Tharman Shanmugaratnam
Singapore
“EDB conducts regular reviews to GIP to ensure its effectiveness in attracting only top-tier business leaders who are interested to drive the growth of their businesses and investments from Singapore.”
“MAS may vary the size of the additional capital requirement imposed on the bank and take other regulatory actions depending on the outcome of ongoing reviews. MAS requires all retail banks in Singapore to ensure that their mission critical systems supporting digital banking are resilient.”
“This question will be answered in the reply to Dr Tan Wu Meng's Parliamentary Question filed for tomorrow's Sitting. [Please refer to "Probe into Recent Disruptions of DBS' Digital Bank and Physical ATM Services and Preventive Measures Implemented", Official Report, 5 July 2023, Vol 95, Issue 107, Written Answers to Questions for Oral Ans…”
“Borrowing from the banks is one of the ways in which MAS carries out MMOs to soak up such excess liquidity. Like other central banks, MAS does this daily through an auction system, enabling MAS to withdraw liquidity through the Primary Dealers that submit the most competitive prices.”
“To mitigate consumer over-indebtedness, the Monetary Authority of Singapore (MAS) requires financial institutions (FIs) to implement a range of safeguards when extending mortgage loans and unsecured credit.”
“The Monetary Authority of Singapore imposes on external asset managers the same stringent regulatory standards for anti-money laundering and countering the financing of terrorism that it imposes on banks.”
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“The Productivity and Innovation Credit (PIC) scheme is for businesses which incur qualifying expenditure for Year of Assessment (YA) 2011 to YA 2015. The filing deadline for the YA 2011 income tax return is 30th November 2011. Statistics on the take-up rate of PIC will only be available in early 2012. As for the National Productivity Fund, the Government will be providing further updates during the upcoming Budget. RULINGS BY INDONESIA'S ANTI-COMPETITION BODY ON TEMASEK HOLDINGS 5. Mdm Ho Geok Choo asked the Minister for Finance in view of Temasek's situation with regard to Indonesia's Business Competition Supervisory Commission (KPPU) (a) what is next course of action available for Temasek; and (b) whether Temasek could have been more pro-active and followed up with the Indonesian Supreme Court when it failed to receive official notification of its failed appeal against the KPPU's ruling after waiting for some months.”
“The tax deduction for donations to Institutions of a Public Character (IPCs) was increased from 200% to 250% for donations made in 2009 to encourage charitable giving during the economic downturn. The enhanced deduction was subsequently extended to donations made in 2010. In 2009, the amount of gross tax deductible donations from individual donors increased by 7% compared to 2008, from about $175 million to $188 million. This should be viewed in the context of the economic recession, which reduced incomes. The percentage of individuals who claimed tax deductions for donations, as a fraction of the individual tax base, has also continued to trend upward, from 55% in 2008 to 58% in 2009. As for corporate donations, the data for 2009 is still incomplete as there is a usual lag in corporate tax filings. MOF is currently reviewing if the 250% tax deduction for donations to IPCs should be extended. LEASE BUYBACK SCHEME (Update) 25. Assoc. Prof. Dr Muhammad Faishal Ibrahim asked the Minister for National Development (a) if he would provide an update on the take-up of the Lease Buyback Scheme (LBS); and (b) how the LBS has benefited flat owners since its implementation.”
“Dr Lily Neo referred to the Food and Agriculture Organisation (FAO) which has been monitoring prices, and which issued a statement recently expressing concern about what is happening in world markets. They were particularly concerned about the impact on the poorest countries in Africa and elsewhere. I think in this part of the world, although economic growth is rapid, we are also facing problems of our own – coming out of high demand in China and some weather-related disruptions. Fortunately, we are not as much a consumer of wheat as we are of rice, but nevertheless there is a certain amount of wheat that goes into the household basket in one way or another, and various other products like sugar and so on. We are concerned about it. As I mentioned, the increase in the average household expenditure basket as a result of CPI increases has not been too significant so far but we are watching it and we think it will go up further. In the Budget, we will take all this into account in deciding what assistance we should provide to households, in particular the poor and the elderly. As the Member knows, we also have ComCare and other schemes which allow residents who are truly in need to get assistance. That is not something we are short of. ComCare is well funded. We will take another look at this in the Budget. MEASURES TO HELP SINGAPOREANS COPE WITH SLOWER ECONOMIC GROWTH 3. Mrs Mildred Tan asked the Minister for Trade and Industry in view that Singapore is likely to hit a high growth of around 15% this year and an anticipated drop of about 10% next year (a) what measures are being put in place to help Singaporeans prepare for the road ahead; and (b) what measures and initiatives will be introduced to help stimulate growth.”
“There is no harm in having a survey to see if it provides a picture different from what the national statistics show. The Ministry of Trade and Industry is in charge of this, but those of us in Government are familiar with how the Department of Statistics goes about its work. The CPI has integrity. It is a robust process of sampling, every so many years, of the household expenditure basket; and they measure prices constantly. The figure I mentioned earlier – for instance for food in November, the average household food expenditure for a set basket of items faced prices that were 1.8% higher than a year ago – that is correct. We will be able to find individual items that went up much faster – whether it be cooked food in hawker centres or items of raw food that you are buying from the supermarkets or wet markets. But, on average, it went up by 1.8%. We think it is going to go up further. We are concerned about this and we will be studying this to see how we can help households, particularly the low-income households and the elderly.”
“But it is something we are watching closely and if Members notice anything that struck them as especially sharp – aggressive marketing practices on the part of banks – it is useful to provide some feedback to the MAS and they will take a look.”
“Sir, food price inflation is a concern. In November, it was already about 1.8% higher than it was a year earlier and it is likely to rise in the coming months for the reasons I mentioned. Several key commodities are seeing prices go up significantly in global markets: sugar, which partly accounts for prices at coffee shops going up, coffee itself, wheat, soy beans and several other commodities. This will impact us. We will take into account all factors when we look at the needs of the poor and the elderly, who tend to spend more of their cash on food items compared to middle- and higher-income households. We will take into account their needs. Whether or not prices are going up too rapidly in response to higher import costs, this is something we always monitor. The Ministry of Trade and Industry has a committee that looks into profiteering. Minister of State Lee Yi Shyan heads it. If the Member finds something unusual happening in her neighbourhood, it is useful to pass on the information. The Monetary Authority of Singapore (MAS) keeps looking at how banks go about their marketing strategies for credit cards as well as consumer debt generally, both from the point of view of ensuring proper professional practices and also to make sure that people are not over-extending themselves. Our rules on credit cards and consumer credit are more conservative than in most countries including those in Asia. We limit consumer credit based on how much income you earn. You cannot borrow on credit cards unless you have a minimum income level.”
“Apart from the homes they live in, CPF savings are the main source of retirement funds for low- and middle-income Singaporeans. CPF interest rates are currently significantly higher than bank deposit rates. This is especially so for the first $60,000 of a member’s balances, which currently earn an interest rate of 3.5% if the money is in the Ordinary Account, and 5% if it is in the Special, Medisave or Retirement accounts. So 3.5% and 5% in a member's CPF accounts for the first $60,000, which are significantly above bank interest rates. For Singaporeans who do not have significant spare savings – which include many of our retirees – it remains best for them to keep their investments simple and conservative. It has been and remains unwise for them to seek higher returns by investing in high risk assets. As Members know, through the MoneySENSE financial education programme, we have been seeking to help more Singaporeans plan for retirement and invest their spare savings prudently. Our capital markets are also developing and offering more investment alternatives. These include instruments that offer better returns than savings deposits but without overly high risk. Retail investors can now participate in Singapore Government Securities (SGS) auctions via ATMs of the three local banks. By the middle of this year, they will also be able to buy and sell SGS on the Singapore Exchange. Well-rated corporate bonds are also becoming more widely available, as high quality borrowers are turning more to the bond market to meet their financing needs. Some of these companies have begun to issue bonds aimed at retail investors, and we can expect this to be a growing trend in coming years.”
“However, for households who are not earning any income from work, including most elderly households, inflation is always a problem. The Government is mindful of the problems these households face, and has provided them with significant assistance over the last year – in fact exceeding the increase in costs of living they have faced. Take for example a retiree couple, living in a 3-room flat. They would have received a total of $1,200 in benefits last year. This would have exceeded the total increase in costs that such households would have faced as a result of rising food, utilities and other prices. If they were living with children who are low-income earners, the assistance provided by the Government would also be considerably greater, as the household would have received Workfare Income Supplement (WIS). The WIS would have gone to the working child, if he or she had a low income. This approach will continue in the upcoming Budget. The Government will take into account the impact of inflation and the needs of low-income and retiree households when considering further transfers. Ms Irene Ng and Mdm Ho Geok Choo had also asked about the outlook for interest rates and what can be done to help Singaporeans, especially the low-income and elderly, get more returns on their savings. The current low level of interest rates reflects loose global liquidity conditions. We do not make official forecasts of interest rates, but market analysts believe that this low interest rate environment could persist for a while in view of the still weak recovery of the US and other developed economies. However, low-income savers in Singapore are in fact less affected by bank deposit rates than our CPF interest rates.”
“Ms Irene Ng referred to the impact of higher inflation on Singaporeans. CPI inflation for November 2010 was 3.8% year-on-year, bringing the average over January to November to 2.7%. It is expected to rise further in the first quarter of this year, before moderating in subsequent quarters. However, about half of the "headline CPI inflation rate" over the last year has been due to a single factor – the sharp rise in COE premiums. This CPI increase hence does not mean a similar increase in actual cash outlays by the majority of Singaporeans, as only 3% to 4% of households, or 7% of all car owners, purchased new COEs in 2010. The majority of car owners hold existing COEs. If COE premiums stay high, everyone who purchases a new car or renews a COE will eventually face this higher price. However, the purchases will take place over a period of years. Hence, the impact on cash outlays for households as a whole will be spread out over a few years. Excluding the recent increase in COE premiums – which contributed significantly to the "headline CPI inflation rate" – inflation during January to November 2010 averaged about 1.3%. It was due mainly to increases in prices of various foods and oil-related items in the household consumption basket. These price increases reflected weather-related disruptions in food supply from abroad, increased demand in emerging countries like China, and the uptrend in global oil prices. These external factors will unfortunately continue to impact us and are likely to raise domestic prices further in the coming months. The best way to help Singaporeans to manage these increases in the costs of living is to grow the economy in a sustainable way and raise our skills, so as to help wages grow. That remains our central strategy.”
“Mr Speaker, may I take Question Nos. 1 and 2 together?”
“This means that MAS has to be satisfied that the Exchange remains able to maintain efficient and transparent markets, and is able to minimise systemic risks. In Australia, the tradition regulatory objectives, the transaction also needs the approval from the Australian parliament, and would have to pass the scrutiny of the Foreign Investment Review Board. MANAGING INFLATION 14. Assoc. Prof. Paulin Tay Straughan asked the Minister for Trade and Industry whether the rising trend of the Consumer Price Index is cause for concern and if his Ministry has plans to manage inflation in Singapore in the next year.”
“On 25th October 2010, the Singapore Exchange (SGX) and Australian Securities Exchange (ASX) announced that they had entered into a merger implementation agreement. They stated that the proposed combination of SGX and ASX would bring together complementary businesses and their respective strengths to serve investors better and leverage on economic growth in the Asia Pacific. They noted that although the ASX and SGX would remain separate legal entities and would be locally regulated, the merger would diversify the product and customer bases of both exchanges. For example, the merger would offer investors access to the second largest listing venue in Asia Pacific with over 2,700 listed companies from 20 countries, including more than 900 natural resource companies and the largest number of REITs and exchange-traded funds in the Asia Pacific. SGX and ASX also said that a combined group will enhance its attractiveness as a partner of choice for future exchange industry collaboration, to tap into strong regional growth. The Government cannot judge the commercial merits of the proposed merger. The commercial merits will be decided by the respective shareholders of the two entities. Indeed, the transaction would need to be approved by the requisite majorities of the shareholders of both SGX and ASX. Regulators on both sides would also need to be satisfied that the proposed transaction meets all regulatory requirements in their own jurisdictions. In Singapore, the Monetary Authority of Singapore's (MAS) objectives as the markets regulator are spelled out in the Securities and Futures Act, as part of its overall mandate of fostering a sound and reputable financial centre.”
“Mr Speaker, Sir, if I could take the next two questions together?”
“The main reasons for inflationary pressures picking up: first, the fact that we are growing very rapidly, the labour market is tightening and in fact most markets for resources are tightening, including commodities. There are also some food price shocks because of shortages in supply in the region, including in China. Thirdly, Ms Sylvia Lim does have a point in that easy monetary policy in the developed world has a way of leading to flows of liquidity all around the world and, sooner or later, flows of liquidity lead to more purchases of goods and services. Demand is picking up partly because the interest rates are very low, and people are looking for other things to buy, and that tends to force prices up over time. We will be on guard. MAS has its eyes very clearly centred on inflation as its principal objective – keeping inflation stable and relatively low in the medium term compared to the rest of the world. MERGER BETWEEN SGX AND ASX 12. Mr Teo Siong Seng asked the Senior Minister if he can explain the rationale behind the planned acquisition of the Australian Securities Exchange by the Singapore Exchange and how it will benefit the local investors in Singapore. 13. Mdm Ho Geok Choo asked the Senior Minister (a) how will the proposed merger of the Singapore Stock Exchange and the Australian Stock Exchange benefit Singapore and Singaporeans; and (b) how will this merger position Singapore as the premier stock exchange in the region.”
“First, in response to Mr Liang Eng Hwa's general point about inflows of "hot money", I would say that by and large Singapore's financial system has a way of intermediating these inflows, so that what is not needed domestically tends to get recycled overseas. In fact, some of it goes back to the developed countries' market themselves, including the United States. The main reason for concern on asset markets, which is not just a short-term concern but may be with us for quite a while, is that interest rates are extremely low. And that is a function of easy monetary policies in the US and the developed world. Our three month deposit rates are about 0.2%-0.3%, and inter-bank rates are barely higher. So we have extremely low interest rates on deposits in the banking system, and that leads to investors, including households, wanting to search for yield somewhere else. That is the problem we have to address for some time to come. It means we have to be vigilant to the possibility of a property market bubble and take further measures when necessary. The MAS has a good handle on its prudential regulation of our banks, so that we are not really concerned, at least not fundamentally concerned about – systematic stability in our financial system. We are concerned about property prices rising too quickly and too far. Our three rounds of measures so far have been aimed and injecting some stability into that process.”
“As Members know, we have also introduced a series of pre-emptive measures since September last year aimed at promoting a more stable and sustainable property market. These have had some calming effect on the market. The Government will continue to monitor the situation closely and take additional steps, if necessary, to ensure financial stability and sustainable asset markets.”
“Expansionary monetary policies in the industrialised economies, aimed at supporting their still fragile economic recovery and avoiding further escalation in financial market stresses, have led to record low interest rates. In contrast, the Asian and emerging economies generally have rebounded strongly from the crisis and have begun to tighten their macroeconomic policies. The increase in capital flows to the region reflects these underlying divergences, notably the differences in prospects for both growth and inflation between the advanced and emerging economies. Capital has flowed to this part of the world in search of higher returns. Policymakers in the region are fully aware of the risks posed by the increased capital flows. Much of it has comprised short-term investments rather than longer term, direct investments, and can hence be volatile and easily reversed. In Singapore, the Monetary Authority of Singapore (MAS) had taken into account this volatility in global financial markets in its most recent monetary policy move in October, which involved a widening of the band in which the Singapore-dollar exchange rate can fluctuate. The capital inflows are generally being intermediated efficiently through our domestic financial markets and banking system. Nevertheless, we are closely monitoring the impact of capital flows on the economy and especially our asset markets. We are not contemplating introducing capital controls, but will continue to rely on a range of policy tools to ensure that capital flows do not threaten financial stability or cause a property market bubble. With our economic recovery more firmly entrenched, the Government has been withdrawing the expansionary macroeconomic policies implemented during the crisis.”
“The US Federal Reserve, or the Fed, has recently embarked on further policy measures aimed at supporting the US economic recovery and coaxing inflation back to the level that Fed policymakers consider consistent with healthy economic growth. The Fed will ease monetary conditions by purchasing longer-term US Treasury securities, amounting to some US$600 billion by mid 2011. It will do so in phases, and will adjust the amounts as economic conditions change. So this is not about US$600 billion being released into the markets all in one shot. The Fed’s latest round of monetary policy easing is not fundamentally different from its actions in 2008 and 2009, when it purchased large amounts of securities although mainly of shorter maturities. Those actions had contributed to stabilising financial conditions in the US and globally, and supported the recovery from the crisis. The Fed hopes that its latest policy measure will lower longer term interest rates and stimulate economic activity – in particular by making housing more affordable, encouraging corporate investments and raising stock prices and consumer spending. Whether the Fed’s measure will be effective remains to be seen. But if the policy does succeed in stimulating a new cycle of growth in the US economy, or at the very least in reducing the risks of a further slowdown in the US economy, it will be positive for Singapore and most other countries in the region. The US remains one of Asia’s largest trading partners, and the state of its economy is still a key concern. The basic reason why capital flows into Asia have increased, including into Singapore, has to do fundamentally with the very different stages of economic recovery being experienced in different parts of the world economy.”
“Mr Speaker, Sir, if I may take the next three questions together?”
“I do not have as detailed data as Assoc. Prof. Fatimah Lateef may like but to just give a feel, the Auditor-General's Office receives roughly 50 cases of feedback, specific complaints or information on possible fraud or misdoings each year. It follows up on complaints which have some credibility associated with them and where there are some material, financial impact associated with them.”
“So this is something we are improving but I do not think that we would be able to eliminate all human failure for all time in all agencies. I say that without the slightest suggestion of complacency on our part. We do want to improve and minimise the risk of fraud. I think that answers your question. Assoc. Prof. Fatimah Lateef (Marine Parade): Sir, I thank the Minister for the assurance and explanation. Can I ask: has the Ministry seen an increase in the number of referrals or complaints about fraudulent cases? Also, with this current climate in which we have sophisticated IT technology and so on, how many of these cases actually turn out to be true positives?”
“First, I agree as a general proposition that we should try to minimise the risk of any such occurrence. I think Mr Low will agree with me that there is no system – private sector or public sector – which can eliminate it entirely because from time to time there are, unfortunately, lapses in human conduct, and I am not referring to the chaps who allegedly perpetrated fraud but to lapses in supervision. We have got to try and minimise those lapses. But there is only so much you can do through rules and guidelines. For instance, one way of minimising lapses is to have more people involved. For tenders, for instance, for large transactions – it is a much more robust process. First, robust process of assessing the need for a tender; robust process of assessing the bids that have come in; and the final approval processes are more onerous. Several individuals involved, and sometimes several layers of individuals involved. If we do that for every single procurement transaction in the Government, it would really slow things down. It would make Government less efficient and less able to serve the needs of the public. So we have got to make sure the rules and guidelines are sound but focus on backing them up with vigilant supervision. And that is not just an empty pronouncement. We are also providing guidelines on supervision which Ministries and statutory boards should take heed of, and some helpful tips on how to go about supervising procurement operations. Quite specific tips, for instance, on how you search through the data to see if certain companies are appearing too frequently or detect certain trends in the data that should be a red flag.”
“It focuses on selective areas of internal audit in each audit cycle. From time to time it will re-prioritise and, indeed, following the SLA and IPOS' cases, it will be placing more emphasis on IT procurement. But we should try and avoid the temptation to look backwards at the last mistake, at the last mishap, the last occurrence of fraud and focus all our resources on avoiding that. Because it could be something else the next time. So we have got to maintain a balance, keep our priorities and keep people guessing as to what the Auditor-General is going to focus on. The Member had a final question which had to do with other statutory boards. I can assure Mdm Halimah and Members that we have been reminding all our statutory boards of the need for vigilant supervision of procurement operations and, specifically, on IT maintenance operations, the need for vigilant audits of these operations.”
“First, I do not think they have a systemic problem. As I have explained, the rules and guidelines are in place. They are not out-of-sync with best practices elsewhere, including in our private sector. We will fine-tune and refine them from time to time and, indeed, there are some refinements we are thinking about. But the rules and guidelines are not what explain what happened at SLA and IPOS, and they in fact had practised the rules and guidelines. There was human failure. Human failure, first, in supervision and, second, in audit. There is no reason to believe that these human failures are widespread. But we are alert. MOF has reminded all statutory boards, quite apart from our Ministries, to pay more attention to supervision of procurement. We have provided a detailed checklist of questions that have to be asked on matters of procurement, including procurement of IT and maintenance services. IDA, on its part, is seeing how it can help agencies, including our small statutory boards, to improve the management of IT maintenance services and how we can also strengthen audit of IT maintenance services because this is a more specialised area than procurement in general, or audit in general. So, we are seeing how we can improve the system but there is no reason to believe that the problems are systemic. The Auditor-General's Office cannot, as Mdm Halimah mentioned, audit all 64 statutory boards in all areas every year. The primary responsibility rests on the statutory board itself. Its internal audit responsibilities are its responsibilities and the board's responsibilities. That of the board and the audit committees'. And it is a requirement for statutory boards to set up audit committees. The Auditor-General's Office provides an important second check.”
“In fact, in response to specific feedback in the past, the Auditor-General has carried out audits of selected financial transactions with the purpose of uncovering irregularities, including fraud. The Singapore Public Service has, over the years, established a track record of clean and effective governance. From time to time, however, there have been dishonest public servants, who have found ways to get around the rules for personal gain. The Government takes a very serious view of each such incident. One of the strengths of our system is a robust process of investigation and prosecution, to bring perpetrators of fraud or corruption to justice and deal with them with the full measure of the law. In sum, I am sorry to have taken a bit of time on this – there are several elements involved in keeping the integrity of our system of public sector procurement. It takes sound rules and safeguards, operated by upright officers and backed up by conscientious supervision and audit; open channels for possible wrongdoings to be reported; and, finally, the deterrent effect of robust law enforcement. We have a working system, and I assure Members we will keep improving it wherever possible.”
“The Auditor-General's Office cannot audit all 64 of our statutory boards in all areas of their operations every year, and hence directs resources towards areas of greater significance. In the light of the SLA and IPOS cases, the Auditor-General's Office will re-prioritise the areas being selected for audit in the next audit cycle to give greater attention to IT services procurement and contracts. However, the external audits performed by the Auditor-General's Office serve as an extra layer of check, and are not a substitute for the statutory boards' internal audit responsibilities. I should add that soon after the discovery of alleged fraud in SLA, the Government had also performed checks on all transactions involving the two officers suspected of fraud as well as all transactions between public sector agencies and the specific vendors involved in the SLA case. This was indeed how the alleged fraud at IPOS was surfaced. There is a further safeguard, which Assoc. Prof. Fatimah Lateef referred to in her question. We must ensure that channels are open for whistle-blowing, because that too has a role to play in uncovering fraud. Within the Civil Service, there are established channels for officers to provide feedback and report wrongful practices. Officers can report cases of misconduct to their supervisors, the HR department, the Permanent Secretary or the Head of Civil Service. They can also report matters pertaining to conduct and discipline in the Civil Service to the Public Service Commission. Feedback, whether from public officers or external parties, is taken seriously and acted upon.”
“MOF has reminded all Government agencies of the importance of vigilant supervision of procurement operations to minimise opportunities for fraud. We nevertheless will not be able to eliminate human lapses in supervision entirely across the public sector. This is why we need a robust system of audit to help detect procurement irregularities as well as deter potential misdoings. Internal audit plays an important role in public agencies, whether undertaken within the organisation or outsourced to commercial auditors. Last year, the Auditor-General's Office (AGO) conducted a review of the governance framework and internal audit practices of statutory boards. Based on its findings, it has established a set of best practices in June this year, which MOF has circulated to all statutory boards. This exercise pre-dated the SLA case coming to light. A second level of audit comprises external audits. Statutory boards' financial statements are subject to annual audits by either the Auditor-General or external commercial auditors. These regular annual audits are for the primary purpose of expressing an opinion on the financial statements and do not focus on internal controls. In addition, therefore, the Auditor-General's Office periodically audits statutory boards in selected areas of internal controls, compliance with regulations and avoidance of waste. Each year, the Auditor-General's Office carries out such audits of all 15 Ministries in Government, all nine Organs of State and around 18 other entities which are mainly statutory boards. The Auditor-General's Office last audited the SLA in FY 2007/08 with the field work being done in 2007. It began its audit of IPOS in December last year, before the recent case of alleged fraud surfaced.”
“All public sector agencies follow more stringent processes for larger value procurements, for which tenders have to be called. For example, tenders have to be approved by tender boards comprising three individuals. Tenders account for some 95% of total Government procurement. We are nevertheless looking into possible improvements to the system. For example, MOF will encourage agencies to adopt good practices, such as the periodic rotation of officers with procurement responsibilities, whenever feasible. It was, in fact, through a rotation of IDA officers in SLA that irregularities were detected in the recent case. In addition, IDA intends to help agencies, including statutory boards, to strengthen the management and monitoring of IT maintenance services. It will also help them draw up the scope of audit of IT procurement, which is more specialised than other types of procurement. This is an example of the industry-specific approach that Assoc. Prof. Fatimah Lateef had raised. But even as we seek improvements to the system wherever possible, the safeguards must be workable. We must ensure that procurement can be carried out efficiently, and we do not add layers of bureaucracy to perform more checks and balances. We should do what we practically can to reduce the risk of fraud, but keep Government lean, efficient and responsive. What matters, therefore, is to have a sound and practical set of rules, and to back them up with effective supervision on how they are implemented. This does not mean that a supervisor has to take on the role of approving quotations or transactions personally. But proper and alert supervision will make it less likely that irregularities in budgeting and procurement will pass unnoticed.”
“Mdm Halimah Yacob and Mr Low Thia Khiang had asked if the alleged fraud at SLA, and I suppose IPOS as well, exposed gaps in the rules and guidelines governing finance and procurement processes in the public sector. The recent cases at SLA and IPOS did not come about because of gaps in rules and guidelines in public sector procurement. In particular, in procurement, the required segregation of roles between officers evaluating quotations or bids and those making the awards was in place in the two agencies during the period in question. The SLA and IPOS cases instead occurred because individuals, allegedly, colluded to get around the required checks and balances to cheat the system. However, the cases reflected two weaknesses. First, failure in supervision. Good supervision requires not just knowledge of the Government rules and procedures, but continual vigilance. This vigilance was lacking in those responsible for supervision of the IT Department at SLA and IPOS at the time. Second, there were gaps in internal audit in both agencies. As the Minister for Law has just stated, the Ministry of Law has acted to rectify the shortcomings both in supervision and audit. The Ministry of Finance (MOF) reviews public sector procurement rules and guidelines on a regular basis. In fact, following the alleged fraud cases at SLA and IPOS, a further review of public sector rules was undertaken. This included a comparison with best practices in the private sector. The review affirmed that the public sector procurement rules, for both quotations and tenders, were fundamentally sound. There are appropriate checks and balances built into the system of procurement based on quotations, and these apply to lower value transactions (in other words, those below $70,000).”
“Mr Speaker, Sir, if I may take the next few Questions together?”
“On any breach in the qualifying conditions for the stamp duty relief, the stamp duty earlier relieved can be recovered by the Government. We will amend the Act to provide that late payment of this stamp duty to be recovered will attract penalties. This change will take effect from the date of gazette of the Bill. Clause 2 of the Bill provides for this change. Third, we will amend the Act to make explicit that the levy of the seller’s stamp duty will apply to all transfer instruments for prescribed property transactions. Typically, in a property transaction, both parties concerned would first enter into a sale and purchase contract or agreement before executing the conveyance instrument to transfer the property to the buyer. This amendment will make clear that the sellers’ stamp duty will apply not just to contracts or agreements for the transfer of properties, but also to any conveyance instrument for the transfer of such properties without a contract or agreement. This amendment will take effect from 20th February 2010, which is when the SSD was introduced for residential properties sold within the prescribed holding period. Clause 4 of the Bill provides for this change. Sir, the final legislative change being introduced arose from our periodic review of the stamp duty system. It is technical in nature and involves no policy change. Mr Speaker, Sir, I beg to move. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill – [Mr Tharman Shanmugaratnam]. Bill considered in Committee; reported without amendment; read a Third time and passed. SUPREME COURT OF JUDICATURE (AMENDMENT) BILL Order for Second Reading read. 3.38 pm”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Stamp Duties (Amendment No. 2) Bill 2010 comprises five amendments. One amendment gives legislative effect to a Budget 2010 initiative, while the remaining four amendments arise from the periodic review of our stamp duty system. In the Budget 2010 Statement, I had announced the introduction of a stamp duty relief and income tax allowance for qualifying mergers and acquisitions (M&As). These tax concessions aim to facilitate corporate restructuring, especially amongst small and medium size enterprises. Under the stamp duty relief scheme for qualifying M&As, acquirers can be granted up to $200,000 of stamp duty relief per financial year for the acquisition of ordinary shares. This change takes effect from 1st April 2010. Clauses 3 and 6 of the Bill provide for this stamp duty relief for qualifying M&As. I will now proceed to explain three other key non-Budget amendments in the Bill. First, currently, based on the Interpretation Act, the Minister for Finance can impose conditions for any reduction or remission of stamp duty granted under section 74 of the Stamp Duties Act. We will now provide for this power explicitly in the Stamp Duties Act. The amendment will also make clear that where the conditions imposed are not complied with, the amount of stamp duty earlier reduced or remitted will be recoverable as a debt due to the Government. Clause 9 of the Bill reflects this change. The change will take effect from the date of gazette. Second, Section 15 of the Act currently provides for stamp duty relief for the reconstruction and amalgamation of companies, asset transfer between associated entities and conversion of a firm to a limited partnership.”
“The House immediately resolved itself into a Committee on the Bill. – [Mr Tharman Shanmugaratnam] Bill considered in Committee; reported without amendment; read a Third time and passed. STAMP DUTIES (AMENDMENT NO. 2) BILL Order for Second Reading read. 3.33 pm”
“The PIC should also be viewed in context of the full range of discretionary grant schemes in supporting productivity enhancement which are being administered by various agencies and overseen by the National Productivity and Continuing Education Council. These grant schemes allow us to catalyse the changes that are required in several sectors like construction and food and beverage. These changes would involve coordinated efforts by enterprises, unions and Government agencies so as to maximise productivity improvements. We have decided on a deliberate balance between across-the-board tax incentives which leave room for free market forces and discretionary grants which are targeted at sector and industry-focused efforts at raising productivity. Finally, I agree with Assoc. Prof. Straughan that efforts to improve productivity will work best if they go hand-in-hand with maintaining a healthy work-life balance. It is worth reiterating that productivity improvement is not about working longer hours or generating greater stress on the job. Through process improvements, upgraded technologies, better management and training up for better skills and by everyone working smarter, enterprises can increase the value each worker contributes without extra hours on the job. That is higher productivity, and is ultimately how workers can receive higher wages and enjoy a higher standard of living. To stick with low productivity operations will only mean the opposite – in other words, workers spending longer hours on the job in order to get higher wages. Higher productivity is, therefore, part and parcel of achieving a good work-life balance in Singapore. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House.”
“A company still has skin in the game when they do so. They still bear more than 50% of the training cost or cost of investment in machinery, although they can get further subsidies from the Workforce Development Authority (WDA) for approved training schemes. It is in their interests to spend wisely on training to ensure that the courses are indeed relevant to raising the skills of their employees or to invest in machinery that truly raises their game in productivity. We should, therefore, let them decide which expenditures are most effective and to plan and invest ahead with certainty on whether they qualify for the PIC. In particular, we should avoid making companies report to IRAS on post-training outcomes for every training course attended by their employees or to justify how their investments in equipment actually raise productivity. The claim process for the PIC should not be cumbersome, given especially that the scheme aims to encourage productivity enhancements amongst a broad base of our SMEs. The market will decide which companies invest most successfully. This includes the employment market. I quite agree with Assoc. Prof. Straughan that employees should be empowered as active stakeholders in raising productivity. Employees will ultimately judge if this is so. However, I should add that while the PIC covers training expenditures, any inhouse training will need to be certified by the WDA or the ITE. The WDA which disburses training subsidies does, in fact, have quality assurance systems in place which include post-training feedback from employers and employees to ensure that the courses remain relevant and value-adding. This is much like what Assoc. Prof. Straughan had in mind.”
“First, we have discretionary fiscal incentives in supporting focused objectives, such as the development of a new high value industrial cluster that has spin offs for the rest of the economy or the growth of R&D capabilities in the sector. Examples of this approach of using discretionary fiscal incentives include the pioneer status tax incentives for manufacturing and service industries, the Research Incentive Scheme for Companies (RISC) which provides co-funding for corporate R&D and, in fact, the Global Trader Programme (GTP) tax incentives that we were just discussing. So that is one type of fiscal incentive. The second type comprises across-the-board fiscal incentives which aim at tilting behaviour in the economy or society at large, for example, to promote economic upgrading and investments in productivity, wherever possible, in any sector or company. These two types of fiscal incentives have to be administered quite differently. The discretionary incentives like the pioneer status or the GTP scheme are granted only where the Government agencies administering that incentive are satisfied that the company merits the incentive because of the value it adds to Singapore and that it has committed to meeting specific investment targets or other deliverables. The company's performance of these specific deliverables is tracked. This is different from fiscal incentives which support economic restructuring across-the-board. The Productivity and Innovation Credit (PIC) is a major example of a broad-based fiscal incentive for economic restructuring. It is impractical and, in fact, not desirable to attempt to manage company's use of such schemes administratively. The PIC gives companies a clear and strong incentive to invest in their workers, equipment, software or R&D.”
“Strictly, this income threshold should apply to both sets of parent reliefs – the general parent relief as well as the handicapped parent relief. Nonetheless, the Government recognises that apart from financial resources, the time, resources and attention needed in caring for a handicapped person is typically of a very different order, compared to looking after other dependants. As a concession, we have, therefore, removed the income threshold for tax reliefs relating to handicapped dependants. This includes the handicapped parent relief. To remove the income threshold for the parent relief, in general, irrespective of whether the parent is a dependant or not, will also amount to cutting the personal income tax rate for a much broader group of taxpayers. It amounts to a macro policy change. Whether we should adjust personal income tax rates is a separate issue which we will continue to review in the future. I now move on to the issues raised by Assoc. Prof. Straughan with regard to the Productivity and Innovation Credit Scheme. Assoc. Prof. Straughan was concerned that the enhanced tax deductions for spending on training, equipment or software would be granted indiscriminately. It could, she felt, result in a proliferation of trading schemes, for example, without assurance of quality or effectiveness. She also suggested that feedback could be obtained from employees on whether the training courses were useful before granting the tax deductions and, likewise, that the company be required to justify or rationalise how productivity will be raised through its investments before it receives its tax deductions. It may be helpful if I first explain that there are two distinct forms of fiscal incentives that we use to support our economic objectives.”
“While there would be actual tax losses for activities that would have come or remained here without incentives, overall, we believe that our incentives serve to strengthen the sector, create spin offs for other businesses and hence increase tax revenues over the long term. In the case of the current GTP enhancement, companies carrying out structured commodity financing activities would have to grow and meet incremental commitments in order to enjoy the concessionary tax rates. Second, Mdm Ho asked whether it is too stringent for angel investors to hold their investment in the qualifying start-ups for at least two years in order to enjoy the tax deduction for their investment. Our two-year holding period is, I believe, quite reasonable. We want angel investors to commit to contributing funds, expertise and experience to help grow the startups. An early exit would suggest a different motivation, different from that of wanting to nurture start-up companies. The holding period is also necessary to balance between making the scheme attractive and preventing abuse of the scheme as a means of enjoying lower personal income tax rates. A few other countries have similar schemes for angel investors. In the UK and Ireland, the scheme, in fact, requires a holding period of three to five years. Third, Mdm Ho asked if the income threshold should be removed in respect of parent relief, similar to what the Bill puts into effect for handicapped parent relief. Both the parent and handicapped parent reliefs provide recognition to individuals supporting their dependent parents. There is, therefore, a need to have a threshold to determine whether the parents can be considered as dependants. We have doubled the income threshold to $4,000 per year.”
“Mr Speaker, Sir, I would like to thank Mdm Ho Geok Choo and Assoc. Prof. Paulin Straughan for their comments on the Bill. I will deal with their points in turn. First, Mdm Ho had queries relating to the extension of the Global Trader Programme (GTP) incentive to structured commodity financing activities. I think Mdm Ho viewed the GTP extension as something to offset the impact of the reduction in total revenue of GTP companies, which is quite a large reduction of 30% from 2008 to 2009. And she asked if the concessionary tax rate under the GTP, going forward, would be adjusted based on the performance of the GTP companies each year. The GTP is not, in fact, aimed at making up for any reduction in revenues of GTP companies in any particular year. What we are aiming to do is to attract a larger critical mass of sophisticated financing and risk management services into Singapore, thus strengthening our position as a leading trading hub in Asia. The concessionary tax rates of 5% or 10% under the GTP are fixed and subject to the recipients meeting their commitments, in terms of business spending or employment of professionals, over the incentive period. The rates are not adjusted based on the performance, in terms of turnover or revenue, of GTP companies for each year. This fixing of the rates in advance provides certainty to the GTP companies and allows them to plan ahead and invest in their people. Mdm Ho also asked how the Government is planning to make up for a reduction in tax revenue arising from this enhancement of the GTP scheme. The reduction in tax revenues is, in large part, notional. Without the GTP incentives, some of the activities would not be here.”
“Third, donors will be required to provide Unique Identification Numbers (UIN) or Unique Entity Numbers (UEN) for their donations to an Institution of a Public Character (IPC), unless the Comptroller waives such requirement. This mandatory provision is to streamline the processing of claims for tax deduction for such donations. Once the donors provide their unique numbers that I have just mentioned – both UIN or UEN – to the IPC, the donors would not need to make a separate claim in their tax returns as the donation would be automatically reflected in their tax assessment based on information from the IPC. This change will take effect from 1st January 2011. Clauses 28(a) and (c) effect this change. The remaining six legislative changes arising from our periodic review of the income tax system are either technical in nature or relate to improvements in tax administration. With the above changes, the Income Tax Act will be enhanced and updated to better achieve our economic and social objectives. Sir, I beg to move. Question proposed. 3.10 pm”
“Clauses 19 to 22, 26, 54(a), (c), (e), (f) and 55(a) provide for this change; Fifth, the Bill introduces a new tax incentive for angel investors to claim deductions for 50% of the cost of their investments in qualifying start-ups. Clauses 28(d) and 33 provide for this change; and Sixth, various personal income tax reliefs such as the wife relief, parent and handicapped parent reliefs, dependant-related reliefs, and course fee relief are enhanced. These changes are covered by clauses 2(b), 35(a) to (g), 35(j) to (t) and 53. Sir, I shall now deal with the other tax changes covered in this Bill that arise from the periodic review of our income tax policies and administration. Let me highlight three of these changes. First, we will enhance the Global Trader Programme by extending its current list of qualifying activities to include qualifying structured commodity financing activities. This enhancement is aimed at attracting more sophisticated financing and risk management services to be performed in Singapore and further strengthen our position as the leading trading hub in Asia. Clause 42 effects this change. Second, we will introduce a new tax incentive for sovereign funds to encourage the building up of a cluster of sovereign funds as a niche class of financial institutions that promotes the development of our financial sector. This incentive, which takes effect for five years from 1st April 2010, will grant tax exemption on prescribed income derived by sovereign funds and their investment offices. Clause 10 provides for the introduction of this tax incentive.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Income Tax (Amendment) Bill 2010 comprises two categories of legislative changes. The first category puts into legal effect the income tax changes announced in the 2010 Budget Statement. The second category covers other amendments to the Income Tax Act arising from the regular review of our income tax system. The Income Tax (Amendment) Bill was released for public consultation from 28th June to 19th July this year. The Ministry of Finance (MOF) has revised the Bill to incorporate the suggestions that had been accepted for implementation. Sir, most of the tax changes in this Bill have already been debated upon in this House following the announcement of the 2010 Budget Statement. Let me summarise some of these key changes. First, the introduction of the Productivity and Innovation Credit (PIC) scheme to support enterprise investments in productivity and innovation. Clauses 2(a), 12 to 15, 17, 18(b), 23 to 25, 29 to 32, 51, 52 and 55(e) of the Bill provide for this change; Second, a new tax allowance to help companies restructure, upgrade and expand their operations through mergers and acquisitions. This is provided for in clause 34; Third, a Land Intensification Allowance to support enhanced land productivity among industrial land users. Clauses 22, 27, 54(a), (b), (c), (e), (f), (g), 55(a) to (c) provide for this change; Fourth, the phasing out of the Industrial Building Allowance (IBA). Existing claimants can continue to claim the IBA on qualifying industrial buildings until the remaining expenditure of such buildings is written down.”
“There is no clear trend that the number of GST evasion cases is increasing. The number of GST cases prosecuted by the Government from 2004 to 2009 ranged from two to 17 cases per year. The amount of GST involved has also ranged widely. Between 2004 and 2009, the 49 GST cases prosecuted by the Government involved GST of about $4.4 million. Of this, about 60% was recovered. The Inland Revenue Authority of Singapore (IRAS) will continue to educate businesses on their GST compliance obligations. It will also continue to monitor compliance, including conducting targeted reviews of industries with higher risks on non-compliance. The Government will take strong punitive action including prosecuting wilful tax evaders. GIFTED EDUCATION PROGRAMME (Percentage of students qualifying) 31. Mr Sin Boon Ann asked the Minister for Education (a) over the last 10 years, what is the number and percentage of students who qualified for the Gifted Education Programme (GEP) by attending special private tuition classes to prepare them for the GEP test; and (b) whether the Ministry will undertake such a survey and disclose its findings to the public, if these figures have not been collated yet.”
“MICA has announced the formation of Arts and Culture Strategic Review (ASCR) Steering Committee to take the directions set out in the ESC Report and operationalise them through a series of concrete initiatives. Studies are also being carried out by the Urban Redevelopment Authority (URA) to develop economically and socially vibrant precincts, including through more active place management. Taken together, these measures have set Singapore on our journey towards becoming a highly-skilled people and innovative global city over the next 10 years, while ensuring we achieve inclusive growth. It is not a one-off effort. Further programmes will be rolled out over the next few years. It is also not being achieved by Government initiatives alone. The unions, business federations and trade associations, and companies are already actively involved. We are busy at this together, and moving ahead comprehensively to achieve our economic goals for the decade ahead. ADDITIONAL FEE FOR TRANSFER OF USED CARS 35. Mr Teo Siong Seng asked the Minister for Transport (a) what is the rationale for charging an additional fee of 2% based on the assessed value for registering the transfer of a used car sold in the resale market; and (b) whether such an additional fee can be waived or reduced in view of the fact that the registration fee for a new car is only $140.”
“The Workforce Development Agency (WDA) has also recently expanded the range of courses available to PMETs to support the ESC's vision of capability and productivity driven growth. With regard to the second priority of the ESC, which was to deepen corporate capabilities, here, too, work is in progress on the various measures that were announced in Budget 2010 and the Committee of Supply. This includes the Partnerships for Capability Transformation (PACT) Scheme which seeks to promote and strengthen enhanced strategic linkages between local small and medium enterprises (SMEs) and multinational corporations (MNCs); and the Public-Private Co-Innovation Partnership enabling Government agencies to work with private sector companies in co-developing innovative solutions to meet medium- to long-term needs. SPRING Singapore is helping SMEs to take advantage of the various new Government schemes to upgrade their capabilities and, together with International Enterprise (IE) Singapore, is rolling out enhancements to the Local Enterprise and Association Development (LEAD) Scheme to help our trade associations to support SMEs in internationalising. Progress is underway in the comprehensive review of our next five-year research and development (R&D) plan to develop greater commercial benefits from R&D investments. Several other key recommendations are still under study, including specific options for developing the market for cross-border financing for Singapore-based companies, and for catalysing growth capital through funds for co-investment with the private sector. The third plank in the ESC's recommendations was aimed at making Singapore a distinctive global city and an endearing home.”
“The Government's major initiatives and plans in response to the ESC's recommendations were announced in Budget 2010 and during the Committee of Supply. As Members are aware, Budget 2010 focused on the first two broad priorities identified by the ESC: to boost skills in every job and undertake a comprehensive national effort to increase productivity; and to deepen corporate capabilities so as to seize opportunities in Asia and globally in the decade ahead. The National Productivity and Continuing Education Council (NPCEC), chaired by Deputy Prime Minister Teo Chee Hean, has been moving ahead actively on the key sectors it has identified as priorities for uplifting productivity. The National Productivity Fund is also being set up, with the First Reading of the Bill required for its establishment being introduced later today. Guidelines on the Productivity and Innovation Credit (PIC), a major tax incentive to support enterprise upgrading, were recently released by the Inland Revenue Authority of Singapore (IRAS) and businesses can already start claiming enhanced tax deductions on their investments in skills and productivity. The increase in foreign worker levies is being phased in, with the first step from 1st July 2010, in order to incentivise businesses to restructure and upgrade their operations and rely less on lower skilled foreign workers. The Workfare Income Supplement Scheme was also enhanced to increase the incentives for lower wage Singaporean workers to stay in employment, while the Workfare Training Scheme (WTS) has been implemented to upgrade the skills of older workers within the group in a systematic way.”
“I would like to clarify that ERP charges are road congestion charges, and are not considered part of taxi surcharges. ERP charges are passed on directly to commuters. The ground situation has shown that the demand for taxi services is not uniform throughout the day and across all localities in Singapore, while the supply of taxis remains relatively fixed. The pricing mechanism of surcharges provides an efficient channel to allocate these resources to meet the varying demands for taxi services. [3] The percentage of taxi surcharges (over the total taxi fares) is derived by taking the total surcharges divide by the gross earnings of the taxi drivers. LTA’s estimation is based on data from Comfort Taxis only as the other companies are unable to give us the breakdown of the surcharges. RULES FOR FULL-TIME NATIONAL SERVICEMEN SEEKING ASSISTANCE FROM MP 43. Mr Lim Biow Chuan asked the Deputy Prime Minister and Minister for Defence whether there are rules and regulations which prohibit full-time national servicemen or regular servicemen from seeking assistance from their Members of Parliament to submit petitions on their behalf to the Ministry.”
“This study will recommend appropriate measures to mitigate any impact that may arise from the project implementation, and ensure that the marine water quality, ecology and coastal processes are protected and preserved. TAXI SURCHARGES (Criteria for increase) 41. Dr Lim Wee Kiak asked the Minister for Transport (a) what is the criteria for the approval of surcharges by taxi operators; (b) for the past three years, how many applications for surcharges were received from taxi operators; and (c) on average, how much do these surcharges, including ERP charges, make up as a percentage of taxi fares. Mr Raymond Lim Siang Keat: Taxi fares have been deregulated since September 1998. The Public Transport Council decided to do so to provide taxi companies with the flexibility to set fares to meet the varying needs of commuters. Together with the liberalisation of the taxi industry in January 2003, this has allowed the market forces to determine the appropriate fare structure according to the demand and supply of the taxi services. Taxi companies are, therefore, free to introduce and make changes to taxi surcharges competitively. Location surcharges are usually implemented at the request of the premise owner or event organiser to address the disparities of the supply and demand of taxi services at the particular location. The location surcharge can only be levied with the agreement of the premise owner or event organiser. In the past three years, location surcharges at Resorts World Sentosa (RWS) and Marina Bay Sands Integrated Resort (MBSIR) were introduced. The CBD surcharge and time-based surcharges such as the peak-hour, booking and midnight surcharges were also adjusted in December 2007. Taxi surcharges, account for less than 20% [3] of total taxi fares today.”
“4% per year in real terms over the last 10 years (1999 to 2009), or by a cumulative 15% over the period discounted for inflation. IMPACT OF GREATER USE OF DESALINATION 40. Mr Seah Kian Peng asked the Minister for the Environment and Water Resources in light of increasing desalination in the coming years (a) what is the environmental impact of releasing brine into the ocean; (b) what is the experience of other countries with regard to releasing concentrated brine (or hyper-saline) over a long period of time; and (c) what is the impact on marine life and whether there is a risk of "dead zones" being created off Singapore island. Assoc. Prof. Dr Yaacob Ibrahim: Brine, or concentrated saltwater, is a by-product of desalination. It may pose a threat to the marine ecosystem if improperly discharged to the sea. However, with available technologies, the brine discharge can be managed through internationally acceptable practices such that there is no long-term impact on the marine environment. These include discharging the brine at locations that would ensure better dilution, and using diffusers to reduce the brine concentration to ambient salinity levels. For the existing SingSpring desalination plant in Tuas, the Tropical Marine Science Institute of NUS was engaged to carry out an environmental study before implementation of the plant to assess the impact of brine discharge on the marine environment. The consultants have been monitoring seawater quality data in the vicinity of the plant since it started operation in 2005, and have found that there has been no significant change in the levels of salinity of the seawater. For the new desalination project which will also be sited at Tuas, PUB has engaged an independent consultant to carry out an environmental impact study.”
“The recent statement that Singapore should work towards an increase in the median wage by 30% in real terms over the next 10 years, reflects the goal of growing productivity by about the same quantum over the period. A sustained and broad-based rise in wages can only be achieved if we grow overall productivity. The Government had adopted the goal of growing productivity by 2% to 3% per year over the next decade, or about 30% cumulatively, following the recommendations of the Economic Strategies Committee. As discussed in Parliament during the Budget debate, 2% to 3% productivity growth is more than double the 1% growth Singapore achieved in the last 10 years, and is also a major challenge for any economy at our level of development. It can only be achieved through the concerted efforts of employers, workers and Government – to upgrade skills and re-design jobs, seek new opportunities for companies to grow, and restructure the economy. The Government's strong support for this shift in the economy was set out in the Budget. By working towards a significant increase in the median wage, ie, for the 50th percentile, we are focusing on a broad-based increase in incomes and standards of living of Singaporeans – not just those in the higher income brackets. This is also why the measures we are undertaking to raise skills and productivity are targeted at every segment of the workforce. The median wage in 2009 was $2,420 per month. Achieving 30% growth in wages discounted for inflation, will take this to about $3,100 in 10 years. Including inflation, assumed at 2% per year, the median wage in nominal terms would reach about $3,800. This will imply significantly higher growth of median wages compared to the last decade. The median wage grew by 1.”