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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“If we look at our financial training scheme, which is part of the Financial Sector Development Fund (FSDF), and the Financial Training Scheme (FTS) which we started in 2001, we have committed over $8 million as of end of last year to train more than 7,000 industry professionals in specialised areas. So we are trying to deepen our pockets of expertise. In Islamic finance, in fact, we have co-funded more than 25 Islamic finance courses for quite a significant number of individuals. We are also looking to develop the financial research industry. In July last year, we launched the $10 million Programme on Risk Management and Financial Innovation to catalyse more research and training in Singapore so that Singapore becomes a hub for research in financial services in Asia. Certainly, Islamic finance will be one area we will be quite keen to encourage more research on. If I can move on to Mr Inderjit Singh and Dr John Chen's questions on alternative platforms in the early stage companies. I agree that we need to do more to spur entrepreneurship. It is a long-term game, but we need to develop the financial markets to try to spur this. It means having a range of financial options, quite apart from venture capital (VC) business, bank loans and some form of mezzanine financing provided by the banks within the range of options in the capital markets not just to develop local enterprise but also make Singapore a centre for funding for Asian enterprises, start-up companies and early stage companies from all over Asia. I think we do have an opportunity. We are doing quite well so far. The venture capital business itself is doing quite well. It has about more than $17 billion managed in Singapore and over 160 VC firms set up already.”
“In September last year, as Dr Ahmad Magad knows, we have fine-tuned our regulations to allow financing based on the Murabaha concept. The Singapore Exchange is also looking into Islamic instruments on the capital markets and the equity markets. We recently launched the first Shari'ah-compliant Pan Asian Equity Islamic index, which should help to grow the Shari'ah-compliant fund management industry, particularly for Asian investors and exposures. I will just add, in relation to Dr Ahmad Magad's broader point about the need for education to spread familiarisation of Islamic finance, that we are not aiming primarily for the retail market. We have a small retail market, but it is not going to be sizeable enough to make us a centre for Islamic finance. We are aiming principally at the market for large funds, eg, institutional players and wealthy individuals, many of whom come from the Middle East and other parts of the world. There is a niche for Singapore to tap at that high-end segment of the market, and we have advantages in terms of our reliability, efficiency as well as a whole array of other financial services in Singapore to service that market. But we are not aiming primarily at the retail segment of the market. I agree wholeheartedly with Dr Ahmad Magad about the importance of manpower development in Islamic finance as well as other areas, in other words, develop professional skills. That is a continuous game. We are stepping up our efforts in that area, otherwise we would not succeed in growing all these niches we are talking about. We are putting in place quite a few initiatives.”
“The Singapore Investment Banking Association (SIBA) has been studying ways to develop the equity derivatives market in Singapore very carefully, and MAS is working with the Association on that. Insurance is another area where there are niches to be tapped and where we have an advantage. We are already a leading regional reinsurance centre and a captive insurance domicile. But we are in a strong position to develop new niche insurance sectors, such as maritime insurance and credit insurance, given our role as a maritime and trade hub respectively. Islamic finance, which Dr Ahmad Magad has spoken about, is an important new niche area, and the Prime Minister had touched on this in his Budget speech. On the regulatory side of things, I would say we take a pro-business approach. It is an evolving market. There are new products coming up. Initially, not everyone understands them, but we want to learn about them quickly and see whether we need to tweak existing regulations to facilitate that growth. It is too early to say that we should set up a whole new edifice to support Islamic finance. The existing regulatory framework is, in fact, quite friendly for Islamic finance. It is able to accommodate most of the new products that have come in. But we are very happy on a product-specific basis, ie, look at the details, see what we need to tweak or amend. That is our approach. Basically, we take a pro-business approach, ie, let the industry come forward with initiatives, and MAS will go forward with them. That is how we have seen the introduction of a whole set of new financial products in the last couple of years, such as Takaful and re-Takaful products, Islamic deposits, Islamic trade financing, and Islamic funds.”
“Another area in the broad wealth management industry, which Miss Penny Low mentioned, is philanthropic services, and more broadly, the trust business. It is a growth business in Asia especially. We know the whole new wave of wealth that is being created, but we are also seeing a growing number of individuals who are keen on investing in worthy causes. Again, our reputation for rule of law and our reliability confers us an advantage. So growth of philanthropic services is one of the areas we are looking into, and it is aided by our broader initiatives to develop the trust industry, which is a common vehicle used for philanthropic services. So we have modernised our trust laws. As you know, we are updating our regulatory framework for trust companies and we have made our tax regime much more conducive for the growth of the trust business. Micro-finance is another area that Miss Penny Low mentioned which we are looking into. I do not know very much about it myself, but I agree with her description of the industry. It is growing rapidly. Big players like Citibank as well as smaller niche players are getting into this market and it is something we are keen to look at to see whether we can play a useful role in the regional as well as broader Asian context, including India. In the capital markets, we already have some strengths. In particular, we are one of the leading stock index futures markets. The warrants market has also taken off very well in the last two years. We are looking ahead now at new areas, and equity derivatives is one important new area of growth. In the Asian markets, it is starting from a very low base but with high prospects for growth, as has happened in Europe and the United States.”
“We are growing not just the volumes, which the Prime Minister had mentioned earlier, ie, double-digit growth over the past five years, but we are also growing new activities. We now have leading fund managers who base management of global mandates out of Singapore, such as in fixed income and emerging markets and in other areas. Second, we are looking to broaden the range of activities that exists on the fund management value chain, not just the front end of investment management, but the whole range of associated services in the fund management industry, eg, research, trading as well as asset servicing operations. Asset servicing, in particular, is an area we are placing some importance on, and that is why this year's Budget included an incentive to encourage funds to domicile in Singapore, instead of Dublin, Luxembourg, Cayman Islands and so on, so as to be able to develop the asset servicing industry, such as fund administration, fund registration, valuation and accounting, fund listing and, importantly, custody services. It is an important part of the value chain, not as sexy as investment management, but there is a lot of money to be made. We see industry interest in this following the conclusion of the Comprehensive Economic Cooperation Agreement (CECA) with India. There is interest in having funds domiciled in Singapore and being used as a launching pad for investments into India to take advantage of CECA. We are also seeing interest from the Middle East. Middle Eastern investors are feeling more comfortable with funds that are set up and registered in Singapore. So, again, our reputation is a credible one and it is proving to have commercial advantage. This is a piece of the asset management value chain that we are keen to develop.”
“Mr Deputy Speaker, I would like to start with Ms Penny Low's first question. She made some observations about the intensifying competition in the financial services for Singapore and made a very useful point that we have got to look at, not just growing existing activities, but looking into innovation and growing niche areas in finance. We agree with her. But, first, let me say that, yes, the competition is intensifying, but we are also seeing very significant new growth opportunities and Singapore is very well-positioned to take advantage of these growth opportunities to be a conduit between East Asia, India and the Middle East, which Dr Ahmad Magad has identified, and also to be a market for raising capital for enterprises from all over Asia. We are making quite good progress. We basically have two strengths that we are now leveraging on. 4.45 pm (1) Because of our efforts over the years, particularly in recent years, we now have a critical mass of financial players in Singapore which, in turn, brings in new financial players. It feeds on itself. (2) We have a reputation that is a very strong one to be a well regulated centre, high standards but also responsive to businesses. We are always well-regulated with high standards, but we are now also known to be quite responsive to businesses. So these are two quite important advantages that we are leveraging on, not just to grow the existing businesses but, as Miss Penny Low says, to develop new niche areas where reliability and rule of law give us a critical advantage. I will highlight just a few areas because of shortage of time. First, asset management or the wealth management industry broadly, where we already have a leading position in Asia.”
“Mr Speaker, Sir, Credit Counselling Singapore (CCS) is a non-profit organisation which helps consumers recover from serious debt problems by providing them with credit counselling and, where applicable, helping them to work out a debt repayment plan. CCS is registered as a Charity and is a member of the National Council of Social Service. It is not a Government agency. So we do not have detailed data profile of the borrowers. However, MAS understands from CCS that they counselled over 1,100 individuals between August 2003 and December 2005. We also understand that CCS facilitated debt restructuring programmes for about 600 individuals over the period.”
“Indeed, Mr Speaker, Sir, NUS, NTU and SMU have revised their financial assistance schemes. They revised it in two ways. First, they have substantially jacked up the total amount of funding that will be available for financial assistance - more than 50% increase. Second, they have also revised their criteria so that more students can benefit. If I can simplify, I would say that a median student, who comes from a family that is around the 50th percentile of income, does not have to come out with any cash to get a university education in Singapore. Through a combination of a loan or bursary, the median student does not have to come out with any cash for the duration of his university education.”
“We do not want the European model and we can do a better job than the Americans, the Australians and the British. Second, what is equitable? I think what is equitable is that we put that extra dollar into our polytechnics, ITEs and schools where there is the Opportunity Fund or extra technology, improving the quality of our ITEs so that they can become centres of excellence in technical education, not increasing the share of subsidy going to our universities. So this is sensible from the point of view of human capital development, and it is also sensible from the point of view of being equitable.”
“That is also why the American public universities have increased fees by seven times more than Singapore in the last six years, because we have retained a very high commitment of public funding for our universities. As we discussed it extensively in last year's COS debate, and as I mentioned very explicitly, over the medium term, we want to move towards the Government funding 75% of the total cost of undergraduate education. Currently, we are still funding a little more than 75%. We do not intend to move there immediately but we will move there gradually. But that is still substantially higher public funding than any comparable country that is seeking to provide an affordable top-quality education, not an affordable low-quality education. I think it is also the most equitable system to address Mr Chia's concern. If we want to subsidise universities more, where do we get the money from? I do not think we want to raise taxes. So it means taking it from the polytechnics, ITEs and schools. I do not think that is right for two reasons. The main reason is that university graduates in Singapore, as is the case all over the world, will earn a premium over graduates from other institutions of education. That is well known. We all know that. It is obvious the starting salaries and expected life-time earnings are higher. So it is not equitable to subsidise them more and more, not just keep a high level of subsidy but increase their share of the educational subsidy. It is just inequitable. Even at current levels of subsidy, we are subsidising university students substantially more than ITE students. So I think we have got to maintain a sense of perspective about this. First, how can we deliver top-quality education? I have explained that.”
“Students must leave the university better educated, better prepared for the workforce, high income profile over time and, hopefully, better citizens. Universities have to compete for faculty. They have to pay market rates in order to deliver quality students. When they think of the facilities they want, they have to provide high quality facilities, so as to ensure that students benefit from access to the latest technology. They are not in lecture rooms that are overcrowded, so that they are able to spend quality time with lecturers and even with the assistants of lecturers. This is the way to go if we want to deliver an affordable but top-quality education to Singaporeans. If we look at the models out there, there are basically two models. One is the European model. It is highly affordable - very heavily subsidised - but it is affordable low-quality education, overcrowded lecture rooms and a consistent brain drain year after year in the Sciences and Engineering, even in the Humanities, from Europe to the United States, and Britain benefiting to a minor extent from the brain drain from Europe. That is not the system we want. Providing affordable low-quality education will be a disaster for Singapore and for our economic strategies. What we want to do is to provide an affordable top-quality education. It is also what the Americans, the British and the Australians are trying to do. But where we differ from them is that we have a substantially higher public subsidy for our universities. And that is why the Australian universities have increased fees by three times more than Singapore universities in the last six years.”
“First, let me say that tertiary fee increases all over the world exceed the rate of inflation as reflected in the consumer price inflation. Our fee increases in Singapore have, in fact, been modest, compared to comparable countries. Just to give you a feel, if you take year 2000 up to now, where we have increased by slightly less than 2%, in the United States, if you take public universities, and I am not even talking about private universities, the increase has been about 9.5% per year or cumulative increase of 57%, seven times the increase that we have seen in Singapore. In Australia, the increase has been about 4% per year, or cumulative increase of 24%, three times the increase we have seen in Singapore over that period. It is a global phenomenon. Maybe to help Mr Steve Chia understand it, because I think his question is genuine and he may not understand the way in which universities function, they are fundamentally different from normal business enterprises. In a normal business enterprise you can have a wage increase for your workers but you try and offset it through some technological or productivity improvement - produce more output for the same input so that your price does not need to go up so much, not as much as your wage increase. That is why, nationally, we find wage increases are always higher than CPI and price increases. But in the universities, it is different, because we do not want to compensate for faculty wage increases by increasing the number of students per faculty. In fact, on the contrary, we want, over time, to reduce the number of students per faculty, so as to be able to improve quality. Universities are in the business of producing quality graduates.”
“However, the fees at our universities remain competitively priced, compared to overseas universities of equivalent quality, such as in Australia, the United Kingdom and the United States. The Government remains committed to substantially funding the costs of undergraduate education. The universities will continue to exercise prudence in their expenditures and keep costs in check. Together, the Government and the universities will work to ensure that university education remains affordable and that Singapore students who are admitted to our universities can enjoy a top-quality education.”
“Mr Speaker, Sir, undergraduate fees at NUS and NTU have been increased regularly since 1990. The exceptions, where fees were kept unchanged, were during two periods. These were the two periods that followed years in which the economy was going through a decline, namely, 1999-2000 and 2002-2004. With the exception of these two periods, we have had fee increases each year. I am circulating a table in response to Mr Steve Chia's request. Undergraduate fees in the two universities increased by an average, if I take the averages over that period of years, of 8% per year in the 1990s, and an average of slightly less than 2% per year since 2000, in other words, 2000-2006, including the forthcoming academic year. For the period as a whole, if one takes 1990 up to this forthcoming academic year of 2006, fees have increased by an average of 5% per year. This includes, as you can see from the table, a large increase of 45% in 1991. After 1991, fee increases have averaged 3% per year. Mr Chia has asked how this compares with the rate of inflation. The most relevant benchmark of inflation or cost pressures for a university is wage inflation. This is because universities are essentially human enterprises, with 70% of their costs, at least, coming from manpower. From 1990 to 2005, wages went up nationally by an average of 5% per year. As we know, wage increases for professionals are under greater pressure. They are increasing faster, not just in Singapore, but globally. In short, fees have been increased regularly in our universities. These fee increases have allowed the universities to meet cost pressures while improving on the quality of education they provide.”
“Dr Amy Khor Lean Suan asked the Minister for Manpower for each of the last five years (a) how many workers aged above 62 were in the workforce; (b) what percentage is this of the total workforce; and (c) what is the breakdown of the categories of work they were involved in.”
“Schools also work with external agencies such as self-help groups, family services centres and SANA to reach out to "at-risk" students and to help counsel them. They also encourage those who leave school prematurely to return to schools. While the impact of intervention programmes is difficult to identify with any precision, the decline in dropout rates over the years suggests that they have had a positive impact. We are doing more. Schools and ITE will continue to work with other agencies to do so. We will reach out to each individual student in a customised way, as each potential dropout is unique. In addition, we believe that a more engaging curriculum and providing more educational options to meet the different needs of students will help to reduce the number of dropouts. MOE has thus introduced Elective Modules (EMs) on subjects like Science and Elements of Office Administrations for Normal course students to make lessons more relevant and engaging. MOE will also be introducing a customised N(T) curriculum from 2007 that is more practice-oriented to better match the learning profile of the students and provide them with meaningful learning experiences in school. MOE is also working to enhance the Vocational Training Centres to make it a more viable option for students who do not find the mainstream curriculum suitable. ITE has and will introduce new courses in response to the changing needs of the economy, especially the services sector, to help meet the different needs, aptitudes and interests of its students. Examples of such courses introduced recently include the Nitec in Service Skills (Tourism), Nitec in Product Design, and Higher Nitec in Wireless Technology. OLDER WORKERS (Figures) 7.”
“The number of students who drop out of our schools before they complete secondary education has decreased from over 3% of cohort five years ago to about 2.6% in 2005. The number of such students is generally on a declining trend among all ethnic groups. Similar to schools, the numbers are on a declining trend in the ITE. In 2005, the proportion of students who left ITE's full-time courses without an ITE qualification was about 12.0% of ITE's full-time enrolment, compared to 17% in 2000. The key reasons cited by students for dropping out of schools include loss of interest in studies and family/personal problems. The same reasons apply for those who leave the ITE. However attrition from the ITE is also higher because the students are older and have more options open to them, including working or pursuing private courses. Some of these students pursue part-time studies in private educational institutions, including re-taking their 'O' levels as private candidates. Schools and ITE adopt both proactive and intervention measures to ensure that students stay enrolled. These include pastoral care, life-skills and career guidance programmes which are aimed at helping students build up confidence in school or ITE and develop purposefulness in life, and to take responsibility for their actions. The intervention measures include counselling of potential dropouts by both teachers as well as professional counsellors. Schools work closely with parents in the education of their children and encourage them to provide the necessary home support to sustain the student's interest in school. In addition, ITE's Guidance and Motivation Programme provides motivational talks and orientation programmes to facilitate a smooth transition for fresh school leavers enrolled into ITE.”
“On average, about 14% of our undergraduates and 30% of our postgraduates in NUS and NTU in 2001-2005 were on scholarships. About one-third of the undergraduate scholars were local students. One quarter of the postgraduate scholars were local students. The largest segment of undergraduate scholarships comes from industry, which offers about 54% of the scholarships. The Government's share is about 35%. The universities have been increasing their provision of undergraduate scholarships, with their share rising from about 8% in 2001 to 11% in 2005. The remainder comprising less than 1% has been offered by research agencies. On the other hand, the universities themselves account for the bulk of postgraduate scholarships, although their share has declined from about 90% in 2001 to 79% in 2005. The industry and research agencies have been increasing their provision of postgraduate scholarships. The number of postgraduate scholarships offered by industry has increased from about 5% in 2001 to 12% in 2005. Similarly, those offered by research agencies have increased from about 2% in 2001 to 6% in 2005. The postgraduate scholarships offered by the Government have also been on a rising trend. Currently, the Government offers about 3% of the postgraduate scholarships. Currently, about 25% of the scholars holding university-sponsored postgraduate scholarships are local students. WRITTEN ANSWERS TO QUESTIONS INSOLVENCY AND PUBLIC TRUSTEE'S OFFICE (Publishing of personal information) 1. Prof. Ivan Png Paak Liang asked the Deputy Prime Minister and Minister for Law if he will direct the Insolvency and Public Trustee's Office not to publish full names and identity card (IC) numbers in the newspapers so as to protect the privacy of personal information such as IC numbers.”
“They will be encouraged to prototype parts of their programmes before implementing them school-wide. MOE will provide on-going consultation to schools while they prototype and consolidate their programmes. MOE will be providing schools with a set of social-emotional learning benchmarks that students should attain by each grade level. For example, students at the primary levels would be expected to learn skills such as knowing how to work and play with others and demonstrate the ability to cooperate and work in groups. At the secondary levels, students would be expected to use communication and interpersonal skills to manage challenges in relationships and apply conflict management skills. Students practise and manifest the social and emotional competencies as they participate in learning activities in the formal and informal curriculum. Teachers can use these benchmarks to monitor their students' social-emotional development over time, and take appropriate actions to provide them with the relevant learning opportunities and experiences. APPENDICES”
“Students can apply a personal perspective to the characters they have studied and evaluate how they would have reacted in a similar situation. A whole-school approach also involves the teaching and development of social-emotional competencies through the informal curriculum (such as co-curricular activities), and experiential learning (such as service learning projects in the community). Yet another strategy is to capitalise on teachable moments, which are incidental opportunities that arise in the students' daily experience in school, such as conflicts between students. Teachers seize these moments to teach social-emotional skills and impart values. Schools will also seek to collaborate with parents so that the students' social-emotional learning will be reinforced at home. Apart from the development of the social-emotional learning framework, curriculum is also being reviewed to strengthen the teaching of social-emotional competencies in the Civics and Moral Education programme and other academic subjects. The new Civics and Moral Education (CME) programme, which will be implemented in 2007, will incorporate a significant component aimed at the teaching of the social emotional skills. CME will also comprise a more flexible curriculum framework, enabling schools and teachers to customise and inject their own elements to meet their students needs. Training will also be provided for teachers to sharpen their skills in this area so that they can be more effective in teaching the social emotional competencies and in providing an environment conducive to the acquisition of these competencies. Schools will be given the autonomy to decide on how they modify existing programmes or re-design current programmes to support social-emotional learning.”
“MOE's aim is to provide children with a balanced and holistic education, which includes their social and emotional development. Schools have always had a myriad of programmes directed to this effort. We are building on these efforts to provide greater clarity in the competencies that we want to help students acquire, and to have a co-ordinated whole school approach in this aspect of character development. MOE has developed a framework to guide our schools in social and emotional learning, as part of their overall efforts to develop strength of character in their students. The framework sets out the social and emotional competencies to be included for students to learn, such as self-awareness, self-management (including anger and stress management), social awareness (such as empathy and ability to see things from the other person's perspective), relationship management (like how to interact socially, work in a team, and resolve conflicts peaceably), and responsible decision making. The framework also sets out values as an integral part of social and emotional learning, and the importance of the school environment in supporting social-emotional learning. MOE believes that a whole-school approach is important to social-emotional learning, and that students should be engaged in as broad a range of learning opportunities as possible while in school. This whole-school approach comprises several components, such as direct teaching of social-emotional competencies through a curricular approach, and infusion across existing academic subjects, such as Literature. In studying the people and events in their literature texts, for example, students learn about character, from how the different people reacted to various situations encountered in the plot.”
“The framework provides a consistent basis for MAS to oversee payment systems and SVFs. It also liberalises the SVF market to encourage competition and innovation, and to better meet consumers' needs. This risk-based regulatory framework addresses the need for safety and efficiency in payment systems, and provides some protection for consumers using large-scale SVFs, while avoiding unnecessary or excessive regulation of market players. Sir, I beg to move. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Mr Tharman Shanmugaratnam]. Bill considered in Committee. [Mr Deputy Speaker (Mr S Iswaran) in the Chair]”
“Where the stored value of a SVF exceeds $30 million, the Bill provides that the holder of the SVF must be approved by MAS, and a bank licensed by MAS must also be approved to be fully liable for the stored value of that SVF. The $30 million threshold would mean that the existing nation-wide multi-purpose SVFs in operation in Singapore, namely, the NETS CashCard and ez-link card would remain under MAS' regulation. Banks would continue to be fully liable for the stored value for these two nation-wide SVFs. The Bill provides that the threshold may be varied by MAS over time to cater for future developments in the SVF market. Obligation on non-widely accepted stored value facilities With the liberalisation of the SVF market, consumers would have to be aware of and take responsibility for the risks relating to the SVFs that they have purchased or are intending to purchase. To enable consumers to discern the risks relating to different SVFs, the Bill allows MAS to impose disclosure requirements. Specifically, MAS will be requiring the market players involved in non-widely accepted SVFs, that is, the smaller schemes, to provide clear and written disclosure to potential users that the players are not subject to MAS' approval. Exemptions While the Bill is drafted broadly to cater to a wide range of payment systems and SVFs, the provisions may not be applicable to every single payment system and SVF since their features and characteristics may vary with time and market developments. Hence, the Bill includes a general exemption provision to enable MAS to exempt specific payment systems or SVFs from any or all provisions in the Bill. Conclusion Sir, in conclusion, the Bill introduces a new regulatory framework for payment systems and SVFs in Singapore.”
“In such a situation, MAS will have powers under the Bill to take expedient actions. MAS will be able to direct the operator or settlement institution of a designated payment system to take necessary actions to maintain or restore the safe and efficient operation of the system. Information-gathering powers in relation to stored value facilities I will now move on to the provisions in the Bill that relate to SVFs. With the liberalisation of the SVF market, the scope of MAS' oversight powers will be expanded accordingly. The Bill provides MAS with discretionary information-gathering powers over holders of stored value. This will apply to any stored value facility, whether single-purpose or multi-purpose. As is the case for payment systems, however, MAS will only exercise this power selectively and will not be collecting information on all stored value facilities. The information gathered will be used by MAS to evaluate and fine-tune the oversight framework for SVFs as the market evolves. MAS' approval for widely accepted stored value facilities As I stated earlier, the new regulatory regime for SVFs makes a distinction between those SVF schemes where holders of stored value require MAS' approval because they cross a certain threshold limit, and the rest which can operate without approval. The Bill specifies a threshold to provide a general distinction between these two groups. The threshold of stored value holdings will be set at S$30 million. The $30 million threshold will strike a balance between MAS' prudential concerns and the need to provide consumers with some protection on the one hand, and the need to allow for a vibrant and competitive market on the other. It encourages innovation involving smaller-scale SVFs.”
“Supervisory power The Bill also gives MAS supervisory powers over the players in designated payment systems, including the payment system operators, settlement institutions, and market participants. MAS will be able to inspect the operations of designated payment systems and issue directions, where necessary, to the operator and other market participants. MAS' approval for the appointment of CEO, directors and significant shareholders The Bill requires the operator of a designated payment system to obtain MAS' approval for the appointment of its CEO and directors, and for persons and entities seeking to become significant shareholders, as they are in a position to influence the management of the operator. Notification requirements for designated payment systems Operators and settlement institutions of designated payment systems are required to inform MAS of pertinent matters or events that could affect the safety and efficiency of the system. Timely notification of such occurrences allows MAS to detect any signs of potential disruptions and to take appropriate pre-emptive or mitigating measures. The Bill also requires an operator to notify MAS if it carries on or acquires substantial shareholding in any business other than the core business of operating a payment system, since non-core businesses could present risks that may spread to the operations of the designated payment system. Emergency powers Even though MAS will be supervising designated payment systems closely, disruptions and failures within a system could still occur. An emergency situation could arise where a designated payment system is prevented from carrying out its functions, or is doing so in a manner detrimental to the interests of its participants.”
“Sir, I will now go through the main provisions of the Bill briefly, starting with those that relate to payment systems, followed by those that pertain to stored valued facilities. Information-gathering powers over all payment systems Currently, MAS' payment system oversight powers extend only to financial institutions. One of the key provisions in the Bill gives MAS the discretionary power to gather information from all relevant players in any payment system in Singapore, including the operators and settlement institutions. MAS will only exercise this power selectively and will not be collecting information on all payment systems automatically. The information obtained will be used to monitor trends and developments in the payment industry, and fine-tune MAS' oversight policy for payment systems over time. Designation of payment systems I mentioned earlier that there is a broad spectrum of payment systems in Singapore, each with unique functions and characteristics. MAS will identify and designate payment systems that are considered important for financial stability or for public confidence. Operators and settlement institutions of designated payment systems will be subject to MAS regulation, in addition to information-gathering requirements. Regulatory powers The type and intensity of regulatory powers used, including the need to regulate entry, will vary according to the scale and risk of each payment system. In regulating entry to a designated payment system, MAS will consult the affected parties and take into account the interests of all stakeholders. Where competition issues are involved, MAS will consult and work closely with the Competition Commission of Singapore.”
“We should give the market more flexibility to meet consumers' needs, and encourage competition and innovation among different providers. The Bill introduces a new regulatory regime that liberalises the multi-purpose SVF market. Any entity will be allowed to issue multi-purpose SVFs to consumers and to hold the stored value, as long as the amount of stored value does not exceed a stated threshold. Where the stored value is above the threshold, the holder of the stored value must be approved by MAS and a bank licensed by MAS must also be approved to be fully liable for the stored value. In this respect, users of these larger SVF schemes, which the Bill terms widely accepted SVFs, will benefit from some protection on their stored value. Single-purpose stored value facilities will not be subject to the stated threshold. They will not need MAS' approval to operate their schemes, which is also the current position under the law. Sir, in liberalising the multi-purpose SVF market, MAS will put in place several measures to enable users or potential users to be better informed and more discerning of the risks associated with the SVFs that they intend to purchase. For the smaller SVF schemes, MAS intends to require clear written disclosure to users that the holder of the stored value is not subject to MAS' approval under the Bill. At the same time, the list of widely accepted SVFs will be published in the Government Gazette and on the MAS' website. MAS will also help SVF users make more informed decisions through consumer education initiatives, such as publications under the MoneySENSE financial education programme. In addition, MAS intends to issue guidelines to encourage the adoption of sound practices in the SVF market.”
“From the industry's point of view, a more formalised and comprehensive approach would provide greater consistency and clarity in MAS' oversight objectives and policies. Second, while the existing framework worked well when financial institutions were the traditional payment service providers, it has become less effective now that payment service providers which are not financial institutions are becoming increasingly common. Sir, the Bill will establish a new regulatory framework for payment systems that will provide MAS with a comprehensive and consistent basis to effectively oversee the payments infrastructure in Singapore, while promoting a competitive marketplace among payment service providers. A number of jurisdictions, such as Australia and Canada, have introduced comprehensive legislation for the oversight of payment systems a few years ago. Hong Kong did so about a year ago. Stored value facilities Sir, I will now speak on stored value facilities (SVFs). These are prepaid payment instruments, most commonly used for low-value retail payments. In Singapore, there are two nation-wide SVFs, namely, the NETS Cashcard and the ez-link card, and several smaller-scale SVFs such as gift cards and store vouchers. SVFs can be categorised as either single-purpose or multi-purpose. Presently, only banks are allowed to issue multi-purpose SVFs, that is, instruments which can be used to purchase goods and services provided by third-party merchants other than the issuer. However, multi-purpose SVFs when operated on a small scale present low risk in terms of potential loss of stored value to their users. The existing regulatory regime is therefore unnecessarily restrictive.”
“So it is easy to see how a disruption in MEPS can have a systemic impact on the financial system and the economy. The middle-tier comprises Singapore's cheque-clearing systems and the Interbank GIRO system. While these systems process payments that are lower in value compared to MEPS, the values involved are not insignificant, and the payments comprise important business and retail transactions such as salary and bill payments. As they are closely tied to a wide range of economic functions, the safety and efficiency of these systems are important for maintaining a high level of public confidence in Singapore's financial system. The third tier is made up of retail payment systems that handle the majority of payment transactions in Singapore in terms of transaction volume. These include systems such as debit and credit card systems, ATM networks, as well as mobile and Internet payment systems. As such systems generally process low-value retail transactions, they have lesser impact on financial stability. But an efficient and innovative market for retail payments is essential if we are to keep our economy vibrant and meet consumer needs. Sir, taken as a whole, the payments infrastructure forms a critical part of our financial system and economy. It is therefore important that we ensure that payment systems operate in a safe and efficient manner, while encouraging market competition and technological innovation to serve businesses and consumers better. A new regulatory framework for payment systems is needed for two reasons. First, MAS' current oversight framework for payment systems relies on legislation introduced on a piecemeal basis and an informal and cooperative arrangement with the industry.”
“Mr Deputy Speaker Sir, on behalf of the Senior Minister, I beg to move, "That the Bill be now read a Second time." Sir, the purpose of this Bill is to introduce a new framework for the oversight of payment systems. The framework also covers the regulation of stored value facilities (SVF), which refer to prepaid cards and other payment instruments used for the purchase of goods and services. MAS has consulted the industry and the public on this framework and the feedback received has indicated broad support for it. MAS has incorporated the feedback received into the Bill, where practicable and where they are in line with its objectives. Need for a consistent framework for the oversight of payment systems and stored value facilities in Singapore Let me now set out the rationale for a new regulatory framework for the oversight of payment systems and stored value facilities in Singapore. I will start with payment systems. Payment systems In Singapore, we have a well-developed payment system industry, consisting of a wide-ranging spectrum of payment systems to cater to a variety of purposes. These payment systems can be broadly categorised into three tiers. The top tier comprises Singapore's large-value payment system, the MAS Electronic Payment System (MEPS). Currently, MEPS is owned and operated by MAS, and functions as the main payment system for settling large-value financial transactions between financial institutions. MEPS is also linked to an international grid of large-value payment systems via the Continuous Linked Settlement (CLS) system, which is a global foreign exchange (FX) settlement system. The values settled in MEPS in 2004 exceeded 70 times Singapore's GDP.”
“As in previous General Elections (GE), Police will pre-designate certain sites as election rally sites. Following the announcement of the General Elections, Police will provide information on the particulars of the Police Liaison Officer (Election), the location of his office, the process for the application to use rally sites as well as the operational hours of the Liaison Office.”
“I do not have precise data on the number of individuals who have large amounts of unpaid debt. But the problem on the whole is not a serious one. The amount of bad debt, as a percentage of total receivables, has come down over the last few years. It has come down from about 7% three years ago to less than 3% currently. That is in fact a more favourable figure than many other countries, such as the United States. On the Member's second point, we have to leave it to the banks to make their judgements. The banks will not lend to someone whom they think is at risk of not repaying. It does not make sense for the banks. So it is a question of the banks setting up a risk assessment system. MAS is quite satisfied that they have the system in place. From time to time, we have to check and we have to remind their management to keep an eye on these things. But it is not a serious problem overall. Column No : 1998 GENERAL ELECTIONS (Allocation of rally sites) 20. Mr Low Thia Khiang asked the Prime Minister and Minister for Finance whether the procedure for allocation of rally sites during General Elections will be reviewed to ensure a more equitable distribution of sites among political parties. The Deputy Prime Minister and Minister for Home Affairs (Mr Wong Kan Seng) (for the Prime Minister and Minister for Finance): Mr Speaker, Sir, Police has put in place a fair and transparent system for allocating rally sites. It is on a first-come, first-served basis. As the number of rally sites in each constituency is finite, it would not be always possible to grant the applicant the requested site at a specific time if another applicant has already applied and obtained approval for the same site earlier. This could happen to any political party at any constituency.”
“So I would like the Minister to share with this House on what is the percentage of this group of people who are suffering from credit card debts. The other question I have is that, looking at the 12-month history of the credit report of an applicant, the banks know that the applicant is already rolling over every month and yet, they still chose to give them ready credit, ie, to transfer the entire balance into the ready credit, knowing well that they will not be able to pay up. What is the Minister's view on this?”
“On the first question, it is good banking practice for our banks to check with the Consumer Credit Bureau for debtors' credit history with other banks. As a matter of fact, this is done. I call tell Prof. Ong that amongst the major banks in Singapore, those that account for the bulk of consumer credit, it is done as a matter of course, ie, close to 100% of the applications they get are first checked with the Consumer Credit Bureau. And we have to leave it to the banks to make their own credit judgment as to whether they think the credit of the individual is sound and whether they are willing to extend a credit card to an individual. Of course, from time to time, MAS will have a look at the banks' procedures to make sure that they are robust. On the second matter, there are some innovations in the credit market, some blurring of the lines between credit cards and other unsecured credit schemes. There are separate limits that are set, however, for these things. In other words, for credit cards, we have the two-month income limit. We have a separate two-month income limit on any other form of unsecured credit. So it is still constrained. At the end of the day, you cannot lend more than four months no matter how you play around with the distinction between these different instruments. So there is a limit of four months of income ultimately on the sum total of credit you can get as a consumer from the bank. Assoc. Prof. Ong Soh Khim: Sir, there have been reports of many Singaporeans suffering from credit card debts, some holding as many as eight to 10 cards with a total debt of $40,000-$90,000, and that is many times of their monthly income.”
“MAS will continue to monitor the situation and the Government will implement appropriate measures related to the ease of availability of credit should it become necessary to do so. Column No : 1937 EXECUTION (Change of method) 4. Prof. Ivan Png Paak Liang asked the Deputy Prime Minister and Minister for Home Affairs if he will change the method of execution from hanging to lethal injection.”
“Singapore’s credit card charge-off rate has been on the decline. It is also lower than that in many other countries. The charge-off rate, defined as bad debts written off divided by total receivables, has fallen steadily from a peak of 7.0% in fourth quarter2003 to 3.8% in the first quarter of this year and 2.9% in the third quarter. The charge off rate for Hong Kong was 3.0% and for the US (second quarter2005 data) 4.2%. In Singapore, credit cards are used mainly as a mode of payment. 17% of credit card debt rolled over for more than one month as at end ofthird quarter2005. The utilisation rate of credit cards on the whole has also fallen from a high of 24% of credit limits to 17% inthird quarterthis year. A recent report by Visa also showed that, for every S$100 Singaporean Visa cardholders spent in 2003, they repaid $96. As the charge-off rates do not suggest a major problem of overborrowing, there is currently no need to impose further restrictions on the issuance of credit cards. Increasing the minimum payment for credit cards would serve essentially the same purpose as the current maximum credit limit, which is set at twice the cardholder’s monthly income. A limit on the number of cards that can be issued to a single person would also be unnecessarily intrusive. It would reduce flexibility and convenience for consumers, many of whom use credit cards as a payment instrument. Card issuers are able to check with Credit Bureau Singapore on the number of credit lines an applicant already has and his repayment record, and would take this into account in deciding whether to extend further credit.”
“SGXTrade was rolled out on 19th August. In mid-October, SGXTrade started to experience intermittent outages. To avoid any potential adverse impact on customers, brokers were offered the option to switch back to SESOPS, with most taking up this offer. SGX is working to diagnose and rectify the problems identified. After SGXTrade’s robustness has been improved, the system will be re-introduced. As the operator of the key exchange in Singapore, SGX has to ensure that its trading platforms and infrastructure operate safely, efficiently and reliably. MAS will continue to monitor the measures taken by SGX to ensure that the issues are resolved expediently and with minimal inconvenience to investors. Column No : 1935 CREDIT CARD DEBTS 2. Assoc. Prof. Ong Soh Khim asked the Senior Minister, from 2002 to the present, what are the respective percentages of credit card holders who (i) in each month, paid off their credit card balances in full, carried a balance and paid more than the minimum amount, and carried a balance and paid only the minimum amount due; (ii) owe more than $5,000, $10,000, $20,000 and $30,000 on their credit cards; and (iii) are unable to obtain loans as a result of poor credit payment records. 3. Assoc. Prof. Ong Soh Khim asked the Senior Minister if his Ministry will (i) increase the monthly minimum payment for credit card debt to cover interest, fees and a reasonable amount of the principal, to reduce Singaporeans’ long-term debt; (ii) limit the maximum number of cards that can be issued to a single person; and (iii) introduce additional measures to prevent credit cards from becoming a major source of personal debt in Singapore.”
“Slow service at the SGX website As with all Internet websites, users may experience slow access on the SGX website if there is a large number of users at the same time. In the case of SGX, almost all public interest is directed at the "live" stock prices and corporate announcements, with the greatest bandwidth consumption coming from the viewing of "live" stock prices. Users typically generate successive requests, often non-stop, for information updates in order to get the latest prices and news. Over the past eight months, SGX has almost doubled its Internet bandwidth to address the high demand for "live" stock prices. Two months ago, SGX separated its Internet bandwidth into two channels so that the public accessing "live" stock prices will not have to compete with those accessing corporate announcements. This was to ensure that the public is able to access corporate disclosures in a timely manner. SGX plans to make further improvements to its IT systems and infrastructure. SGX is also evaluating options on how to serve the needs of different customer segments better- from occasional users to heavy users. Besides the SGX website, investors can also obtain market information from alternative channels, such as Teletext, Internet trading sites and data service vendors like Bloomberg and Reuters. Implementation of SGXTrade The SGXTrade initiative forms part of SGX’s business objective to offer more sophisticated trading capabilities to market participants. The current system, SESOPS, is a 16-year-old system that is becoming obsolete. SGX decided to work with participating broking houses, in a commercial relationship, to offer SGXTrade as a replacement solution to SESOPS. While some broking firms decided to develop their own trading solutions, 11 chose to adopt SGXTrade.”
“Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill.- [Mr Tharman Shanmugaratnam]. Bill considered in Committee; reported without amendment; read a Third time and passed. Column No : 1921 GOODS AND SERVICES TAX (AMENDMENT) BILL Order for Second Reading read. 7.03 pm”
“Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Sir, theSingapore Management University(or SMU) Act was enacted in 2000 following the incorporation of SMU as a not-for-profit public company limited by guarantee. The strategic intent of the SMU Act is to provide SMU with autonomy and flexibility, while putting in place mechanisms to safeguard public interest and proper use of funds. The approach taken was to strike an appropriate balance between the statutory board model of NUS and NTU, and that of a private university. In the short space of five years, SMU has performed commendably as can be seen in how it has spurred healthy competition among the other business schools in Singapore. More importantly, SMU has developed a good reputation among students and the public by providing a different education based on the Wharton model, adding greater diversity to our university landscape. The experience with SMU has shown that theAutonomous Universitymodel can work. My Ministry is now prepared to give SMU even more autonomy, especially in the financial area through the one-line block grantin both recurrent and development needs in line with the University Autonomy, Governance and Funding (UAGF) recommendations. This will allow SMU to apply the resources where it can create the most value. As we give SMU greater autonomy, it will also be sensible to place SMU under the enhanced accountability framework, that we are also placing for NUS and NTU. In this regard, the SMU (Amendment) Bill has included the enhanced accountability framework. The House has discussed the content and rationale of these clauses at length during the debates on the NUS and NTU (Corporatisation) Bills. Sir, I beg to move. Question put, and agreed to.”
“Basically, this is something which we will have to leave the universities to judge, as Autonomous Universities, but they know that there is market demand, there is advantage in maintaining some specialisation in China, which is emerging to be a major player in Asia. Mr Ang also suggested that NUS and NTU set up special courses forsenior citizens or mature students in general, like some universities abroad have done. I think this is a useful suggestion which the universities should look more carefully at. Again, this is something which they will have to decide on using their autonomy. But I think it is a useful suggestion for them to look at. So, Mr Deputy Speaker, I think I have addressed the main points. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Mr Tharman Shanmugaratnam]. Bill considered in Committee; reported without amendment; read a Third time and passed. Column No : 1919 SINGAPORE MANAGEMENT UNIVERSITY (AMENDMENT) BILL Order for Second Reading read. 7.00 pm”
“Their local students also pay a higher fee ofabout S$7,800, and this is despite the fact that Australia makes it a priority to subsidise its local students. In the United Kingdom, starting from next year, it will be about S$9,000 for their local UK citizens. So we are not expensive by international standards, and the reason for that is that the Government funds 75% of the cost of an undergraduate education, and we intend to continue doing so. We also intend to continue ensuring that the universities have internal processes that ensure discipline on cost increases, andthey are able to justify fee increases based on real increasesin costs and improvements in quality.We are not going to take our eye off this ball. Mr Ang made useful points on the importance of maintaining this tradition in NTU, in particular, of Chinese studies. This also applies to some extent for NUS which sees this as anopportunity - building up links with China and developing expertise on China. But for NTU in particular, I think it allows it to draw on the tradition andsupport from a community that is already with NTU. NUS has already formed some meaningful programmes of exchanges and joint programmes with Chinese universities, and NTU is doing the same. Quite apart from their partnerships with Chinese universities, they are also developing their internal curriculum. The Confucius Institute at NTU, which was jointly established by the Ministry of Education in China and NTU -in fact, it isthe first example of collaboration involving the Chinese Government witha Singapore university - is up and running, conducting short-term courses, and it will be officially launched when it moves to its new premises at One North in July next year.”
“But the fundamental point,thepoint that I will have to restate,is that it serves the interests of our local students for us to have NUS and NTU taking an international orientation, so that we can get the best students who in turn get the best faculty, who in turn give the university the reputation and quality that local students deserve. This is a fundamental point. If we have a closed-door policy or a policy that prices out all but the richest foreign students, it is local students and Singaporeans who will be the worse for it. Our local students' fees are, in fact, very competitive by international standards. I am not just comparing this withthe foreign student fees of various universities.Even if you compare local students' fees in Australia, UK or the United States, Singapore universities charge far less.Since Mr Ang Mong Seng circulated a table, I will give some data of my own in this respect. If you look at American state universities-and I am not even talking about the private universities -for students who are within their own state, the average cost - and this is an average amongst a broad dispersion of universities -is about S$8,400. If you come from outside Michigan and you want to attend the University of Michigan, you pay about US$20,000, which is a far higher sum.Those are American citizens whocome from outside the state. And these are state universities. For private universities, a different order of magnitude altogether. Typically, you are talking about US$25,000-US$35,000 a year, regardless of where you come from - in state, out of state, foreign or national. Those are the US rates. For Australia, foreign students, of course, pay a very substantially higher fee than what we charge here.”
“Mr Speaker, Sir, I would like to thank Mr Ang Mong Seng, firstly, for his comments and observations and, secondly, for the specific queries that he has raised on the NTU (Corporatisation) Bill. Let me first reiterate what I have said in connection with the NUS Bill,thatcorporatisation will not lead to institutions aimed at making profit. These will be not-for-profit institutions. That will be unchanged in their mission of serving the public andSingapore's strategic objectives. So there is no prospect anytime in the future of them being listed on the Exchange. They will continue to receive substantial public funding. But through autonomy, we think there is amuch better chance of them being able to retain and build on their stakeholders' support, including, in particular, the alumni, whom Mr Ang Mong Seng has referred to. Next, on the issue of fees and whether we should be trying to garner more fees from foreign students. First, let me say that the Ministry and the universities are indeed reviewing tuition fees for foreign students. But we have to make sure that we remain competitive, that we are able to attract the quality of students that we want. I certainly hope for the day in which the universities will be able, through their reputation and branding, to attract the best foreign students with the fees that MIT and Harvard charge. But we are not there yet.So we will have to make sure we move in sensible steps,make sure that we are able to attract the best students and charge a price that the market is able to bear.”
“Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The House has just debated on the National University of Singapore (Corporatisation) Bill. The Nanyang Technological University (Corporatisation) Bill is similar to the National University of Singapore (Corporatisation) Bill and has the same objectives of effecting the University Autonomy, Governance and Funding (UAGF) recommendations. The Nanyang Technological University (Corporatisation) Bill is to effect the corporatisation of NTU as a not-for-profit public company limited by guarantee in mid-2006. My Ministry will continue to provide strategic directions to the University and ensure that NTU meets national strategic objectives. The rationale and considerations for the Nanyang Technological University (Corporatisation) Bill have been elaborated in the House's deliberationson the National University of Singapore (Corporatisation) Bill. I have nothing further to add. Sir, I beg to move. Question proposed.”
“His observation at the end of his latest trip, having had intensive discussions with both NUS and NTU, and knowing the Asian and global landscapes well, was that Singapore can create world-class universities in NUS and NTU. He was not addressing his mind to SMU. We are not too small to create world-class universities given the pool of talent we can draw on locally as well as across Asia and internationally.I think that gives us some confidence. Thatheas an independent and very experienced university leaderwas able to tell us that that was his conclusion. It needs a new culture, particularly a new internal culture within the universities. When you free up the external links, your real intent is to create a new internal culture because it is that internal culture that will make the universities great. We trust the people we have. We will not cut all strings completely because wehave to retain public trust in the use of substantial public resources in our universities. But we are going to allow these good people to chart the course forward and support them in every way we can in the Ministry. Sir, I think I have completed my replies to the questions. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill.- [Mr Tharman Shanmugaratnam]. Bill considered in Committee; reported without amendment; read a Third time and passed. Column No : 1910 Column No : 1910 NANYANG TECHNOLOGICAL UNIVERSITY (CORPORATISATION) BILL Order for Second Reading read. 6.35 pm”
“They will have to put in place appropriate and adequate internal controls and procedures to ensure proper use of funds, and they will have to conduct annual financial audits under this enhanced accountability framework. And, where necessary, the Ministry can request for records relating to financial transactions of the university and even to make them public. Finally, there were a few specific issues which Dr Neo had also asked. She pointed out that the Bill had not addressed issues concerning the universities holding equity in companies doing research, issues of university royalties and fees for commercialisation of research and related issues. These are not matters we address in the Act. These are important operational issues which the Autonomous Universities will have to deal with, and we do not capture these operational issues in the Act. The universities already have technology transfer offices to manage the patenting and commercialisation of their inventions. They tend to follow best practices. They look at how other top universities are doing this in their relationship with research companies, as well as on what rights the individual faculty member has over the patents and so on and so forth. Mr Deputy Speaker, Sir, I think I have addressed most of the main points that have been raised. Let me conclude by saying that we are confidentwe are moving in the right direction. I was quite heartened to hear from Dr Charles Vest who stepped down recently as President of MIT and was recently here as Lee Kuan Yew Distinguished Visitor. He knows our universities well because he was instrumental in the forming of the Singapore-MIT Alliance.”
“India and China, in fact,aremore skewed. On my last visit to India, I was in Chennai. Maybe Tamil Nadu is more skewed than the rest of India. Every top high school I went to was not offering a single humanities subject in their equivalent of 'A' levels. I asked the principals why. The principals are all very educated people. They said they would love to, but every time they start up a class, they have to close it in six months because there were no takers. So we are not doing too badly. We have got our Humanities scheme.We have got the University Scholars Programme at NUS that placesemphasis on the humanities. And we will keep pushing along, particularly in ensuring that students get this cross disciplinary education that we think is very important, regardless of whether you are going to become a scientist or a lawyer. But we have to move with society, and the instincts of parents and students that we have to reshape but we cannot force. We make no apologies, of course, about having a fundamental focus on science and engineering for the reasons I gave earlier. They increase Singapore's choices economically and they, ultimately, provide the jobs that Singaporeans need. Dr Lily Neo also asked about how we make sure that the corporatised universities are going to be transparent in their dealings, management and in their spending. This is something that we address in the Policy Agreement. The universities are expected, under the Policy Agreement, to exercise good corporate governance. This comes not just under the purview of the management but the Board of Trustees.”
“So we take that into consideration and we have got a lot more fuzziness in the system now. In fact,quite apart from the broad targets we are setting, we also allow them to deviate by 10% for eachcluster.That also explains why NUS is expanding its business intake - because it is deviating from the targets, taking advantage of that 10%. It is not doubling its intake by the way,it is making some increase, but it is not a huge increase. On humanities, NUS and NTU are not losing sight of it. NUS has built up a tradition in its arts and social sciences faculty. NTU is now starting a new school of humanities andsocial sciences and they take this job very seriously. It is ultimately parents and students whodecide what discipline they want to go into. We are not going to stop providingplaces in history, geography, literature, economics, and in the social sciences more broadly. We think it is essential for the national economy. Secondly, we think it is going to be more important in future than it has been in the past for engineers and scientists to have a decent dose of exposure in the humanities, particularly as we move up the knowledge curve and as they have to deal with a lot more ambiguity in their jobs,not just existing formula and ruleswhich have to be processed as efficientlyas possible. All the top scientists we havetalked to tell usthat it helps in the grooming of scientists to give them an early dose in the humanities. And we take that seriously starting from school. That is why our new 'A' level curriculum from next year will make it mandatory for every student to take a subject other than his main specialisation.It is a case of planning and intervention to ensure that we achieve our objectives. We are not as badly off as many other Asian countries.”
“Secondly, as a small economy that wants to make an impact in a knowledge economy, we need to have reasonably deep pools of expertise. We cannot be shallow all round. We cannot just leave itto chance and let our brightest minds study any subject they want or provide subsidised places for them to study any subject they want. We have got to try and gear things so that we do develop deep pools of expertise, otherwise,we are not going to make an impact in the knowledge economy. So how do we balance these two objectives between wanting to have some breadth and wanting to make sure we have got enough depth of capabilities in five or six areas so that we can really make an impact? That is our challenge, and that is a challenge we apply our minds to, both when we think of manpower planning targets as well as research funding targets. But we cannot run away from it as a small economy. So that is my economist answer to Dr Geh Min. But I quite agree with Dr Geh Min that we should not be too micro or too strict about these targets.In fact, the National Manpower Council has moved towards looking at broader clusters of disciplines rather than very specific disciplines. We cannot predict future demands with precision, or as Dr Lily Neo says, you always have to provide training, not just for jobs that exist and can be identified by industry, but also jobs which have not yet been created.You really want to produce people who would then create their own jobs and create jobs for others. That is a very important point once you are looking beyond five or eight years, that you want to produce people with a set of traits and specialisations, but they are not quite sure what jobs they are going to do or how they are going to create jobs for others.”