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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“IRAS has substantial experience in handling foreign requests and tax administration, and will be competent in making an assessment of whether a request constitutes a fishing expedition. Mr Liang rightly points out that it is important that information shared with the requesting authority does not fall into the wrong hands. The internationally agreed Standard recognises this as a key concern for many countries, and has hence made the confidentiality of any exchanged information a key tenet of the Standard. This is therefore explicitly spelt out in our DTAs which incorporate the Standard. Any information received by any jurisdiction in the course of processing or making a request shall be treated as secret in the same manner as information obtained under the domestic laws of that jurisdiction, and may only be disclosed to persons or authorities concerned with the assessment and collection of, enforcement or prosecution in respect of, determination of appeals in relation to the relevant taxes. Such persons and authorities shall use the information only for such purposes. Next, the question of legal privilege that was raised by Mdm Ho. The protection of information subject to legal privilege is provided for under the internationally agreed Standard, and is spelt out in our DTAs which have legal effect under section 49 of the Income Tax Act. The Comptroller is not obliged under the DTAs to obtain or exchange information that is subject to legal privilege. There is no need to repeat this requirement in section 105J of the current Act. In addition, where a court order is served on a person, he is entitled to refuse to comply with the order insofar as he can claim legal privilege. Mdm Ho had also asked about sections 105K(3) and 105K(4)(b).”
“The internationally agreed Standard has the concept of "public policy" or what they call in French, ordre public. It covers especially national security interests, or sensitive information held in the vital interests of the requested country. We have used the term "public interest" only so as to be consistent with our Mutual Assistance for Criminal Matters Act (MACMA), which is an existing act. "Public interest", as used in the Act, does not depart in substance from what is envisaged under the internationally agreed Standard, under its public policy provision. Public interest, however, is unrelated to the rejection of requests that are not bona fide, or fishing expeditions. Such requests should be screened out in the first instance by the Eighth Schedule, which spells out very clearly the information that a requesting jurisdiction has to provide to IRAS when it makes its request. These requirements are intended to ensure that any request carries the necessary specificity and has clear relevance to the tax matter at hand. In addition, under section 105J(3)(a), the High Court has the power to reject unjustified requests. Fishing expeditions can therefore be stopped at two levels – first by IRAS, then by the High Court if it relates to information protected under the Banking Act and Trust Companies Act. This arrangement offers robust safeguards without compromising on the efficiency and responsiveness of our information exchange regime. It is in essence similar to the processes in other major jurisdictions such as the US and the UK, and is not aimed at stifling the effective exchange of information. To answer Mr Liang Eng Hwa’s query, IRAS, rather than other agencies, will determine if a request is a fishing expedition.”
“All of these agencies, and not just the Competent Authority, must have employed all legal means under the country's domestic laws to gather the relevant information before they can make a request to us. In fact, the internationally agreed Standard recognises that it is reasonable to expect a country to do this before it sends a request to another country. With regard to Mdm Ho's question on Paragraph 9 of the Eighth Schedule, the term "period" refers to how soon a requesting country wishes the request to be met. Mdm Ho also asked whether the new section 105G would oblige other local tax authorities besides the Comptroller of Income Tax – in other words, the Comptroller of Goods and Services Tax and the Comptroller of Property Tax for instance – to actively gather information that they do not possess in order to fulfil a request. The Standard obliges us to cooperate on information exchange, regardless of the type of tax information. Section 105G(1) spells out that the Comptroller of Goods and Services Tax, the Comptroller of Property Tax and the Commissioner of Stamp Duties are only obliged to transmit information already in their possession to the Comptroller of Income Tax. For any other information not in their possession that is required to comply with the request, the Comptroller of Income Tax, himself, may directly obtain the information, before transmitting all information requested to the foreign jurisdiction. These powers are provided for under section 105F(2). Next, on the definition of "public interest", which was raised by Mdm Ho. "Public interest" under the Act covers the same grounds as "public policy" as stated in the internationally agreed Standard.”
“They regard us as a substantive and well-diversified economy, not a name-plate jurisdiction. What we have always believed in is that the global issue of cross-border tax evasion has to be addressed through the rule of law and on the basis of a level-playing field internationally. As Mr Liang has pointed out, our move to adopt and implement the internationally agreed Standard for exchange of information is being taken together with other financial hubs such as Hong Kong and Switzerland, which are taking similar steps to enhance their respective tax cooperation regimes. A level playing field will be maintained. Mr Liang Eng Hwa also asked whether Singapore's implementation of the internationally agreed Standard would pave the way for negotiations with the United States on a comprehensive DTA. We do think that such a DTA would be in the interest of both US and Singapore taxpayers, and would deepen the strategic relationship between the two countries. Both Singapore and the US are keen to explore a comprehensive DTA and I expect the process to get underway next year. Mdm Ho Geok Choo had several specific questions on the Bill which I will now address. I will first address her question on Paragraph 8 of the new Eighth Schedule, which requires requesting countries to have pursued all means available in their own territories to obtain the information they are requesting. Requests between countries must be made through their Competent Authorities as defined under the DTA between the two countries. They may be made on behalf of other agencies that require the information for the enforcement of tax laws, such as the Justice Department or other relevant agencies.”
“Mr Liang Eng Hwa was concerned, with good reason, that some countries would adopt protectionist moves under the guise of taking counter-measures against jurisdictions that they deem to have unfair tax systems. The diversity of fiscal and tax systems internationally, and competition between fiscal and tax systems internationally, is a strength of the world economy. It is entirely distinct from the need for concerted action to tackle the global problem of tax evasion or financial crimes. Tax diversity is a real positive for global economic growth. However, everyone knows that the fact that countries have diverse tax systems is something which can be easily politicised, and we have already seen this happen between countries which have a long history of differences on the matter. As of this point, there is no indication of a descent into concrete protectionist measures. There is also no reason for any country to adopt protectionist measures against Singapore. We are a jurisdiction committed to international cooperation according to the internationally agreed Standard; we will soon meet, in fact, more than meet, the OECD target of 12 DTAs incorporating the new Standard. It is also well-recognised internationally that Singapore is not a tax haven. We will not otherwise be having comprehensive DTAs with major countries – not merely Tax Information Exchange Agreements (TIEAs). The Tax Information Exchange Agreements are concluded between countries which are unable to conclude comprehensive DTAs. We have not taken that route. We have instead stuck to comprehensive DTAs and incorporated the Standard within them. And we would not be able to do so with major economies if we were regarded as a tax haven.”
“Mr Speaker, Sir, I would like to thank Mr Liang Eng Hwa and Mdm Ho Geok Choo, both for their statements of perspective on the matter as well as their specific queries. Let me first say that our decision to endorse and implement the new internationally agreed standard is a natural consequence of our long-standing policies. It is the right thing to do and it is in our interests to do so without delay. In fact, we announced our intention to endorse the Standard in February this year before the OECD had put out its listing of countries according to their compliance with the new Standard in April 2009. After the G20 London Summit in April this year, the OECD published a list of tax jurisdictions classified according to whether they had committed to the internationally agreed Standard and whether they had already substantially implemented it. White-listed countries were those that had already substantially implemented the Standard – the benchmark being at least 12 signed agreements with others that incorporate the Standard. Grey-list jurisdictions were those that had already committed to the Standard, but had not substantially implemented it yet. Singapore was on the grey list together with several other financial centres. However, as I have said earlier, we have since reached agreement with 20 jurisdictions to incorporate the Standard under our DTAs, and have formally signed 11 of these agreements. We are confident that we will formally conclude more than 12 agreements before the end of this year. Further, most of our agreements are with major economic jurisdictions, such as the United Kingdom, the Netherlands, Australia, New Zealand, Denmark and Norway. We have not treated this as a numbers game or sought to sign DTAs indiscriminately.”
“IRAS will make an application to the High Court for a production order to access the requested information. The affected taxpayer and bank or trust company will have the right to apply to the Court to discharge or vary the Court order. I should emphasise that these procedures are not meant to frustrate or delay the information exchange process. Rather, they are intended to provide a fair and independent assessment of the validity of requests, and allow us to render effective assistance to valid requests. They are essentially similar to procedures used in the United Kingdom, which relies on a tribunal process, or the United States which relies on the courts. Sir, the proposed amendments that the Bill contains will allow Singapore to implement the new internationally agreed Standard. Other leading financial centres are moving in tandem to implement the Standard. The changes we are enacting are fully in keeping with Singapore's status and reputation as a trusted and responsible business and financial hub committed to the international effort to combat cross-border tax evasion. Sir, I beg to move. Question proposed. 3.13 pm”
“Allowing exchange of information for other taxes in addition to income tax Thirdly, as the internationally agreed Standard applies to all forms of taxes, IRAS will be allowed to share information obtained under the Goods and Services Tax Act, Stamp Duties Act and Property Tax Act to fulfil Singapore's exchange of information obligations under the prescribed DTAs. The new section 105G provides for this change. Safeguards The second category of amendments sets out safeguards to ensure that requests for information are only acceded to where they are clear, specific, relevant and consistent with the internationally agreed Standard. Proper safeguards, including due legal process, are crucial to protecting the rights of taxpayers, and in maintaining confidence in our tax and legal systems. Documentary requirements The new Eighth Schedule sets out the documentary requirements which a requesting jurisdiction must fulfil for all requests. These requirements ensure that requests are justified, that is, clear, specific, relevant, legitimate and consistent with the Standard. They will help screen out "fishing expeditions". Access to banking and trust information There will be safeguards for assisting in requests relating to information that is protected from unauthorised disclosure under the Banking Act and the Trust Companies Act. The new Part XXB sets up a judicial process for IRAS to obtain such information in response to requests under prescribed DTAs. The affected taxpayer and bank or trust company will be notified of the request, unless there are exceptional circumstances, such as if doing so would prejudice an investigation into any breach of tax laws, or prevent or unduly delay the effective exchange of information.”
“For example, Hong Kong is making the same moves. It is amending its legislation and intends to conclude DTAs to give effect to its amended legislation. Switzerland and Austria have each signed more than 12 DTAs that incorporate the internationally agreed Standard, and will be able to fulfil their obligations under the Standard once these DTAs are ratified. Enhancing the scope for foreign assistance Sir, I will now explain the two categories of specific amendments to the Act that will allow us to implement the internationally agreed Standard. The first category enhances the scope of assistance that Singapore can provide to foreign jurisdictions under DTAs that incorporate the Standard, or "prescribed DTAs" for short. Lifting of domestic interest Firstly, as I have explained earlier, under our current laws, exchange of information with our treaty partners is subjected to the domestic interest condition. The new section 105F lifts this domestic interest condition to enable IRAS to satisfy its obligations under the prescribed DTAs. Access to information held by banks and trust companies Secondly, under existing laws, IRAS may only obtain banking and trust information for the purpose of investigating or prosecuting a suspected domestic tax offence. The internationally agreed Standard requires the exchange of information which is foreseeably relevant to the administration of the requesting jurisdiction's own tax laws, without it being predicated on the taxpayer having committed an offence. IRAS' information gathering powers will be widened under the new Part XXB to enable it to access bank and trust information to accommodate requests on tax administration matters under prescribed DTAs and domestic tax administration matters.”
“They are provided for by the internationally agreed Standard to uphold the principle of respecting taxpayers' rights. With the amendments proposed in this Bill, Singapore is committed to respecting these rights, while fully meeting our obligations under the Standard and playing our full role as a trusted and responsible jurisdiction. The Standard also sets out clear limits on the types of information that jurisdictions are obliged to exchange. Jurisdictions are not obliged to exchange trade or business secrets, or information that is subject to legal privilege. They may also decline to exchange certain information if doing so would be contrary to public policy. Some examples of such information include state secrets or information sought for the purposes of political, religious or racial persecution. However, these are serious grounds of refusal, and we do not expect to invoke them under normal circumstances. Implementing the Standard through DTAs The legislative amendments contained in this Bill will enhance the level of assistance that Singapore can provide to foreign jurisdictions whose DTAs with us incorporate the new Standard. To date, we have reached agreement with 20 jurisdictions to incorporate the Standard under our DTAs, and have formally signed such agreements with 11 of these jurisdictions. Most of these jurisdictions are those we already have full DTAs with and therefore have broader cooperative arrangements with on matters of tax, and with whom we have established a good understanding on each others' systems and processes of law. Of the 20 jurisdictions that we have reached agreement with, 15 are in fact OECD members. Sir, the changes Singapore is making are essentially similar to those being made by other major financial centres.”
“The new internationally agreed Standard for exchange of information enhances the scope of information exchange cooperation under DTAs by lifting the domestic interest condition and allowing for access to information from banks and trust companies under certain conditions. This enhanced scope of cooperation will not only allow Singapore to provide greater assistance to its prescribed treaty partners, but also help Singapore obtain information for the enforcement of our domestic tax laws. An integral aspect of the internationally agreed Standard is its respect for taxpayers' rights. The Bill contains important safeguards in this respect. Spurious or frivolous requests for information will not be acceded to. Further, it does not allow for what is called "fishing expeditions" – it requires requests for information to be specific, detailed and relevant to the tax affairs of the taxpayer in question. Consistent with the tax Standard, we will only provide assistance where there is a genuine case at hand, and the requested information is specific and relevant to the case. Additionally, the Standard also does not allow jurisdictions to take advantage of the information system of another jurisdiction if it is wider than their own system. Hence, we will only exchange information that a requesting jurisdiction would have ordinarily been able to obtain under its own laws or administrative practices, had the information resided in that jurisdiction in the first place. Jurisdictions must also have pursued all domestic means to access the requested information before putting forth a request to us. Such safeguards do not impede the effective exchange of information.”
“The Standard only gained recognition as an internationally agreed Standard when the United Nations Committee of Experts on International Cooperation in Tax Matters endorsed the Standard in October last year. Following the UN Committee's move, Singapore decided to endorse the Standard in March this year. It has always been our practice to adopt relevant international standards, in keeping with our role as a trusted international financial centre and a responsible jurisdiction. Our financial sector is built upon the quality, depth and breadth of services we offer, strong and consistent regulatory policies and a firm commitment to the rule of law. Our strict anti-money laundering regime, for instance, is held in high regard by the Financial Action Task Force (FATF) which is an international body, which rates Singapore's compliance score equal to the US and second to none. Our confidentiality laws are not intended to shelter tax criminals. What the Standard means for Singapore It is important to note that Singapore was able to exchange information with foreign jurisdictions on tax matters even before we endorsed the internationally agreed Standard. We can and already provide tax information in response to foreign requests through our DTAs. However, assistance through DTAs was subjected to the domestic interest condition, meaning that the information had to be relevant to the enforcement of domestic tax laws before the Inland Revenue Authority of Singapore (IRAS) can gather and exchange it with DTA partners. Where there was a domestic interest, our banking and trust confidentiality laws allowed for information to be obtained for the purposes of investigating or prosecuting a tax offence.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time". The Income Tax (Amendment) (Exchange of Information) Bill proposes amendments to the Income Tax Act that will allow Singapore to implement the internationally agreed Standard for the exchange of information for tax purposes upon request. The Bill was released for public consultation from 29th June to 28th July this year. The Ministry of Finance (MOF) has revised the Bill to incorporate the public feedback received. Internationally agreed Standard Sir, for the benefit of Members who may not be familiar with the internationally agreed Standard for the exchange of information, allow me to first explain how it came about. The principles of transparency and exchange of information for tax purposes have evolved over the years. The Standard in its current form was first published by the Organisation of Economic Cooperation and Development (OECD) in 2005. It was most recently articulated in the OECD 2008 Model Tax Convention on Income and on Capital, and sets out how tax jurisdictions should address cross border tax evasion by entering into effective information sharing arrangements through their Avoidance of Double Taxation Agreements (DTAs). When the Standard was first published by the OECD in 2005, jurisdictions which were not members of the OECD did not have to adopt it in their DTAs. Not all jurisdictions accepted the Standard. In fact, even some OECD jurisdictions expressed reservations on the Standard. Singapore noted the Standard, but did not adopt it because it was one promulgated by the OECD which we are not a member of, and was not a worldwide Standard then.”
“As the project progresses, MND and the JV Co will continue to facilitate the involvement of more Singapore companies, including Small and Medium Enterprises (SMEs), in the project. LIFT UPGRADING PROGRAMME (Priority for flats with elderly residents) 6. Mr Christopher de Souza asked the Minister for National Development (a) how many HDB flats do not have lift access on the same floor yet due to the cost of the Lift Upgrading Programme (LUP) going beyond the allocated financial budget and subsidy for each unit; and (b) given the Government's aim to upgrade all flats by 2014, whether the Ministry will consider prioritising the upgrading of blocks which have a disproportionately high number of senior citizens, despite the costs exceeding the budget.”
“Environmental rehabilitation works, such as the construction of the wastewater treatment plant, are on schedule. Developers have taken up nearly all the land in the SUA, and construction works are scheduled to commence soon. The Chinese Government has decided to locate national-level projects, such as the National Animation Park in the Eco-city to help drive its economic development and provide jobs for its residents. The Green Building Evaluation Standards, which were jointly formulated by officials from Singapore and China, have been officially adopted in the Eco-city, in line with the KPI that all buildings in the Eco-city must meet green building standards. MND and other agencies are sharing with Tianjin officials our software, expertise and experiences in areas like public housing, community management and water management, in tandem with the development of the Eco-city’s hardware. To help Singapore businesses tap business opportunities in the Eco-city, MND has been working with agencies like IE Singapore and the Building and Construction Authority (BCA) to organise awareness seminars and business missions to the Eco-city. The Joint Venture Company (JV Co) undertaking the development of the Eco-city, which is formed by a Singapore consortium led by Keppel Corporation and a Chinese consortium, has also engaged or signed MOUs with several Singapore companies to be involved in projects in the Eco-city. These include architectural consultants, developers, contractors, education providers, solution providers and service providers. Surbana International Consultants, for example, was involved in drawing up the Master Plan as well as the design for the first public housing project for the Eco-city.”
“It is not possible to fix a duration because it depends on how long it takes to conduct investigations, in fairness to both the third-party as well as to ensure that where in fact an offender has not conducted due diligence, then something has to be done. So investigations are conducted expeditiously but it is not possible for us to fix in advance a time limit. In practice, it has not been very long duration. SINO-SINGAPORE TIANJIN ECO-CITY PROJECT (Spin-offs) 5. Dr Ong Seh Hong asked the Minister for National Development if he will provide an update on the Sino-Singapore Tianjin Eco-City project and what spin-offs there have been to date for Singapore businesses. The Senior Minister of State for National Development (Ms Grace Fu Hai Yien) (for the Minister for National Development): Mr Speaker, Sir, the Sino-Singapore Tianjin Eco-city, or "Eco-city" for short, is a joint project between China and Singapore to develop a city which can serve as a model for sustainable development, environmental protection and social harmony. It is our second flagship collaborative project with China, after the Suzhou Industrial Park. The framework agreement to jointly develop the Eco-city was signed in November 2007. The Master Plan and Key Performance Indicators to guide its planning and development were finalised and approved in early-2008. We target to complete the development of the 4 sq km start-up area (SUA) in five years’ time by late 2013. Since the groundbreaking ceremony in September 2008, we have achieved good progress in the development of the SUA, despite the global financial crisis. The reclamation works for the SUA have been completed, while the construction of roads, the laying of the utility services and the landscaping works in the SUA are progressing well.”
“Mr Speaker, Sir, the number of offenders prosecuted for cigarette smuggling offences was 1,314 in 2007 and 1,382 in 2008. From January to September this year, 895 offenders have been prosecuted. The court forfeited 218 vehicles used for cigarette smuggling in 2007, 193 vehicles in 2008 and 156 vehicles for the period to September this year. Singapore Customs applies to forfeit a seized vehicle used for cigarette smuggling if it belongs to an offender. If the seized vehicle belongs to a third party, Singapore Customs considers whether the owner had conducted due diligence prior to letting the car be used. If investigations reveal that the owner was unaware of the use of his vehicle in the customs offence, the vehicle is released. One hundred and twenty-six vehicles belonging to a third party were released after seizure in 2007, 101 in 2008 and 48 for the period to September this year. This works out to roughly half of the total number of third party-owned vehicles that were seized in the first instance.”
“I think the most that can be said is that we are past the worst. And in particular, we are past a stage in the world economy when there was a tremendous psychological fear that the bottom would fall apart. So we are not in a stage of unending decline. The banks, at least the larger ones, are now in a position where no one expects them to fail but there are still problems ahead because the global financial system is still fragile and the underlying problems have not been resolved. The fear of big failures has receded but fear over the extent of the economic recovery and about the banks' ability to shed bad assets and to start lending again remains. Confidence has not returned to normal and we, for that matter, seasoned observers all over the world, do not expect the next year or two to be very pretty. CUSTOMS AND EXCISE RELATED OFFENCES (Vehicles used) 4. Ms Ellen Lee asked the Minister for Finance (a) how many offenders of customs and excise related offences, specifically cigarettes smuggling, were prosecuted in the last two years; (b) where vehicles were used in the commission of the offence, how many of these vehicles were detained and forfeited by the court; and (c) whether there were instances where the vehicles were owned by third parties who had no knowledge of the use of their vehicles, and upon due proof were not forfeited but returned.”
“I would like to thank the Member for her questions. To relate them to the previous question, the key issue is not merely the size of fiscal deficit that we run in the next fiscal year but the type of measures that we put into place. What we do is as important as how much we do. And as the Prime Minister has indicated, we are making a shift from broad-based relief type measures towards measures that are targeted specifically at restructuring and enhancing productivity and preparing for growth over the medium to longer term. We are making that shift. This means measures that all companies can enjoy if they are putting into place productivity-enhancing measures or increasing their innovative capacity, as well as measures that some companies will enjoy more than others because they are the ones that are growing the fastest, are investing more and are likely to lead the economy, not just out of recession, but for growth over the next five years. So we will be more discriminating and more targeted. This does not mean aiming to help companies create only high-end jobs. This means improving our workers' capabilities up and down the line, from the simplest jobs to the most complex jobs. Every worker can improve and every job can yield higher productivity and therefore, higher pay. So whether it is a mature worker or a younger worker, we have to address this across the board. The Economic Strategies Committee is looking at this very comprehensively. Minister Gan Kim Yong heads the sub-committee that is spending a lot of time looking at this issue of raising skills, productivity and therefore wages, up and down the line to preserve employment for everyone in our workforce.”
“Sir, it is too early to talk about the Budget position for the next fiscal year but I do not expect a significant swing away from the fiscal stimulus position that we have this year. There are a few reasons for that. First, our expenditures are going up. We are spending a lot more next year, and in the coming years, compared to the past. If you take infrastructure alone, we are spending a lot more – the Marina Coastal Expressway, the Circle Line, the Gardens by the Bay. Infrastructural spending is on the uptrend. We are also spending more on education, healthcare and continuing education and training. When you add all together, our expenditures are going up, and will be higher next year compared to this year. Our revenues will not fully compensate for that. Corporate tax revenue, in particular, can be expected to be dampened by the fact that this year was a bad year for most companies. Our tax revenues next year will reflect what happened this year as well as last year. So revenues will not go up by as much as expenditures. Overall, I do not expect to see a major shift from the expansionary fiscal stance that we had this year, but it is too early to say exactly what our fiscal position will be. We will have to look at the economic situation and outlook at the time of the Budget as well as our revenue position. We will live within our means within this term of Government. We have some savings, as I indicated in the Budget this year, and we will ensure that we live within our means.”
“Mr Liang Eng Hwa (Holland-Bukit Timah): Sir, in the recent G20 Summit, which the Finance Minister attended, the leaders cautioned against any premature withdrawal of the stimulus measures. I would like to ask the Minister what are our exit strategies for the $20.5 billion Resilience Package? Secondly, given that we are expecting slower-than-typical growth rates in the next few years, how would this exit and reduction in measures in this Package affect the momentum of recovery? Thirdly, the Prime Minister has said the extension of the $675 million Jobs Credit Scheme will be funded from the Government Budget and not from reserves. I would like to ask the Minister what our Budget position would be like in the financial year.”
“About three in four (73%) companies which had earlier plans to lay off workers reported they would postpone or reduce the number of workers to be laid off, as a result of Jobs Credit. Reducing the immediate loss of jobs has not been the only benefit of the Jobs Credit, however. Companies receive the Jobs Credits based on the number of local workers they employ but the money they receive can be used in many ways to help their business and employees. On the evidence we can gather this has included using the money to avoid wage cuts or reduce the scale of wage cuts; to invest in their people; to pass on the savings to consumers; or to pay suppliers on time. It is not possible to estimate the full impact of the scheme with any precision. But whichever way companies use the Jobs Credit, the scheme amounted to a significant fiscal injection that would have had a multiplier effect on the economy, and thereby helped support more jobs. The Special Risk-sharing Initiative (SRI) has also proved beneficial. It has helped to stimulate bank lending to SMEs and ensure that a broader segment of companies have access to credit to sustain their operations. In the first eight months of the enhanced Government measures to share risks with banks (from February to September 2009), the 16 Participating Financial Institutions (PFIs) registered loans worth about $4.9 billion under the various SME financing schemes. This is about seven times the value of loans approved in the same period last year. SMEs especially have benefited from the SRI. More than 90% of the loans approved were granted to SMEs and these loans accounted for about 70% of the total loan quantum approved.”
“Sir, as the Prime Minister has announced on 13th October 2009, the Jobs Credit Scheme has been extended for half a year, with two more stepped-down payouts in March and June 2010. Whereas the Jobs Credit is currently calculated based on 12% of an employee’s salary (up to the first $2,500), the two additional Jobs Credit payments will be based on 6% and 3% of the salary. The Special Risk-sharing Initiative (SRI) expires in January 2010, and the Government will monitor the situation in the coming months before deciding what should follow it. As the Prime Minister had also stated, the Government will be introducing and enhancing other measures suitable to the new phase of the economy. We want to support companies in their efforts to grow, restructure and raise productivity. The measures will take into account the proposals of the Economic Strategies Committee. They will also complement SPUR, which was introduced as a two-year programme and will be kept for the full period until end 2010. Mr Liang Eng Hwa had asked if the Resilience Package measures such as the Jobs Credit and SRI had achieved their intended results. The Package is generally assessed as having mitigated the scale of economic decline that Singapore would have faced and helped avert major job losses. Despite the sharp fall in our GDP resulting from the global recession, unemployment went up moderately and local employment actually increased by 7,000 jobs in the same period. The Jobs Credit Scheme, in particular, has been strongly supported by both employers and workers. A survey conducted by Ministry of Manpower from May to July 2009 showed that the scheme was having a positive impact in helping companies and workers cope with the downturn.”
“Mr Speaker, with your permission, may I take Question Nos 1 to 3 together?”
“Through these various efforts, some rental tenants will be able to move to home ownership by improving their income over time. HDB also reviews the rental tenancies every two years to ensure that rental flats, which are heavily subsidised, cater to the truly needy.”
“The Parliamentary Secretary to the Minister for National Development (Dr Mohamad Maliki Bin Osman) (for the Minister for National Development): Mr Speaker, Sir, about a year ago, the average waiting period for a rental flat was 21 months. I am pleased to inform the Member that the average waiting period currently has dropped to about 13 months. The reduced waiting time is the result of HDB’s multi-pronged approach to manage the rental flat supply and demand. On the supply side, HDB resumed building rental flats in 2007. Since then, 1,400 flats have been added to the rental stock. By 2012, 8,000 new rental units will be added to the current rental stock of 42,000. On the demand side, in February this year, Members will recall that HDB introduced a set of revised rental eligibility criteria. For those who have enjoyed one housing subsidy, HDB will take into account their assets, including proceeds from the last flat sale. Those who previously owned private property will not qualify for a rental flat. In addition, if the applicant has children who own private property or HDB flat with room(s) that may accommodate him, he would not qualify. Approved applicants are added to the queue according to their date of applications. For those already in the rental queue before February this year when the revised eligibility criteria took effect, they will retain their queue positions if they satisfy the revised criteria. Rental tenants, especially younger households, are encouraged to work towards home ownership. Where appropriate, HDB will refer tenants to the Community Development Centres (CDCs) for employment assistance. Those who have not previously bought a subsidised flat may qualify for the Additional Housing Grant to purchase their first flat.”
“First, I quite agree with Mr Hri Kumar that we should not and, in fact, we do not penalise more fuel-efficient cars. The whole structure of our tax system for vehicles today, in fact, does not penalise more fuel-efficient cars – it rewards them. Road tax is a classic example of that. But even by way of our tax on fuel, the petrol tax taken together with the special tax for diesel, it is clear that we are rewarding more fuel-efficient vehicles. We reduce the special tax significantly from something like four times of the road tax to 2.7 times of the road tax in Budget 2008, in recognition of the fact that it is more environmentally-friendly than the pre-Euro-IV cars. We will take a look at the Euro-V very carefully, study its emission standards. If it is true that it got much lower carbon emissions compared to petrol cars, but it does have slightly higher particulate matter emissions. These are things we will study and find the appropriate special tax to impose. But on his basic questions, we do not penalise more fuel-efficient cars. We do not penalise more environmentally-friendly cars. At the margin, we have, in fact, favoured them. And the calculation of what we achieved through the green vehicle rebate together with the road tax structure, does point to that. HDB RENTAL FLATS (Waiting period and criteria) 10. Mr Hri Kumar Nair asked the Minister for National Development (a) what is the current average waiting period for the allocation of rental flats; (b) how does the Ministry prioritise applications; and (c) whether there is any requirement for occupiers of rental flats to take active steps to improve their financial position.”
“Put it another way, if the regime makes it cheaper to buy and maintain a less fuel-efficient car, does that not mean the regime is flawed?”
“Mr Speaker, Sir, the basic objective of our road and vehicle taxes is to control congestion on our roads. Through upfront ownership taxes, road tax and fuel tax, the Government seeks to manage road use. This is complemented by the ERP, which manages peak congestion. Naturally, however, measures to reduce or manage road congestion are also environmentally-friendly. Further, the structure of our taxes does in fact encourage people to use vehicles that are fuel-efficient and produce less emissions. First, we provide a Green Vehicle Rebate (GVR), which is calibrated so that a typical hybrid car does not attract higher upfront ownership taxes than the equivalent conventional car – despite the higher Open Market Value (OMV) of a hybrid car. Second, road taxes, which are based on engine capacity, are higher for bigger cars, which tend to consume more fuel and produce more emissions than small cars. Third, we have also taken environmental considerations into account when setting fuel taxes. In Budget 2008, the special tax rate for Euro-IV diesel cars was reduced significantly, in recognition of their improved emission standards compared to pre-Euro-IV diesel cars. In determining the special tax to be imposed on Euro-V compliant diesel engines, the Government will consider the fuel-efficiency and emission standards of Euro-V cars relative to both Euro-IV and petrol cars. Mr Hri Kumar Nair (Bishan-Toa Payoh): I thank the Minister for his response. Industry reports suggest that not only Euro-V are as clean as petrol engines, they are more efficient and consume far less fuel. Could I ask the Minister the following supplementary questions? Would the Minister not agree that our tax structure should encourage or at least not penalise the use of more fuel-efficient vehicles?”
“Dr Fatimah Lateef asked the Minister for Education following the introduction of the National Education Programme in schools (a) whether the objectives of the programme have been met so far; and (b) whether there are KPIs pertaining to this.”
“Singapore has a simple and broad-based Goods and Services Tax (GST) regime with a single flat rate of 7% levied on all goods and services purchased or consumed in Singapore. This includes goods that may be regarded as having investment value – such as gold bars, which are commonly thought of as investments, or diamonds and luxury watches, which are regarded similarly by some. By subjecting all goods to the GST, we avoid skewing consumers' choices in favour of one good or another, keep the GST system simple for administration and compliance, and allow tax rates to stay relatively low. Mr Teo also asked if the Government could further streamline the existing schemes to promote Singapore as a jewellery exhibition hub. Mr Teo may wish to know that currently, jewellery exhibitors can already enjoy suspension of GST on the import of jewellery for an exhibition or auction in Singapore, if the jewellery is exported out of Singapore after the event. They can also enjoy suspension of GST if they remove jewellery from a Zero-GST or Licensed Warehouse for an exhibition or auction, so long as the jewellery, whether sold or otherwise during the exhibition or auction, is subsequently returned to a Zero-GST or Licensed Warehouse. With these two schemes in place, GST is thus payable only on sale of jewellery that enters the domestic market after the exhibition or auction. Even then, the payment of the GST is made via a customs permit, which takes less than 10 minutes to be approved by the authorities. The Government will continue to strive to keep the application of the GST suspension schemes as straightforward and streamlined as possible, and remains open to feedback on how the schemes can be improved. Column No : 1431 NATIONAL EDUCATION PROGRAMME (Progress) 6.”
“Mr Teo Siong Seng asked the Minister for Finance if the Government will consider (i) removing the GST on the purchase of gold bars for investment purposes and jewellery brought in for exhibitions; and (ii) reducing the red tape imposed on foreign jewellery exhibitors to attract jewellery traders/investors and promote Singapore as a jewellery exhibition hub.”
“Value for Money (VFM), and not cost alone, is the key consideration for Best Sourcing, as it is for Government procurement in general. Public agencies will evaluate the bids received taking into account not only the price, but also other factors such as compliance with all requirements in the tender specifications and the quality of goods and services. Therefore, the offer that gives us the most Value for Money service is accepted, and not necessarily the lowest bidder. At the national level, the Government, together with the unions and employers, had in March 2008 issued the Tripartite Advisory on Responsible Outsourcing Practices. Service buyers including public sector agencies which have adopted the Advisory would require their service contractors to comply with employment laws so that their workers' statutory employment benefits are not compromised. These public sector agencies would therefore consider not just tender price, but also the contractors' compliance with employment laws, when awarding a tender such as checks on their financial standing and track records. This is to safeguard against contractors who quote very low prices but might not be able to fulfil their employment obligations, including prompt payment of salary and CPF as well as other benefits under the laws. This could also result in workers' poor work performance and adversely affect the service standards. Column No : 1429 JEWELLERY EXHIBITION HUB (Call for support) 5.”
“Mr Lim Biow Chuan asked the Senior Minister whether the Monetary Authority of Singapore will consider regulations to limit the liability of credit card holders whose credit cards were lost or stolen and unauthorised transactions on these credit cards had been made.”
“We grant taxpayers a tax relief of $3,500 or $5,000 for supporting each parent, depending on whether the taxpayer and parent are living apart or together. There is an additional relief of $3,000 if the taxpayer’s parent is handicapped. Like other reliefs, the parent relief was not conceived to actually defray the cost of looking after parents nor to incentivise children to look after their parents. The Government’s tax policies, like its social policies, are premised on preserving a society where children care for their parents regardless of the tax reliefs that the Government offers. The parent relief is a gesture towards recognising taxpayers who put effort and resources into supporting their aged parents. Besides this relief, a taxpayer can also receive an additional tax relief of up to $7,000 for cash top-ups to the CPF Minimum Sum of their parents. The Government recognises that in an ageing society and with families becoming smaller, the responsibility of caring for parents will fall on fewer children. What the Government has done is to continually keep the tax burden low for all individuals. In fact, Singapore has one of the world’s lightest personal income tax burden, and we have reduced the personal income tax rates over the years from the top marginal rate of 28% in 2001 to 20% currently. Currently, our allowable reliefs and high income threshold mean that about 60% of our resident labour force do not have to pay any income tax at all. Nonetheless, we will continue to review the parent relief as part of our periodic holistic review of the personal income tax system. Column No : 1399 CREDIT CARDS (Liability limit) 22.”
“Dr Lam Pin Min asked the Minister for Health in view of the rapidly ageing population and the increasing demand for home-based care, what are the Ministry's middle to long-term strategies in developing this sector of healthcare in Singapore.”
“In line with these five strategic thrusts, MOF has launched a number of important initiatives in recent years to further promote prudence and accountability: A Value-for-Money (VFM) Office, established in 2007, enables MOF to systematically examine whether Government expenditures are achieving their intended outcomes and doing so in a cost-efficient way. What VFM amounts to is a selective, ex-post review of Ministries’ budgeting decisions – either for an individual Ministry or at a Whole-Of-Government level. VFM audits hence provide an important complement to the system of block budgeting, which gives Ministries autonomy over the internal allocation of their block budgets. We are also making progress in ensuring effective land and building usage and management. Among other measures, MOF has revised the office space norms for public agencies last year to ensure more efficient use of space. MOF will continually review our framework and will be following up with agencies identified in the Auditor-General's Office (AGO) report to further enhance prudence and accountability. Even with a rigorous framework of rules and guidelines, there will unfortunately be instances of lapses. What is important is to have such lapses picked up in time and thereafter distilled as lessons. By doing so, we minimise the chances of bigger or more systemic problems occurring. To specifically address the lapses in Procurement and Contract Management, MOF is implementing a new Procurement Competency and Training Framework that is aimed at raising the capability of public officers in procurement and contract management. A forum would also be conducted in October 2009 to cover lessons learnt from AGO’s observations. Column No : 1241 HOME-BASED CARE 18.”
“The Auditor-General’s Report indicates the need to continually enhance prudence and accountability in the use of public monies. The Ministry of Finance (MOF) is addressing this through a Whole-of-Government framework for use of public monies. The framework comprises five main thrusts: First, instituting controls. MOF puts in place expenditure policies, rules, procedures, limits and norms to ensure budgetary prudence and accountability. These policies and rules are issued to all Government agencies for compliance. Second, encouraging best practices. MOF promotes Best Practices at the Whole-of-Government level to drive better usage of resources. Best Sourcing and Public-Private Partnerships are examples of such initiatives. Advisories such as on advertising and public relations expenditures are also issued to provide guidance for agencies. Third, promoting a mindset of thrift. Efforts are made to raise awareness of public servants on the need to be prudent in expenditure and ensure value for money through the Economy Drive, and the Cut Waste Panel, which is chaired by public sector leaders. Fourth, developing capabilities. MOF has established a competency and training framework to systematically develop officers across Government agencies with the necessary skills to undertake budgeting and procurement work proficiently. Fifth, monitoring performance. MOF works closely with the Ministries to identify and review their strategic outcomes, outcome and performance indicators annually to ensure accountability.”
“The main thing that we are very guarded about is the size of our reserves – not Temasek's assets because that is fully published, with many slices of that data as well being published. But the size of GIC-managed assets is not published, and that would not have been accessible to Mr Goodyear or to other senior management in Temasek. So there is not much information that is critical to Government that is within the Temasek fold. But there is proprietary information. Had Mr Goodyear stayed on for a few years, he would have had the same proprietary information as other senior management. And that is always the risk you take with people coming and going, be they Singaporeans or foreigners. That does not fall under the Official Secrets Act. That is proprietary company information. That is the risk you take with any candidate. TRANSPORTATION OF FOREIGN WORKERS (Update on review) 4. Mdm Halimah Yacob asked the Minister for Transport (a) whether he will give an update on the outcome of his Ministry’s review into the unsafe manner in which foreign workers are transported in the back of lorries; (b) why is there a delay in the completion of the review which was supposed to be completed by end of 2008; and (c) in the interim, what measures have been taken to mitigate the dangers posed to foreign workers travelling in this manner.”
“Sir, on his first question, let me repeat what I said earlier. The Board, together with Mr Goodyear, issued a carefully crafted statement. Both sides agreed on the statement, and I really do not think it is advisable for the Government to comment further on the matter to add grist to the mill. There is a reason why they crafted the statement as they did – words were carefully chosen. People do want to know. There is curiosity, it is a matter of public interest. But that is not sufficient reason to disclose information. It is not sufficient that there be curiosity and interest, that you want to disclose information. And this applies to private sector organisations as well. It applies to publicly listed companies. Sometimes they disclose the reasons, sometimes they do not. It depends on the circumstances of departure. Is it mutual? Is it amicable? Is there an understanding between the parties as to what should be kept private and what should be made public? I think it is fairly clear what I am saying in this regard. It will not be advisable, and it is not in the interests of Temasek or Mr Goodyear, for us to have to comment further on it. It serves no strategic purpose. I understand the interest but it serves no strategic purpose. On his second question, we discussed it earlier as well in Parliament. I cannot remember when it was. I think Ms Sylvia Lim had raised the question. Anyone who is a CEO, or for that matter senior management of Temasek, has access to proprietary information. Sometimes people leave. There is clearly a code of conduct on the part of departing management as to what they should keep private. There is not much Official Secrets Act information in Temasek, as distinct from proprietary information.”
“Sir, on the second question, there was not. On the first question of whether it is a dent in the reputation, it is a dent in the reputation. It is a very visible dent in the fender; no damage to body parts, no damage to the axle, no damage to the engine.”
“How quickly they find a CEO successor will depend on whether the right person is available.”
“Sir, the Member's first question, in essence, is very similar to Mr Low Thia Khiang's question. I would prefer that internal governance matters continue to be overseen by the Board. The Board will, I am sure, reflect on this recent episode to see whether improvements could be made. And I trust that it will make refinements, where possible. But, on the face of it, this was not a situation of a faulty selection process. This was a situation which both parties realised would not work out well only after working together in the transition process. And sometimes, quite frankly, this happens. It is never desirable but it is not rare in the private sector for CEOs not to work out, typically after being on the job. It is not rare, never desirable, always unfortunate, and always something which boards should try to learn lessons from. On the Member's second question, basically, if I can put it squarely, there were no push factors for the current CEO to want to step down. There was no push factor in terms of the way the organisation was being run, no push factor in terms of the performance of Temasek over relevant periods of time compared to the markets or compared to comparable organisations. Temasek has, on objective reckoning, done rather well since 2003, exceeding most comparable organisations. So it was not a push factor. It was part of a Board discipline that they imposed on themselves, which the Government supports – go for regular succession planning for all your key management posts, not just the CEO but other senior management posts. And if someone whom you find suitable is available, which is not often, take that very seriously. It is a discipline that they impose on themselves and which they intend to continue.”
“That is what we have extensive dialogue with them on, not just once a year but through the course of the year. That is what the President looks at very carefully. But we want it to be clear that this is an independently-managed organisation, independent of Government interference. I am not keen to change that dispensation, that balance, because it may tip against the interests of Temasek and against our interests, ultimately, as stakeholders. Keep it as an independent organisation, hold it accountable and up to scrutiny on its performance, particularly over appropriate periods of time. As you know, we have had a healthy debate in Parliament not just on long-term periods, but even short-term periods – which is understandable given the nature of the global crisis we went through in the last couple of years. So I would rather keep to that dispensation. It is not untransparent, it is more transparent than most on matters that really concern us ultimately – investment performance, being accountable for long-term sustainable returns.”
“Our approach has been to go for ample disclosure of investment performance, investment strategies and the distribution of the investment portfolio. And frankly, if you look at the Temasek annual Review and compare it with many comparable institutions, it has far more disclosure, as an objective matter. In fact, it has insisted on having far more disclosure. For instance, on investment returns – not all Members would have had the opportunity to go through the Temasek Review – it reveals annual returns and the value of the whole portfolio on a one-year, two-year, three-year, five-year, 10-year, 30-year basis, both by market value as well as shareholder funds, plus full income statements, balance sheets – all fully audited. So it goes for full disclosure. In fact, it is more than most comparable organisations. Internal governance is a matter for the Board to oversee. The key task of the Government is to make sure we are comfortable with the people on the Board, so that they can be entrusted with the responsibility of running the organisation well. Once the Government starts intruding, with the best of intentions; once for that matter Parliament starts intruding with the best of intentions as well as just out of interest in what goes on in Temasek, then we are, over time, changing the character of the relationship between Government and Temasek. It is a relationship that clearly designates Temasek as independent of Government in its operations, including its internal governance procedures. The rest of the world must understand that. Temasek is accountable to the Government, like GIC for that matter, to deliver good, sustainable returns. That is what we hold them accountable for.”
“I think Mr Low Thia Khiang has rightly pointed out that at the point when Mr Goodyear was selected, he was assessed not just on the basis of his career track record but also on the basis of interviews of the Board members with Mr Goodyear and cross-checking with other sources – Chairmen or board members of previous companies he had worked with. The assessment was reached that he also shared the basic values of Temasek. I have no reason to doubt that even after this recent episode, the Board remains unchanged in its views that he shared the basic values of Temasek – building long-term sustainable value, not just going for a quick turn of profit; commitment to maintaining a globally-diversified portfolio; commitment to the basic geographical stance of Temasek. Points of disagreement between management and the Board, or even amongst management, are not just about basic values. There are many possible points of disagreement – some can be serious, some can be minor. I think it is fortunate that Temasek had, together with Mr Goodyear, provided for this transition period. It was a good idea to have a transition period for both sides to work into the relationship and find out more about each other's thinking, think through future possible strategies and make sure they were aligned. It is unfortunate that it did not work out but it is fortunate that they both realised this early, during the transition period. I think we should look forward now. On the second half of the Member's question – I know where the Member is coming from. It is a matter of public interest who the CEO of Temasek is, just like other prominent public positions in Singapore. But we have to find the right dispensation between Government and Temasek; Parliament and Temasek.”
“But we should allow for a few foreigners and indeed, we currently have at least one foreigner on the Board. Let the Board decide on who the best candidate is for CEO. The Board knows our preferences but it knows also that the Government wants to ensure that Temasek gets the best person for the job each time it looks for a potential CEO successor. And we are not just talking about the current situation of the search for a CEO successor but also the situation well down the road. This is about managing a complex, large investment organisation – large in terms of its portfolio – in the best interests of Temasek and Singapore. We should not restrict their choices. To restrict their choices would also be sending a signal – not just to Singaporeans but more importantly to the countries which Temasek invests in – that there is an element of political decision-making in the way Temasek is run. We do not want to send that signal. So it is a fair question and we had considered it very carefully within Government when the issue of Mr Goodyear came up earlier in the year. That was the only issue we considered because the Government did not know Mr Goodyear. We were not responsible for nominating him. We had to consider whether we were comfortable with Temasek appointing a foreigner. We decided we should not restrict Temasek from appointing a foreigner. If the Board's assessment was that Mr Goodyear was suitable and ready, we were willing to put his name to the President for concurrence. But the key issue on which Cabinet deliberated was whether we should allow for a foreigner and it was not a trivial issue.”
“I think Mr Lim Biow Chuan was referring to the question he had asked in March this year, which my colleague Mrs Lim Hwee Hua had answered. The question of whether the CEO of Temasek should be a Singaporean is not a trivial one. It is one which the Cabinet considered very carefully and debated on before arriving at a decision. I would say that, ideally, we should have a Singaporean as a CEO – that is the ideal. Everything else being equal, when you look at two candidates who are equally suitable for the job, I think we should prefer to have a Singaporean. But Temasek is not a typical company. It is a very large company and a rather complex one, as has happened over time. It is now engaged in many regions, geographically, and in many sectors. It is much broader in its sectoral reach than it used to be. It is not just a steward of Singapore's TLCs (Temasek-linked Companies). So it has really been transformed very substantially over the years. So we really want someone as CEO, and we want enough people on the Board, with direct experience of managing global operations – ideally not just the operations of an investment company but someone having operating experience. Quite frankly, the field at any point in time is always narrow – among Singaporeans, as well as among foreigners. Even among foreigners, to find someone who is willing to come to Singapore and work for a Singapore Government-related organisation is not easy. So I would prefer, and the Government's position is that it would prefer, not to restrict Temasek in its choice of CEO. The ideal is not always possible. What is critical is that the Board remains in the control of Singaporeans – the Chairman has to be Singaporean; Deputy Chairman, a Singaporean; majority of the Board, Singaporean.”
“While it is obviously unfortunate that the Board and Mr Goodyear decided that the leadership transition should be terminated, Temasek intends to keep up its processes for CEO succession review and planning as part of Board discipline. Temasek’s leadership remains strong, at both the CEO and Board level. They have enabled Temasek to sustain its generally superior overall investment performance over the years, including over the last cycle in global markets that began in 2003. The Board will continue to review succession options, and the Government is confident that it will make its decision to appoint a successor CEO in the best interest of Temasek when a suitable candidate is available and ready. Thus, with regard to Mr Seah Kian Peng’s question, Temasek has no deadline for the search for a CEO successor. Mr Lim Biow Chuan and Mr Seah Kian Peng also asked if a severance bonus or “golden handshake” was offered to Mr Goodyear. Temasek had no contractual obligation to make any compensation to Mr Goodyear on separation. It was an amicable separation, based on mutual agreement.”
“Temasek’s Board has issued a carefully considered statement on the mutual decision that the Board and Mr Charles Goodyear have taken to terminate the leadership transition process at Temasek. It would not be appropriate for the Government to add to the statement, bearing in mind that the Government had no role in the decision of the Board and Mr Goodyear not to continue with the CEO transition. Temasek informed the Government of the decision before it was announced, but the Government was not involved in any way in the decision. This does not mean that the Government is a disinterested observer of Temasek’s leadership succession. As shareholder of Temasek, the Government has a clear interest in Temasek continuing to have strong leadership, so that it can deliver good returns over the long term. However, the Government does not directly manage the process of CEO succession. To do so would be to make the appointment of the CEO a political decision, which it must never be. The decision must remain the responsibility of the Board of Temasek, which oversees the process of leadership succession and decides based on the merits and suitability of any CEO candidate. Temasek’s Board and current CEO Ms Ho Ching had set about the process of CEO succession review since 2005 not because there was an urgent need to find a new CEO, but because a disciplined system of regular succession planning for its CEO and senior management is essential for Temasek’s future as a professional organisation. It was through this process that Temasek had found Mr Goodyear to be a suitable CEO successor and made the offer for him to join Temasek.”