, and that is not even talking about things like fleet size and how they cover the routes and so on. The issue of size is a factor and we could say that our Temasek-linked companies or GLCs, whilst they may look like very big fish in our small pond, once we look at the big ocean, actually, they are, at best, medium size.”
“Because we are highlighting an obvious outlier and dodging the core question, which is whether a company can diversify into new businesses successfully, leveraging on skills and assets it has built up in perhaps other business areas. And I think this is worth thinking about. I am not suggesting that the company should stray and pepper its resources in many different directions. But there are some good examples of companies that have, over time, evolved and developed some new areas, and we do not have to go too far away to find out. For example, look at CDL. CDL is a listed company in Singapore. Its primary core business is properties. But over time, it has developed an excellent hotel business under the Millennium & Copthorne label. By all accounts, it is attributed to the entrepreneurial flair of Mr Kwek Leng Beng. The question to ask is: do we want to encourage that or discourage that? Is that good or is that bad? So, again, in talking about diversifying businesses, we need to have some level of measurement and not put all the companies that do so in the same basket. Sir, the point about size has been raised, and I want to make a few comments on that. In my view, there are really two inexorable forces that are compelling the issue of size - globalisation, which is reducing barriers for the flow of goods and services, and people, to a large extent, across countries. The second is technology. Both of these are enablers. They are enabling companies to access new markets, across geographical barriers and to get into new areas.”
“It is true that in the 70s and 80s when businesses in the US, for example, were expanding horizontally and vertically, they were straying quite a bit, and becoming large, unwieldy conglomerates. Then, in the 90s, there was a move back to core competence, and there was a stress on core competence. If I want to summarise the point, it would be this way. There are conglomerates though that remain extremely successful. General Electric is a good example, one of the most admired companies in the US, but it has 18 different business groups. There are also companies which have got a single focus, which also do very well. Coca Cola is a good example of that. And we also have good examples of companies, both conglomerates and single focus, which have failed. Global Crossing is a good example of a single focus business. Sir, the point is that we cannot be influenced by just general trends and fads. I think the underlying value of a company is determined by many factors - its corporate culture and values, its strategy, the people and, ultimately, the execution of the business. There is no such thing as one size fits all. And in this House, when we are discussing these issues, let us bear that in mind. Another question that has been debated quite a bit in this House is: should a company diversify into new businesses? Particularly, let us talk about the listed companies. In general, I think we would all agree that we want companies to stick to their knitting. You know the business, you know the customers, the various channels, and so your core competence lies in that area. And I think that is a very important guiding principle. But citing old and hackneyed examples like roast duck, I think is a decoy.”
“If we compare a labour cooperative with a private or listed company, say, under Temasek Holdings - and here I must declare my interest because I am an employee of Temasek Holdings - we will find that the mission and objectives vary. Therefore, the strategies will differ. And even the stakeholder groups are different for each of these categories. So we must guard against adopting a very generic broad brush approach in talking about these companies, because each faces its own constraints and its own set of circumstances in pursuing its ultimate objectives. The second point I would like to make is that we ought to guard against being too theological or doctrinaire in our approach to issues of business or management. Markets and analysts are always given to fads. If we just think back to a few years ago, dot-coms were in. All companies were being told either you "e" or you would be eaten. And now things are very different. If we also look at it from the angle of business theory, there have been ebbs and flows. And in a sense, we can argue that unless there are these ebbs and flows, management gurus and business schools will be out of work. In the history of companies, for example, there has been a discussion about whether decision making should be centralised or decentralised, and the accordion has moved in and out quite a few times. And there are other examples like that in the area of business. So the key point here is that we ought to keep our eye on the ball and take a pragmatic approach in dealing with the issues. Let us take the example of business models. Some of our Members talked with some disdain about the model of conglomerates.”
“Sir, I rise in general support of the Motion. I think there are a few key elements of the Motion and the debate which have particular resonance for me. First, Government's involvement in business ought to be circumspect and carefully calibrated. This is the recommendation of the EISC, and it is really difficult to have any issue or quarrel with that. It is a sound principle to guide Government's decision-making going forward. The second is supporting the growth of private enterprise and entrepreneurship in Singapore. Again, I think this would have little problems finding support in this House or elsewhere. The third element is, of course, greater symbiosis between big and small companies, whether they are GLCs, MNCs and so on, on the one hand, and SMEs on the other. Ultimately, all these principles are important elements in guiding the way Singapore remakes its economy, restructures itself, in order to face the challenges ahead. However, in the course of the debate, the issues that struck me the most was that I thought there were some broad guiding principles that we ought to use, not just in the way we present ideas but in the way we analyse them. Allow me to illustrate that. The first is that we ought to be quite discerning in the way we categorise the various entities we have in our enterprise ecosystem. We have used the term "GLCs" as a kind of catch-all, and we have put in there labour cooperatives, the private companies under the care of Government, the listed companies under the care of Government, etc, etc. Many speakers before me have pointed out the special nature of labour cooperatives. In general, the DNA of all these companies is very different.”
“In view of the transport companies' privileged position of no competition and the no-choice situation of the commuters, we would like to urge the PTC to make known and be transparent on the factors considered when evaluating the affordable fare. Sir, I support the amendments to the Motion.”
“Member Mr Ravindran's call for the amount of transport expenses in relation to the average income of the commuters to be made known. The threshold of pain of the commuters is further compounded by the string of increases of the other economic factors adding to the cost of the commuters, ie, the increase in refuse collection fees in May, the simultaneous increase in utilities rates and transport fare, the coming September increases in carpark charges and factors affecting the income of the commuters, eg, the coming review of the CPF rates. In addition, the Economic Restructuring Shares, which are to help our people in overcoming the poor economic situation, have not been received yet, as they are only scheduled for next year. It is timely for the PTC to be transparent with the public on the factors that are used as their bases to determine this affordable fare. Listening to the Minister's reply, none had explained how the affordability fare was determined and the list of the factors that were taken into consideration. Dr Tan's timely amendment has highlighted the need for the PTC to be transparent in the evaluation of this affordable fare, in view of the transport companies being in a privileged position - a ready pool of no-choice commuters, free infrastructure costs, minimum competition and good surpluses. To conclude, I would like to urge the PTC to readily take into consideration the call of the Members in this House in the amended Motion to take into account the affordability of the commuters and the unemployment situation in relation to the current economic situation in reviewing the affordable fare.”
“The present formula does not consider the income of the commuters directly, especially during this economic downturn period. When the economy is reasonably good, one can argue that the annual increase in income would have been taken into account relative to the CPI. For example, the public service sector has always taken into account the CPI to consider their salary increases yearly. When the increases in income are higher than the cost, it would probably have taken into account that the commuters are able to afford the additional cost. The PTC has argued that this increase is only a very small increase, and has then allowed it. But it is the relative increase in cost and income that should be the issue. The lowering of the income bar and the overall increase to the cost of transportation result in an increase in the cost to income ratio of the commuters. But in the present state of the economy, most commuters have either no increase in the income for the past years or suffered a pay cut, or are even out of job. Some are even living day by day in fear of losing their job because of the closing down of the companies. These small increases would have reached the threshold of pain. To understand the commuters' threshold of pain is to determine the composition of cost in relation to the income. Although, again, Senior Minister of State, Mr Khaw Boon Wan, has stated that transport fares have lagged behind wage growth by a big margin over a period of 15 years, we are looking at the present scenario in this economic downturn where income has been lowered, the transport fare relative to the income would indeed have been increased even with a small increase in the fares. Sir, I support the hon.”
“I would suggest one other point that we could consider - whether some of the schemes which we already have, like the Economic Downturn Relief Scheme and there is a scheme through the CCCs for those who are affected by the GST, perhaps we should give more flexibility to the grassroots organisations on the ground, so that for those who are unduly affected by these transport fare increases, they too should be eligible for some form of assistance. Sir, on that note, I support the amendment moved by the Member. Mdm Cynthia Phua (Aljunied): Mr Speaker, Sir, I rise to support the hon. Member, Dr Tan Boon Wan's proposed amendments and his call for the PTC to be transparent in its review for fare increases, and to specifically take into consideration the affordability of the commuters for the review of the affordable fare, which is one of the PTC's objectives of safeguarding our public interest. Such an amendment would serve the public interest better, a concrete step towards a longer-term view, as it takes a harder look at the fundamental considerations of the measurement of the affordable fare. Presently, the affordable fare is indirectly measured using a formula that was recommended seven years ago, consisting of cost data, ie, the CPI + X factor. Both are cost factors of the transport network operators from which the fare is computed and levied on to the general public. Quoting Senior Minister of State, Mr Khaw Boon Wan's explanation, within this framework of the formula, the PTC decides what is a reasonable rate of increase which is commensurate with the affordability level of the population. Affordability is a relative term. The cost increase should be measured in relation to the income.”
“I think we ought to try it, if not in a total way, then in some measured manner. Finally, Sir, on the issue of broader Government charges, the Government should make an effort not to over burden Singaporeans at this time. I fully endorse that. There is an element of cynicism out there. They think that the Government charges go through a kind of political Circadian rhythm. You start after the elections and rates go up, and then around the middle of the period, it stays steady, and then towards the end of the five-year term, there is an inverse performance, either rates go down, or they may not go down, but other forms of compensation kick in. This might be because we have a range of various Government bodies who are all run by people who are thinking ahead and trying to ensure that the Ministers do not have a tough time. But perhaps we ought to take a "more hands" approach on this and say, "Let's look at how we can actually space this out and manage this as a total impact." Because that is the crux of the issue here today. The public transport fare increases and the Public Transport Council, as Mr Tan put it yesterday, have become lightning rods, but they are not the problem. The issue is broader and it has just become a convenient point of reference, or scapegoats. And I think we should ensure that we do not fall into that trap again by addressing this issue comprehensively.”
“I do believe the PTC's deliberations can also be more transparent. Because, at the end of the day, people do want to know why and, by this, I mean both commuters as well as transport operators, how they arrive at their decision, and that will help raise the level of understanding and debate. On the issue of formula, CPI + X, I would like to know how productivity factors are encapsulated in this formula. The Senior Minister of State yesterday alluded to this, but some clarification is necessary. Because on the face of it, it looks like you have got a total insulation from cost increases and you get the clear increase in nominal prices without any adjustment, or requirement to improve your productivity. And, yet, I think this is not the case. This needs to be brought out in the open so that people understand this clearly that there is already, if there is not then there should be, a productivity discount to this formula. But, ultimately, Sir, we can talk about all this tinkering with the process. I feel the best solution is still to introduce greater competition in our public transport system, particularly perhaps in the bus area, if we cannot do it in the train system. Because then, we will avoid issues of how do you fix the price, are you profiteering, and so on. Because the market will lead to straight competition, and there should be an element of internal correction within the market. Many Members have drawn the analogy with the telecommunications sector and others. I know there are differences between transportation and telecommunications, and so on. But at the end of the day, we do not realise the benefits of competition until we have it. And then, it becomes very obvious. Why did we not do this before?”
“But the amendment that has been moved by the Member which says, first, it drops the need for the PTC to review its specific recommendation, and instead focuses on the process where, in making its decision, it takes into account all factors and, in particular, viability of the operators and the affordability of the commuters. That is a more productive, long-term solution that this House should be endorsing. On that score, in terms of the process, a lot has been said about what we can do to improve and change, and I offer a few suggestions. On the composition, I do believe that the PTC's composition can be improved. Whilst having public transport operators as members of the PTC may not necessarily, in any way, have a conflict, because they excuse themselves from critical decision points. There is still the issue of perception. And for that reason alone, we should leave them out of it and let them come in as experts, or as presenters of their point of view. There has been another suggestion in some quarters, where maybe we bring in commuters themselves into the PTC. I have trouble with that, as it is the exact analogue of the public transport operators, but on the other side. If we cannot have a transport operator who stands to benefit from a fare increase on the Council, then can we justify having commuters who stand to benefit from a fare reduction on the Council as well? I think there is a contradiction here. What we ought to have is a Public Transport Council made up of experts from different areas, whether it is financial experts, transport industry experts and maybe those with prior experience in the industry, so that when the deliberations occur, it is a considered final opinion, drawing on a wide range of expertise.”
“I have been thinking about whether we should really be asking PTC to review its decision. Let me tell Members that the best thing that can happen now is, yes, for the fares to be reduced, or restored to the original position. I think all of us would be very happy about that. It is an easy decision. The question is: is that the right decision? Dr Tan Boon Wan has elaborated on the point, and I would just reinforce it. The first is the issue of the integrity of the PTC. We need to distinguish between the process and the outcome. We may not like the outcome, fine. But you do not undermine the process unnecessarily. Let us go back, revisit the process that led to this outcome and see how it can be improved. But once we start tinkering with everything at the same time, we create uncertainty in people's minds. Why would any self-respecting individual want to serve on the PTC, if the concerted view of the PTC is subject to parliamentary review, Executive review, public opinion review, and so on, and then they are forced to recant? Where is the credibility when the next time they make an announcement, whether it is a fare reduction or fare increase? How would they defend their position? The other part is the message we would send if we do compel this fare reduction after it has been announced. It goes to the heart of the issue of how we would be perceived as a country, and a system within which to do business. If we have capricious changes in policy, or specific policy decision, because of this sort of public opinion, then I think the regulatory risk premium, that I talked about earlier, would go up significantly in Singapore. But does that mean we do nothing? I am not saying that. And I do not want to be misinterpreted. I think there is a lot we can do.”
“If you want to continue to invest in improvements to rolling stock and other innovations, there are only two sources of funding, either the profit you make in your internal financing, or you get it from outside, equity or debt. And if they do not achieve a reasonable rate of return and offer a reasonable yield, who is going to put money in SMRT? Mr Ravindran says, "Well, if they do not get it, they can go and raise money outside by issuing shares." But the question is, who will subscribe to those shares? Because, at the end of the day, the comparison will be made on an international basis. So, we have to be realistic. I am not defending the fare increase per se. But in the heat of the discussion and argument, let us not throw the baby out with the bath-water and start vilifying institutions and companies unfairly. I was reflecting on this last night. If SMRT's profitability goes down, then we will have another debate in this House saying, "You see, this is the GLC that is under performing." And I know many Members of this House would champion that line. If SMRT's profitability goes up, there will be another line, precisely along what we are talking about, that it is making money at the expense of Singaporeans. So it is a no-win situation. Sir, ultimately, if we pursue this kind of logic, it is not going to be helpful for Singapore, Singaporeans or, for that matter, our transport companies and our transport system. So, I was trying to inject that sense of reality, just to create a balance in the thinking. Let us not get carried away without some reflection on the broader issues. Sir, I would say that the amendment to the Motion that has been moved is a fair one. It balances the issues, and the Member has pointed out clearly why he is doing so.”
“1% is gross of tax. It is gross, before you take into account tax. So, if you are on the top tax bracket, you have to knock off another 20-odd percent after tax under the new tax regime, or lower for the lower tiers. Let us compare that 4.1% dividend yield with some less risky products. For 10-year Government bonds, the yield is 3.5%. If you look at the LTA bonds, the yield is 3.7%. So, when you compare that with what SMRT shares give as a dividend yield, is it that unreasonable for the risk that the shareholders have to bear? We can also compare this dividend yield with utilities companies around the world - US, Japan, UK, etc. Because, let us face it, it is an international market, you do not put money in SMRT, you can put it in the same kind of stock elsewhere in the world. The interesting result is that the range for dividend yields for utilities counters is between 3.5-6.5%. That means SMRT's dividend yield rate is not exorbitant. It is within the industry's norms and, if anything, at the lower end of the industry range. Sir, there were a lot of other points that can be raised on the financial front. I do not want to go into that and a lot of details now. But why go into all these? Why this financial comparison? What is so important about it? SMRT is a listed company. We can debate the merits of whether it is good to have public transport operators as listed companies or not, but that is a separate issue. We should not vilify a listed company which is basically competing in the market not just with other operators and so on, but also for investor funds.”
“So this is not a company whose stocks you buy because you expect this wild run in its share price, because it is going to become very valuable and you get capital appreciation. There is another dimension to this. SMRT is like any transport company whose fare structures are regulated and have a regulatory risk because, at the end of the day, the revenue is affected fundamentally by policy decisions. I do not think I need to belabour the point about the regulatory risk because the debate in this House on the fare increase is ample evidence of what that risk is all about. So, why invest in SMRT shares? What is the benefit? If you ask fund managers or financial analysts, they will tell you that it is what you call a counter-cyclical defensive stock. What does it mean? Basically, it is a nice stock to have in your portfolio, so that when your tech stocks are bombing out, all those high growth stories are now fizzling out, you still have some stocks in your portfolio that continue to offer you a low but steady growth rate and a decent rate of return, either through dividend pay-outs or from very small capital appreciation. It is a kind of stock where when the economy goes up, it will not go up as fast. But when the economy goes down, it will not go down as fast either. That is the value of stocks like this, low beta stocks. So, it is not a stock you hold for capital appreciation. If you want to look at SMRT shares, in July 2000 when it was listed, its price was 61 cents, and yesterday when I checked, it was about 68-68.5 cents. It is not a fantastic growth. At the end of day, it is the dividend yield that it will pay. So, are they profiteering and rewarding the shareholders unfairly? What is the dividend yield of SMRT? The current dividend yield is 4.1%, and this 4.”
“Indeed, we could infer that this is what is happening here. Is that a right business strategy? Probably from MTR's point of view, yes, because, overall, it is able to continue to improve its profitability. But the analogy with SMRT then is perhaps unfair, because SMRT, by comparison, is a pure transport operator. 90% of SMRT's revenue comes from the train, bus and taxi type services, and 70-80% of its profits comes from the same business. So the exact reverse, if you like, of what MTR has. SMRT has very little scope to cross-subsidise. There is nothing to cross-subsidise from. Really, at the end of day, the only return it gets is from its fares, and just to be complete, with a little bit of rental and advertising income of about 10%. Sir, the next question, from a broader perspective, is: Is SMRT profiteering? It is a listed company. Is the company rewarding its shareholders unfairly? Again, I think it was the Non-Constituency Member, Mr Steve Chia, who raised this question rather rhetorically, if not theatrically: "Isn't making more than $50 million profit enough?" That is a good question. Let us look at the issues. What kind of investment product or share is SMRT share? Think about it. The growth prospects of this company are very constrained. Ridership and fare increases are the only real factors that would drive its top line growth. I do not want to talk like an analyst, but since we have totted up a lot of figures and financial data, I think we need to look at these in totality. The best proxy for growth in this company is really population growth, which means, at best, it is going to achieve 2-3%. In fact, last year, SMRT achieved, I think, 0.6% growth, in fact, lower than you would think to be the average.”
“But the question, I suppose, is "fair" from whose point of view and "reasonable" from what perspective? Let me try to broaden the perspective a little to show what I mean. I am looking at it from the perspective of the company, and here I would like to make a declaration. I am an employee of Temasek Holdings, which is a major shareholder of SMRT, but I have no direct interest in any of the public transport operators. Is SMRT such a laggard in comparison to similar companies, ie, transport operators, in other parts of the world? Yesterday, there was a very sharp contrast drawn between SMRT and MTR in Hong Kong. Mr Tan Soo Khoon gave us many examples of why MTR in Hong Kong was such an innovative transport operator, introducing many interesting dimensions to its service. If I recall correctly, some examples were: if one takes 10 rides, then he gets a free lunch or a free dinner. And, also, when a new line was introduced, there was no fare increase. In fact, it was a fare decrease. So why can the SMRT not be like that? Indeed, I was quite troubled and puzzled by that, and I thought this warrants a little bit more investigation. So, I dug up a little more data on this. It is interesting. As always, there is no such thing as a free lunch, and let me tell Members why. MTR is actually better described as a property company than a transport company. It owns the land above its stations and around its stations. 70-80% of MTR's profits come from its property business, not related to its rail business. What does that mean? MTR has to promote ridership on its lines. Why? Because that is what will increase the value of its main business, which is the property business. And MTR will therefore cross-subsidise from its property business to the rail business.”
“Mr Speaker, Sir, thank you for allowing me to join in this debate. I rise in support of the motion that has just been moved by the Member for Ang Mo Kio GRC, Dr Tan Boon Wan. It injects a note of balance, a note of circumspection, to this debate which is warranted, given the heat that has been generated in this House in the course of the last day-and-a-half of debates. Allow me to elaborate. Yesterday, I was moved significantly by Mr Tan and Dr Tan's impassioned plea on behalf of Singaporeans and commuters on why these fare increases are ill-timed, unwelcome and inconvenient. But, having said that, I also want to say that my personal experience with this has been the same. I have received a lot of feedback from constituents and others on this increase and why it is not welcomed. The timing is part of an unholy confluence of factors - economic downturn and retrenchments. At this time, a fare increase for buses, no matter how small, is, in a sense, the proverbial straw that breaks the camel's back. But, Sir, even as this House has the responsibility to voice the concerns of Singaporeans and address those issues in a comprehensive way, we equally have the obligation to ensure that the debate encompasses the total perspective of the issue. I think the wave of public opinion is great in this debate. Many Singaporeans are agitated about this. But it would be a disservice to the quality of the debate and the final policy or conclusion we draw if we were to only focus on that aspect of this issue. In the course of this debate, the terms "fair and reasonable" have cropped up many times. And, indeed, I think all of us would like to be fair and reasonable and be seen to be fair and reasonable.”
“My question for the Ministry of the Environment is, assuming the Ministry of Transport's policy remains unchanged on the matter of green vehicle rebates, whether it is capital or operating cost rebates, what more can the Ministry of the Environment do to encourage public transport operators to adopt the use of more environment-friendly vehicles? 1.30 pm”
“Sir, in the Singapore Green Plan, the target for air quality is 85% of good days - "good days" being defined as days when the PSI reading is below 50. I understand that the key pollutants that matter in this regard are sulphur dioxide and also particulate matters. One of the main contributing factors, if we take away the haze, is diesel vehicles. And we know that public transportation in Singapore is the main user of diesel vehicles. Sir, we are now in an era where there is a range of more environment-friendly options. The range includes electric vehicles, hybrid vehicles, right through to natural gas, and so on. So the question is: how actively are we pursuing these options as part of our longer term effort to improve air quality in Singapore? I welcome the initiative of the compressed natural gas pilot project that the Ministry of the Environment has initiated with SBS and also with the taxi companies, ie, Comfort and City Cab. I think 30 buses and 50 taxis are involved. Sir, the questions I have are, first of all, what is the time-frame for this pilot project, and what criteria will be used to assess its success and viability for extension to the broader fleet within the public transportation system? The second question is that the feedback, in general, suggests that the upfront cost of many of these green vehicles is not adequately compensated for by the vehicle rebates that are given by LTA. I believe that there has been some discussion on this in the debate on the budget of the Ministry of Transport.”
“I am particularly concerned about small businesses, and whether compliance to some of the new initiatives that are being considered by the Ministry of the Environment might have an adverse effect on business cost, particularly for small and medium-sized enterprises. Thirdly, the Green Plan envisages the people, private and public sector involvement in the realisation of its vision. I would like to ask the Minister how the Ministry of the Environment proposes to educate and enthuse Singaporeans around the goal of the Green Plan. Singaporeans have been somewhat apathetic to various efforts like recyling and other environment-friendly measures. How can we ignite their enthusiasm and get it going, so that the intention becomes action? Finally, in the Green Plan, I have not come across any specific proposal to promote Singapore as a venue for the environment business. There are many initiatives today around the world, through technology and other measures, to come out with environmental-friendly solutions to conventional problems. The question is whether Singapore can position itself well in that spectrum. I would like to ask the Minister what plans his Ministry has in that regard.”
“The Singapore Green Plan 2012 in a way encapsulates certain balances that have to be made in the context of the dilemma of development. As Singapore is scaling up the economic ladder, there is growing international expectation that we will do our part in not just setting a good example in environment management but also promulgating and propagating it. At the same time, Singaporeans' own expectation of environmental issues and our compliance to them is rising. And, yet, we have to assess the economic impact of onerous environmental standards, especially in this economic environment which is very competitive and cost pressures are great. I see the Green Plan 2012 as an effort to address this challenge to meet Singaporeans' aspirations, to live up to our responsibilities within the international community and, at the same time, trying to balance our economic and social interests. I do have, however, some specific questions and proposals which I would like the Minister to respond to. The first is that the plan outlines some very specific targets that are to be attained over a 10-year period. This pertains to recycling rate where the target is an overall 60%, that is, where 67% of land is to be water catchment and 60% of electricity generated is to be from natural gas. I would like to ask how realistic are these targets, given our city state environment. How do they compare with developed countries and are we over-stretching or keeping pace? Secondly, I would like to ask the Minister what is the potential impact of such targets, and the Green Plan in general, on businesses.”
“Two years ago, Dr Aline Wong told this House - she was then the Senior Minister of State for Education - that MOE was embarking on a pilot research programme to establish the long-term cognitive and non-cognitive benefits of pre-school education so that the Ministry can assess what level of Government investment is justifiable in pre-school education. The longitudinal study was expected to take seven years, but Dr Wong did give the assurance that after two to three years, if the preliminary result of the study were convincing, the Ministry would act. I would like to know what is the status of this study and what actions the Ministry is contemplating.”
“Madam, for the pre-school system, the terrain is characterised by a bewildering array of choice by any parameter. If we look at fees, we have a few tens of dollars of monthly fees to over a thousand dollars. If we look at pedagogic methods, we have the whole range - from Montessori to all forms of experimental and the very traditional classroom-based methods. If we look at it from the angle of the sort of emphasis it has on language and so on, again, there are some that are specialist or known for their English, and others for their Mandarin and so on. This is a diversity that ought to be celebrated and welcomed, if it were underpinned by a few key parameters and considerations, and I would like to outline them. The first is quality assurance. We can have diversity in teaching methods, classroom style and so on but, at the end of the day, parents want to be assured that a core curriculum that is necessary in preparing the child for Primary 1 is being delivered. And this is one area in which MOE could make a difference. The Ministry has said that it does not want to get involved in pre-school education. But it can play the role of a quality assurer or, at least, a quality prescriber. The second is in the area of teacher training. Several colleagues have mentioned this. I just want to stress the point that we need to professionalise pre-school teaching, and that means training is essential and the Ministry must play a catalytic role in this regard, because the output of the PSE system is the input of the primary school system. Finally, on the issue of access, it would be desirable for us to create a situation where every child would be able to get access to at least two years of pre-school education. Cost is an inhibitor and there are other factors as well.”
“I want to know whether as a result of this announcement by NUS, that plan has now been set back or it is proceeding apace.”
“Sir, the recent announcement by NUS that it would open perhaps one or maybe two campuses in Singapore, in addition to its existing Kent Ridge Campus, has raised several questions which I would like to bring up today for some elaboration by the Minister. First question is: what is the preferred model for our university education system going forward, as we try to enhance the capacity of the system to meet our goal of allowing more Singaporeans to participate in tertiary education? Is it a model where we are going to have many universities, such as the addition of a fourth university, maybe a fifth, or one where we are going to have fewer universities, such as the existing three, but then mushrooming multiple campuses? The reason I ask this is because previously, when we had discussion on the fourth university, Deputy Prime Minister Tony Tan had made the point that Singapore should move away from the model of one university suits all, and we should instead be encouraging the development of diversity in our university system, so that there is diversity in terms of curriculum, criteria for enrolment and generally in terms of the cultural lifestyles of these universities. So, I would like some clarification on that as to how we will proceed as the University system develops. A related question then is that for a university like NUS, which already has a capacity of about 15,000-16,000 students, if I am not mistaken, is developing more campuses a desirable way to go forward? Or would it have an adverse impact on its standing as a premier research academic institution in Singapore? The final question is that of the fourth university which had been announced as something that was under quite intense study.”
“Sir, Higher Tamil is offered in, perhaps, two or maybe three secondary schools today - Raffles Institution, RGS, and, possibly, Cedar, I may be wrong there. The other students are required to go to the Tamil Language Centre and take up Higher Tamil. While the facility is well appreciated, it does mean that these students have to take time away from school which means they either miss out on CCA, or they miss out on remedial classes, or other enrichment classes, in order to pursue their interest in Higher Tamil. The question is not perhaps that Higher Tamil should be ubiquitous and offered in all schools. But in additional schools where there might be a critical mass of such students, could we reconsider offering it in situ in the schools itself? One example could be Crescent Girls where I have received feedback that there are at least 20 students who are taking Higher Tamil.”
“Sir, two to three years ago, the Minister chaired the committee to review the teaching of Malay Language in schools. It was part of a general review of the teaching of mother tongue in our schools. Some of the key recommendations were to modify the curriculum and textbooks, also to introduce a third stream, or to give the option to do an examination in Tamil Language B. The other recommendation was to enhance the Umar Pulavar Tamil Language Centre as a place for the learning of Higher Tamil. Sir, my first question is whether the Minister could give us a progress report on the implementation of those recommendations and, in particular, on how the upgrading and improvement of the Umar Pulavar Tamil Language Centre has progressed and the response of teachers and students to that new facility. The second question I have is, based on feedback, whilst we have modified curriculum and textbooks, there is a perception certainly among many parents, whose children take Tamil as a second language, that the assessment system, whether it is examination or school-based tests, has not reflected the change of the curriculum content adequately. This is quite a systematic feedback and it occurs both at the levels where there are national examinations, like P4, P6, as well as school-based examinations at other levels. Sir, I would like to know whether the Ministry has a process by which the curriculum changes and the textbook changes will feed through to have a material impact on the examinations and assessments that we have for the mother tongue and, in particular, Tamil. The third aspect, Sir, pertains to access to mother tongue and specifically Tamil Language.”
“Sir, may I seek a clarification from the Minister? The IUP Plus initiative is in addition to the $43 million Lift Upgrading Programme that has already been indicated in the Budget book for the coming financial year. My main concern is whether the LUP will cover more flats as a result of this initiative, or whether it is just a redistribution.”
“Sir, like several of the preceding speakers, I want to raise a plea on behalf of those who have, as Mdm Halimah Yacob put it, lost the spring in their stride. It makes me wonder whether there is a statutory board they can turn to for help! Sir, the Minister has pointed out, quite accurately, that we have a financial constraint going forward, and we need to ensure that the dollar we spend is spent well. In that regard, I want to raise two points for the Minister to consider. The first is whether we can indeed prioritise the Lift Upgrading Programme over the Interim Upgrading Programme. Because, essentially, the Interim Upgrading Programme has lift upgrading plus covered linkways, and then an assortment of other general municipal works, many of which can be undertaken by Town Councils on a progressive basis from money they generate through the S&C charges. That being the case, the big ticket item is the lift upgrading, and it is also one that is heavily sought. The Minister has overseen the study on the ageing situation in Singapore, and he is well aware of the pressing needs on behalf of those who are getting on in age, and they need this facility, in terms of the lift stopping on every floor. 1.30 pm The second point is whether the programme can be accelerated. In other words, quite apart from prioritising it over the IUP, whether we can, in fact, allocate even more resources to ensure that more flats benefit from this. Sir, it is of scant consolation to a 65-year old to say that the lift upgrading programme is a 10-year programme and it will come to his flat or block in the fullness of time. I hope the Minister can consider this request.”
“Once we have got a competitive public housing market, where various developers might be involved in the process of building and offering new units, then perhaps what we ought to be doing is offering Singaporeans vouchers which they can then use in deciding which houses they want to buy, done by which developers. That would also give important feedback, it seems to me, to the Ministry on the quality and type of housing Singaporeans desire. Sir, I know that in bringing up these points, there is a risk of being somewhat simplistic about a very complex issue. But I have a healthy regard for the calibre of the Minister and his team, and I know this is a matter that has been under heavy discussion in the Ministry for quite some time and I would appreciate some clarity on the matter.”
“In other words, the Public Housing Authority could create a tender or a bidding system, where parcels of land are opened up for various developers, private or public, to then bid in order to develop certain types of housing. The nature of the flats and the type of mix to be offered can all be specified in the process of inviting the bids. The third, is whether we can retain HDB as a core developer, a developer who can focus on certain aspects of the housing range, perhaps at the lower end certainly, in terms of rental and in terms of 3-room flats, perhaps, but also because we want to harness HDB's vast experience over the years as a developer. And we want to make sure that there is a certain quality assurance and price stability in the market. One could draw an analogy, say, with the cooperatives in the context of grocery business, and so on. So I think we need to seriously consider retaining HDB's role as a core developer in any revised public housing market going forward. Sir, on this score, in relation to a subsequent cut I have, I just want to make one important point, echoing what Mr Othman Haron Eusofe has said. I am an Advisor to the HDB Staff Union and I have received feedback that the staff are quite concerned, largely because of uncertainty about the future of HDB's role, and then, of course, on the impact it will have on their own livelihood. I think it is important that we address the issue reasonably fast, and we give them some level of assurance on, first the future of HDB's role and, at the same time, on how their welfare will be addressed. Finally, whether we could move away from subsidies to the developer, in this case, HDB, towards a voucher-based system in our public housing.”
“Sir, a review of the public housing policy is timely and I think the Minister has announced this recently. There are many reasons for this. I think key among them is, first, by and large, the public policy objective of home ownership has been achieved. 85% of Singapore's resident population are in HDB estates. Secondly, there are questions about whether we are spending too much on housing. A recent NUS study suggests that Singaporeans spend about 37% of their household income on property and insurance, property tax and other related expenses, compared to about 15% for the US and about 12% for Germany. This in turn has an impact on incentives to take risks and so on. Thirdly, Sir, we have been reminded by the Finance Minister on our funding constraints going forward, and what would be available in the way of money for building new flats and upgrading existing flats. So, that being the case, in going forward, clearly there are several issues that need to be dealt with and I would like to raise a few key points upon which I hope the Minister would be able to give some insight on the Ministry's thinking. First, is on whether we should decouple the role of the developer from the role of the planner with the oversight of the public housing market. Both these functions are encompassed within the HDB today, and there is some merit to the argument that this should be separated. A Public Housing Authority, for example, could be established which would have oversight on issues such as supply, demand, price, quality and other policy objectives, which might emanate from time to time. The second question, Sir, is whether we could create a competitive market for public housing development.”
“I would like to know, therefore, how we are going to be able to preserve that character and what sort of measures are in place to ensure that we do not lose that charm in the process of identifying and preserving old neighbourhoods.”
“The URA has done a good job in terms of consultation on its Master Plan, Development Guide Plans, Concept Plan, and so on, through various channels (feedback sessions and so on). But it could be argued that Singaporeans feel left out, partly because these macro plans do not quite resonate with Singaporeans. We do not really think in such big picture terms, in general. We worry about what is in our neighbourhood, in our immediate locality, what we are comfortable with. At the same time, it could also be said that this is a rather intimidating way of seeking legitimate views on what people consider to be worthy of preservation. The question is: what can we do, in terms of process, to enhance the involvement of Singaporeans - active citizens - who would like to preserve certain nostalgic neighbourhoods, because they think that would add to the collective experience of Singaporeans? Lastly, Sir, there is a question of what will happen after we have identified such neighbourhoods. I think the fear in the hearts of many is that in the Government departments, there is a rather clinical perspective of the term "preservation". Once a place has been identified as an area we want to preserve, we clean it up, we white-wash the buildings, we sanitise the place, and in the process we render it devoid of the very character perhaps that it had, which merited the treatment of it as a special place. And that is the question that needs to be addressed clearly, which requires some stoicism on the part of the URA officials to be able to tolerate some level of messiness in the environment, so that we can still carry on and enjoy messiness, which is a part of the character of these neighbourhoods.”
“Sir, Concept Plan 2001 has identified the need to focus on the identity of places, neighbourhoods which are of distinct character or centres of social and commercial activity. This is a welcome move. It is a clear acknowledgement of the fact that Singaporeans' sense of ownership, rootedness to this place derives not just from kinship ties and other experience of growing up, but also from the physical relief or landscape of our country. I know that this is a challenge, especially in an urban context. We do not have large natural reserves or mountains and valleys, and yet we seek to at least capture some element of nostalgia and the history of our country. Sir, that being said and acknowledging the good intention embodied in the Concept Plan, there are a few key questions that have been raised. They fall into three broad categories. The first is criteria. The question really is what qualifies a neighbourhood as, to quote the URA, "a one of a kind neighbourhood", which is worthy of such preservation. The URA has identified Jalan Leban in Upper Thomson and Anak Bukit, Beauty World area, as examples of these "one of a kind" neighbourhoods. Yet, we have also seen places like, say, Taman Serasi, being ruled out as worthy of conservation. And yet it could be argued that those areas have similar emotional ties for Singaporeans. The question is: what is the criterion in identifying such neighbourhoods? If it can be made more transparent, it would be helpful for all Singaporeans in having a common level of understanding. That would also help them participate more meaningfully in the process, which brings me to my next point - how are Singaporeans able to participate in this process, to be meaningfully involved?”
“They therefore urge the Government to take further measures to reduce business costs which will be of the greatest significance to them, and the key components they highlight are the cost of land and rentals. This would also apply to many MNCs who have to pay corporate taxes at the rates applicable in the countries where they are headquartered regardless of Singapore's tax rates. Many are aware that the Economic Review Committee is studying this aspect of the economy and are anxiously awaiting the recommendations on these other measures. Sir, finally, a word on intellectual and social capital. I was very inspired by some of the measures announced by the Finance Minister to promote and grow both aspects of our country and economy. In times of economic difficulty, there is a tendency for companies to cut back on R&D expenditure, because it has an immediate impact on expenditure and cash flow, and the benefits are only realised in the long term. I am therefore glad that the Minister will be liberalizing the tax deduction for expenses incurred for R&D, leading to ownership of intellectual property in Singapore. This, together with our laws protecting intellectual property, will certainly encourage Singapore's development as a hub for intellectual capital and knowledge-based industries. Another casualty of economic hardship is philanthropy. I am aware that many charities and volunteer welfare organisations are finding it hard to raise funds in this climate. Yet, we would all acknowledge that their work is essential if Singapore is to be cohesive and united. Sir, the introduction of double tax deductions of donations to IPCs and allowing such tax deductions to be carried forward for five years is a welcome investment in our social capital. Sir, I support the motion.”
“The second question pertains to the criteria for allocation. By using the annual value of properties and setting it at $10,000, the Minister for Finance has erred on the side of generosity, and I suspect deliberately, and captured all HDB households, and then some. But property value is a relatively blunt instrument to gauge a household's financial situation. There are, for example, many retirees who may be living in terrace houses bought 20 years ago, and they certainly do not fall within the higher income bracket, but they would probably get the lower tranche of ERS shares. At the same time, there are high income individuals, some owning several properties and driving luxury cars, who live in HDB flats. Could we therefore not use income, based on income tax returns or other sources of data, as the allocation criteria instead? I know the Minister has to strike the tricky balance between efficiency of the process and equitability of the outcome. There is also a need to ensure privacy of personal data such as income. But given the sophistication of IT systems and the civil service's experience with previous schemes in this genre, could we not try to have a more equitable outcome based on a more reflective allocation criteria? Sir, from the SME perspective and on business cost, several small businessmen have opined that the Budget appears to favour the larger and more profitable companies. They pointed out that a tax cut is useful only if one's business is profitable in the first place, and the reduction in personal income tax does not really help them in attracting the necessary talent to drive their businesses so as to get them into new areas of growth.”
“Singaporeans accept the need for Government to compensate for revenue lost through tax cuts in order to meet the growing demand for essential Government services. The Finance Minister elaborated on this point extensively during his statement on the need to maintain Government services in education, health, housing, transport and defence, and I think the point has been well taken by Singaporeans. The question is whether there is a need to implement the GST immediately, in the short term, especially given the economic situation today and cost of the offset package. I do hope the Deputy Prime Minister and Finance Minister will elaborate on the Government's thinking on this matter. Sir, the other aspect that has come up for some degree of commentary is the Economic Restructuring Shares. Sir, the ERS is a welcome and effective means of cushioning the impact of the GST increase on average Singaporeans. The ERS, together with the S&C and rental rebates, will go a long way towards helping Singaporeans adjust to the changes, especially those in financial difficulty. However, some questions have been raised on the ERS scheme. The first pertains to its coverage. Many have asked whether the ERS scheme's coverage need be so wide. For example, even those who benefit from the corporate and personal tax reductions and, for that matter, the other reductions for vehicle related taxes, will be receiving the shares. Is that necessary or should the scheme have been confined to those in the lower income brackets or those who do not benefit directly from the tax reductions? Sir, unlike 1994 when the GST was first introduced, in this instance, it is being raised to compensate for revenue lost from other measures which already favour those who are better off.”
“Small businesses are concerned that an increase in GST in the current economic environment will have a further negative psychological impact on consumers and cause contraction in spending. They are also worried about an increase in business costs, even though GST-registered businesses can claim input taxes. Individual Singaporeans welcome the Government's comprehensive offset package to ease the impact of the GST on them. But they also asked whether the whole exercise could have been deferred till the economy is more firmly on the path to recovery and the employment situation has stabilised. They are concerned that many sellers of products and services might use this opportunity to raise their prices. We have the legendary examples of coffee prices going up by more than the 2% implied by GST increases. Perhaps the rises in prices may not be high enough to be deemed to be profiteering but, nevertheless, it could be significantly higher than the 2% implied by the GST rise, and that, in turn, they fear would have a greater impact on their own spending. Sir, from a broader fiscal perspective, the question is also whether the desired corporate and personal tax cuts, which are essential for repositioning our economy, could have been absorbed without a concomitant rise in the GST. In particular, the increase in GST from 3% to 5% is expected to yield additional revenue of $1.3 billion annually. The offset package costs nearly the same amount. The ERS alone will cost the Government about $1.2 billion a year for the next three years. So, that being the case, the question is whether we could have deferred the decision on the GST.”
“Sir, over the past week or so, I have also had the opportunity to discuss the Budget with Singaporeans from all walks of life, through numerous feedback and dialogue sessions, and I must say I was very inspired by their feedback. In general, Singaporeans accept and support the principle that underpin Budget 2002. They understand the need to attract and retain businesses and talent to foster growth in our economy. And they also appreciate the heightened competition that Singapore faces and the need to reposition our economy. They also understand the role they have to play through training, skills upgrading, and maybe even absorbing some short-term pain. Ultimately, Sir, the Singaporeans I have spoken to, and they are reflective of Singaporeans in general, they are concerned about jobs and job security. They have put their trust in this Government's judgment that Budget 2002, and other recommendations of the Economic Review Committee, will best serve their long-term interests. It is critical that we live up to this expectation and fulfill our obligations. Sir, I wish to make specific comments on one or two aspects of the Budget, drawing on some of the feedback I have received so as to represent some of the views many Singaporeans have conveyed to me. One pertains to the GST, and it pertains to the timing and extent of the increase. Many have raised this question and I believe some of my colleagues have done so earlier as well. Why increase the GST? Why now? And if any increase in the new financial year is necessary, why not adopt a more graduated approach? These questions come from different segments of the community, stemming from varying concerns.”
“Thank you, Mr Speaker, Sir, for allowing me to join in the debate. Sir, several European businessmen I met last week, when discussing the Budget, felt that this is a rather bold, even audacious Budget. They were very impressed by our commitment and political will to implement fundamental changes to our fiscal infrastructure. They admired, even envied, our financial capacity and commitment to help Singaporeans adjust. But they also pointed out that, after all, the core proposal is to cut taxes for corporates and those at the higher end of the income spectrum whilst increasing the GST, which will affect the man-in-the-street. And in their countries, such a fiscal mix would make for a very volatile cocktail. That is perhaps why Singapore is different. I think a close analysis of the Finance Minister's speech and specific measures within the Budget should dispel any misconceptions. Because this Budget addresses both the needs in the immediate term of businesses and talented individuals so that they will come here but, at the same time, also sets in place fundamental changes which will benefit Singaporeans as a whole in the long term. The aim is to create economic growth and jobs. The strategy is to put in place fiscal measures that will ensure Singapore's long-term competitiveness whilst maintaining essential Government services. The short-term impact on Singaporeans is cushioned by a slew of offset measures. And if we are successful and with a modicum of luck, the average Singaporean will be a significant beneficiary, through more and better job opportunities as well as higher wages.”
“Sir, notwithstanding the legality of Singapore's reclamation works, there appears to be a perception across the Causeway that we ought to have consulted before we undertook these works. May I ask whether there is any basis for such a request or expectation in law and also whether this observation of Rule No. 1 has been bilateral.”