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…”
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“I am sorry I missed out Dr Tan's question. Let me very briefly say that the average Ministry of Education subsidy for a medical undergraduate student at NUS is $64,600 per year over the course of his 5-year MBBS. This subsidy is about 3.5 times higher than what an Australian medical student, for instance, would receive at, say, the University of Sydney. As for the Graduate Medical School, it has not announced the details of its fees and other financial details. They would have to charge higher fees because they are providing for a graduate medical programme and is also aiming at a very small, select group of students who are going to receive a much more costly programme that requires much more substantial investment. They would price their fees realistically. They are not going to price it beyond what the market can bear, but the details would be announced later.”
“Beyond the median income level, we provide loans as well. The loans are not onerous. As a percentage of the starting pay of a graduate, $100, maximum $200, if he has also taken the Study Loan. Over time, as the university graduate's pay goes up, it is a smaller and smaller fraction of his monthly income. It is the practice all over the world. In fact, the proportion of students who take loans in Singapore is somewhat less than in many other places, especially Australia. So this is a pragmatic way forward to have a top quality and affordable education. Top quality cannot mean 100% Government subsidy because that must mean taking money away from very deserving investments in our school, polytechnic and ITE sectors. Top quality must mean charging realistic fees, but making sure that those who cannot afford it, get assistance. That is how we avoid tying ourselves into a political knot.”
“Let me start with the last point. The framework for the autonomous universities allows for fee increases of up to 10%, but it does not happen automatically. In fact, the framework states quite clearly that the universities have to first make a submission to the Ministry six months beforehand on what their fee proposals are, and the Ministry will have to look at it to make sure the cost increases are reasonable, apply some standardised benchmarks for cost-increases across the universities, before it gauges whether the universities' proposals are justifiable. So it is not an automatic 10%. In fact, this is a different framework from what exists in some other countries. We do not envisage a situation like what happened in Australia. On loans, I am not sure what Mr Low is getting at. This is an equation where if you disagree with all the parts you are not going to get the outcome. You cannot disagree with realistic fees being charged with loans being a means of financial assistance and, at the same time, disagree with the Government having to raise taxes in order to fund the universities more, or disagree with the policy that we should keep some fair proportion of subsidy in education between universities, polytechnics, ITEs and schools. What is our strategy? Not to charge fees that are unreachable to Singaporeans? That would be crazy. And it would not be in the interest of our universities to do so because a needs-blind admission must mean not just financial assistance provisions, but fees that are basically within the reach of the middle-class as well. We have to make sure the university keeps cost in check, that fee increases are within reach, that financial assistance is always there for needy students and even students right up to the median income level.”
“Some renovations would be required for the Bukit Timah Campus because it is accommodating quite distinct faculties and also research institutions. NUS intends to fund that very largely from its endowment income, rather than from its operating revenues.”
“We want more students to qualify, and this is the way forward as we continue to allow the universities to charge realistic fees to meet the cost of providing top quality education. * It is interest-free only for those with PCI $500 or less. I am a little short of time but let me say very quickly regarding Prof. Low Seow Chay's comments. I know what he is referring to. First, I think we should distinguish between the reputable universities that do confer honorary degrees, quite rightly, on distinguished individuals who made significant contributions either to a university or to society. Our own universities do so and they have very clear guidelines regarding who they confer such degrees on. There is no proliferation of such degrees from our own universities. What Prof. Low was concerned was about people buying or somehow engaging in some donations, so as to be able to obtain either a Doctorate degree or some other degree. It takes place all over the world. There is a market for it. The Ministry cannot do anything to stop this. It is a global phenomenon and the market can judge. I think Prof. Low judges very well the worth of these degrees. Most people know how to judge these things. I do not encourage the obtaining of degrees by transaction, but I would add that the fact that people are very keen to obtain a degree by donating money to the university is probably also a reflection of our society's reverence for education and educational advancement, probably better than obtaining knighthoods and peerages by donation.”
“We estimate he would need about $11,000 per year to pay for tuition fees plus full provision for living expenses, if I am not economising too much on the estimates. So tuition fee is about $6,100, maximum expenses about $5,500. He can apply for a Tuition Fee Loan and Study Loan to cover his total cost of fees. He will be able to get a living allowance under the Study Loan of about $3,600. He will be able to obtain a bursary that could come up to about $1,500. That would leave about $400. And the $400 can be easily covered by the work-study programmes that the universities have introduced. It does not mean you work every night. Occasional work, you get paid for it, you can easily cover the $400. Of course, there are also some students who want to cover part of the fee costs using their parents' CPF accounts but that probably does not refer to the lowest income category, but the middle-income category. For the middle-income students, in fact, for higher income students, they too can go through the university years without any cash outlay for their fees because of the Tuition Loan, plus being able to use their parents' CPF account. But I will focus on the example concerning a low income student to show how, not just his fees, but his living expenses can be covered completely. The loan repayments are not onerous. For the Tuition Fee Loan, it is a minimum amount of $100 per month after he graduates and obtains a job. Study Loan, it is also $100 per month. So if he takes both, that is $200 a month, spread out his Tuition Fee Loan repayment period over twenty years. Study Loan is interest free*. So it is quite generous. It is quite manageable. The main thing is that we have expanded our financial assistance facility.”
“Second, NUS and NTU are setting aside larger amounts of funds for financial assistance and I think Mr Tan Soo Khoon's point is a useful one. They may also want to consider, besides their regular funding resources, to seek out dedicated resources from philanthropic donations to boost the sum up. It is not one in ten who obtained a bursary last year. One in 10 referred to year 2003. In fact, it has been going up year by year. Last year, four out of ten NUS students who applied for bursaries obtained them. But they will take it beyond it, going forward, with the increase in NUS' and NTU's allocation for financial assistance - an increase of two to three times on average, in fact, in the case of NUS it is three-fold. We will be able to cater to more students. Third, MOE is providing a new Government bursary of $800 per year to help needy students pay for their living expenses. This will apply to students with a per capita household income of about $900 per month, which is roughly equal to the 50th percentile and below of the Singapore population. So all Singaporean students, with a gross monthly per capita household income of up to $900, will be eligible for the new MOE bursary of $800 per year. In lieu of the MOE bursary, students will also be eligible for university bursaries. So, you will have more than four out of ten NUS students qualifying for bursaries because of these increased provisions. Let me just give you an example, since Mr Low has given us an example. Let us take a needy student, who comes from a four-member family with gross monthly household income of $2,000, taking a four-year undergraduate course.”
“To put it very simply, the average Government funding per year which an university undergraduate receives, if I take last year as an example, was twice that of a polytechnic or an ITE student. And if we consider the fact that we are funding our university students over more years - two years in junior college and four years in university, compared to a polytechnic or an ITE student - then we arrive at an outcome where we are currently funding a university student five times more than we subsidise an ITE student and three times more than we subsidise a polytechnic student. So it will not be fair to take more resources away from schools, polytechnics and ITEs in order to give more to university students, particularly when you take into account also that university students will have higher lifetime earnings compared to other graduates from our system. 2.15 pm What is important is that we are committed to two key things. First, to continue to enhance the quality of university education; and, second, to ensure that university education is accessible and affordable to all Singaporeans. We have revamped our financial assistance framework. The universities have revamped it and we have also given them a supplement. We are significantly expanding financial assistance provision for our universities. Let me mention three enhancements. First, starting from this year, the maximum Tuition Fee Loan quantum has been increased from 80% of fees to 90% of fees, to minimise the cash outlay the students need. Needy students can get an additional Study Loan for the remaining 10% of fees and to cover a substantial portion of their living expenses. And all these loan schemes have quite generous terms.”
“Our universities are fully aware and will have to be aware of the need to keep costs down. They have put in place cost control measures. Measures like reducing administrative staff headcount, bulk tendering for goods and services, demand aggregation for electricity, outsourcing of non-core activities and constant leveraging on IT to improve productivity. The University Hall, whatever you might say about it, was funded by philanthropic donations. And I quite agree with Mr Tan Soo Khoon that the universities might want to specifically seek out philanthropic donations for the purpose of financial assistance, which I will come to in a moment. So we will keep up our hefty subsidies. The universities will continue to exercise control over cost and we will adjust our subsidies over time to keep pace with cost increases that are necessary to deliver quality education. But what we cannot do is to increase the universities' share of the Education budget, ie, increase it beyond what it already is, which is a large share. We fund the universities 1% of GDP. Three universities, 1% of GDP - that is far higher than what almost any other country I can think of funds for their universities. It is one-quarter of the Education budget now. Ten years ago, it was about one-fifth. It has gone up mainly because we succeeded in educating more Singaporeans in our schools such that they are able to go on to universities. We can justify our significant investment in the universities. We are not apologising for this. I am not saying that 1% of GDP is too much. It is a significant investment because it brings benefits to the wider economy. But we cannot increase the share of the universities in the Education budget, and it will not be equitable to do so.”
“There is a certain natural cost increase but there is also some cost increase over time as we aspire to provide better quality. I do not think we disagree with that. There is no intention on the part of the universities to raise fees by 10% every year once they go autonomous, which incidentally has not started yet - it is only from 1st April that universities go autonomous. I will be very surprised if I or any future Minister for Education will be happy if each year university fees go up by 10%. What is the record so far? With all the cost pressures that I have been talking about that all top universities face internationally, since the start of this decade, from 2000 until last year, fees in NUS and NTU increased by an average of 1.8% per year. This is, in fact, lower than the average rate for wage increase in Singapore. This year, fees are going up by 3% in NUS and NTU. I do not think we expect wages to go up by less this year. I do not have a forecast, but 3% is not unreasonable. We will ensure that fees are never beyond the reach of the average Singaporeans, and I do not just mean needy Singaporeans but the average Singaporeans, the middle-class, even those in the upper middle income bracket. It will never be beyond their reach. We will keep tuition fees competitively priced. I do not want to get into details. I answered Mr Steve Chia last week in Parliament. But a quick scan of what is going on in the rest of the world - Australia and UK - shows that fee increases in recent years have been much more substantial. In fact, Australian universities raised fees up to the full limit allowed by the government under their autonomous status, 25% in one year. UK universities are going up by almost three times this year.”
“In comparison, the universities ranked within the top 50 universities, like NUS and NTU, in the same survey provide education for only a very small percentage of each cohort in their countries. In Japan and China, it is well below 1%: China, 0.02%; and Japan, about 0.5% of cohort; in India, the same order of magnitude. In the US, although there are 20 universities in the top 50 rankings, in total, they cater to about 1% of cohort. In Hong Kong, it is 6%, somewhat higher; and in Australia, which is the only country which comes close to Singapore in this regard, the six Australian universities in the top 50 rankings provide for 15% of Australian cohort. So NUS and NTU are quite exceptional and, together with SMU, we are going to provide for 25% of cohort a top quality, affordable education, unparalleled to anywhere else in the world. There are many other indications on quality but because time is short, I will not go through them. But let me emphasise this - that we all have a stake in ensuring that our universities provide high-quality education and receive international recognition for doing so. The high standing of our universities is in the interest of students, the alumni, donors and all stakeholders of the universities. It is in the interest of Singapore. Students in the alumni would not want to see a decline in the standing of the universities and their alma mater over time. So, it is not in anyone's interest that we skimp on quality. Let me now go into a few specifics on university fees. First, I think we all agree that fees need to be revised regularly in the universities to allow them to meet their cost increases while improving on the quality of education they provide.”
“And I quote: "The basic problems with the universities are the same across Europe: too much state control and too little freedom to manage their own affairs. Governments have forced universities to educate huge armies of students on the cheap, and have deprived them of the two freedoms that they need to compete in the international marketplace: to select their students and to pay their professors the market rate for the job." Everyone knows the problems, but they have tied themselves into a political knot that prevents them from solving the problems. We have avoided this, and we can continue to provide an excellent university education to Singaporeans if we keep up public funding at 75% of costs as we will do, and if our universities charge realistic fees and continue to provide every needy student with financial assistance. I will speak a little more on that later. What we must not do is to give up on quality, give up on getting the best faculty, give up on improving teaching and keeping the laboratories up to date. The universities have to aim to provide the highest quality, while keeping overall costs under control. Let me say something about quality. We know the latest rankings. NUS and NTU were both ranked within the top 50 universities in the world globally by Times Higher Education Supplement. That is well known. But what is less well known and even more remarkable is that NUS and NTU are providing top-quality education to a sizeable proportion of Singaporeans, a far larger proportion of citizens than what the top universities in other countries provide. We are providing high-quality education to all our university students, not high-quality education for a few. NUS and NTU take in slightly over one-fifth of each Singapore cohort.”
“But all the universities face the same cost pressures as, globally, the cost of high quality university faculty has gone up, together with the cost of knowledge-based professionals at large. So in the US and Australia, they have raised fees substantially more than Singapore, and to a substantially higher level than Singapore. They try to deliver quality, but they can only do so at a much higher cost to students compared to the situation in Singapore. In Europe, it is the other way around. The governments prevent universities from raising fees. In fact, the universities charge very low fees. Despite high taxes, the governments are not able to fund the universities adequately to be able to provide a good quality university education. The universities are faced with relentless financial pressures and, particularly, in the last decade, they are close to a breaking point. So they have no choice but to lower quality because the funds are not there. They cannot raise fees, and the only option is to lower quality. They pack in more students per lecturer and hire more part-time lecturers. And because they cannot pay their best lecturers the market rate, they lose them. So, with the exception of a few top European universities, you get a low-cost education, but a low-quality education. I say this not as my own assessment, but the assessment of European university heads and academics. In fact, there are a number of independent analyses pointing to the problems. Everyone knows the problems. I just quote very quickly from an Economist article. This is a very good survey of higher education. I think it was in September last year called "The Brains Business".”
“Mr Chairman, first let me thank Mr Tan Soo Khoon, Mr Low Thia Khiang, Ms Eunice Olsen, Dr Tan Sze Wee, Dr Ong Seh Hong, Assoc. Prof. Low Seow Chay, and Assoc. Prof. Ong Soh Khim who spoke yesterday as well, for their various comments on the universities and the higher education sector. Let me first address the issue of university fees. The Government's objective is to ensure that our universities, polytechnics and ITE provide Singaporean students with a top-quality education at affordable cost - top quality and affordable. Our aim is not to gear up our institutions to provide a lowest cost education, low-quality education, but to provide an affordable education that is top quality. This is, in fact, what our universities are providing. They are able to do so for three reasons: first, the Government funds them substantially, more than three-quarters of the cost of an undergraduate education; second, they charge realistic fees; and third, they provide substantial financial assistance to needy students. This is what is called "needs-blind admission", ie, you get in as long as you qualify on merit, and the university helps you with your needs and takes care of your cost once you are in. It allows for a top-quality education, affordable to all university students. This outcome is quite different from what we see in most other developed countries. In the US, UK and Australia, public funding of the universities is much lower than in Singapore. In the US, the top state universities - I am not even talking about the private universities - will get something in the order of 20% of their funding from government. In the UK and Australia, it is 50% or less.”
“We will consider that eventually. First, we have to build up the capacity of NorthLight School, as well as the experience with the new programmes it is adopting. Over time, we will consider whether we want to allow parents to elect to have their children, after they fail the first time, go on to such a school. But we should look at that very carefully. Many students can repeat the PSLE and pass. There is a reasonable number of them that pass on their second attempt and go on to do reasonably well in secondary schools and on to ITE. So we do not want to make a pre-emptory move of shunting them out of the mainstream. Teachers would be able to advise parents on whether the child is suitable to repeat the PSLE. This is something which we will consider in later years. For now, we are taking in a significantly larger group of students by opening the doors of NorthLight School to students who have failed the second time, instead of failed first time. Over time, we will consider whether we can expand it further. Malay and Tamil Language Promotion”
“So, we have a whole set of initiatives, starting from pre-primary to early-primary, through primary school upwards, plus having the NorthLight School, that would provide a holistic approach for this group of students who are not suited to a regular academic curriculum. Let us give them time. I can assure him that we are putting a lot more efforts and resources into this, a lot more time and a lot more expertise, quite apart from the financial resources, which is the easier part. I think we will achieve success as we go along. We are not unique in facing this problem. In fact, as I mentioned in my remarks earlier, our problems are not large. We think they are too large for us. We want to do more, 2.6% of kids dropping out is far too large a number, as far as we are concerned. But they are not large by international standard. If you look at the UK drop-out rates, if you take those who drop out all the way through the end of secondary school, they are far higher. And truancy rates are extremely high for those who remain in school. I was just reading a report by the National Drop-out Prevention Centre in the United States, in some US cities, as much as 50% of the pupils are totally disengaged from their studies. I am not saying that that should give us comfort. All I am trying to say is that this is a problem the world over - truancy and dropping-out. Our problems are not large by international standard, but they are too big for us, too big for our comfort and we want to do more, and we will do more.”
“I take it that the Member is referring to the Learning Support Programmes in the early primary years. It has been working quite well. It is an intervention which, by international reckoning, has achieved more success than most. 12%-14% of Primary 1 students go through the programme in the first year. About one-third is able to graduate out of the programme and join regular classes after one year. It does not mean that we solve all their problems, but I think we have achieved a lot to correct early deficits. Second year, another portion of them, also at the end of the second year, managed to graduate to regular classes. It is quite resource-intensive because we have got to train up teachers, especially to deal with the students in these Learning Support Programmes - small classes, different teaching methods. It is not something that you can just scale up at the word "Go". I think we can do more. We can do more in Primary 3, 4 and 5. I do not think we have the resources to continue our Learning Support Programmes for four or five years. It would be more practical to improve what we are doing in Primary 1 and 2, which is what we are doing. We will not be able to reduce the failure rate to zero. In fact, if we reduce the failure rate to zero, it would probably mean that examinations are not doing what they are meant to do. If a student has not mastered the basics, it should be reflected in his grades. What we have got to do is to keep trying to improve our teaching, and where a child is really not able to benefit from a regular academic curriculum, even the EM3 curriculum, find something else that he can do well in, take an interest in, motivate him, that gives him confidence, which is what we are trying to do.”
“That is not a topic that pertains to the matter I was talking about. There is progress being made. I do not have the details. The LTA is, in fact, the chief coordinator for this Committee, but I understand that there is progress being made.”
“On her first question, the answer is yes. Currently, all schools draw on a network of social workers, both those who are working part-time with the schools as well as those provided through the entire MCYS' network, the Family Service Centres and the various voluntary agencies. And we are taking this a step further. We are going to provide full-time counsellors in each of our secondary schools by the end of this year and even primary schools by 2008 - people who can try to help the teachers to spot problems early and prevent students from coming to a point where they make the wrong decision of dropping out of school. So it is something which we are working on and, in fact, it is a question of recruiting the right people and putting them through a training pipeline before sending them out to the schools. It takes a bit of time but we are getting there. On her second question, this is a very important focus, particularly for the pre-primary years, but also for the older children. MOE, MCYS and all the community agencies, as well as some specialist agencies, those that specialise in students with specific learning difficulties like the Dyslexia Association, for instance, are working together quite closely. First, to make sure that at the pre-primary level, every family sends their kid to kindergarten. Secondly, to be able to detect students with learning difficulties early and have a multi-pronged approach to helping that child and also, sometimes, having to help the family realise the importance of education and try to provide some support for the kids when they are in education. So it is a lot of work, a very challenging task, quite complex, no easy fix, but we are trying hard.”
“I am sorry that I did not make myself fully clear on this. In fact, students who have failed three times would certainly go into the NorthLight School. In addition, the school will also open its doors to students who have failed twice and who wish to progress on to that school, whereas previously, you need to have failed three times and reached the age of at least 14 years old before you can enter one of the VTCs. So the first group is still a very important target group, ie, those who have failed three times.”
“Mr Zainudin Nordin also asked about the relevance of ITE's training to industry. This is something that is foremost in ITE's mind. The market is the best test and the best testimony. According to the ITE graduate employment survey, the last one done in June last year, 89% of ITE graduates found jobs within five months of job search. After 10 years on the job market, ITE graduates had doubled their starting salaries. And more ITE graduates are moving up the educational ladder. Within 10 years from graduation, 10%-12% had acquired degree qualifications and a further 24% had diploma qualifications. So you can see, we are taking a comprehensive approach in education to address students who are at risk of dropping out at various stages. We are adopting new approaches to help students at risk, from the early years up. We will learn from the experience of these experiments and improve the programmes as we roll them out. I have to repeat that there are no short cuts to reducing drop-out rates. The problems are complex and often rooted in the home. What we want is to try harder and do better, and we will. We will help ensure that students are better prepared for school, help them to get a good start in their early primary years, remain engaged through secondary school, and after leaving school go on to a first-class education at ITE that prepares them for employment and further education. And we will provide the NorthLight School a new holistic approach to engaging students who need a more active, hands-on and practice-based approach to learning. Sir, I would like to thank Members once again for their interest and suggestions on this important topic.”
“But the four-hour session on swiss rolls also made Mathematics come alive, as the students have to calculate the correct proportion of water, flour, sugar and the other ingredients, in order to bake delicious swiss rolls. The students were so engaged that they asked if the session could be extended to a longer time. And the session also gave ideas to the school teacher who was there, on how to conduct the regular classes for the Normal (Technical) students back in school. The elective modules are catching on in our schools. More than 40% of schools which offer the Normal (Technical) course are now offering at least one elective module to their students, in a whole range of areas from digital videography to basic mechatronics. They are making schools more interesting and more relevant to life for the students. The next piece is what we are doing at ITE. We are making ITE a centre of excellence in technical education. All across Asia and, indeed, internationally, ITE's reputation is now up there - it is well-known. ITE's key improvements are in two areas in recent years: new courses to keep pace with the interest of students and the needs of industry, and closer collaboration with industry to ensure that ITE students find fruitful employment after graduation. The changes are making an impact. ITE has been attracting more school leavers, year after year, with enrolment of full-time students reaching a high of 23,000 in 2005. As I shared earlier, more and more of our Normal (Technical) students are going on to ITE. ITE's attrition rate has also been decreasing. In 2005, the proportion of students who left ITE without a qualification was about 12% of ITE's full-time enrolment, compared to 17% just five years ago.”
“They are taking a proactive approach well before the counsellor becomes necessary. It is a holistic approach, getting students to participate in CCAs, camps and other school activities, so that they develop bonds amongst each other and develop confidence in themselves. The schools are helping students find the best in themselves, whether in their studies or in their CCAs and other activities. This proactive approach to developing bonds among students and creating a sense of attachment to the school is being enhanced in all our schools. Another initiative is the Normal (Technical) course. We are implementing a revised Normal (Technical) curriculum with a more practical orientation, to better engage students in their learning. The curriculum content is being made more meaningful to students by relating what they learn to daily life. There will be greater emphasis on group work and presentations, creativity, hands-on activities and use of IT, and new ways of assessing the Normal (Technical) students, such as evaluating their coursework, either individually or in groups, instead of the traditional pen-and-paper test. We will start rolling out the revised Normal (Technical) curriculum in 2007. As part of the revised approach to Normal (Technical), we also introduced elective modules last year to create opportunities to broaden the experiences of the students. The students enjoy the elective modules tremendously because of the more practical and hands-on nature of these modules. But they also develop a deeper understanding of the concepts of their learning quite often. One of our principals gave me an example of students who attended an elective module on baking at the Baking Industry Training Centre. They were learning to make swiss rolls.”
“We are also investing more to help students with special learning difficulties like dyslexia and ASD (Autism Spectrum Disorder) in our schools. By 2010, we will have 140 trained Special Needs Officers in our primary schools. We already have 28 of them in our primary schools currently. We are also aiming to train close to 100 officers for secondary schools and they will be concentrated in certain schools - some schools that will pull together resources for dyslexia, others for students who are autistic. These are students who do not have severe difficulties and can be well accommodated with our mainstream system and they can benefit from the mainstream curriculum. These provisions that we are making in the mainstream schools will complement what we are doing to improve quality and facilities in our special schools which cater to children with more significant learning difficulties. Next, secondary schools. We are strengthening counselling resources in all our schools but with priority being given to the secondary schools because that is where the challenges of growing up are greatest. MOE is on track to providing all secondary schools with one full-time inhouse school counsellor by this year. Primary schools and junior colleges will receive a full-time counsellor by 2008. Many of the counsellors we are recruiting are former teachers or some current teachers who decided to switch to full-time counselling and some former principals. They understand students and they have a heart for them. And we put all of them through a rigorous six-month diploma course at NIE. It is early days, but so far this programme is working quite well. But the schools are not just reacting to problems, or dealing with problems as and when they arise and calling the counsellor in.”
“MOE will monitor and evaluate the effectiveness of the pilot at the end of this year, before fine-tuning and implementing it in all our schools from 2007. The enhancement of the Learning Support Programme will also be supported by changes in English Language classes for all students in the early primary years. This will help all students, but it is particularly impactful for students from lower-income families - whose main language deficit is English, because it is not the language spoken at home. We have started a pilot programme, or what we call, SEED - English Language. SEED refers to the whole set of experiments we are taking in the early primary years, so SEED - English Language is an experiment that is taking place for English Language teaching. So this is a pilot programme. We have started in 30 schools this year to provide students with an enhanced curriculum for learning grammar and phonics, to help them learn English with confidence. I would not go into the details, but it involves a very careful and gradual building up of the students' language skills. And it also aims to develop amongst young children a love for reading at a young age, by providing more early exposure to books and engaging them in the conversation on what is being read. Second, we are also rolling out Learning Support for Mathematics. We want children with a weak start in numbers to be able to catch up and follow the class. This is now being implemented in 50 schools at Primary 1, after it has spent the last four to five years piloting this programme, and it will be in all our schools from 2007. All the schools will be provided with additional teachers to provide support to Primary 1 pupils with a late start in numeracy skills.”
“MOE will then work with the kindergartens to customise the programme to support these children. The National Library Board will loan story books to supplement the kindergartens' reading resources and assist them to set up reading enrichment programmes for the children. 12.15 pm Next, primary schools, when the children enter Primary 1. We are enhancing the Learning Support Programme. As Mr Ong Ah Heng has pointed out, the Learning Support Programme is a critical piece in our strategy to help students who are not school-ready when they enter primary schools. The Learning Support Programme has helped many students. It is a specialised programme, focusing on basic oral language and reading skills. Each year, about 12%-14% of our Primary 1 pupils with weak basic language and literacy skills are identified for support in the programme. And on average, after one year of intervention, about one-third of the pupils supported by the programme will graduate from the programme and rejoin the regular classes. We are now piloting an enhanced Learning Support Programme for English in 34 primary schools this year. It will further differentiate the students, because some of them need much more basic support than others. There is a group of students each year, with very weak language skills, who needs more targeted attention. We will put them through a more intensive reading support programme in the first instance. Over the longer term, if we can reach out to such students when they are in kindergartens, we can hopefully reduce the numbers in this group when they enter our primary schools. Another feature of our enhanced Learning Support Programme is a smaller group size. Pupils are supported in groups of no more than five pupils, as compared to 10 currently.”
“The exchange of experience between NorthLight and the mainstream sector can throw up more ideas on how we can engage all our students and help them stay in school. Besides the new vocational pathway that Northlight School will provide, MOE is implementing several other targeted initiatives to assist students who are at risk of dropping out. We have mapped out a comprehensive approach, at various stages of the education system. First, at pre-school. We know the early years in kindergarten are important in nurturing children's confidence and interest in learning. Children who are confident and eager to learn are more likely to take school seriously, and want to stay on in school. We have been helping to level up the quality of teachers in our kindergartens, and MOS Chan Soo Sen will be talking more about our approach. We are also working on some more targeted interventions at the pre-school level. MOE is working with MCYS and other partners to help encourage every family to put their children in pre-school education. That is the first priority. Next, we are starting a prototype project with some neighbourhood kindergartens, aimed especially at helping children who do not receive adequate support at home. We are working with 10 neighbourhood kindergartens on what we call Project SEAL (Sustained Early Assistance for Learning). It is a multi-pronged effort and a multi-agency approach that pulls together expertise from several bodies. An important part of this prototype project is to identify young children with learning difficulties early while they are in kindergartens. For example, the Dyslexia Association of Singapore is developing a simple screening tool to help teachers identify children who need special help in language.”
“NorthLight School will aim to prepare as many of its students as possible for further education at ITE or apprenticeship with industry. It will also aim to give them skills and strengths that they can take with them through life. Its new three-year curriculum will have three key aspects: first, to place emphasis on developing emotional resilience and instilling essential life-skills, as Dr Amy Khor had also suggested, such as taking responsibility and managing relationships. These will take up a greater share of curriculum time but within a longer programme of three years. The school will also have a full CCA programme, including sports, games and the arts, so as to develop bonds amongst the students and develop character. The school will have more full-time, inhouse counsellors to advise and guide students facing social and emotional challenges. Second, the school will adopt a hands-on and experiential approach to learning, suited to students who learn better in non-traditional classroom settings. As Mrs Chua Yen Ching put it to me, she wants NorthLight to be the school where "School Comes Alive" - where students find lessons interesting, and see their relevance to day-to-day life. Third, there will be a wider range of vocational options to stimulate students' interests and open up their career choices. Each of the options will have a 10-week long industrial attachment. The school's new approach to learning, especially its attempt to create a living and learning community for students where they apply what they learn in their classes in day-to-day real-world applications, will be of interest to some of our mainstream schools as well.”
“In fact, it is set on an island called Treasure Island. It chooses students who have done very poorly in nearby schools and puts them together in a 'living and learning' community. The principal and teachers were passionate about what they were doing. The principal herself had a rough start in her youth, but turned her life around. She had a personal mission to help youth in trouble make good. One of the Chemistry teachers was an aerospace engineer who left a high-paying job because he wanted to do the same. And they were achieving results. Some of the school's students even made it to the top universities in California. We have put some effort into choosing the right people for NorthLight. We have chosen as NorthLight's first principal, an experienced MOE school leader with a zeal for helping students in difficulty. She is Mrs Chua Yen Ching, whose work in recent years as principal of Shuqun Secondary School has gained the attention of the school community and the public. Yen Ching has developed fresh approaches to re-define success for her students, and help them gain the confidence to pursue their dreams. She will be accompanied by many dedicated staff from the present Geylang Serai VTC, and other MOE teachers with a passion for helping this group of students. One of them won the Outstanding Youth in Education Award last year, for the way she has used the arts to reach out to students who feel disengaged from their studies. In fact, she had written a thorough report on how we should make more use of the arts to reach out to students at risk, which she had sent to me before she even knew that we would start a new school of this nature. The school will have a collection of passionate teachers like her.”
“They need a programme that not only focuses on building skills, but on nurturing emotional resilience and giving them a sense of belonging to the school. In fact, the students we spoke to - those who had gone through the VTC and succeeded in going onto the ITE - tell us that they find the teachers of the VTC warm and approachable. But they hope for a fuller environment, with a range of CCAs, for instance, a broader range of courses, and a more holistic and school-like environment. MOE will set up a new school to implement this new and enhanced pathway for students who can benefit from a more customised and practice-based curriculum. The new school, which will be called NorthLight School, will build on the current VTC programme and enhance it. Geylang Serai Vocational Training Centre will become a part of the new school. NorthLight School will admit students from January 2007. It will allow in students who have attempted the PSLE twice or more (in other words, 13 years old or older). It will thus be able to give them a longer programme - a three-year programme will be offered to students who have failed the PSLE twice and want to enter the school. Parents and students will retain the choice, if they wish, of repeating the PSLE a third time. The school will also be open to students who leave secondary school prematurely. We expect that it will start smallish, about 600 students, including the current Geylang Serai VTC students, and expand up to 1,400 students eventually, which is about the size of a regular school. Getting the right school leaders and teachers is critical. Their conviction is critical. The MOE Committee that studied how we can enhance the VTC programme visited a number of similar schools abroad. One was the Life Learning Academy in San Francisco.”
“Of these 1,100, about 130 of them failed the PSLE for the third time. Currently, many of these students enrol at the two Vocational Training Centres (VTCs) under the Institute of Technical Education (ITE), eg, Geylang Serai VTC and Assumption Vocational Institute. But attrition is high, sometimes because of the lack of home support. 60% of the VTC students drop out. Of the 40% that do complete the programme, less than half made it to ITE. We spoke to teachers, students and parents, to work out a new pathway that can help these students stay in education and get the best chance to succeed. First, we will open the doors to such students earlier, as Dr Amy Khor has suggested. Currently, the VTCs admit the students only after they have reached 14 years of age, and provide them with a two-year programme - which means that the student would first need to have failed his PSLE three times before he can enter the VTC. Many of the VTC students and their parents told us that even with the best efforts of their primary schools, it was not helpful for them to keep repeating a PSLE curriculum that they were able to benefit from. There are also limits to what we can do to provide a more customised approach for these students while they remain in primary school, as they are distributed among many schools with no more than five or 10 students per school. So we should try to let them move beyond primary school, instead of waiting for them to take a third try at the PSLE, and move them up to a school where they can be provided with an education that is customised to their needs, and their different learning styles and abilities. Second, we will take a more holistic approach to engaging these students.”
“The increase reflects the efforts of both the ITE and our secondary school teachers, who bring their students to the ITE campuses to see what they offer and get a taste of the range of courses they can take at the ITE. I will touch more on this later. But, again, we want to do more. The number of Normal (Technical) students who choose not to go to the ITE translates to about 3.3% of the overall age cohort, which is about 1,500 students. We will do more to engage this group of students, and encourage them to go on to a post-secondary education. This is the second group we are focusing on, besides the group of students who drop out during their primary and secondary school years. We cannot completely prevent students from dropping out of school. The reasons why they drop out are varied, and the fundamental reasons usually lie outside the school. And, even within the school, there are no quick fixes to this problem. We are working on several initiatives, beginning from the pre-primary level and extending all the way up to the ITE - initiatives to help students learn better, see the relevance of what they learn, and feel engaged in the school community. It is a challenging and complex task, and we are trying some new approaches. We are also working with MCYS and the various social agencies, so that what we try to do in schools goes hand in hand with efforts to strengthen the family. Let me, first, focus on a key initiative that Dr Amy Khor, Mr Zainudin Nordin, Dr Ong Seh Hong and others have referred to, which relates to vocational education. In each cohort, there is a small group of students who are unable to cope with the mainstream curriculum. In 2005, there were 1,100 students who failed the Primary School Leaving Examination (PSLE).”
“Mr Chairman, Sir, let me first thank Dr Amy Khor, Dr Tan Boon Wan, Mdm Ho Geok Choo, Dr Ong Seh Hong, Mr Ong Ah Heng and Mr Zainudin Nordin for raising questions on what more we can do to engage students who are at risk of dropping out from our schools, what more we can do to get them to stay in school and benefit from the quality education that our schools provide. Dr Lily Neo and Dr Loo Chong Yong had raised similar issues during the Budget debate earlier. Let me, first, address the scale of the problem. First, students who drop out during their primary or secondary school years. This number has been coming down. As a percentage of each student cohort, the number of students who drops out without completing a secondary education has, in fact, declined from 3.6% of the cohort in 2003 to 2.6% of the cohort in 2005. But this is still too many - 2.6% of the cohort is about 1,200 students in each cohort - and we want to bring it down. Another concern for us is the students who do complete their secondary education, but do not progress to a post-secondary education. We do not have a precise handle on the numbers because many of the students who do not enrol in our polytechnics, ITEs or junior colleges, in fact, go on to study in various private institutions, such as NAFA, LaSalle, SHATEC, and so on. And some of them go overseas. They have not dropped out, but are continuing their studies. Our main focus at the post-secondary level is on encouraging as many of our Normal (Technical) students as possible to go on to the ITE. We are making progress. The percentage of Normal (Technical) students who go on to ITE has been steadily increasing over the years. Last year, 76% of our Normal (Technical) students went on to ITE, up from 63% in 1998.”
“But it will be a mountain range of peaks where the foothills are also well above sea level. We will keep high average standards and improve the quality of education that all our schools provide. We will keep our robust national curriculum framework. We will preserve the core curriculum in schools while allowing them to have more free play around the core, to differentiate themselves. And this new balance, between what is common and what is diverse in education, will be founded on our system of meritocracy - a meritocracy that is more lively but also in many ways more authentic in the way it recognises a full range of Singaporean talents and helps them to go as far as possible. Tuition Centres”
“It is a meaningful innovation, a way to preserve the core elements of our national system while allowing schools to develop niches of their own. The third implication of these new applied modules and subjects is that they will bring new types of teachers into some of our schools. MOS Gan's Committee recommended allowing instructors who are trained and qualified in their specific fields to teach applied subjects in our secondary schools. They need not have been trained by the National Institute of Education (NIE), if they have the requisite experience, knowledge and skills, to teach the applied subjects. It will enrich the pool of teaching expertise in our schools. Over time, we may also see some synergies, some cross-learning, between teachers of existing subjects and the instructors who are hired by the polytechnics to teach the new applied subjects. It can lead to useful innovations in the way some of our existing subjects are taught. Mr Chairman, Sir, the expanded choices and opportunities that we are bringing into our schools is the way we are developing a mountain range of diverse talents amongst our young. Wherever there is a talent, we want to do all we can to develop it and take it to the fullest. Talents like Stefan Tseng of the Sports School - some of you might have read in today's news - just broke the Under-17 triple jump record in at the UK Amateur Athletic Association Indoor Championships over the weekend. In fact, he broke a 25-year-old record by 30 centimetres. For Members who are familiar with triple jump, 30 centimetres is quite a distance. In fact, he broke the Under-20 record as well by something like 12 centimetres. These are the talents we will search out for, nurture, give them the best, take them as far as possible.”
“They made it compulsory for students to take an applied subject because, as they put it, they wanted students to go beyond being "book-smart". Some students were doing mechanical engineering, wearing factory overalls and working on lathes. They were not just learning new skills, but applying their minds to problems in a different way. The Japanese still produce top minds in technology and innovation. These benefits are experienced by our students in subjects like Design and Technology, not just picking up skills, but developing a knack for making things, and developing something of an innovative mind as they do so. We want to expand these opportunities and appeal to students with a broader range of interests. Another implication of the new applied subjects that some of our schools will offer is that we are allowing a system of school-based curriculum and assessment. Schools will develop the assessment methods for the subjects they introduce, jointly with the polytechnics. There are advantages in this, because schools will be able to assess what their students have learnt and demonstrated more authentically. Assessment would be shaped by what schools teach, rather than teaching being shaped by what they are assessed in. However, MOE will ensure that standards are maintained. We will work with the polytechnics to establish an Academic Panel to ensure that the curriculum and standards of assessment for the applied subjects remain high, comparable in rigour to the existing O-level subjects. This framework will therefore allow schools greater autonomy to customise their curriculum to meet the interests of their students, without compromising on standards.”
“We want to expand these opportunities for practical application of knowledge across a spectrum of schools and students. In fact, even schools which offer the Integrated Programme, all of whose students go on to junior college, are keen to introduce applied learning options in their curriculum. This is also the thinking behind the motto of the Massachusetts Institute of Technology (MIT) in the US. "Mens et Manus" in Latin, which literally means "Mind and Hand". MIT believes passionately in this cooperation between knowledge and practical science, ie, in training students who not only understand issues conceptually and at a very deep level, but who are also able to apply concepts to find practical applications and solutions. It is also what lies behind MIT's entrepreneurial culture, and it is why MIT has launched more than a thousand companies in the last decade alone. Some very good high schools abroad also provide their students with these opportunities. An MOE team visited a top high school in California this year, the "High Tech High School", which emphasised practical learning. For example, instead of taking an examination, students were asked to present their science projects in exhibitions. The team met one of the students who already had a patent to his name and was working on another patent for his latest invention - a glove which allows people to type into their computers without a keyboard. The glove is wired so that you can key in letters and symbols by tapping your fingers in different combinations on a surface. The student was confident of getting into MIT based on his inventions, without having to worry about his SAT scores. Some Japanese schools do the same. I visited the Tokyo Tech High School, which collects very bright students from all over Japan.”
“It has made a set of significant recommendations aimed at introducing more diverse applied offerings in our secondary schools. The Government has accepted the recommendations of the Committee's report, which we have circulated to Members. 5.00 pm Several secondary schools are working with the polytechnics to develop new applied modules and subjects in areas such as electronic product design and computer animation. We will also introduce a Direct Polytechnic Admissions exercise, similar to the recently introduced Direct Admission exercise for junior colleges and secondary schools, which will allow a certain number of students to be offered places before their O-levels, based on a range of talents, as assessed by the polytechnics. We will start with a small number of students, and expand their numbers over time as we gain experience. Mr Gan Kim Yong will spell out the changes in fuller detail later and will address specific queries. Let me just highlight a few broader implications of these school-based, applied learning experiences that we are introducing. First, I want to emphasise that the introduction of new applied options is not in essence about training students early in skills. It is not in essence about new specialisations, but about developing innovative minds. The idea is not just about providing early exposure to applied subjects like electronics or digital media, or about gearing up students who are set on going to the polytechnics to study such fields. What we are really trying to do is to provide more opportunities for students to develop inventive minds by doing, ie, minds that are able to look for problems, invent solutions, and make them happen.”
“Fifty-eight secondary schools have introduced a total of 135 Elective Modules (EMs) for Normal course students to give them exposure to practical, hands-on learning. JC students are taking a new 'A' level curriculum from this year, which is broader and more flexible, and will allow those with the talent or interest in a specific area to pursue it in greater depth. JCs are offering students more choice, and students are doing subjects that interest them. In fact, the JCs have more than doubled the number of subject choice combinations that they are offering this year compared to last year. In addition, some JCs are developing more advanced electives of their own, or what we call H3 options, in the new 'A' level curriculum that they are developing in collaboration with the universities. For example, VJC and NJC have tied up with NUS and A*STAR to offer science research programmes. Students from the two colleges will carry out individual science research projects in the JCs or at A*STAR research institutes, with NUS serving as the examining authority. We are now taking another step to enrich our secondary school curriculum, by expanding the range of options for students to engage in applied or practice-oriented learning. There is growing interest in applied learning among our students. If you take Design and Technology, for example, last year more than 5,000 students took the subject as one of their 'O' level subjects, compared to 4,000 just two years ago. Mr Gan Kim Yong chaired the Polytechnic-School Review Committee that we set up in October last year. His Committee consulted a wide cross-section of people, including students, teachers, principals and parents, through group discussions and getting feedback online.”
“From primary schools to JCs, schools are developing niches of excellence in the whole range of areas. New subjects, new ways of teaching students and centres of excellence in the sports and arts. And we are giving schools more discretion to select students from their own criteria, so as to recognise a wider range of Singaporean talents. Take primary schools. MOE has given 24 primary school awards over the last two years to develop quality programmes in niches of their own. Like Telok Kurau Primary School, which is using team-based project work from Primary One upwards, to help young children develop communication and social skills, deepen interactions between their students of different races, and to learn about Singapore through their projects. Many other examples, Maha Bodhi School has a comprehensive aesthetics programme from Primary One upwards, where every kid has exposure to dance, art, song, drama and the cultures of all our ethnic groups. Secondary schools - 19 secondary schools are now offering three new 'O' level subjects from this year - Drama, Computer Studies and Economics. It is part of the differentiation of the mainstream school curriculum that we have been developing over the years. If a student wants to start dabbling seriously in computing before he leaves school, there will be a few schools offering computing as an 'O' level subject, as a niche of their own. Just like if he is good with his Malay Language and wants to go further in the culture, he can try to get into one of the schools with EMAS (Elective Programme in Malay Language for Secondary Schools). The Normal course is also seeing innovation.”
“We believe that all our students should undergo a 10-year broad-based and comprehensive education. So secondary school education should not be overly specialised. It should provide a good foundation in the fundamentals that prepare students for further studies in the JCs, polytechnics and ITEs. This is why all secondary school students are required to take a core of subjects - English Language, Mother Tongue, Mathematics, one Science subject, one Humanities subject. Social Studies is also taken by all secondary students, to give them an appreciation of Singapore's unique circumstances as a city state. There is a lot of sense in keeping this core curriculum for secondary schools. But we will provide for more free play around the core curriculum to encourage students to find and develop a range of talents. The way we are rolling out choice and diversity in the system is by allowing some schools to develop curriculum niches of their own. They will provide different subject choices or new modules, besides the core curriculum that they share with all schools. This is the most practical way to offer choice, rather than require all or most schools to offer new subject options. This way too, the schools take ownership, they want to differentiate themselves, and they are most likely to deliver quality. It is ground-up initiative owned by the schools, with MOE providing top-down support. Some of the choice and diversity we have introduced is highly visible. Like the introduction of the Integrated Programme (IP) in 11 schools at the secondary level, specialised schools like the Sports School, NUS High and, soon to come, Arts School. But there is a lot that is bubbling in the mainstream.”
“So, the Bush administration is putting in place major reforms - introducing a clear set of standards for what every child should know and be able to do, and testing students against these standards annually from grades 3 through 8, and once again in high school. It is like what I heard Mr Khaw Boon Wan mentioned earlier this afternoon when he was referring to the Canadian and American health systems - exceptional quality in a few areas but impoverishment of standards elsewhere. So we have to keep a sense of balance as we go forward. We are shifting the balance in education towards diversity. We are encouraging and entrenching diversity in our schools, so that we can develop our individual talents to the fullest. We develop talents in every area. I heard Dr Loo's concern. We should not be embarrassed about developing talents. It is our strategy for taking Singapore forward, for taking all Singaporeans forward. But let us find every talent and take him or her as far as possible. It is not an elitist strategy but a national strategy to take Singapore forward. As we do so, we also have to ensure that we retain and improve the common foundations that we have built up over the years, that give all Singaporeans, whichever schools they come from, a high quality education and a solid preparation for further education in our ITEs, polytechnics and universities. We will keep the rigour of curriculum that makes Singapore education different from the rest. This sense of balance is at play in our latest moves to introduce more choice in the secondary school curriculum. As Dr Amy Khor has raised, we will introduce a richer range of options for applied learning in secondary schools. We are not shifting from the core curriculum that our schools provide.”
“Our success in education will, in fact, continue to rely on these strong, common foundations - a rigorous national curriculum system, a system of meritocratic progression, well-trained teachers in all our schools who have opportunities to grow and advance through the system, and school leaders who are systematically developed, moved around the system from time to time, and held to high standards. All our schools provide facilities which are of a very high standard by any international comparison, and allow for richness of experience that is virtually unmatched. And our schools, importantly, also provide the common educational experience for Singaporeans, a common experience that was totally lacking 40 years ago, that brings each generation of Singaporeans together, and gives them a shared identity as Singaporeans. We will keep strengthening these common foundations and experiences, give Singapore students a high quality education in every school, and keep levelling up. This is what differentiates Singapore from others. We avoid the huge variance in standards that we see in many of the other developed countries, particularly those which lack robust national curricula. In the United States, for example, the best schools in the States are exceptionally good - probably the best in the world. But a large proportion of their public high schools are in bad shape. According to the US Department of Education, less than half of all US high school graduates have Mathematics and Science proficiencies that they need to progress beyond high school. Reading scores for 17-year-olds have remained flat since the early 1970s, more than 30 years.”
“Sir, let me thank Dr Amy Khor, Mr Ang Mong Seng, Dr Loo Choon Yong, Dr Tan Cheng Bock and Prof. Ong Soh Khim for their comments and questions. Dr Khor has asked how we can offer more choices to our students today - more choices of subjects and pathways that they can take. I will focus on this in my first reply. She also asked about how we can better engage students who are less academically inclined and how we can reduce the number of students who drop out from schools. Several other MPs had also raised this issue during the Budget debate. I will address these questions later - what we can do to strengthen the non-academic or vocational pathway, and to reduce drop-out rates. My colleagues and I will also address the specific questions raised by Dr Tan Cheng Bock, Mr Ang Mong Seng, Dr Loo and Prof. Ong Soh Khim. First, let me address the issue of expanding choices. It is an important direction in education that we have been taking in the last several years. Step by step, we are introducing more choice and more diversity. New types of schools and niches of excellence in all our schools, that differentiate one school from the other. This diversity and differentiation of schools is essentially our strategy for developing talent - it is how we are developing all talents, not just the top talents, not just the best academic talents, but every talent. It is developing every Singaporean talent, and discovering unique strengths and abilities in all our students and taking them as far as possible. But let me say that the diversity we are bringing into our schools builds on common foundations - the national system that gives our school system its strengths.”
“We have been doing this for a few years now, mainly national messages, reaching out through the mass media. We are now penetrating the neighbourhoods, working with grassroots organisations and we have to do more in that area.”
“Borrowers ultimately will have to play their part, carefully assessing their own ability to service a loan before they commit to it. That is fundamental. This brings me to Miss Penny Low's last question on financial education. She made some useful suggestions on what we can do to raise financial literacy among Singaporeans - to go beyond generic messages to specific messages, and to go beyond quantity of programmes to quality of programmes. I quite agree with her. We are stepping up MoneySENSE and, in particular, we are trying to find ways to reach into the neighbourhoods. This means working with community organisations. I agree that we have to look at capacity building in our community organisations. One important initiative that is being undertaken right now involves MoneySENSE working with the five CDCs to run a basic money management workshop for low-income families. These are often families that have been referred to the CDCs in the first instance because they have got financial difficulties. We can improve quality, I am sure. The CDCs are, in fact, building up their capabilities in this regard. South East CDC has implemented a three month train-the-trainer workshop for CDC officers and family service centre (FSC) social workers. They did this in October last year. It is a good initiative, providing the trainers first with knowledge of how to run a basic money management workshop, but also on how to follow up with families subsequently to make sure that they understand how to design a family budget and stick to it. Some consistent advice is required over a period of weeks and months. That is what we found. So it is a good approach, training the trainers, and it will have a multiplier effect. This is a long-term effort.”
“I do not think it is a situation, as Dr Tan describes, where banks simply willy-nilly grant loans as long as someone has met the minimum requirement. We do have more than a modicum of risk management in place in our banks, and MAS ensures that this is the case. What happens when borrowers cannot meet their loan instalments? Banks do not immediately foreclose. They will undertake some form of remedial action first and, particularly for owner-occupied housing loans, they go through great pains to take remedial action, giving the borrowers more time to pay or restructuring the loan so as to reduce the immediate debt servicing burden and spread it out over several years. This is the norm in fact for mortgage loans as with other loans. Banks have an interest in doing so, because no bank wants to have a reputation of being quick to pull the plug as soon as a borrower runs into trouble. Ultimately, decisions on debt recovery and foreclosures are commercial ones and MAS has to leave it to banks to decide on these things. But what MAS has done, and will continue to do, is to check that banks have robust and careful credit assessment procedures in the first place. This will help minimise the number of borrowers who over-commit themselves to loans, enter into loans that are beyond their capacity to repay realistically. Despite these safeguards, there will remain a small percentage of borrowers who have serious problems in managing their debts. Credit Counselling Singapore (CCS), which Assoc. Prof. Ong Soh Khim had asked about earlier, can help these individuals through credit counselling and, where applicable, assist them to work out a debt repayment plan. This is a useful role which MAS and the banks recognise.”
“In other words, rather than set up ex ante listing barriers, they rely on the Nomads and the credibility of the Nomads to attest to the company's readiness. So the success of AIM rests on this pool of expertise that they have in London, expertise in the Nomads to be able to vet, scrutinise and give some assurance about the company's readiness. It also rests, I should say, on certain tax incentives that are peculiar to Britain. They have high capital gains and inheritance taxes, so they give tax incentives to British investors in the AIM market which has provided a bit of a spur relative to traditional capital market instruments. SGX is currently studying the business case for alternative platforms or financing for start-up companies. MAS' current regulatory framework can broadly accommodate the setting up of these new platforms, but the industry must first make its own assessment as to what is commercially viable in the local and Asian contexts. If the financial industry considers a specific proposal to be viable, MAS will look at the specifics and see whether amendments are required to our regulations so as to facilitate the introduction of any such platform. 5.00 pm Dr Tan Boon Wan had asked whether financial institutions can show borrowers more flexibility in settling their debts. First, let me first say that the level of non-performing loans (NPLs) in Singapore is very low, particularly by international standards. Our NPL ratio for all types of loans is less than 5% and for mortgage loans it is less than 2%. In fact, for owner-occupied mortgage loans, it will be below 2%. What this basically reflects is that risk management is working in Singapore.”
“Members would know that in October last year, we amended our securities laws to provide for two new "safe harbours" in the Securities and Futures Act to allow private placements and small offers to be made without a prospectus. We are now seeing industry interest. Phillip Securities, as Mr Inderjit Singh knows, is in discussion with MAS on its plan to develop an OTC platform to facilitate trading in shares of SMEs that are not publicly listed to take advantage of these "safe harbours". It is a good proposal, and Phillip Securities is now putting in place the necessary capabilities. MAS does not usually announce approval until everything is ready and I am not about to today. Dr John Chen also asked about a third Board, which is another interesting possibility to allow start-ups to raise funds, and I agree we should look at this. GEMS in Hong Kong may not be the best example. In fact, GEMS has had a rather poor record in recent years, and they are now taking a fundamental relook at GEMS in Hong Kong. They have a public consultation paper to see how they should go forward because the existing formula has not worked. A better model worth careful scrutiny is Alternative Investment Market (AIM) which is offered by the London Stock Exchange. It is doing very well. AIM allows companies to access capital at the early stage of development before they become ready for full public listing. And they do it by doing away with most traditional listing requirements but relying instead on nominated advisers, or "Nomads" as they are called, who take responsibility for coordinating the admission process and in carrying out due diligence to ensure that the company is suitable for an AIM listing.”
“The Singapore Exchange (SGX), through both the Main Board and SESDAQ, now has more flexible admissions criteria, eg, shorter profit record or even no profit track record, subject to other requirements. But it is a lot more flexible and it is up to the standards of the more innovative exchanges internationally. Last year, SGX announced its intention to introduce Global Depository Receipts (GDRs), which will provide another convenient way for companies from all across Asia already listed on a primary stock exchange in their own country or elsewhere to tap our capital markets. I agree that we should look carefully at the case for new or alternative platforms for early stage companies. There are a number of trends that support this. First, there is a wave of enterprise creation across Asia, many more new companies being formed, small companies that do not have traditional capital markets very well suited to them. So there is a case that is being built up by this new wave enterprise creation in Singapore as well as across Asia. Second, interestingly, there is now increased allocation on the part of global portfolio investors to the emerging markets and to higher-risk opportunities. They want to diversify, enhance their returns and to extract alpha in the financial markets, and they are looking at emerging market opportunities, including private equity and other forms of emerging investments. So there are fundamental trends that are driving this. We are not going to rush. We want to study this carefully to make sure that whatever we do is based on business viability and sustainability. Mr Inderjit Singh asked about the status of the private equity or OTC exchange.”