Zaqy Mohamad
Singapore
“Deputy Speaker, may I seek your consent and the general assent of Members present to move that the Question Time at this day's Sitting be exempted from Standing Order No 22(1) so as to enable questions for oral answer to continue until the completion of Question Nos 7 to 29, including relevant supplementary questions, until 12.45 pm?”
“Mr Speaker, may I seek your consent and the general assent of Members present to move that the proceedings on the item under discussion be exempted from the provisions of Standing Order No 48(8) to remove the time limit in respect of the Minister Tan See Leng's speech, please?”
“I think on the hawker front, we keep our rentals as low as possible to sustain our hawkers. But for food prices, we continue to monitor. My colleague, Minister of State Gan mentioned about how we are monitoring food supply of food prices, and I think that we will continue to do so.”
“I thank the Member for his question. On seafood specifically, we do not see immediate risk. We have diversified our food imports. We have also got local production of seafood readily available. At this point, as both the Deputy Prime Minister and Coordinating Minister have shared, our main risk for agriculture lies in fertiliser.”
“Mr Speaker, as I shared, we are monitoring the situation. The Government is monitoring at this point. There is no need at this juncture, because we have not seen the price hikes hit the hawkers in the same way as yet. There will be downstream impact. I think that is quite sure.”
“For us to also look into buying local produce, that helps our farms to increase capacity at this point, helps them build resilience over time and should there be disruptions or should there be a need for us to divert supplies or look to ramp up local production, I think they would be in a better position if we do what we can today to supp…”
The complete record
Every one of 1,752 lines we hold for Zaqy Mohamad, in date order, each linked to its source. Free to read, in full, without an account. Page 31 of 36.
“Sir, on 17th November 2008, the House had passed the amendment to the Administration of Muslim Law Act (AMLA) to raise the legal age of marriage for Muslim couples from 16 to 18 years of age. From 1st March 2009, anyone who is below 18 and wants to get married is required to obtain a Special Marriage Licence (SML). Applicants are referred by the Registry of Muslim Marriages (ROMM) to our INSPIRASI hubs for premarital counselling and assessment of the couple's preparedness for marriage. Twenty-four out of 32 applications for these licenses were approved last year after review involving both the couple and their parents. Run by PPIS-Jurong Family Service Centre and the Association of Muslim Professionals (AMP), the INSPIRASI hubs are dedicated to provide intensive support to marriages involving minor couples. In 2009, a total of 323 minor couples attended premarital counselling. And of these, 138 (43%) couples changed their minds about marrying. Even if they proceed with marriage, these couples will be supported in their first five years of married life under Club INSPIRASI, a structured programme for minor couples that provides mentoring support, development activities, and other skills that will help in a successful marriage. Sir, Dr Ahmad Mohd Magad had asked about the Muslim Marriage Preparatory Course (MPC). This Course had undergone a major review and revamp in 2008. Now known as "Bersama Mu" or "With You", it places greater emphasis on topics such as couple communication and financial management. Feedback from couples, operators and the community has been positive. As an extension to "Bersama Mu", customised marriage enrichment programmes focusing on enhancing relationships within the family will be rolled out in the first quarter of 2010.”
“This plan is a comprehensive strategy that leverages on both national and community resources to help such families move towards normal functioning. MENDAKI is implementing this plan together with several CLF partners. And let me assure Dr Ahmad Mohd Magad, Dr Mohamad Maliki, Assoc. Prof. Dr Mohammad Faishal and Dr Fatimah Lateef that our focus has not wavered from strengthening Malay/Muslim families, especially during the economic downturn. The issues of such low-income families are complex and varied. This is why our key institutions in the community work closely with one another and collaborate with Government agencies as well as MMOs and VWOs as part of a whole-of-community approach. The CLF has been critical in mobilising this effort. Mendaki, as secretariat for CLF, provides strong foundation support for our CLF partners to serve the many needs of our families, enabling us to offer comprehensive and integrated programmes. For example, the CLF formed a working committee comprising practitioners and experts from MMOs to develop a core parenting skills manual and to deliver a core parenting skills workshop. The CLF also launched the Strengthening Families Series (SFS) in November last year as part of the Core Parenting Skills Programme aimed at enhancing family resilience. These modules help families to strengthen communication and bond among members and help establish a sense of ambition and aspiration for the family. In our efforts to assist such families, we also recognise the need to pay special attention to vulnerable groups like those who married as minors and also reconstituted families. Both Dr Fatimah Lateef and Assoc. Prof. Dr Mohammad Faishal had asked for an update and our efforts for these families.”
“The rising middle class must draw upon our traditions of community cohesiveness and the spirit of unity and reach out to infuse a more progressive outlook in our community. By all accounts, Sir, our able and bright have responded well to this call. Over the last few months after this subject was raised, several of my parliamentary colleagues and I received unsolicited responses from many professionals wanting to do something for our community. The strong feedback from the young and upwardly mobile in our community shows that our efforts to engage them are bearing fruit. Sir, the Community Leaders' Forum (CLF) is currently engaging young professionals under a Consultative-Participatory Forward Planning Exercise to have them study the issues, learn from the experiences of older leaders, take ownership of the challenges and present their recommendations at CLF 2010. With this experience, continuous involvement and dedication, over time, our young will be ready to assume leadership positions. Ninety-three young Malay/Muslim professionals from diverse backgrounds are actively engaged in this exercise, including several members from various Malay/Muslim organisations (MMOs), such as 4PM and Young AMP. Sir, while we are proud of our achievements, we remain keenly aware of the challenges facing our community. Indeed, the issue of low-income families trapped in multiple problems received a disproportionate amount of public airing late last year. However, Sir, this is not a new issue and we are certainly not wringing our hands in despair. Community leaders are aware of this, understand the complexities, and together we launched the Action Plan to Strengthen the Malay/Muslim Families in 2007.”
“With a strong Government looking ahead and setting the direction, and with community organisations working hand-in-hand with national agencies to reach out and ensure everyone is on board, we can move closer towards achieving our vision of a Community of Excellence. Excellence, Sir, involves consistent effort. So we need to constantly improve our education, increase our knowledge and upgrade our skills. When more of our students increase their competency in subjects like English, Mathematics and Science, and when our workers constantly upgrade their know-how and skills, and when our professionals gear themselves up for an ever changing economic landscape, the community will be in a stronger position not just to face up to adversities but also to overcome them. Self-help group MENDAKI and our many Malay/Muslim organisations including the Association of Muslim Professionals (AMP) have put in tremendous energy and resources towards ensuring the community's progress. This, Sir, is a long-haul effort for which there can be no let up. We must ensure that the good work of senior community leaders is continued so that the next generation can also stand tall with fellow Singaporeans and contribute significantly to Singapore's continued well-being and growth. Like fellow communities in Singapore and in cities elsewhere, we will also feel the impact of the income divide. Mr Zaqy Mohamad has raised a similar concern of keeping the cohesiveness in our community, especially with respect to engaging the middle class and our professionals. The concern of whether an emerging middle class might disassociate itself over time from the larger base is a valid concern observed by minority communities elsewhere. We must avoid this trap.”
“What is our strategy to make use of every resource within our community so that we can together bring forward the community. *Cols. 4163-4164 The Minister for the Environment and Water Resources and Minister-in-charge of Muslim Affairs (Assoc. Prof. Dr Yaacob Ibrahim): Mr Chairman, Sir, I would like to thank all Members who spoke and made some relevant suggestions. 12.15 pm Sir, like fellow Singaporeans, the Malay/Muslim community continues to grow in confidence and show greater resilience in the face of challenges from within and beyond our shores. We are witnessing an emerging middle class with a wider range of professionals – from traditional areas such as medicine and engineering to new ones such as multimedia and the life sciences. The community produces a good crop of top students who do their schools and nation proud as we see from the number of Anugerah Mendaki recipients which has grown from a handful to a few hundreds. These developments show that our community is responding and adapting well to improve our academic performance and upgrade continuously, thereby seizing the opportunities created by the growing economy. And it is to the upward-bound middle class that we look towards to set the tone and marshal the responses of our community to face the challenges of globalisation as raised by Mr Zainul Abidin. The able and bright must step forward to help the community respond to challenges and to be intimately involved in the community's relentless desire to give the best in whatever that we do.”
“Mr Chairman, the Malay/Muslim community has made much progress over the years and, to the community's credit, on their own merit and self-help spirit. The social problems that we are tackling are complex and there is no overnight solution. Many in the community have shared their concerns about these social problems, including dysfunctional families. The Minister has spoken about the possibility of the growing Malay/Muslim middle-class that may, over time, become detached from the community and its problems. It would be a pity if this trend happens. All our successes in the past had been derived from "gotong royong" spirit. No matter how much funding and resources the Government is prepared to allocate, the support of everyone in the community is vital. I would therefore ask the Minister what are the strategies to engage the very successful, middle-class Malay professionals to help in this drive. (In Malay ): [For vernacular speech, please refer to Appendix A *.] The Malay/Muslim community has undeniably achieved much success that we should be proud of, and what is encouraging is that this achievement was attained based on merit and the spirit of self-reliance. Many Malay/Muslim organisations are working to solve our community's social issues, but the question is what is the level of their capability, and how can we strengthen that capability and coordinate the duties so that it will become a concerted effort? I also feel that this effort do not just lie with the Malay bodies and leadership as well as the national infrastructure and resources. Each individual, especially those who are successful including the middle income, must also pitch in and continue our gotong-royong spirit. The question is: how?”
“Mr Chairman, the challenge today is much of the expectations on financial and social assistance rest on the Government and the various schemes they administer, such as ComCare. The danger in the perception is that the MCYS is seen to be the only hand responsible to help the needy in Singapore. On the other hand, the ownership of financially and socially disadvantaged should go beyond just the MCYS and the people sector, but right down to the people. We should do more to inculcate the sense of community ownership over issues concerning the needy and underprivileged in Singapore and garner greater support for the people sector. 4.30 pm The recent petitions raised by residents in Tampines and Pasir Ris about the development of rental flats in their matured HDB estates do raise the issue of whether we truly have a caring and gracious society. It is sad when we see Singaporeans trying to disassociate themselves from the needy in that manner. Can the Ministry share how much money was raised by the charities last year and if it tracks how much of it was disbursed to needy Singaporeans? How does this compare to the amount disbursed by ComCare? The common criticism on ComCare is that the aid given is insufficient given Singapore's high cost of living. But, on the other hand, what is the Ministry's assessment of effectiveness of the charities sector to provide additional help above the base as given by the Government? How does the Ministry measure whether its Many-Helping-Hands approach is effective? I think we can do more to involve more young Singaporeans in this effort to inculcate a more gracious and compassionate society that cares for its own. Right now, the expectation is on that one hand to clap and that one hand to clap loudly. Dysfunctional families”
“For a full day programme, MOE can continue to provide funding for the morning session for the existing kindergartens or MCYS can look into funding for the afternoon session for those with added spare capacity. Due to the various legacy schemes, some kindergartens are tied in for five years, before they can consider conversion to a childcare. Therefore, this hybrid proposal can help to maximise our existing infrastructure and teaching talents. Adoption”
“Mr Chairman, I commend the Ministry of Community Development, Youth and Sports (MCYS) efforts to provide more quality childcare centres across Singapore. The target of increasing the number of childcare centres to 200 by the next two to three years is certainly one that I can appreciate, given the emphasis on quality and affordable pre-school education. I do not foresee any issues with the hardware infrastructure, where I believe MCYS will face challenges with the software. My questions: do we have enough quality teachers and management staff to maintain quality pre-school education and childcare services? Will the childcare centres cannibalise the kindergartens currently operating out there granted that the next kindergartens are governed under the Ministry of Education's (MOE's) purview? Based on feedback, the industry does not seem ready for this growth spurt. Perhaps the Ministry can update us on the efforts to provide sufficient human resources to fulfil this growth in the short term. There are leakages in the number of graduates for Early Childhood Education in the sense that many of these graduates do not go into childhood education. The numbers of teachers coming in through mid-career are limited. With the economy recovering, there will even be fewer. Thus, we see a "merry-go-round" effect of proaching in the industry which will counter the objectives set by MCYS to provide quality and affordable childcare. If there is greater demand for childcare centres today in some estates compared to kindergartens, would the Ministry consider working with MOE to co-fund a hybrid childcare programme?”
“We strive to keep our tax regime competitive to give businesses and individuals incentive for enterprise and effort, and support economic imperatives at different phases of our development. We also keep our overall system of taxes fair, so that everyone pays some tax but the better off pays more. By adopting a "Government-with-You" approach, MOF seeks to work closely with businesses and citizens to further create new value. We recognise that some of the best ideas are out there in enterprises and the wider community, and thus would be adopting a collaborative approach to create new services for our people.”
“Let us work together to develop a culture of good customer behaviour and good service delivery. With your permission, Sir, I will ask the Clerk of Parliament to distribute the handout. [Handout distributed to Members.] As I have just mentioned, the Government is committed to improving our public services to delight our customers and to keep up with new technological trends. To support this role, the Government will also evolve from being just a public services provider to a platform provider. It will set and referee the rules in the ecosystem to allow the enterprises or individuals to freely innovate and create value-added services. In other words, the delivery model will change from "Government-to-You" to "Government-with-You". For example, the Government can facilitate the discovery and use of publicly-available Government data by putting them on a central portal for downloading in machine-readable formats. A common map platform can also be provided to share Government geospatial data. Sir, we are mindful that this move towards a "Government-with-You" model does not rely on technology alone. On our part, public officers need to embrace a new mindset that some services can be developed and delivered more effectively through collaboration with the public. Sir, to sum up, MOF has taken a comprehensive approach in addressing the multiple challenges and opportunities ahead of us. On the expenditure side, we have devised programmes and initiatives to make sure that our resources are carefully allocated to worthwhile projects and, second, efficiently used to achieve the intended objectives. We will also use our tax regime to help promote social and economic objectives.”
“He then replied with phrases like, I quote, "Mr Yam, I would like you to personally reply to this email of mine and explain to me and the residents why LTA would not want to re-surface such and such a road completely. And please do not hide behind your staff to get them to respond on your behalf." LTA acknowledged his second last letter and promised to reply soon, but this only met with further unhappiness. Again I quote: "I would like my resolution letter from LTA to be responded personally by Mr Yam Ah Mee. For your information, I am a CEO of a large financial services company, and I will always take it upon myself to respond and sign off any letters/emails if they require my personal attention." And for good measure, he copied his latest email to the Prime Minister. For the CEO of LTA to personally respond to thousands of mails would be impractical as well as highly inefficient for the organisation. What matters, or should matter, is for the CEO to ensure that there are proper internal processes to give timely, considered responses to citizens. Sir, please do not get the wrong impression that we have a lot of demanding customers. We have many customers who appreciate the services of our public agencies. Many have in fact written in to express their heartfelt appreciation for our agencies' attention and service standards. Our public officers are encouraged by these letters of commendation and will try even harder to serve their customers better. I have provided this example to illustrate the ever-rising expectations of the public, which has been fuelled by technology. The Government will always endeavour to improve on its service standards. However, whether it is the public or private sector, we know that good customer behaviour begets good service.”
“I would just like to highlight that the operative word is not consolidation but integration, where agencies with similar needs come together to jointly leverage on technology to achieve better outcomes. There is a whole range of integrated Government projects and some are smaller scale ones which SMEs can be involved in. Sir, MOF notes that our citizens are becoming increasingly Internet-savvy. They are used to accessing information and securing services over the Internet. They are comfortable with downloading music and applications using iPhones and other mobile devices. Many are also socialising and sharing resources on Facebook. Our citizens now expect the same convenience and easy access in their dealings with the Government. In fact, with emails replacing snail mails as a main mode of communication, some customers expect Government replies and actions to be instantaneous and, moreover, favourable, failing which they will become demanding or even unreasonable. As much as we would like to, it is not always possible for Government agencies to satisfy all their customers. Also, big statutory boards like LTA and IRAS each receives tens of thousands of correspondences in a month. It would be impossible for their CEOs to reply to each one personally. Sir, allow me to give you one such example of someone who emailed the LTA repeatedly, to insist that the stretch of road in front of his house be re-surfaced instead of being patched locally. Now, road re-surfacing is expensive and should be undertaken judiciously. LTA explained this to the writer, but he did not accept LTA's explanation.”
“To help promote Singapore's sector internationally, the Committee is also proposing to anchor practice leaders and Centres of Excellence in Singapore. It would encourage regional and international work to be done from Singapore and to eventually build up a critical demand. CDAS will submit its recommendations to MOF in April 2010. Sir, the Government will commit $450 million over the next five years to start a Public-Private Co-Innovation Partnership. This initiative is to spur private sector R&D by bringing together Government agencies and companies and co-develop innovation solutions. Mr Zaqy Mohamad has sought further details on the scope and measures of success. Sir, the Co-Innovation Partnership will focus on innovations that can meet public sector needs, and which can eventually be exported to the region. For a start, we will look at areas such as urban mobility, energy efficiency and environmental sustainability. We would seek to increase the number of public-private collaborations, and innovative products and services. However, we will not just focus on numbers. The Government recognises that risks are inherent in the innovative process and accepts that not all collaborations may succeed. However, the emphasis should be on creating opportunities for public and private sectors to innovate together. Last but not least but still on the theme of innovation, Members Zaqy Mohamad and Muhammad Faishal Ibrahim have asked how MOF is responding to the rapidly changing ICT landscape to meet the needs of increasing sophisticated Singaporeans. Sir, on the iGov2010 masterplan, many of the integrated Government projects are still in progress and will only be completed over the next one to two years.”
“CDAS, which comprised public and private sector representatives and accountancy professionals, plans to transform our accountancy sector into a modern, trusted and high value-adding Global Accountancy Hub over the next 10 years. The Committee’s strategy overlaps with Mdm Ho’s views that Singapore needs to enhance sector-wide professional capabilities and to develop a stronger international outlook. 4.45 pm Today, many international professional bodies have established, or are establishing, their presence in Singapore. Within this context, the Committee is recommending to strengthen the Institute of Certified Public Accountants of Singapore (ICPAS) into a global professional accountancy body; and to develop a post-graduate structured professional accountancy qualification to strengthen and broaden the talent pool of accountants. In addition, to add to the richness of services that Singapore can offer, the Committee intends to develop and build distinctive niches and specialisations such as Chief Financial Officers, internal audit services and valuation. Sir, merger and acquisition (M&A) activities should strictly be market-driven, and the recent announcements in the Budget are designed to help facilitate but not direct such corporate activity. Nonetheless, our accountancy sector can play an enabling role in M&A activities, as transaction advisory, financial due diligence and valuation. This, in turn, could further deepen the expertise here. The Committee also hopes to develop Singapore into a leading global centre in Asia for accountancy professional development and education and to attract regional talents into Singapore.”
“Third, we would expect a commercial institution to be constantly looking out to roll out new products and services to serve its customers better and to generate more revenues. And in doing so, it will catalyse innovation in the private sector market for cross-border financing. By drawing cross-border financing opportunities to Singapore, the institution will encourage existing players to strengthen their teams here while attracting new market participants. Hence, with such an institution in place, companies that go abroad – both SMEs and large companies – will have better access to financing support than today. While Mr Teo highlights shipping, any sector in which viable Singapore companies have competitive advantages would stand to benefit from this initiative. Sir, next on the accounting sector, I agree with Member Ho Geok Choo that it is important to develop the accountancy sector to solidify Singapore’s position as a leading financial and business services hub in Asia. Having a deep competency in accountancy will enable the growth of our enterprises in and beyond Singapore. Since 2000, the accountancy sector has generated contribution of about 0.4% of our GDP – similar to the legal sector’s contribution of annual value-add of about $900 million to Singapore. This is poised to increase in tandem with the surge in demand for accountancy services in Singapore and the region. The Asia-Pacific market alone is expected to be worth US$38.3 billion by 2013. In December 2008, my Ministry established the Committee to Develop the Accountancy Sector (CDAS) to review the accountancy sector.”
“Sir, it is the right time to consider this as Mr Teo Siong Seng has noted: The number of Singapore companies internationalising has increased; and besides large companies, SMEs are internationalising more actively than before. As we evaluate EXIM banks and Export Credit Agencies (ECAs) around the world, we must, however, avoid replicating the experience of EXIM banks abroad where under-performance or political interference has resulted in long-term subsidies out of the Government’s budget as this is an approach we cannot afford. Instead, we should consider examples in countries like Hong Kong, Sweden and Canada, where EXIM banks or ECAs have clearly-defined mandates to operate commercially and to generate positive returns on capital. These institutions have independent, professional management and use specialist market expertise to assess risks and viability of projects. As a result of their ability to generate commercial returns, they can sustain their operations without Government subsidies. Adopting a commercial orientation has other benefits besides sustainability. First, a commercially-run institution would be more responsive to the needs of its customers, including SMEs. For example, it would have the commercial incentive to ensure that its products and services meet the needs of its customers, or that the process to obtain financing is not too burdensome. Second, as the institution develops expertise ranging from trade financing to internationalisation and project financing, it would also naturally want to expand its business to finance both exports and overseas operations and projects, as Mr Teo has suggested.”
“I would therefore like to reassure Member Jessica Tan that the Government has streamlined and will continue to streamline regulations, simplify processes and keep administrative costs low. Even though Singapore has been ranked first in the World Bank’s "Doing Business" Report for four consecutive years from 2007 to 2010, we do not take our ranking lightly and will strive to ensure that we continue to be a favourite place to do business. Sir, let me now move on to the cuts on EXIM bank. The Government reviews our policies to support enterprises regularly in response to market trends, new opportunities and gaps. As more of our companies go abroad and the scale of their overseas operations grows rapidly, it becomes imperative to address gaps in cross-border financing. And these are points which both Mr Inderjit Singh and Mr Teo Siong Seng have made pertaining to the Export-Import (EXIM) Bank. Today, IE Singapore has a suite of financing schemes that support the internationalisation of our companies including the one that Mr Inderjit Singh has highlighted — the Internationalisation Finance Scheme (IFS), which provides support for asset and project financing overseas. Fundamentally, our schemes today are market-enabled, leveraging on commercial banks to facilitate financing to companies through risk-sharing with the Government. There are, however, structural constraints to this approach, as support from our schemes is limited to the sectors and markets that the commercial banks have appetite for. Therefore, the development of a market-based institution for cross-border financing is one issue that the Government is studying very carefully to facilitate the next wave of growth. The study is expected to be completed in a few months’ time.”
“Take, for example, the recently announced Productivity and Innovation Credit, which is an economy-wide initiative to spur all businesses to upgrade themselves and to invest in activities along the innovation value chain. This scheme is kept simple so that all businesses, even the smaller ones, can understand and benefit from it. Under the scheme, businesses simply claim the enhanced deductions as part of their normal tax filing process. In general, no application is required. Businesses automatically qualify for these tax deductions so long as they spend on any of the six pre-stated categories of innovation-based activities. MOF has also taken the effort to ensure that the qualifying criteria for these deductions are clear, specific and not overly restrictive. This gives businesses more certainty upfront on whether a potential investment can qualify for the scheme. The scheme also allows some businesses to convert their tax deductions or allowances into a non-taxable cash grant. To apply for this, a business only needs to fill in a declaration form at the point of claim at the end of the financial year. And again, this is done together with its annual tax filing. Upon receiving the form, IRAS will process the claim and credit the cash grant into the business’ account within three months. Given that the Productivity and Innovation Credit is meant to be a broad-based scheme, the process will be much simpler than the targeted grant schemes, where businesses have to submit an application along with the supporting documents, pass through selection criteria and meet required commitments.”
“Social enterprises can tap on seed funding from the Ministry of Community, Youth and Sports through the ComCare Enterprise Fund to cover start-up costs, including their training needs. Sir, however, we recognise that there is scope to see how we can do more to help grow this sector. We will study the overseas examples which Miss Penny Low has described to see if there are models of Government support for social enterprises that are suitable for our local context. Next, let me also address Miss Penny Low’s suggestion to promote greater philanthropy. We agree wholeheartedly with this. That is why, in Budget 2010, we extended the 250% tax deductions for charitable contributions, which means that Government is literally contributing up to 50 cents of every dollar donated to charitable causes. In fact, for the universities, the Government also provides one-for-one direct matching for donations, so that for every dollar received, the Government actually contributes up to 75 cents. Sir, let me now move on to the pro-business Government initiatives. This year, the Government introduced a number of incentive schemes to spur productivity in businesses. Many Members have expressed similar sentiments to Member Jessica Tan's comment on the importance of keeping the application processes simple so that more businesses can truly benefit from the schemes. Sir, MOF agrees that the incentive schemes must indeed be simple so that all businesses can benefit from them in an easy and timely manner, while ensuring that the schemes remain relevant to achieving the intended policy outcomes. I would like to assure Ms Tan that we will administer our tax incentives with this objective in mind.”
“Furthermore, as Member Cedric Foo has rightly pointed out, the move should be towards a volumetric basis for charging rather than the existing fixed special diesel tax. As the Member has also noted, any such move would, however, require careful consideration of the transitional issues, which include not just taxis but also other public transport and commercial vehicles, and other off-road users. Sir, next, let me address Member Penny Low’s suggestion of incentives for social enterprises, which are businesses set up to achieve social objectives, in order to let them flourish and in a bid for Singapore to be a hub for the rising Asia social investment dollar. Sir, we also recognise and note the important role that the social economy can play. The question is what is the best way for the Government to support social enterprises. Ultimately we want to nurture social enterprises that have sustainable business models because these enterprises would then have the largest impact and the highest chance of succeeding in their social mission. Giving social enterprises special tax privileges over conventional businesses will not help them to develop as sustainable and competitive businesses. Moreover, our social enterprise sector is still in its nascent stages. Most of our social enterprises are very small outfits and do not have significant amounts of taxable profits. Hence, further tax incentives beyond the generous ones that we already provide to our start-ups and SMEs are unnecessary. Our focus has been on building up the competencies of our social enterprises to position them for sustainability, while not compromising their businesses’ competitiveness and resilience.”
“The objective of the GVR is to level the playing field for green vehicles in our system for upfront vehicles taxes, and leave motorists to weigh the additional cost of green cars against their fuel savings in their buying decisions. Clean diesel cars are not much cleaner than petrol cars; although more fuel-efficient, they emit more particulate matter (PM). Moreover, the OMVs are not materially different from petrol cars. Currently, we impose a volumetric tax on petrol to discourage the excessive use of vehicles. Ideally, diesel should be taxed on the volume consumed as well. However, we have not introduced a volumetric tax rate on diesel used for vehicles, as diesel is also used for non-transportation purposes such as powering portable electricity generators. Instead, a special tax was introduced for private diesel cars as a proxy. This special tax also took into account the higher particulate matter emissions of diesel cars. In Budget 2008, in recognition of the improved emission standards of Euro IV diesel cars, the special tax rate for Euro IV diesel cars was revised from four times the road tax to $1.25 per cc with effect from July 2008. And this in effect ensured minimal differences in fuel consumption costs between Euro IV diesel and petrol cars. For a typical 1,600cc Euro IV diesel car, this change translates to a reduction in the annual special tax of about $1,000. In determining the special tax to be imposed on Euro V diesel cars, the emphasis should be on the desired outcome or performance of the car concerned rather than the technology. Thus, the Government will consider the fuel-efficiency and emissions standards for Euro V diesel cars relative to both Euro IV diesel and petrol cars.”
“This was in the form of a 50% property tax rebate, with absolute amounts of between $50 and $120 per flat. This rebate cost the Government $88 million. With the new 2010 property tax rebate and the ongoing 1994 rebate, all one- and two-roomers will continue to pay no property tax in 2010. In addition, under the new progressive property tax regime just announced in 2010 which will take effect from January 2011, each HDB owner will enjoy tax savings of up to $240, arising from the exemption of the first $6,000 of AV. All HDB owner-occupiers will thus pay less in taxes. To recap, this new progressive system of property taxes for all owner-occupied homes will cost the Government about $230 million a year. 4.30 pm Sir, it is not advisable, as Mr Chiam has suggested, to disrupt the regular revision of AVs as it would lead to a larger than manageable increase when accumulated. Instead, the Government will continue to explore possible forms of transfers, when necessary, to help the needy in a targeted manner. Next, I would like to assure Members, Mr Cedric Foo and Mr Hri Kumar, that our current vehicle tax structure already serves to encourage the use of more fuel-efficient and environmentally-friendly cars. For example, road taxes, which are levied according to engine capacities, already favour smaller cars which tend to consume less fuel than larger cars. We also provide the Green Vehicle Rebate (GVR) to encourage the adoption of fuel-efficient vehicles. This rebate is calibrated so that a typical hybrid car, which is greener and more fuel efficient, does not attract higher upfront ownership taxes than the equivalent conventional car – despite the higher Open Market Value (OMVs).”
“5 billion worth of growth capital by seeding a range of funds over 10 years, for which the Government will contribute up to half the capital or $750 million. A key feature of this programme is that it will leverage private equity expertise in evaluation, making and managing investments so as to ensure market discipline. Sir, I would now turn to the taxation issues raised by the various Members. First, I would like to provide some clarifications to Mr Chiam See Tong’s comments on property taxes for HDB flats. Sir, property tax is imposed on the ownership of properties in Singapore, including HDB flats and is based on the Annual Value (AV) of each property. Annual Values are determined yearly according to the prevailing market rents that each property can fetch. The property tax for HDB flats in a given year is based on market rentals data from the previous year. The previous AV revision for HDB flats was carried out on 1st January 2008, based on rentals values in 2007. In 2009, the AVs for HDB flats should have been adjusted upwards because rentals had by then jumped by more than 30% through 2008 over 2007. However, the Government decided to defer the increase in AVs for HDB flats in 2009 in recognition of the weak economic outlook and uncertainties in rental trends at that time. The annual review of AVs for HDB flats resumed in January 2010. HDB rentals have stabilised after a moderate decline from late 2008 to the middle of 2009, and have since begun to rise. As the current values of HDB rentals are significantly higher than levels observed in 2007, IRAS proceeded to raise the AV this year. Nonetheless, the Government has provided a one-off rebate to help HDB owner-occupiers adjust to the January 2010 AV revision.”
“Next on Temasek II, Mr Inderjit Singh has suggested setting up a Temasek II to invest actively in locally-based companies. For GIC and Temasek, the Government’s position remains that they should continue to operate on a purely commercial basis in order to provide good long-term gains. Requiring Temasek or GIC to invest so as to fulfil other objectives would distract them from their respective mandates. In any case, Temasek is not precluded from making its own decision to invest in local enterprises where there are attractive opportunities and, indeed, it has done so, for example in its investments in Hyflux, Fraser and Neave (F&N) and Olam International. Even if the proposal is for a company to be set up independently of GIC and Temasek, such an approach may not be the best way to nurture local companies. Rather, the Government should identify and bridge market gaps, where they exist, so as to support a thriving ecosystem of locally-based enterprises and leave the private sector to take the lead in identifying worthy investment opportunities. It would be neither sustainable nor appropriate for the Government to step in to finance local enterprises that cannot themselves locate private funding, since our ultimate goal is to nurture globally competitive companies. Indeed, the Economic Strategies Committee (ESC) considered the matter carefully and sought to identify financing gaps in the market to nurture globally competitive companies. It recommended that the Government create conditions to catalyse, rather than supplant, private financing for SMEs in doing so. The Government has accepted the recommendation and announced the co-investment programme as part of Budget 2010. Under this programme, the Government will mobilise up to $1.”
“I should add here that GIC takes very seriously every decline in the value of its portfolio and in the value of individual investments. However, it is not realistic to avoid losses on every investment as that would require GIC to be completely risk averse. While GIC has made losses on some investments, in this case its investment in Stuyvesant Town/Peter Cooper Village, it has made gains on others. The only reasonable way of evaluating GIC’s performance is to look at how the losses and gains stack up and how its overall portfolio performs across market cycles. Overall, both Temasek and GIC have so far delivered creditable returns on their portfolios over the long term as well as during the six-year cycle between March 2003 and March 2009, which marked the points of the dot-com bust and credit crisis – in other words from trough to trough. Sir, Mr Inderjit Singh has asked how the setting up of Seatown fits into Temasek’s overall investment framework. Seatown is a global investment company that is a wholly-owned subsidiary of Temasek with its own board and management. It is no different from Temasek’s other investment-related subsidiaries, for example, Fullerton Fund Management Company, which was set up in 2003 as an Asia specialist offering investment products and solutions to its clients. As shareholder, the Government assesses Temasek on the performance of its overall portfolio over the long term. I wish to reiterate again that the Government neither influences nor interferes in Temasek’s investment decisions, which are guided by its own board and management. In this case, the board and management of Temasek have considered and approved the setting up of Seatown as part of its overall investment strategy.”
“Nonetheless, the execution of their mandates, through specific investment strategies and approaches will evolve and adapt to structural changes in the investment environment. For example, while Temasek reiterated its focus on long-term value in the updated Temasek Charter released in 2009, it has increased its exposure in Asia, excluding Singapore, due to its belief in the deep potential of these markets. The Government is also assured that the boards of GIC and Temasek have in place risk management frameworks and the proper processes to take risks prudently, while maintaining their long-term orientation. Sir, Member Ho Geok Choo has requested for an update on GIC and its investments. Let me begin by noting that the recent financial market crisis brought about the sharpest stock market fall since the Great Depression. Investments of GIC as well as other investors worldwide were inevitably affected. Nevertheless, as noted in the last GIC annual report released in September 2009, the GIC portfolio has recovered more than half of the losses sustained in FY 2008/2009, in line with the broad recovery of global stock markets since the market trough in March 2009. The performance of the portfolio will be updated after the audited full year results are ready. GIC typically releases its annual report in September/October each year. The Government will continue to assess GIC’s investment performance over the long term, in line with our objective to grow our reserves in a sustainable manner. As noted previously in this House, the Government does not judge the performance of GIC by individual deals but on its overall portfolio performance. In this regard, it is not the Government’s practice to discuss the performance of GIC’s individual investment deals.”
“Member Inderjit Singh has suggested more conservative mandates for GIC and Temasek as their investment outcomes directly impact the reserves of Singapore. Sir, in May 2009, in response to a Parliamentary Question, the Minister for Finance had explained to Members that there is a distinction between the investment approaches of Temasek, GIC and the Monetary Authority of Singapore (MAS). Let me just recap. The MAS is at one end of the risk spectrum. As a central bank, it is the most conservative, with significant holdings in liquid, mainly fixed income instruments. GIC is fairly conservative, with a globally diversified portfolio spread across asset classes, mainly in the public markets. Temasek is at the other end of the spectrum. It is largely an equity investor, a value-investor aiming at long-term returns. Temasek is exposed to significantly higher risk than GIC and MAS, but has also delivered higher returns over time as expected. In contrast, MAS will have more stable but lower returns over time. The respective boards of MAS, GIC and Temasek make their own decisions on asset allocation, but the Government regards the whole-of-Government assets from a holistic perspective. The Government regularly monitors and reviews the overall long-term performance and risk profile for the whole-of-Government assets, at various points in a market cycle. Sir, moving to a more conservative mandate as a knee-jerk reaction to the recent downturn would not be prudent, as this could risk compromising the ability of GIC and Temasek to deliver long-term sustainable returns. And both GIC and Temasek have thus far delivered creditable returns. It is important for GIC and Temasek as long-term investors to be able to maintain their long-term orientation and ride out market cycles.”
“Such integration achieves the twin objectives of setting aside prime space within our estates for key infrastructure, while enhancing their value by capitalising on the steady stream of public transport commuters. The redevelopment also allows LTA the opportunity to right-size the space required for the bus interchanges. To determine the appropriate size for a bus interchange, LTA applies a set of space norms for the various components such as driveway and bus park lots. These space norms are reviewed regularly to optimise land take, while ensuring that operational requirements would continue to be met. This is an example of how the Government continuously reviews its land use to unlock the productive yield of our land assets. Every 10 years, URA also conducts the Concept Plan Review to plan ahead for the future so as to optimise land use, taking into consideration inputs from the various stakeholders. The Minister for National Development elaborated on this during the Ministry of National Development’s COS debate. On MOF’s part, we have put in place measures that encourage the optimisation of land use and the realisation of maximum value. Land cost, at market rate, has been made explicit to Ministries through the application of the Resource Management Framework. Under this framework, public agencies are charged an imputed rent on the land so that they are mindful of the cost of the space of property they use. Should there be development potential beyond the current use – as a bus interchange in this case – Ministry of Finance would certainly review, with the public agency concerned, the possibility from an optimisation perspective. Next, on the management of Government investment companies.”
“Next, the Accountant-General's Department undertakes regular Value-for-Money audits to assess programmes and projects of Ministries; and finally, the Auditor-General is constitutionally empowered to audit and report on the accounts of the Government and this includes reviews of key financial systems and controls. 4.15 pm Sir, this House itself plays a role too. Parliament has its own Estimates Committee which scrutinises the Government’s Budget, questions the Government on its Budget estimates and processes for managing expenditure, and suggests improvements. Moreover, the Parliament also has a Public Accounts Committee which examines various accounts of the Government, including the Auditor-General’s Report. Sir, let me now move on to optimising land assets. Member Cynthia Phua spoke about the need for Government agencies to be aware of the opportunity cost of using prime land for bus interchanges. Sir, allow me to share some history behind bus interchanges. In the past, bus interchanges were built by HDB as part of its town planning and infrastructure provisions. Many are, therefore, located within the town centres so as to facilitate the transfer of passengers between trunk and feeder bus services. Today, as part of its efforts to optimise land use, the Land Transport Authority (LTA) works closely with the Urban Redevelopment Authority (URA) and the Housing Development Board (HDB) to redevelop the bus interchange sites from stand-alone developments into integrated developments, for example, commercial development with a bus interchange on the ground floor.”
“At its core, block budgets, which have been the basic foundation of Singapore's budgetary framework for the last ten years, seeks to establish limits to Ministries' expenditure by capping their spending as a pre-determined percentage of GDP. These limits are tied directly to Singapore's economic performance, which is also the key determinant of Government's revenues. By pegging Ministry budgets to the GDP, MOF ensures that the Government, as a whole, spends only as much as it expects to collect in revenues on a sustained basis. Compared to the line-item method of budgeting we practised in the past, block budgets accord Ministries greater certainty on the funding that they can expect to receive over a three to five year period. Furthermore, Ministries will take responsibility for optimising and re-prioritising their programmes within the allocated block budgets. Notwithstanding these budgeting flexibilities, sufficient frameworks and checks have been put in place to ensure proper accountability of expenditures. Firstly, MOF reviews and evaluates the strategic expenditure plans for each agency on an annual basis against the desired outcomes set out. Secondly, major development projects require the approval of the Ministerial Development Planning Committee. Thirdly, Ministries are subject to the Manpower Management Framework, which limits the growth of their headcounts by the smoothened Resident Labour Force growth rate and this ensures that growth in public sector manpower does not outstrip that of the economy at large.”
“In addition, should Member Low Thia Khiang and Members wish to know further line item details of spending by Ministries, they can obtain the detailed information from the "Expenditure Control Document", copies of which are found in the Parliament Library. I wish to add that the three volumes totalled more than 1,500 pages. Over time, we have been providing more information, not less, contrary to the MP's assertion. Let me just show Members very quickly the Budget Books [holds up books]. These are two of the volumes, so it is quite a tome. Sir, the Budget Book also includes KPIs which provide information on the agencies' achievement of objectives through their programmes. Over time, these indicators have evolved from being just input-based indicators to outcome measurements, wherever possible. Recognising that the issues facing the public sector are becoming increasingly complex and intertwined, MOF has been working with Ministries to identify key strategic outcomes at the whole-of-Government level. And these will be published in the Singapore Public Sector Performance Report, which will be released some time this year. The report will provide an overview of how well the public service is collectively achieving whole-of-Government (WOG) strategic outcomes. Furthermore, MOF has a Budget website to reach out to a wider audience. And in this website, you can find a write-up, summarising the spending trends of the year based on the four sectors of Security, Social, Economic and Government Administration. In addition, each Ministry publishes a summary of their spending highlights on this website. Sir, let me now move on to elaborate how MOF's block budget system ensures an optimal balance between budgetary flexibility and accountability.”
“To illustrate, service-wide demand aggregation of contracts for the supply of fuel and office furniture led to cost savings of 12% and 20% respectively. Likewise, agencies can learn from each other's best practices and enjoy cost savings by coming together to develop shared IT systems and applications. Sir, it is important for me to highlight that productivity improvements, in the context of the Government, also includes innovation and this is really at the heart of our productivity drive. MOF introduced a Public Sector Innovation Framework in 2008 to encourage experimentation, test-bedding and capability building within Ministries and statutory boards. We are also seeking to enable productivity growth in the economy at large via partnerships with the private sector through the Co-Innovation Platform, and e-Government. I will again elaborate on these areas further in my speech. Sir, let me now move on to Member Low Thia Khiang's question on the amount of information in the Annual Budget Books and how we strike a balance between budgetary autonomy and accountability. The primary purpose of the Budget Book is to provide the annual estimates of revenue and expenditure of the Government as required by the Constitution. In fact, the Constitution does not require the Government to publish programme descriptions in the Budget Book but MOF has chosen to include these, along with key performance indicators (KPIs). Explanations for material changes in the Ministry's expenditure from the previous year can be found under Section III of the Budget Book entitled "Expenditure Estimates By Heads of Expenditure". The information provided in this section is intended to help readers understand how the sums voted to each Head of Expenditure have been appropriated.”
“Every year, a budget is set aside for investment in new areas that support whole-of-Government strategic outcomes, cross-agency collaboration and innovation. This is a mechanism which prioritises and redistributes resources to Ministries with proposals for new and worthwhile projects on a competitive basis. Through the re-investment fund, the Government has provided $1 billion a year over the last three years to fund new Government initiatives. These include, for example, the ABC Waters Programme that is helping to transform our water bodies and parks into aesthetically pleasing and vibrant places that everyone can enjoy. Secondly, value management. Value management is a process that seeks to achieve better value by scrutinising the specifications of large infrastructure projects upfront at the conceptual design stage. One such example is the Downtown Line 1 where the value management process yielded savings of about $200 million through the use of the most optimal method of constructing tunnels between the Chinatown and Cross Street stations. Thirdly, the block budget manpower management framework and economy drive mechanisms, which are examples of measures designed to instil discipline over the use of resources by public agencies while according them maximum flexibility and autonomy to derive the best value from these resources. I would elaborate on the block budgeting system later on in my speech. Further, MOF works closely with the public agencies to achieve higher productivity by pooling resources at the whole-of-Government level. For example, as a consumer, the Government aggregates demand for economies of scale through joint procurements.”
“And, fourthly, preparing for the future through the next wave of e-Government innovation. Sir, I will address each of these in turn and, if time permits, to take on the related issues that Members have raised during the Budget debate last week as well. First, on Government performance resource, utilisation and accountability. Member Jessica Tan asked about the Government's plan to drive productivity and innovation within the public service. Sir, there are many aspects to productivity growth and I quote Deputy Prime Minister Teo who said, "The factors which contribute to productivity include the quality of the systems, the processes, technology, organisation and workforce within enterprises, the attractiveness of their product and services to markets and leadership and management to bring all these factors together." Hence, we know that productivity growth requires everyone to play his part, not just the individual but also the enterprise. The public service, too, has to play its part. Deputy Prime Minister Teo has mentioned that the Head of Civil Service will be overseeing the public service's productivity drive and that the public sector will continue to emphasise training and improvements to processes and to the delivery of quality service to the public. The Government recognises that the public service can itself be more productive and, as a regulator and a facilitator, the Government can continue to play a role to help businesses enhance their productivity. In the context of this afternoon's debate, however, let me explain how MOF is ensuring effective allocation and use of resources. Sir, the Ministry of Finance has instituted mechanisms to drive productivity growth through the optimal allocation of resources. Firstly, through the re-investment fund.”
“In the spirit of Budget 2010, I feel that this calls for a great leap and a surge of innovation in using the platform of the e-Government in engaging not only those within its ambits but also the stakeholders outside its organisation. These include linking the services of the Government and the private sector to the people. I feel that the Government should integrate its capabilities via the ICT together with that of the private sector to cater to the needs of the lifestyle of Singaporeans and beyond. With the availability of hand held and high-tech handphones and other equipment, this will certainly change the way we live and enhance our integration and engagement via e-services platforms of the Government, private sector and other stakeholders. Therefore, I would like to ask the Minister on the plans laying the future direction for e-Government as we move into the next decade. The Second Minister for Finance (Mrs Lim Hwee Hua): Mr Chairman, Sir, first let me thank hon. Members for their comments and suggestions, and given the constraints of time, I shall endeavour to elaborate on the policy intent and address specific comments wherever possible. The issues that Members have raised reflect the opportunities and challenges that Singapore faces today and how the Government will ensure that, as an economy, we are well equipped to tap these opportunities. These centre around four broad areas. Firstly, the need to ensure high Government performance, efficient resource utilisation and accountability. Secondly, suggestions to enhance our tax regime, in particular leveraging on it to achieve social and environmental objectives. Thirdly, measures to aid businesses in their economic expansion and transformation.”
“How does the initiatives plan to meet citizens who are becoming more sophisticated, want to be engaged and expect the Government's services to match to those by private sectors and consumer technologies? What is the approach to empower civil servants to work seamlessly and respond faster to the public and establish greater collaboration between the public, private and people sectors? How can we ensure that senior citizens and the needy are not left out of this engagement? Sir, one feature of the iGov2010 is the implementation of large-scale consolidation projects such as the SOEasy initiative. Can the MOF comment on the progress and measures of success of large-scale initiatives of iGov2010? Have they delivered up to expectations and are there lessons learned that can be applied to future large-scale initiatives? Given the high-risk nature of such projects, has the Ministry also studied the impact of such large-scale projects on the small and medium enterprise sector, given that many have given feedback that they no longer have access to Government contracts that have been consolidated under such initiatives? Assoc. Prof. Dr Muhammad Faishal Ibrahim (Marine Parade): Sir, we have witnessed rapid development in the ICT environment over the last decade. Over the years, I understand that the Government had used the ICT to enhance its services and integration process. However, much has changed today. There has been drastic advancement in technologies, Singaporeans' lifestyle and the level of engagement of the different stakeholders in our society and with the regard to the ICT. I feel that we need to capitalise on these changes to enhance the way the Government engages its stakeholders, thus, sustaining its relevance today.”
“Mr Chairman, the co-innovation platform is a good means to develop growth companies that have potential to provide innovation and support through Government and international goodwill projects. It is a good approach to identify potential champions within the various sectors. I would like to ask the Minister which are the sectors that the Ministry of Finance (MOF) plans to focus on and what are the indicators of success for this platform to promote research and development. Can the MOF comment on the take up of tax relief incentives for R&D over the last three years? One feedback is that it is generally the large companies that are participating in such initiatives. So, the question is – is this the Ministry's target group and what more could be done to garner more participation from the mid-size and small players in the industry? The other feedback concerns the issue of IP ownership in such collaborations, so is this something that the Ministry should be looking at and is there something that we can do to promote greater participation to overcome this? Future direction for e-Government I have to commend the Government for delivering efficient services to citizens and businesses through the whole-of-Government e-Government initiatives. Some projects have delivered cost savings for the people, businesses and for the Government. I am heartened that the next wave of e-Government projects plans to put more emphasis on the front face of the Government. Hopefully, this translates to better communication, interaction and participation from businesses and citizens. What is the MOF's directions for the next e-Government innovation beyond iGov2010?”
“Sir, I thank Lee Yi Shyan for touching on my point about business costs. A large part of many of the costs to our businesses is rental cost and utilities cost. I am not sure whether the Ministry has looked into how big this is today. I do agree that while the approach is really to look at business models that go beyond just these high costs. Having said that, is MTI just resigned to the fact that our costs will always remain high and therefore we do not have to look at our own business models to see whether we can bring such costs down? Is there a competition among the landlords to see whether there is enough supply, so that we can bring the costs down for the businesses, especially for the small companies? The challenge for small businesses is that there is still space for them. Not everyone can globalise at the same time. I think we talk about very big plans. We talk about some successes. But I also notice that among the office holders, they are constantly meeting the same few $100 million companies. I think we need to probably relook at this in terms of how we support the smaller businesses and, at the same time, to keep them sustainable in the long term as well. The other point I want to raise is on the question of tourism. I think we have done well with F1 and the IRs. My question is that beyond the F1 and the IRs, what more can we do to promote tourism to Singapore? Right now, what I am seeing is that we are doing quite a bit in terms of getting MICE and the events companies moving in terms of to make it more vibrant. But having said that, beyond these two, are there other concept plans that we can look forward to?”
“Can the Ministry share if it has performed a study on what percentage of revenue earned by SMEs goes into rental? The challenge with land scarce in Singapore is that high rentals of businesses are controlled by a small pool of landlords and this form the basis of business costs as everything else comes on top. Anecdotally, many business feedback that for every dollar earned, a high proportion goes into rent and utilities. I fear that this may counter our productivity efforts because in the long run, it might may make it tough for employers to pay workers better, even with higher productivity.”
“Mr Chairman, the Budget has certainly brought upon a rejuvenated focus on productivity to get companies and the workforce better prepared to adapt to an increasingly comparative world economy. The unfortunate reality is that the business world is brutal. And our competitive companies and workers who are not willing to adapt may find themselves left behind. I believe the incentives approach given on this Budget is a right approach for those who are willing to adapt and transform. I would like the Minister what are the additional resources given to SPRING and IE Singapore to focus on transforming local companies into globally competitive ones and help them build strong management teams? Some measures certainly favour medium and larger sized companies that are able to transform, invest in R&D and commercialise innovation. However, smaller firms may not have sufficient cash flow to transform and invest in HR due to tight resources. How does MTI plan to help the smaller firms below $10 million in revenue, achieve critical mass so that they can scale to $200 million? What more can be done for them? With limited Government resources for industry development, are there key sectors that MTI is counting on to deliver, improve productivity and promote Mergers and Acquisitions (M&A) to grow globally competitive companies? Would the MTI consider partnership incentives for MNCs and successful global Singapore firms to help our SMEs enter new overseas market and sub-contractors or business partners? This can be a potential channel to help IE Singapore scale its operations through the use of partner enterprises. One challenge for local businesses here is the high cost of rental and utilities.”
“Mr Chairman, the 2008 and 2009 downturn as well as concerns about ensuring sufficient liquidity for enterprises prompted the establishment of the Special Risk-Sharing Initiative (SRI) scheme. The scheme was well-received by the industry, following a period in which many local companies face a credit crunch in the market. Can the Ministry update us on the scheme's effectiveness during the recent downturn? Were there segments of the industry that the SRI scheme as well as other schemes of the MTI not found to be as effective? Does the MTI see any potential risk for businesses with the phasing out of the SRI scheme within a year? Based on MTI's assessment, has the scheme resulted in any change in the sensitivity of the banks in evaluating credit risk for corporate lending, given that the Government has been subsidising a substantial portion of lending risk for the past few months? What is the assessment of commercial lending by the banks for SMEs over the next six to 12 months?”
“Mr Speaker, I thank the Minister for his clarification as well as the increased funding for the FY2010 budget. I just want to check with the Minister – with increased funding, does MDA also monitor the quality of current affairs programmes to support public communication as well as Government communication? The two channels face increasing pressure from the cable TV providers to go into entertainment but I think there is also a role where we provide public service broadcast funding to ensure more current affairs programmes and Government communications. RAdm [NS] Lui Tuck Yew: Indeed the funding goes largely towards supporting quality programmes in the areas of news, current affairs, children's education programmes and so on. We have a panel comprising a good mix of members of the public, both from the professional as well as the non-professional sectors to help us, basically evaluate the quality of the programmes to take into account feedback from the public and to help us do the assessment of whether the range, the mix and the quality of the programmes are appropriate. CONTINUING EDUCATION AND TRAINING CENTRES FOR THE DISABLED 4. Ms Denise Phua Lay Peng asked the Minister for Manpower if he has plans to set up Continuing Education and Training centres for the disabled since similar efforts were already made for non-disabled Singaporeans.”
“(In English): Mr Speaker, Sir, the success of any Government initiative, policy change and new programme would very much depend on the people and how they respond to them. Hence, constant communication is needed and the Government can play a more proactive role to connect the Government’s intent with the Budget and the ESC with the expectations of employers and workers in order to ensure our success and even survivability as a nation. Mr Speaker, I support the Budget. *Cols. 2577-2578. 2.12 pm”
“The community has come together well and, perhaps, trying its best to punch above its weight but I would like to see us find ways for the Government to fight to give the Malay community more direct support through its existing channels such as schools, worker training and industry development agencies to drive the community in the right direction and in a sustained manner. Mr Speaker, Sir, in Malay, please. (In Malay): [For vernacular speech, please refer to Appendix A*.] The new direction proposed by the Economic Strategies Committee is well received for the sake of Singapore’s survival, and requires the support and mindset change of all Singaporeans. The Government must ensure that each Singaporean can understand concepts like the meaning of productivity and innovation, especially the low-skilled and low-income group. Actually, this is the group that needs more attention and increase in their income, so that they can escape from the poverty cycle. Similarly, for small companies that lack resources, many Malay companies are in this category. For instance, in the effort to help such companies as well as low-skilled individuals, it will be good if we can identify the opportunities that are available regionally, and provide information and guidance on how this opportunity can be used. The Government must be proactive in the effort to engage this group, and not just say that it will cooperate with self-help groups like MENDAKI. This is because MENDAKI has limited resources, as they carry the burden to solve the social challenges of the Malay community. I hope we will together support Singapore’s new strategy and ensure that no one is left behind.”
“So, we need to bear this in mind as we execute the ESC's recommendations, otherwise we may risk creating an underclass that will be tough to manage if left unchecked. For example, I raised an issue on the educational performance of the Malay children in Parliament last week. I am glad that the educational achievements of the Malays have progressed over the decades. Despite much intervention and programmes run by the Government and MENDAKI, there are still students who underachieve, particularly in key subjects like Science and Mathematics, but their poor performance could be due to their weak command of English and this may require early intervention. Surely, it is easy and maybe politically correct for us to say as a Government, let us work with self-help groups like MENDAKI. However, we need to assess if MENDAKI can really cope and how it is going to implement the programmes, given its limited resources – in terms of people on the ground and the funds available. The other issue is that, should this be tackled at a different level, such as the nature versus nurture level, in the way we teach children who come from non-English speaking homes? Socially, it is always easier for teachers and students from culturally similar backgrounds to communicate and explain teachings. More attention is needed if both teacher and student are from different backgrounds or race to provide effective education support and nuturing. But this is just one example, because it is probably the same with workers and businesses as we engage them in a different area. In reality, I think the community is already trying its best to tackle many social issues honestly with a growing but limited talent pool.”
“But it is certainly a harder job, with potentially less productive gains, to focus on the low-skilled, low-educated minorities, who are the workers of businessmen. But this is important to prevent the development of an economic underclass of minorities who feel disengaged, disenfranchised, who are not able to reap the economic benefits or not see their role in this transformation that we will embark on. Specifically on the Malay community, the community has always been supportive of the Government and they, too, would like to know how they can be part of this transformation and what opportunities are in store for them. As it is, many Government agencies send signals to businesses and the wider community that they are gearing up to tap opportunities in China and India – and seeking talent to do so. Thus, many feel that employers are also following suit and that they are left out. They do not have the language ability and, sometimes, the qualifications to find jobs with international firms that are focused on Asia’s growth engines. So, to help the community understand the changes and directions of the Budget, the Government must ensure there is clear direction and messaging to the community, including opportunities that can benefit the Malays where they can tap growth internationally and how the ESC will bring them better incomes and quality of living. If at all, this is the group that needs more assistance. For example, for larger SMEs and better qualified workers may find it easier to gain access to business networks and high-powered social circles. But this is not so for the usually smaller Malay companies or the less-skilled workers.”
“There has to be greater space to create environment for small businesses, as small as two or three persons, to thrive. Because this tier allows for those who are not suited for the workforce, eg, low-skilled but certified technicians, housewives, retirees, long-term unemployed or those seeking a second chance in life. We recognise that the cost of doing business is high, but there is a social agenda that also needs to be protected. We must continue to find spaces for small businesses as the number of traditional opportunities are becoming limited, eg, small food stalls are taken over by food operators like Kopitiam; school canteens are taken over by operators due to tender process; and even wet markets are at risk. I think we do not see it, but smaller business owners also help to support the community in different ways, such as through philanthropy or sponsorships to help the community and various social interests. Global competition will surely weed out the weak, so I agree that Singapore companies must shape up, consolidate or acquire, and find more ways to innovate. Nonetheless, we must be careful as we favour productive companies, we must leave room for those who may be at risk of being sidelined by the economy and employment – such as mid-career professionals and senior technical workers – to find gainful means of living. As we transform the Singapore economy and tap on the growth of a rising Asia, we must ensure that no one is left behind. And the Government rightly talks about the rapid growth of China and India, and of increasing productivity to be competitive. I tend to agree that for many Government agencies they are likely to produce results from their engagements with the global MNCs, national enterprises and even the most successful SMEs.”
“Therefore, with our current definitions of housing affordability, long-term CPF savings and even social safety nets will see many falling through the cracks given their asset-rich, cash-poor situation. Thus, with many young Singaporeans who have accepted the reality of economic uncertainty, some feel disengaged or have unrealistic expectations. The high prices of property or the expectation that they have to take long-term loans to finance their aspirations of a home or quality living means that they expect high increments on their salaries or properties which can increase in value quickly. Similarly, the high expectations on their children to perform in school result in many believing that the cost of raising children is high – due to additional pressure on enrichment classes and quality living. These have negative impact on why pro-family measures have not been able to produce more babies, why companies do not invest in training because of the high worker turnover, as many workers go for better salaries as well as the seemingly high expectations of first-time home owners. It will be difficult for the middle class to have direct visibility to the strategies and benefits of this Budget and the ESC's recommendations for as long as we are distracted by the above constraints and expectations. I think the Government needs to do more to engage – across all channels and languages – to walk the ground of the middle class and address the roots of dissatisfaction and disengagement. Sir, I go on to my next point. Sometimes, the Government needs to take steps that cannot be quantified by value added (VA) and KPIs to look after the social agenda. Small businesses should sometimes be viewed to serve a social agenda, not just an economic one.”
“There is no incentive to push for the productivity target if companies cannot be more profitable, more competitive and more effective, and if our people do not see real growth in their wages to cope with the rising cost of living. The Budget’s social agenda needs greater visibility, without which the Government will fail in its quest to execute the recommendations of the ESC. The debate today needs to also consider the social compact with Singaporeans – what each of us needs to do to bring greater prosperity and cohesiveness as a nation. Do Singaporeans subscribe to this agenda? That is the question I ask. Do employers subscribe to this agenda? I think that is the other question that has to be asked. It will be hard to achieve this productivity goal if our workers do not see growth in their real income, and employers find it more difficult to do business here. The growth of Asia will bring many benefits and opportunities. However, the rapid growth of India and China will also bring about greater competition and, especially in this case, I am actually addressing the middle class. These developing countries will breed more highly-skilled, mobile workers who will compete with many of our middle class. There will also be greater competition for resources, such as food, energy and even property, causing higher prices in the long term. Therefore, we need to get companies and workers, especially PMETs, to be more competitive in the open market. We have to be prepared for more to be affected by competition. The middle-income earners will face greater competition and real wages may not increase.”