|
PARLIAMENTARY DEBATES
SINGAPORE
OFFICIAL REPORT
ELEVENTH PARLIAMENT
| PART I OF FIRST SESSION |
VOLUME 82 |
The House met at
1.30 pm
PRESENT:
PERMISSION TO MEMBERS TO BE ABSENT
(2007)
(2007) Ms Ellen Lee
Mr Masagos Zulkifli B M M
Mr S Iswaran
Mr Tharman Shanmugaratnam
Miss Penny Low
Mr Teo Ser Luck
Dr Vivian Balakrishnan
Mr Cedric Foo Chee Keng
Mr Lee Yi Shyan
Mdm Ho Geok Choo
Mrs Lim Hwee Hua
Dr Lim Wee Kiak
Mr Wee Siew Kim
Assoc. Prof. Dr Yaacob Ibrahim
Mr Zainul Abidin Rasheed
Mr Ong Kian Min
Mr Seng Han Thong
Mr Ang Mong Seng
Mr Michael Palmer
Mr Alvin Yeo
Mr Chan Soo Sen
Dr Balaji Sadasivan
Mrs Yu-Foo Yee Shoon
Mr Hawazi Daipi
Mr Inderjit Singh
Mr Charles Chong
Ms Jessica Tan Soon Neo
RAdm (NS) Lui Tuck Yew
Mdm Cynthia Phua
Mr Lim Swee Say
Mr Yeo Guat Kwang
Mdm Halimah Yacob
Dr Ong Seh Hong
Mr Sam Tan Chin Siong
Dr Fatimah Lateef
Dr Lily Neo
Mr Lim Hng Kiang
Dr Ng Eng Hen
Assoc. Prof. Ho Peng Kee
Mr Gan Kim Yong
Mr Sin Boon Ann
Mr Raymond Lim Siang Keat
Mr Teo Chee Hean
Mr Liang Eng Hwa
Dr Muhammad Faishal Ibrahim
Mr Lee Hsien Loong
Assoc. Prof. Koo Tsai Kee
Mr Abdullah Tarmugi
Mr Mah Bow Tan
Ms Lee Bee Wah
Dr Lee Boon Yang
Mr Zainudin Nordin
Mr Matthias Yao Chih
Prof. S Jayakumar
Dr Ahmad Mohd Magad
Mr Goh Chok Tong
Mr Khaw Boon Wan
Mr Arthur Fong
Mr George Yong-Boon Yeo
Mr Lee Kuan Yew
Mr Seah Kian Peng
Ms Grace Fu Hai Yien
Mr Heng Chee How
Ms Eunice Elizabeth Olsen
Mr Gautam Banerjee
Prof. Thio Li-ann
Dr Lam Pin Min
Dr Amy Khor Lean Suan
ABDULLAH TARMUGI
Speaker
Parliament of Singapore
Column No : 922
Mr Speaker: I have to inform hon. Members that I have on 15th November 2006 communicated to the President the Address agreed to by Resolution of this Parliament on 14th November 2006.
Column No : 922
Mr Speaker: On 14th November 2006, Parliament resolved in accordance with the Fourth Schedule of the Constitution of the Republic of Singapore that there shall be nominated Members of Parliament (NMPs) during the term of the present Parliament.
The Special Select Committee was constituted on 15th November 2006 and its Report was presented to Parliament on 12th January 2007 as Parl 1 of 2007.
The Special Select Committee nominated the following nine persons to the President for appointment as NMPs:
Mr Gautam Banerjee;
Ms Cham Hui Fong;
Mr Edwin Khew Teck Fook;
Dr Loo Choon Yong;
Assoc. Prof. Kalyani K Mehta;
Ms Eunice Elizabeth Olsen;
Mrs Jessie Phua;
Mr Siew Kum Hong; and
Prof. Thio Li-ann.
On 18th January 2007, President S R Nathan, by Instruments of Appointment dated 18th January 2007, appointed the nine Members as NMPs for a term of two and a half years with effect from 18th January 2007.
The Nominated Members are present today to take their seats. They will now take their oath or affirmation of allegiance.
Column No : 923
Column No : 923
The following Members took and subscribed the Oath of Allegiance, or made Affirmation of Allegiance, in the order below (in group):
Mr Gautam Banerjee (Nominated Member of Parliament);
Ms Cham Hui Fong (Nominated Member of Parliament);
Mr Edwin Khew Teck Fook (Nominated Member of Parliament);
Dr Loo Choon Yong (Nominated Member of Parliament);
Assoc. Prof. Kalyani K Mehta (Nominated Member of Parliament);
Ms Eunice Elizabeth Olsen (Nominated Member of Parliament);
Mrs Jessie Phua (Nominated Member of Parliament);
Mr Siew Kum Hong (Nominated Member of Parliament); and
Prof. Thio Li-ann (Nominated Member of Parliament).
Mr Speaker: My congratulations to the new Members! I welcome them to Parliament and look forward to their participation in the proceedings of this House.
Column No : 924
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1. Mdm Halimah Yacob asked the Minister for Health if he will provide an update to the House on the MediShield and ElderShield reviews and when these reviews will be completed.
The Minister for Health (Mr Khaw Boon Wan): Sir, both reviews of MediShield and ElderShield are on-going. I hope to complete the reviews within the next few months so that we can have them implemented this year. There will be many rounds of public consultations during the review so that we can forge the best solutions for Singaporeans.
The basic MediShield reform is more straight-forward. We did one last year which has brought about many benefits. The industry structure is now sustainable. Cherry-picking has been eliminated. MediShield has regained its financial viability. Patients with large bills have benefited from larger payouts, with co-payment reduced from 60% to 40% of hospital bills. They have saved thousands of dollars.
But 40% is still high for many patients. Preliminary soundings suggest that Singaporeans are prepared to pay higher premiums for greater MediShield payout, provided the premium increase is not too big. Our actuary consultant is helping us in the review.
In addition, we are reviewing the deductible imposed on the private MediShield enhancement policies. The current level of $3,000 may be too high and there is scope to reduce it by $500 or so. We will settle the details within a month or two. This will particularly benefit the middle income group who use the private unsubsidised wards.
As for ElderShield, this is a four-year-old scheme launched in 2002 to provide some basic financial protection for Singaporeans with severe disabilities. It is contractually bound for a review and renewal by September this year. So we will conclude the review within the next few months and be clear on what to do come September.
Our actuary consultant has been on this assignment for a few months now but it is a complicated review. I hope to achieve clarity by next month so that we can discuss more of this in this House.
Dr Lily Neo (Jalan Besar): Sir, supplementary question on MediShield. Could I ask the Minister whether he is concerned about the 30% of Singaporeans who are not covered under MediShield? How does this group of people pay for their high hospital bills as many of them, in fact, belong to the less well-off group? If the Minister is going to reply that they can apply to Medifund to pay for their bills, then may I ask him how long will the present Medifund last, taking into consideration the increasing life expectancy of the majority and the fast ageing population?
Lastly, may I ask the Minister whether MediShield can only be claimed through hospitalisation as many illnesses can now be treated under day-surgery? Should we not heed to prevent over-consumption incentives in the design of medical insurance?
Mr Khaw Boon Wan : Sir, I am certainly as concerned as Dr Lily Neo and, rightly so, because if you stay out of insurance thinking that you will never fall very sick, then when you are hit with a major illness, life will be rough on you. As for the 30% uninsured - I thought it was 25% but I cannot remember the figure but it is a significant minority - not necessarily all of them belong to the lower income group. I have looked at some of the data and there are those in the middle-class and many of them are housewives of middle-income families. My message remains the same: please buy insurance for your spouse. Most of them are female who are not working and they look after the family, so as husbands, please look after them and buy them insurance. But a large number are children who are not yet in the workforce. Because they are young, their insurance is actually very low. I remember it is only about $30 a year. Please buy insurance for your children as well. They may be young and fit, but you never know, when something happens and you want to buy insurance, they may be excluded because of pre-existing illness. It is far better to sign them on when they are young and healthy.
I think we have discussed this in this House several months ago. A large number of them are young and below 20 years old. We will eventually catch up with them because once they start working and contribute to CPF, we have a way of reminding them. But it is the spouses whom some husbands may have forgotten, but please sign them on.
As for the adequacy of Medifund, certainly with ageing, the demand will grow and that is why every year, around this time, I will be reminding the Minister for Finance to top up Medifund, if possible. There is an immediate target to double it to $2 billion and I am sure the Minister for Finance will be sympathetic.
Mdm Halimah Yacob (Jurong) : Mr Speaker, Sir, after the review, I would like to ask the Minister whether he will give an assurance that MediShield and ElderShield will continue to remain affordable to Singaporeans, in particular, since the Minister has announced that premiums will be reviewed.
My second question is what will be done to assist older and lower-income Singaporeans who do not have enough Medisave savings to take care of their healthcare needs and also to pay for their MediShield premiums.
My third question is to ask the Minister whether he will review the upper limit imposed on Medisave funds because once it reaches a certain amount it will roll over into the Ordinary Account. Will the Ministry be reviewing the upper limit imposed on the Medisave account?
Mr Khaw Boon Wan : Sir, I can certainly assure the Member that affordability must be one of the key elements in the design of the 3M system because, if it is not affordable, what is the point. It may be a good plan on paper but if most people are excluded, then it does not serve any purpose. That is the reason why in the last MediShield reform, I sought advice from Members and I remember Mdm Halimah and Dr Neo gave me very good advice that the premium increase should not exceed single digit which limits it to about $10 a month. That is why we designed the last MediShield reform that way. But once you are limited by $10 per month, the payout is also limited and that is why I was not able to bring the co-payment down from 60% to 20% which was the target I set out to do. But, never mind, we achieved quite a good outcome in reducing it to 40% and this year I hope that the public, at least based on the people whom we have spoken to during the focus group discussions, will find it reasonable to have another round of increase of a few dollars a month and, hopefully to bring co-payment down to 20%, if possible. The various computations are actively being done now. I hope this is something that we can achieve and we can discuss this next month.
On the inadequacy of Medisave for the elderly, whenever the budget allows it, we have some top-ups for the elderly. I am looking forward to the Budget Statement next month. Hopefully, there is some good news for us too.
Dr Lily Neo: Sir, a supplementary question on ElderShield. But before that, the Minister did not reply to the question on whether MediShield can be claimed without hospitalisation. On ElderShield, may I ask the Minister whether the take-up rate is small and whether he will look into this issue? May I also ask him whether he will look into the tenure and amount of ElderShield payout? Is $300 per month for a totally dependent elderly not too little, even for subsistence?
Lastly, could he also look into the unaffordable premium for ElderShield for the elderly?
Mr Khaw Boon Wan: I think the limitations of the current ElderShield have been voiced by Dr Lily Neo and Mdm Halimah and a few MPs before and I have taken note of those criticisms. They are valid and that is why the design of the revised ElderShield will take some time.
Roughly, what I have in mind, which we can discuss more next month is this: obviously the society is not homogeneous and there are people who find $300 per month helpful, but there are also people who find $300 per month too little for the premium they have to pay. Like in the case of MediShield, what I have in mind is to restructure it so that there are various plans and, obviously, they come with different prices, and it is up to Singaporeans to choose which plan they think is reasonable, and then subscribe to it.
As to the acceptance of ElderShield, I am quite glad that the last few times when I looked at the subscription level - because we have a system now, whenever Singaporeans reach the age of 40, a notice will go out to them to encourage them to sign on - those who objected and said, "No, I don't want to sign on.", I think it is down to about 10%. So, in terms of flow, 90% of Singaporeans who reach 40 are signing on to ElderShield. I think that is good and there is a better understanding of the need of such a severe disability plan. But I am quite sure, after reform, if we do a good job of it, many more will find it even more acceptable.
As regards the MediShield for non-hospitalisation or day surgery, I thought it covers.
Dr Lily Neo: Medisave covers.
Mr Khaw Boon Wan: Only Medisave? I have to refresh my memory on this point. Is the Member quite sure that day surgery is not covered by MediShield?
Dr Lily Neo: Not for MediShield.
Mr Khaw Boon Wan: I suppose, like all things, if you want it to cover more, then the premiums have to go up too. So it is one of those things that we always have to find a balance. But the key point is to make sure that at least on hospitalisation, the additional $10 premium increase must be able to cover. If indeed day surgery is not covered then I think the reason must be this: because this is not a routine general health insurance, it is a catastrophic illness insurance, that is, it is for the very sick who requires hospitalisation and typically may require prolonged stay in ICU. So, for day surgery, probably that is why there is no coverage.
Mr Speaker: Mdm Halimah, last question.
Mdm Halimah Yacob: The Minister did not answer my last question. I asked whether he would consider raising the upper limit as currently imposed on Medisave account, instead of allowing it to roll over because there is now more need for funds on the part of the individual.
Mr Khaw Boon Wan: I am sorry for missing this out. Yes, I am sympathetic on this particular issue. Mdm Halimah has raised it before. I have voiced my support for this. The ultimate decision lies with the Minister for Manpower because CPF comes under him. But I will continue to lobby for raising it. I think it is still academic at this stage because most people have not quite crossed that level. But we will look at the data and see when it is a good time to raise it, provided there is acceptance by the other Cabinet Ministers as well.
Column No : 930
2. Dr Lim Wee Kiak asked the Minister for Health (a) what is the average amount of Medisave a Singaporean has upon reaching the retirement age of 62 years; and (b) following the higher withdrawal limit for Medisave, if there has been a corresponding increase in the utilisation of private paying wards in the restructured hospitals.
Mr Khaw Boon Wan: Mr Speaker, Sir, as at end-2005, Singaporeans aged between 61 and 65, have an average Medisave balance of $11,700. So it is about $12,000. This can cover about 10 normal episodes of Class B2 hospitalisations.
On 1st April, 2006, we raised the inpatient withdrawal limit for Medisave from $300 to $400 per day of hospitalisation. The purpose is to help Singaporeans cope with their hospitalisation cost, particularly for those who choose to stay in the unsubsidised wards.
Prior to this, Medisave covered, on average, 67% and 52% of the Class B1 and Class A/private hospital bills respectively. After the change, the Medisave coverage has increased to 76% and 57% respectively, reducing the patients’ out-of-pocket expenses. The change has also benefited patients in Class B2/C. They can now use Medisave to pay for more than 95% of their bills. So, it is practically the full amount.
Dr Lim asked if the change has led to more patients in restructured hospitals opting for private wards. The evidence based on five months of data does not support such a view. I am glad that patients have remained prudent in their choice of wards in accordance with what they can afford. This will help conserve their Medisave balances for their future needs.
Dr Lim Wee Kiak (Sembawang): Mr Speaker, Sir, I would like to ask the Minister for Health whether the current amount in the Medisave is enough, keeping in mind that we are liberalising and allowing Medisave to be used for more chronic illnesses. So for a person having diabetes at 40 years old now, or hypertension as well, the question is whether there will be enough Medisave by the time he actually retires.
Mr Khaw Boon Wan: Indeed, I am very concerned about this particular topic because $11,000 or $12,000 is a five-digit figure, but it is not a big number, bearing in mind that you have many years to go. With medical science, life expectancy is growing every decade by a year or two. So, really, people should look at Medisave carefully and try to conserve, and that is the reason I have to be the very unpopular gatekeeper now and then when Members put up their hands and say, "Please, can I use Medisave for this and for that?", I have to always bring them back to the original purpose of Medisave, which is for costly hospitalisation. So when it is for outpatient treatment, a few dollars, or even if it is tens of dollars, please pay for it out of your pocket and conserve the amount in Medisave for the old age, especially at the time when you will not be working. That is why it took us 20 years after we introduced Medisave to decide to make a major change, which is from inpatient to outpatient, but even then to restrict it to 4 chronic illnesses and we have to restrict it carefully. We have started it for four diseases. Implementation so far has been smooth. It is a little bit of leap of faith. If all patients follow, comply with the instructions of their doctors and manage their chronic illnesses while they are still mild, the hope is that we can avoid very costly complications 20 or 30 years down the road. So, on a life-time basis, hopefully, you save money and not just deplete your funds. That is why for the extension of this scheme to other illnesses, we restrict it to those where there are clear-cut disease management protocols and not just for any kind of outpatient treatment. Because if it is purely consumption without any impact on the future health, then I think we should not do so.
Dr Lim Wee Kiak: One last supplementary question. Since the Medisave is mainly used for hospitalisation as well as more serious disease, the question is, for the poor, they cannot really afford the amount of money to use for health screening. Will the Ministry consider in the future or near future to allow Medisave to be used for health screening, especially for the poorer population so that they can detect their disease at an early stage to avoid costly treatment later on?
Mr Khaw Boon Wan: Health screening is a most interesting topic. It covers a wide field. There are a lot of self-interested parties with personal interest at play when they push for certain kinds of screening. For one, some of those esoteric health screenings cost hundreds, if not thousands, of dollars to pick up things which often the patient would die before that thing kills him. That means he dies of something else and not because of that. Because the scanning technology is now so advanced, you can pick up all sorts of things. Nobody is perfect and we have all kinds of problems with us in the body but we may not die of those things, but die of something else. But if you pick it up, and the US begins to coin a term called "pre-disease", you are in fact healthy people, but if you are pre-diseased, you are pre-diabetes, you are pre-whatever, it merely caused you so much anxiety and, of course, along the way some of the hospitals may come in to say, "Do this, do that." And because in the US, they allow advertising of prescription drugs, you are just making the population hypochrondriac. And when they go to the doctor, they ask, "Please prescribe this, please prescribe that.", and the money just run out but, at the same time, their health does not improve.
So, for screening, please take it with, shall I say, "a pinch of salt". All I know is some of the most effective health screenings which really make sense, which really prolong life and improve health are rather inexpensive, which is, what is your blood pressure, your cholesterol level, and those basic tests are really very cheap which most people can afford. If you cannot afford it, as MPs, as organised by Dr Lily Neo for many years, we do it on a community level and we can help subsidise them. But for those esoteric $600 or $700 type of screening, if you feel that it will benefit you, please pay for it yourself and do not look to me for subsidy or for Medisave to be used.
Column No : 934
3. Ms Ellen Lee asked the Minister for National Development (a) whether a 30% subsidy is in fact true of all HDB flats bought direct from the HDB; and (b) how does the HDB explain the magnitude of the loss in value to some first-time buyers of new flats which had a purchase price of $320,000 to $350,000 in 1996-1998 but which value had dropped to $290,000 to $320,000 since 2004.
The Minister of State for National Development (Ms Grace Fu Hai Yien) (for the Minister for National Development): All new HDB flats are sold at a subsidised price, below the market value. The extent of subsidy varies with flat-type and market conditions. It is not a fixed percentage.
HDB flat prices are subjected to market forces. They move up or down depending on demand and supply factors similar to private properties. It is possible therefore for the prices of HDB flats to fall below their purchase price even with a subsidy. This was what happened when the property market suffered a severe downturn after the Asian Financial Crisis. Without the subsidy, the diminution in value would have been even greater.
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4. Mr Zaqy Mohamad asked the Minister for National Development (a) will the Ministry review the limits on the maximum income for the purchase of subsidised flats from the HDB; and (b) whether, in the HDB’s measure of affordability, it takes into account families which have illnesses to bear or aged parents to support, whether living with them or not.
Ms Grace Fu Hai Yien (for the Minister for National Development): The household income ceiling for the purchase of a subsidised flat by first-time flat buyers is $8,000 per month. For extended families buying a subsidised HDB flat to stay together, they will enjoy a higher household income ceiling of $12,000 per month.
The income ceiling is necessary to ensure that the Government’s limited public housing subsidies are given to those who need them more. It is already generous, as eight out of 10 Singaporean households will satisfy this income ceiling.
Families whose household income exceeds the income ceiling can buy resale HDB flats. Those with monthly household income of up to $10,000 can buy a new Executive Condominium (EC) unit with an EC Housing Grant.
Nonetheless, we recognise that there may be cases deserving special consideration. For example, the household income may exceed the income ceiling only marginally. Or although the household income exceeds the income ceiling, the family is in financial difficulty due to prolonged costly medical treatment needed by a family member. As it will not be possible for HDB to set a meaningful income ceiling that covers all extenuating circumstances, HDB exercises flexibility on a case-by-case basis to allow deserving cases to purchase a subsidised HDB flat.
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5. Dr Teo Ho Pin asked the Deputy Prime Minister and Minister for Home Affairs if he will update the House on counter-terrorism measures taken by the authorities on vehicles transporting hazardous materials on our roads.
The Senior Minister of State for Home Affairs (Assoc. Prof. Ho Peng Kee) (for the Deputy Prime Minister and Minister for Home Affairs): Sir, the threat of terrorists using hazardous material (hazmat), such as flammable materials or hazardous chemicals, for terror attacks is real. For example, on 11th April 2002, terrorists drove a truck carrying liquefied natural gas and ignited the cargo in front of a synagogue in the Tunisian island of Djerba, killing 21 and injuring 30 tourists. Currently the use, manufacture, storage and trade of hazmat are regulated by agencies such as the Singapore Civil Defence Force (SCDF) and the National Environment Agency (NEA). Companies and individuals must adhere to safety and security standards stipulated by these agencies. In addition to safeguarding the hazmat while it is in situ, ie, during storage, the protection of hazmat has been extended to its transportation to minimise the possibility of its being used as a moving terrorist weapon.
A number of measures have been implemented to regulate the transportation of hazmat in Singapore. Let me set these out:
First, hazmat vehicle drivers must pass security screening and a one-day emergency response course conducted by accredited institutes before they are issued with a Hazmat Transport Driver Permit (HTDP) by SCDF.
Second, vehicles must either be licensed by either SCDF or NEA before they can be used to transport flammable materials or hazardous substances respectively.
Third, foreign-registered vehicles transporting hazmat are checked at Tuas Checkpoint before they are allowed entry into Singapore.
Fourth, hazmat drivers are required to adhere to regulated routes and transportation timings.
Fifth, to further minimise the possibility of a terror attack using a hazmat vehicle within the Central Business District (CBD), vehicles that need to travel into the CBD are only allowed to enter through three designated entry points at Anson Road, Lavender Street and Newton Circus where they are checked.
Sir, in addition, the GPS-based Hazmat Transport Vehicle Tracking System (HTVTS) was implemented on 1st July 2005 to track the movement and location of all local and foreign-registered hazmat vehicles transporting bulk quantities of licensable toxic or flammable materials to prevent the possibility of terror attacks using hazmat vehicles as weapons of mass destruction.
These vehicles are monitored on a real-time basis round-the-clock by SCDF's Control Room to ensure that drivers comply with the prescribed requirements. Any violation such as deviation from approved routes would trigger an alarm at SCDF's monitoring console. At the same time, the horn and hazard warning lights of the errant vehicle will be activated. When the alarm is activated, the Hazmat Transport Vehicle Tracking System (HTVTS) operators will verify with the company involved to ascertain the nature of the violations, eg, transportation of hazardous cargoes outside of the regulated transportation routes or hours without prior approval from SCDF. If a violation is unable to be verified through the company concerned, the operators will activate SCDF's Enforcement Bikers and Police's Fast Response Cars, if necessary, to intercept the errant vehicle.
Currently, whilst the tracking system can detect an errant hazmat vehicle, it cannot immobilise the vehicle to prevent a determined terrorist from driving it into a target. We now have plans to roll out the progressive installation of immobilisers on these hazmat vehicles that would enable SCDF to remotely activate them to stop the vehicles by shutting down the engine safely. We will implement this plan over a one-year period, starting from April this year.
Dr Teo Ho Pin (Bukit Panjang): Sir, may I ask the Minister whether the present water tank trucks which actually carry potable water for watering plants will be classified under hazmat vehicles because these vehicles can be easily stolen and refuelled with hazardous materials and pose as a security threat?
Assoc. Prof. Ho Peng Kee: Currently, about 680 vehicles are licensed and these are vehicles of three metric tons or more, because they carry hazardous materials like chlorine and flammable materials like acetylene or butane. These are the ones that are the target and focus of this regulation, not water-carrying trucks.
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6. Dr Fatimah Lateef asked the Deputy Prime Minister and Minister for Home Affairs if he will give an update on Subutex abuse since Subutex’s classification as a controlled drug was implemented in August 2006.
Assoc. Prof. Ho Peng Kee (for the Deputy Prime Minister and Minister for Home Affairs): Sir, buprenorphine (which is the active ingredient in Subutex) was made a Class A controlled drug under the Misuse of Drugs Act on 14th August 2006. Between 14th August 2006 and 31st December last year, CNB arrested a total of 347 persons for Subutex-related offences. Of these, 150 Subutex abusers were sent to the Drug Rehabilitation Centre (DRC) for treatment, 55 abusers were imprisoned under the Long Term Imprisonment regime, and 102 persons were sent to Prisons as they were found to have either trafficked or possessed the drug. As for the remaining 40 persons, 22 were given a warning and 18 are pending further investigations.
Since the implementation of tougher measures to counter Subutex abuse, I am happy to report that the situation has improved significantly. To prevent the influx of illicit supply of the drug, CNB is maintaining a watchful eye at the checkpoints as well as on the ground situation. CNB has not detected any signs of a black market emerging and the number of Subutex tablets seized monthly is not high. Between 14th August 2006 and 31st August 2006, 512 Subutex tablets were seized. Although about 1,000 Subutex tablets were seized in September 2006, this is attributed to a single seizure of 884 Subutex tablets, which is the largest consignment seized so far. 319 tablets and 590 tablets were seized in October and November last year respectively. In December 2006, only 79 tablets were seized.
Feedback from the public also suggests that the Subutex abuse situation has improved. I am sure Members of Parliament who monitor the grounds will know this. Since September 2006, the monthly number of calls and other feedback from the public on Subutex abuse have declined. We believe that CNB's strong enforcement action has led to a decline in public concern over Subutex abuse.
CNB's intelligence indicates that, while it is likely that a small proportion of Subutex abusers may attempt to illicitly access the drug, the vast majority of ex-Subutex abusers have very likely managed to overcome their Subutex dependence. Thus, CNB's enforcement actions have helped to contain Subutex abuse. Nevertheless, CNB will continue to keep a close watch on the Subutex abuse situation and will press on with vigorous enforcement efforts to detect and deter illicit drug activities, taking firm action against both drug traffickers and abusers alike.
Ms Sylvia Lim (Non-Constituency Member): Sir, since August 2006, based on the information released by the Central Narcotics Bureau on its website, it appears that there have been several operations in which significant amounts of heroin had been seized. And I would like to ask the Senior Minister of State whether he thinks it is possible that there has been a displacement effect from Subutex now that it is controlled and such abusers switching instead to heroin.
Assoc. Prof. Ho Peng Kee: Sir, as I have reported, our assessment is that there has been no displacement effect. Firstly, the number of heroin abusers who have been arrested has remained low. Yes, there was some increase in 2006 over 2005, but not significant in terms of the numbers. So that is the key point. Otherwise, you will find the vast number of Subutex abusers on the CARDS system, more than 3,000, if the supply of Subutex is hard to come by, then they would have gone for heroin. But despite vigorous enforcement action, and this is something that CNB has not compromised on just to have nice figures, the number of heroin abusers arrested has not shot up dramatically. The price of heroin on the ground has also remained constant because if the demand is high, the price will go up. These are figures which CNB will monitor very carefully. As for seizure of drugs, I think the number can go up and go down. I think there will be those who may try to bring drugs into Singapore of whatever volume and the bringing of drugs and the seizure of drugs in themselves do not suggest the deterioration of the ground situation.
Dr Fatimah Lateef (Marine Parade): Sir, can I just find out the utilisation rate for the Subutex voluntary rehabilitation programme and the take-up rate since it has been implemented and, also, if the Minister has the data for the ratio breakdown?
Assoc. Prof. Ho Peng Kee: About 3,000 persons signed up for the Subutex programme. Of these, about 2,500 turned up for the first consultation, and about 1,600 completed the medical detoxification phase. So not all have signed up. But I think what is heartening is that of the number of Subutex abusers who were arrested, not more than 170 were people who had gone for the SVRP programme. In other words, a large majority who went and completed it were not arrested subsequently for Subutex abuse. So that is heartening.
Mdm Halimah Yacob: I wanted to ask the Senior Minister of State what is the success rate of the rehabilitation programme because there have been newspaper reports that there have been drop outs of this Subutex rehabilitation programme.
Assoc. Prof. Ho Peng Kee: I think we can only go on the figures of the arrestees, the number of Subutex abusers who have been arrested, since we began the programme in August 2006. As I said in my main answer, only about 350 persons have been arrested for Subutex-related offences over the past four or five months. So that signals that when Subutex was legal, people went for it because it was legal and it was accessible. But when the message was sent that Subutex would be illegal and that you should kick whatever habit you may have, whether it is heroin or other related drugs, in a way we have always said should be done, which is zero tolerance, I think the message went to the ground. So that is the current situation.
Mr Low Thia Khiang (Hougang): Sir, why was Subutex not classified as a controlled drug earlier? Why wait until there was widespread abuse, then the Government decided to take action? Secondly, I wonder whether it is a wise decision for the Government in the first place to allow Subutex to be used legally in a way to counter the impact of heroin drugs.
Assoc. Prof. Ho Peng Kee: I think this point has been answered before, principally by the Minister for Health whose officers are in charge of bringing drugs into Singapore as prescription drugs. This was done in 2002. I think the officers at that time felt that this could be part of the overall scheme to help heroin abusers kick the habit. And, indeed, when it was introduced in Singapore, already six countries had it. So it was done. To the credit of the Government, we did not just do it and leave things as they are because we monitored the ground. When CNB fed back to MHA that there was abuse on the ground, steps were taken to try to arrest the situation, not immediately by making it a controlled drug but by various measures taken. For example, the CARDS system was started whereby all abusers of Subutex were required to register and this online registry was made available to doctors so that they would know if the abusers doctor-hop. A protocol was started, clinical practice guidelines where doctors were taught and informed, workshops were conducted to tell them what is the proper way to administer Subutex. When these measures were implemented and still did not stem the tide, we felt that we should do more and in a sense reversed the decision and hence we made Subutex a controlled drug.
Mr Zaqy Mohamad (Hong Kah): I would like to go back to the question earlier whether heroin was a substitute for Subutex. If we look at the trend the other way around where Subutex became a substitute for heroin, does the Ministry see any other substitutes? I do not think that they would go to a more expensive substitute but to a cheaper alternative. Do we see a trend with substitute drugs, apart from Subutex, now that we have clamped down on Subutex?
Assoc. Prof. Ho Peng Kee: We do not want to use a drug-substitution approach. This episode shows us that that is not the approach to take. We are, of course, monitoring other drugs. For example, Dormicum is one drug we are monitoring. But unlike Subutex, Dormicum has also other medical uses. It is used for pre-surgery anaesthesia. It can be used to help people who cannot sleep. So, we do not want to just always make a drug a controlled drug when it is abused. The best way is to monitor, work within the framework and make it controlled, if need be.
Just one other point on my previous answer. The Minister for Health is on record saying that it was a matter of poor judgement on the part of the Ministry of Health for having introduced Subutex. So it is already very widely explained in the media. There is nothing to hide. But to give the Government credit, when we realised that it should not have been done in the first place, we took remedial actions clearly, decisively and, most importantly, as a Government, multi-agencies working together.
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7. Mdm Ho Geok Choo asked the Minister for Manpower (a) how will a 3% increase in CPF contributions impact the business competitiveness of Singapore; and (b) if the fruits of Singapore’s economic growth can be passed on to workers through their variable wage component instead of raising the employer’s CPF contribution.
The Minister for Manpower (Dr Ng Eng Hen): Mr Speaker, Sir, the NTUC proposed the CPF increase. The Government is still consulting various stakeholders, including unionists, employers, workers and other relevant agencies on the proposed CPF increase. It would be premature to speculate on the actual increase, if any, but we agree with Mdm Ho that the impact on our overall business competitiveness should also be a factor for consideration.
Mdm Ho also asked if we should increase workers’ variable wage component instead of the employer's CPF contribution. CPF increases and rewarding workers through a higher variable wage component are not mutually exclusive options. It does not need to be "either or". You can do both. Our view is that, if the economy continues to do well, an increase in employer CPF rates may be appropriate, as a structural change to benefit all workers.
Mdm Ho Geok Choo (West Coast): Mr Speaker, Sir, I would like to ask what is the Ministry's view with the following observation. Where economists have warned of divergent growth patterns between different businesses and income groups and that a dual economy may emerge, with businesses catering to the global market seeing robust growth whilst, on the other hand, companies serving local markets are lagging behind because private consumption growth is slow. I would like to ask how and how else can the Government help equalise this disparity for businesses and incomes.
Dr Ng Eng Hen: Mr Speaker, Sir, I thank Mdm Ho for her question. She is asking for two sets of situations. One set is for workers. In fact, she is quite right. The low-wage workers, if we increase the CPF for them, they would be more costly to employ and they might find problems in employability. If we increase, for example, the employees' CPF, obviously they will have less in take-home pay. I think that is why there is merit in NTUC's suggestion that, for this group of workers, we actually reduce both, and that is something we are seriously considering, ie, reduce the employees' CPF so that their take-home pay is increased, and reduce the employer's CPF so that they cost less to hire.
Of course, then something has to be done if we did do that to match the reduction in CPF, and this is where Workfare comes in and this is an active area that we are consulting various agencies. For various companies, Mdm Ho is saying, "Yes, some companies are doing well and there is a global demand for my goods, but certain companies that are looking at domestic demand may not be doing very well." And we agree that the CPF is a blunt tool. Even when we reduced it, there were companies that were doing well post-SARS. We recognise and, therefore, it is important to consider two general points.
One, that we should do it only when the economic forecast is sustained and projections are good. Two, the actual increase, if any, should be able to allow a majority of companies to respond to it, as well as to look at other budget measures which may be helpful to these companies which are usually the SMEs.
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8. Mdm Halimah Yacob asked the Minister for Manpower, considering that only four in ten Singaporeans had the mandatory Minimum Sum savings in their CPF accounts in 2005 and a survey result released in February 2006 showed that only one in ten actively saved for retirement, what more can be done to help enhance Singaporeans’ retirement security.
Dr Ng Eng Hen: Sir, about four in ten active CPF members who turned 55 in 2005 met the Minimum Sum of $90,000.
One reason for this is that members were and are able to withdraw 50% of their CPF balances when they turn 55, before they set aside the Minimum Sum. In other words, previously we said, "Even if you did not, you could withdraw an amount of your CPF." If we had not allowed that, 60% of active members would have met this Minimum Sum.
This is the reason why the Government had announced in 2003 that the Minimum Sum should be gradually increased, and the 50% withdrawal rule will be progressively phased out starting from 2009. These changes will help Singaporeans to set aside more funds for their retirement.
Besides changing the withdrawal rules, the Government will help Singaporeans to enhance their retirement security in a number of other ways.
Firstly, the Government will help older Singaporeans keep their jobs and stay longer in their jobs so that they can earn more and put more into their CPF.
Secondly, we will find ways to help CPF members enhance the returns on their CPF savings. In February this year, the CPF Board has tightened the criteria for admitting funds into the CPF Investment Scheme (CPFIS) in order to improve the quality of funds in CPFIS. In other words, we set out a number of criteria, both on expense ratios and fund loading charges as well as how they perform. So, we are using two levers. One is information, ie, to put out the information on how the funds perform. We rank them in terms of their expense ratios, as well as set benchmarks for how much they can charge.
Finally, the CPF Board will continue to educate CPF members on ways to improve their retirement adequacy. We are working with market players to provide members with better information about their investments, educating members so that they can make informed investment decisions, providing online financial tools and reaching out to Singaporeans through seminars and road shows on the need for retirement funding. The most recent road show at the HDB Hub in September 2006 attracted 92,000 visitors. So Singaporeans are actively engaged, and I take it that they want to learn also how to plan their retirement. We will also work with the Housing and Development Board to encourage the prudent use by members of CPF for housing.
Mdm Halimah Yacob: Sir, I would like, firstly, to ask the Minister whether, in the Minister's view, the Minimum Sum that members can withdraw after 62 is sufficient to take care of their retirement needs. Secondly, the Minister alluded to the fact that there is a study that is going on to look into how to enhance the returns to members' CPF contributions. When will that study be completed and its recommendations made and put in place? Thirdly, are there any proposals to look into how to help Singaporeans make use of their flats or assets to convert them into cash to make use of them for their retirement income?
Dr Ng Eng Hen: Sir, I thank Mdm Halimah for bringing up those salient questions, which give us the opportunity to touch on them.
The Minimum Sum, as it is called, is the minimum sum, ie, minimum enough for substantial living and let me translate it into monetary terms. If we assume a 20-year lifespan from age 62, the average life expectancy now at age 62 for males is 81 and that for females is 84. For females, 84 minus 62 is 22 years. If we translate so many in dollar terms, ie, about $90,000 over 20 years, we get the amount. That is the amount that we think is adequate for subsistence living. That is why it is called the Minimum Sum.
The second point which Mdm Halimah asked is whether we are considering a variety of plans to enhance the retirement savings for members and when the study would be completed. Sir, the study is on-going. But even as we are looking at various aspects, we have moved. Some of the changes the CPF Board has made in terms of tightening entry of funds and dictating maximum expense ratios were as a result of this study. There was a proposal put that the CPF Board should consider itself as an aggregating body to put out funds. That is a little bit more complex and it has taken us a while. We are still consulting various stakeholders. The issues are risk-tolerance and educating members, which the industry tells us is not that easy. No matter how much we educate members, some do make wrong decisions in investments. In any framework where we liberalise the investment framework, members must be willing to live with that risk.
There was a third point, on the monetisation of assets. As the Prime Minister mentioned, the majority of Singaporeans have assets. Even the lowest 20% of households have a positive equity of $138,000. This is a significant asset that we can help them monetise and have an income stream. It is an added revenue for their retirement. I think the Minister for National Development is actively studying these options in terms of how we can provide options that allow our elderly to monetise.
Dr Lily Neo: Mr Speaker, Sir, could I ask the Minister what is the total amount of members' balances in the CPF presently? How are members' funds being invested and what are the returns of such investments? How are the CPF rates of return being protected against the current rates of inflation? Can there be better returns to members, especially during retirement, to address the issues of longevity and inflation risks? Lastly, could the Minister look into the CPFIS scheme, ie, the early withdrawal scheme, to see whether such funds should be centrally managed, instead of leaving them to individual choice, for better return outcomes for members?
Dr Ng Eng Hen: Sir, as I mentioned, these are active suggestions that we are looking into. But we cannot run away from one cardinal principle on investing, ie, higher returns come with greater risks. So, if a member wants to put in his funds which may have a projected higher return, he has to live with the fact that he may also lose money in the short term. That is why the current framework, which pays 4% for the SA and the MA accounts, is risk-free, the Government bears the risks. Members, if they want to, for example, could invest in the CPFIS. Unfortunately, as our results show, about three-quarters of them do not make good investment decisions and fail to outperform CPF's interest rates.
Mdm Lily Neo asked whether we should invest on behalf of members. That is a good suggestion. It allows us to aggregate the sums and reduce the expense ratio. But the problem we are still grappling with is one of investment risk. Even though I may do it cheaper for you, ie, at a lower amount, if the stocks go down and there is a loss of money, there is a risk that we will have to factor in. So, we are looking at all these issues. Currently, at the 4% interest risk-free rate on SA and MA, I think it is quite reasonable, given the current conditions of the market.
Dr Ahmad Mohd Magad (Pasir Ris-Punggol): Mr Speaker, Sir, the Supplementary Retirement Scheme (SRS) has been indeed one of the vehicles used to enhance Singaporeans' retirement security. May I ask the Minister to please explain why the maximum contribution cap on the SRS declines each year instead of going the other way round?
Dr Ng Eng Hen: Sir, that is a very good question best answered by the Minister for Finance.
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9. Ms Lee Bee Wah asked the Minister for Trade and Industry in view of the large investments involved in, and the high profile of, the two Integrated Resorts (a) if mechanisms have been put in place to monitor the work-in-progress to ensure compliance with the contract awarded; (b) if he will provide an update on the work-in-progress with regard to these two projects; and (c) what recourse is there if the companies fail to meet their contractual obligations, such as completion deadlines.
The Minister for Trade and Industry (Mr Lim Hng Kiang): Sir, the obligations of the Integrated Resort (IR) operators are clearly outlined in the Requests for Proposals and the Development Agreements. The two IR operators are contractually bound to deliver the overall IR concept and all the components of the IR as detailed in the accepted proposal. Any changes to the accepted proposal would require the Government's approval.
Furthermore, the IR operators must start construction within three years and complete the construction within eight years from the date of the signing of the Development Agreement. They also have to incur 100% of the development investment within three years from the first issuance of the casino licence, or eight years from the date of signing the Development Agreement, whichever is earlier.
If the IR operators fail to meet their contractual obligations, the Government reserves the right to forfeit the security deposit, which is 5% of the development investment, or about $200 million for each IR. If necessary, the Government can also repossess the IR land.
Let me assure Members that while we have put in place robust safeguards, the IR operators themselves have every incentive to complete their projects on time and on budget. The two IRs have an exclusivity period of only 10 years, and every month of delay translates to not just substantial revenues forgone, but also interest costs incurred for the IR operators. The cost of delay will thus be high especially given the large investments involved.
The Government will continue to closely engage with the two IR operators to ensure the successful implementation of the IRs.
Ms Lee Bee Wah (Ang Mo Kio): Sir, now that Singapore has awarded one of its biggest projects on Sentosa to a Malaysian company, can the Minister please inform the House whether he expects that Singapore companies will find themselves more welcome when they invest in Malaysia, especially the south Johore economic zone?
Mr Lim Hng Kiang: Sir, we awarded the IR to the Malaysian company entirely on the merits of their proposal. And we hope that our neighbours - Malaysia, Indonesia, whichever country - will welcome Singapore investors on the merits of their investment proposals. I think this is the best way for an enduring and sustaining relationship. Of course, with more economic contacts with our companies, the economic linkages and the people-and-people linkages will help facilitate relationship between us and our neighbours.
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10. Mdm Ho Geok Choo asked the Minister for Trade and Industry (a) what is the increase in the number of small and medium enterprises (SMEs) in the last five years and which industries do they belong to; (b) what contributions do they make to the Singapore economy; and (c) what are some of the more pressing needs of these SMEs and how are they being helped.
Mr Lim Hng Kiang: Sir, between 2000 and 2004, the number of small and medium enterprises (or SMEs) increased by about 13,000. Today, we have some 133,000 SMEs in Singapore, which make up 99% of all our enterprises. About 94% of our SMEs belong to the service and commerce industries, with the remaining 6% in manufacturing . SMEs contribute some 42% of our GDP and employ 56% of our workforce.
Capability upgrading
The Member asked about the pressing needs of our SMEs and what we are doing to help them. A key concern facing our SMEs is the increase in global competition, especially from lower-cost competitors offering higher value-added activities. In this respect, we have various programmes, at both the industry and the enterprise level, to help our SMEs upgrade their capabilities and move up the value-chain.
At the industry level, we have the Local Enterprise and Association Development, or LEAD programme, which supports industry development efforts by able and willing industry associations. At the enterprise level, we have introduced the Capability Development Programme, which covers areas such as process improvement, strategic alliances, and certification of products and processes to international standards.
Companies can also leverage on the Technology Innovation Programme to strengthen their technology innovation capability and capacity. The programme provides SMEs with the expertise, infrastructure as well as the financial support for their research and other innovation related projects.
Financing
The second area that we help our SMEs is in financing. Access to financing, as we all know, is a key concern of our SMEs. In 2005, we extended some $800 million worth of loans to more than 3,600 SMEs through the various schemes, such as the Local Enterprise Finance Scheme (LEFS), and the Micro Loan Programme. The Internationalisation Finance Scheme was launched this year, making available $500 million worth of loans for overseas expansion purposes. To complement the loans, the Government has also made available equity financing, matching Government funds with private sector investments under the Start-up Enterprise Development Scheme (SEEDS) for innovative start-ups. The Business Angel Scheme was also introduced last year to spur the level of business angel investments in Singapore.
We are pleased that the private sector has recognised that not all SMEs are high-risk, and have introduced loans and services to cater particularly to the SME market. Several banks are even offering unsecured financing products to SMEs, in the form of instalment loans and revolving credit lines.
Accessing overseas markets
The third area of concern for SMEs is access to overseas market opportunities. To build up these connections, SMEs can participate in outgoing missions and fairs as well as the various IE Singapore’s networking platforms. Companies can also tap on the International Marketing Activities Programme which supports the activities organised by trade associations and chambers.
To promote our enterprises to the world, we recently launched the BuySingapore portal. This initiative is a national e-channel that leverages on the established Singapore Brand to acquire and disseminate foreign business leads to our companies.
The Government has put in place quite a comprehensive package of assistance to our SMEs. I assure Members that we will continue to improve and adapt our assistance as the needs of our SMEs evolve.
Mr Sin Boon Ann (Tampines): Sir, one common feedback from the SMEs is the bewilderment over the sense of the many financing schemes that are available. I do not know if the Government is minded to put together all these schemes into one organisation. The Government has resisted the call for setting up an SME bank. I am wondering whether or not an alternative parallel organisation, which mirrors the functions of the bank and that supports these SMEs financially, in terms of the various schemes available, is something which the Government may consider.
Mr Lim Hng Kiang: We have debated this many times. We do recognise that there is a wide range of SMEs and we try to establish programmes that best suit the SMEs. At the same time, whenever there is a proliferation of such schemes, we try to streamline and narrow them so as to reduce confusion. I thank my colleague, Mr Inderjit Singh, for bringing together a group of people, trying to streamline and make it more comprehensive and more comprehensible to our SMEs. We must recognise that the needs of the SMEs are very diverse and this idea that a single entity or a single SME bank can meet the very vast needs of our SMEs has yet to be proven. Right now, what we are doing meets the needs and we continue to have dialogue with the various associations and the SMEs. The feedback we get is that the Government's approach is becoming more holistic and their needs are being addressed.
Mdm Ho Geok Choo: Sir, the 2006 SME's Development Survey found that there is a very low take-up rate of Government funding schemes. Only 8% of SMEs surveyed took up the Local Enterprise Finance Scheme; only 4% took up the Micro Loan Programme and only 2% took advantage of the SME Access Loans. What are the reasons for these very low take-up rates and what will MTI do to improve these rates?
I would like to ask the Minister for Trade and Industry to critically review these schemes with the following parameters:
(i) the relevance of these schemes to the needs of the SMEs;
(ii) the promotion of these schemes to raise the awareness of these schemes; and
(iii) the workflow of SMEs applying for these schemes.
Is the application process, for example, too complex or too time-consuming? Are we disbursing the funds quickly enough for SMEs to use them in a timely manner?
Mr Lim Hng Kiang: I thank the Member for her feedback. These are areas which we will continue to look at to improve our processes. The very fact that 8% of our SMEs take up the LEFS scheme, to me, is a very good sign. First, the schemes are there. So if SMEs do not take them up, it does not necessarily mean a bad thing. But we will look into the take-up rates. It is not for lack of availability. The funds are there. There are also competing avenues for the SMEs. So it is not that they have to depend entirely on the Government for the LEFS scheme. The banks are coming in. We have an OTC market. There are many avenues. And it is good that our SMEs are self-reliant and they have their own financing resources.
Ms Lee Bee Wah: Sir, in view of the impending increase in CPF, does the Minister foresee that it will bring additional burden to the SMEs, in particular, now that the SMEs are also facing a steep increase in rental, labour cost, material cost, etc?
Mr Lim Hng Kiang: Again, let me thank the Member for raising this. We watch the business cost very closely, particularly the business cost of our SMEs. If the changes to the CPF that have been debated upon come about, obviously, the Government also looks at how to have countervailing measures to help the corporate sector, particularly the SMEs, to meet these challenges.
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11. Ms Ellen Lee asked the Prime Minister and Minister for Finance if the Civil Service is following the private sector by giving wage increments based on performance as there is a perception that many civil service officers are still on a seniority-based wage system enjoying yearly salary increments till they reach the maximum salary within their grade, regardless of positive or negative economic growth.
The Minister for Defence (Mr Teo Chee Hean) (for the Prime Minister and Minister for Finance): Sir, the Civil Service has introduced merit increments for the majority of its graduate schemes of service since 2002. Officers receive annual increments based on their performance and potential. Better performers will therefore receive higher increments.
Besides monthly salaries, all civil servants have performance-linked pay components in the form of an individual performance bonus. This is paid out in March each year. Those who perform well can expect to receive a larger performance bonus, while those who only meet the basic expectations of their job do not receive any performance bonus.
In addition, the civil service pay package is adjusted in tandem with economic conditions through the Annual Variable Component (AVC). The AVC quantum is reduced during periods of low economic growth. Conversely, the AVC quantum is increased during good economic times to ensure civil service salaries remain competitive with the market.
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12. Ms Sylvia Lim asked the Prime Minister and Minister for Finance if he will provide an estimate of the expected additional funds to be available for Government use annually as a result of the proposed amendment to the Constitution to include realised capital gains from reserves as part of Net Investment Income.
The Second Minister for Finance (Mr Tharman Shanmugaratnam) (for the Prime Minister and Minister for Finance): Sir, it is not possible to estimate with any certainty the additional funds that will be available as a result of including capital gains in the Net Investment Income (or NII) from past reserves that the Government can spend. While more will become available for spending, capital gains and losses are inherently volatile and difficult to predict.
We are working out how best to overcome the implications of this volatility, the implications for our budgetary process. The Government is discussing with the President the proposed revisions to the NII spending formula. The intent, as stated earlier by the Prime Minister, is to work out a formula for spending a portion of NII on past reserves that will neither result in over-saving at the expense of the current generation, nor deplete what should be protected for future generations.
Ms Sylvia Lim: Sir, is the Minister not able to provide us with a range of the possible funds based on past performance?
Mr Tharman Shanmugaratnam: As I have said, it is volatile and difficult to predict. Past performance is not a very good guide for the future. I can tell you, for instance, that the performance for the last five years, was not as good for capital gains in the previous five years because everyone knows that there was a global equity market collapse four years ago. I would be wary of looking at past performance and saying, "That is the basis on which we project into the future."
Ms Sylvia Lim: Sir, could the Minister confirm that, to some extent, the Government has some say in whether to realise capital gains at a certain point or perhaps hold them for the next year?
Mr Tharman Shanmugaratnam: The Ministry of Finance has not influenced the GIC, or Temasek, for that matter, on their decisions on when to realise investments. Let me say, more generally, that this is a very complicated issue. We are concerned about having to smooth out what are inherently volatile flows. We are working with the President to devise a formula that we think is practicable and is fair to both current and future generations. We will be coming to Parliament in a few months' time to amend the Constitution and we can have a fuller discussion then.
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13. Mdm Halimah Yacob asked the Minister for Community Development, Youth and Sports (a) since its establishment, how many firms have made use of the Engaging Persons with Disabilities in Employment (ENGAGE) Fund and how many workers have benefited from it; (b) whether this scheme covers workers with chronic illnesses; (c) whether the amount allocated under this Fund to individual companies is sufficient for them to effect changes to accommodate people with disabilities; and (d) what measures have been taken to promote the use of this Fund and the employment of the disabled.
The Minister of State for Community Development, Youth and Sports (Mrs Yu-Foo Yee Shoon) (for the Minister for Community Development, Youth and Sports): Mr Speaker, Sir, we acknowledge that it is not easy to match persons with disabilities with the right jobs. However, I am pleased to say that we have come a long way in facilitating the employment of persons with disabilities. In the past, persons with disabilities would be kept at home and not given the opportunity to work. Now, persons with disabilities are able to find meaningful employment. For example, today, Bizlink Centre, a central job placement agency funded by MCYS and the National Council for Social Service, manages to place about 250 Persons with Disabilities into open employment annually, while another 1,300 of them are finding employment in our sheltered workshops.
My Ministry firmly believes that employment is the best form of self reliance for the disabled and will encourage all persons with disability, who are work-capable, to seek employment. However, we recognise that people with disabilities do face difficulties in securing employment, not because they are incapable but because they are often not given the opportunity to demonstrate what they are capable of.
That is why my Ministry worked with the Singapore Workforce Development Agency to set up the ENABLE Fund (Engaging Persons with Disabilities in Employment Fund) in July 2006. It aims to encourage employers to make that first step of employing people with disabilities.
Through the process, these companies which employ people with disabilities will demonstrate that people with disabilities can also be contributing staff and they are employed not out of compassion, but based on their merit. This is what the disabled community is asking for too.
The ENABLE Fund is one of the many initiatives that my ministry has to encourage employment amongst persons with disabilities. It complements the efforts of Bizlink, which also conducts vocational assessments and onsite job counselling or coaching after placement to help the employee with disability adjust to his new work environment. For example, Natural Cool Holdings, one of the companies that has tapped on ENABLE Fund, has utilised the grant to engage a training officer from Bizlink to coach its staff.
The ENABLE fund is open to employers who are willing to hire four or more persons with disabilities. As at 15th January 2007, 14 companies have tapped on the fund, with 41 workers benefiting from it. There are another seven companies currently at different stages of discussion with the Singapore National Employers' Federation (SNEF), which administers the ENABLE Fund.
As the ENABLE Fund has just been launched, it is still too early to establish if the grant is sufficient. The Employment Sub-committee of the Enabling Masterplan is concurrently gathering feedback from the employers through focus group discussions on how to assist persons with disabilities in getting employment. The committee is a 3P effort, involving the people sector, the private sector and the public sector. In addition to voluntary welfare organisations, the sub-committee also has representatives from the National Trades Union Congress, the Singapore Workforce Development Agency, the Singapore National Employers' Federation, the Singapore Human Resource Institute, the Ministry of Manpower and several employers. These agencies are well placed to advise on the ENABLE Fund. If adjustment to the grant is necessary, the Enabling Masterplan Employment Sub-committee will make the appropriate recommendations to my Ministry.
Meanwhile, SNEF has been actively promoting the ENABLE Fund through marketing brochures and posters, and the distribution of marketing collaterals to SNEF member companies.
A Disability Awareness and Public Education campaign has been launched in conjunction with the International Day of Disabled Persons on 3rd December last year. With greater awareness of the ENABLE Fund and public education on the abilities and productivity of persons with disabilities, I hope more companies will recognise the work value of people with disabilities and provide them jobs.
Mdm Halimah Yacob: Sir, I would like to ask the Minister of State whether the Ministry is satisfied with only 14 companies and 41 workers benefiting from this Fund. If the Ministry is not satisfied, what else can be done to promote the use of this Fund? Is it a question of lack of awareness, because I do get feedback from HR practitioners and companies that they are not aware of this Fund. Is it a question of lack of awareness, or is it a question of inadequacy of the Fund being allocated, or is it too much restrictions? Could the Minister of State inform the House how it can make better use of this Fund so that we can really make it possible for people with disabilities to work?
Mrs Yu-Foo Yee Shoon: Mr Speaker, Sir, I have said just now that this scheme was launched in July last year. It is too early to say whether it is effective or not. Besides this Fund, we have worked very closely with NCSS and also the employers' group, including NTUC. Actually, I have just got a report that for the last part of last year, Bizlink has broken the record of successfully matching 300-over disabled people. Previously, it was 260 annually. But last year, they broke the record to over 300.
Besides this ENABLE Fund, as I mentioned just now, my Ministry also announced an Enabling Masterplan Steering Committee last September. I think some of the Members of Parliament are also involved in this Committee. This Committee will wrap up its report in January, and we are looking into some of the new recommendations.
I would also like to inform the House that the ENABLE Fund is about $0.52 million over two years, and the Government also has tax deduction on expenditure on building modifications for those employers employing disabled persons. We also set up an IDA-SPD Infocomm Accessibility Centre that costs about $1.7 million, committed over two years, to help the disabled to also learn IT technology. We hope that they will not be left out because of this digital age. Besides that, we also have vocational assessment and employment placement services that cost about half a million dollars a year. We also have a disability awareness public education campaign fund which my Ministry has set aside about $200,000 a year. So, if we add all these together, it is about $4.7 million. I am not saying that we are very happy with the result. As I mentioned, to help the disabled to get a job is not an easy task. So we need the people sector, the VWOs, the employers, MOM, WDA and so on, to work together to achieve this objective.
We look forward to receiving this report by the Enabling Masterplan Steering Committee maybe at the end of this month.
Mr Sin Boon Ann: Mr Speaker, I am gratified to note that there are so many schemes available to help the disabled. But I suppose the question really is whether the Government has set itself any benchmarks by which it measures the performance of these various schemes, and that will be key towards the Government helping these disabled people.
Mrs Yu-Foo Yee Shoon: As I have mentioned, based on the last two or three years' records, the main player - Bizlink - had successfully matched about 260 disabled persons, and they also placed about 1,300 of them in our sheltered workshop. But, last year, they broke the record to over 300 persons. So we hope to achieve that through campaigns and also through our sub-committee discussions and some of the lunches we had with all the employers. Under the Enabling Masterplan Steering Committee, one of the members of the sub-committees who heads this employment is the CEO of a bank, Mr David Wong. He gets a group of people from all walks of life, and these employers represent different groups of people like FairPrice, and so on. We hope that, with the many-helping-hands approach, we can really help the disabled persons to get meaningful jobs.
Mr Sin Boon Ann: The MOS is not responding to my question. My question is really whether the Government intends to set any targets or benchmarks by which it hopes to achieve in respect of these various schemes that are available.
Mrs Yu-Foo Yee Shoon: I wanted to tell the Member, honestly, that, in the past, we did not have a proper record of how many disabled persons in Singapore. It is only in the last few years that we work very closely with Kandang Kerbau Hospital, through intervention, that we see that every year, we probably have about 1,400 babies diagnosed with some disabilities. Even with disabilities, there are different ranges of disabilities.
My Ministry is working very hard to keep some meaningful records, at least among the newly-born babies. So, if the Member asked me about the old people or the existing workforce, we really need to develop a meaningful target and KPI. But, of course, we should make sure that we push this through the many-helping-hands approach and the numbers should be increasing.
Column No : 965
14. Dr Lily Neo asked the Minister for Health (a) what is the progress on efforts to promote Singapore as a medical hub; (b) what are the Ministry’s successes in targeting more foreign patients from non-traditional sources, such as the Middle East; and (c) how is Singapore faring in comparison to Thailand’s Bumrungrad International Hospital.
Mr Khaw Boon Wan: Dr Lily Neo asked about our progress to promote Singapore as a medical hub. We are making some progress. Over the last three years, foreign patient arrivals have grown at an average rate of 20% per annum.
Last year, nearly 400,000 foreign patients came here for treatment. Our target is to attract one million foreign patients by 2012.
We expect the medical travel market to continue to expand as the middle class grows. The competition to be medical hubs will at the same time intensify. Dr Lily Neo mentioned Bangkok’s Bumrungrad Hospital which was reported to have served about 400,000 foreign patients per year. But there are many more such competitors in Thailand, Malaysia and India. In due course, I am sure China too will move into this sector.
Currently, patients from ASEAN countries account for about 70% of our international inpatient volume. We have begun to reach out to non-ASEAN countries, with encouraging results. There is a growing trend in patients arriving from further afield, including Russia, Bangladesh and the Middle East. These are new markets with significant potential.
To tap these opportunities, we need to increase our capacity, especially in manpower and hospital beds. We also need to raise our clinical capabilities and service standards so as to justify our higher cost premium. We will continue to push these efforts, without undermining the services to our local patients.
Dr Lily Neo: May I ask the Minister how does he reassure Singaporeans on the concern of compromising care for the locals with the increasing number of medical tourists?
Mr Khaw Boon Wan: I can reassure with action rather than words and really the key strategy is to expand capacity. Because if you do not keep on training and recruiting many more doctors and nurses, then, inevitably, as we are not closing our borders, we cannot stop foreign patients from coming in and, services will be affected. So the key is to continue to expand our doctors and nurses. And capacity as well, in terms of physical beds. Right now, I really see a need for at least one or two private hospitals to come up, and I am working very closely with URA to release land for this purpose.
Mr Speaker: Order. End of Question time.
[Pursuant to Standing Order No. 22(3), Written Answers to Question Nos. 16, 18, 20, 22-25, 27-29 and 31 on the Order Paper are reproduced in the Appendix*. Question Nos. 15, 17, 19, 21, 26 and 30 have been postponed to the sitting of Parliament on 23rd January 2007.]
*Cols. 1067-1084.
Column No : 967
Column No : 967
"to amend the Monetary Authority of Singapore Act (Chapter 186 of the 1999 Revised Edition) and to make a related amendment to the Currency Act (Chapter 69 of the 2002 Revised Edition)",
presented by the Minister for Trade and Industry (Mr Lim Hng Kiang); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.
Column No : 967
"to amend the Economic Expansion Incentives (Relief from Income Tax) Act (Chapter 86 of the 2005 Revised Edition)",
recommendation of President signified; presented by Mr Lim Hng Kiang; read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.
Column No : 967
"to regulate the manufacture, import, supply, presentation and advertisement of health products and active ingredients used in the manufacture of health products and provide for matters connected therewith, and to make certain related amendments to the Medicines Act (Chapter 176 of the 1985 Revised Edition) and consequential amendments to certain other written laws",
presented by the Minister for Health (Mr Khaw Boon Wan); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.
Column No : 968
"to amend the Civil Aviation Authority of Singapore Act (Chapter 41 of the 1985 Revised Edition)",
presented by the Minister for Transport (Mr Raymond Lim Siang Keat); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.
Column No : 968
Column No : 968
3.03 pm
The Deputy Leader of the House (Mr Mah Bow Tan): Mr Speaker, I beg to move,
"That, notwithstanding Standing Order No 48(7), with effect from this day’s sitting until the end of the Eleventh Parliament, a Member may use any or all of the four official languages in a speech in the proceedings of this House".
Mr Speaker, Sir, this motion seeks to obtain the House's agreement to lift the current restriction on the use of multiple languages by backbench Members in making their speeches in this Parliament. Members will recall that the restriction was lifted specifically for the Debate on the President's Address in November 2006 when Parliament opened for the session.
During that debate, Members welcomed the opportunity to make their speeches in English and mother tongues. In fact, there were a total of 13 speeches recorded in multiple languages over the four-day period. The new Members, particularly, made use of the opportunity to deliver their maiden speeches in mother tongues and English so as to reach out to their constituents and also to a wider section of Singaporeans.
Mr Speaker, Sir, this Parliament has seen the entry of more Members who are bilingual or proficient in more than one of our official languages. This is the result of our education system, which has placed emphasis on bilingualism, and nurtured a new generation of Singaporeans who are comfortable in both English and their mother tongue. Though English will remain as the common working language for Singaporeans, there is room for greater use of dual or multiple languages in our Parliament when national issues are debated, so that Singaporeans of all races and all generations can be engaged on these issues.
Sir, allowing Members a greater opportunity to use mother tongues in this House will not only make for more effective debate, especially when the issues can be better expressed in their own language context, but will also allow the House to reflect the multi-racial and multi-lingual heritage of Singapore.
In line with this, there will be changes made to the Official Reports of the Parliamentary Debates to incorporate the written transcripts of mother tongue speeches, for public record and access. Now, copies of speeches made in non-English by MPs in this House are already available for Members' reference and these are deposited in the Parliament Library.
I believe Members will welcome these changes to our House proceedings and support this motion.
Sir, I beg to move.
Question proposed.
3.06 pm
Dr Teo Ho Pin: Mr Speaker, Sir, I rise in support of the motion, as moved by the Deputy Leader of the House.
The use of any or all of the four official languages in a parliamentary speech will provide more flexibility for Members of this House to conduct our debate more effectively. It will also facilitate the broadcasting of parliamentary debate to Singaporeans in different languages through the TV, radio and new media channels. As a multi-racial society moving towards a cosmopolitan society, it is necessary that parliamentary debate be conducted in different languages so that Members of Parliament are able to express their views and the concerns of our people using different languages in parliamentary speeches. This is even more crucial for elected Members of Parliament who represent their constituents to provide feedback to the Government.
The use of the different official languages in a speech will also enable elected Members of Parliament to better express their concerns of their constituents in this House, and at the same time help Singaporeans to better understand the contents of parliamentary debate.
Sir, as an elected Member of Parliament for Bukit Panjang constituency, I have always made it a point to translate key points of my parliamentary speeches into the four official languages and publish them in my constituency newsletter - Bukit Panjang News Express. Feedback from my residents is that they find it useful to understand my parliamentary work and also the issues which I have championed for them in Parliament. The translation of my speeches in my newsletter has also allowed my residents, especially those who are monolingual, to better understand national policies and parliamentary debate. Thus, the use of different languages provides opportunity for Members of Parliament to better connect and engage Singaporeans.
Sir, I support the motion.
3.08 pm
Mr Sam Tan Chin Siong (Tanjong Pagar): Mr Speaker, Sir, I would like to deliver my speech in Mandarin.
(In Mandarin ): [For vernacular speech, please refer to Appendix A *.] Mr Speaker, Sir, let me thank the Deputy Leader of the House, Mr Mah, in moving this proposal to allow the use of different languages in a same speech. This proposal is far-sighted. It allows the MPs more flexibility in using any one or more of our four official languages to better reflect the feelings on the ground. At the same time, it allows the different communities in Singapore to listen directly to the MPs using the languages they are most familiar with. To the many citizens who do not know English, especially the senior citizens, this is definitely good news. Now they can listen directly to the MPs and understand the contents of their speeches in the language that they are most familiar with. If the various communities in Singapore can understand the contents of parliamentary debate, Government policies will certainly be disseminated to the public more effectively.
Singapore is a multi-racial society and, in our society, there are many senior citizens who do not understand English. This may well be one of the reasons why hitherto, they are not very keen to follow parliamentary debates. Of course, one of the reasons may be that they are confident that the Government will discuss and make decisions which are in the interest of the country. It is also possible that many senior citizens do not know English, they simply give up watching televised reports of parliamentary debates. Although there is simultaneous interpretation into Chinese, Tamil and Malay in Parliament, it is always better to hear the MPs themselves speaking in the language that they are most familiar with. If Parliament is debating a topic which is of concern to them, and the MP can use the mother tongue, it will certainly improve the effectiveness of communication. The people will be more interested and concerned with the issue in question. This is in line with Government's policy to allow more people to understand the broad directions of our policy. This is most beneficial. So I personally fully support this proposal to allow the MPs to use one or more of the official languages.
At the last sitting of Parliament in November 2006, PM suggested that the MPs be allowed to switch to the other official languages in their speeches. This proposal was moved by the Leader of the House and approved by Parliament. Almost all of us are in favour. But the suspension of Standing Order was an ad hoc measure that allowed the MPs to use more than one language in a speech, only during that particular sitting. This is not good enough. When many of my MP colleagues knew that the Deputy Leader was going to move this motion to allow MPs to use multiple languages in one speech once and for all, all showed support and enthusiasm. On behalf of all my parliamentary colleagues, I would like to thank the PM for his suggestion and the Deputy Leader for moving this motion.
Singapore is a multi-racial country and I would like to express my thanks in all the four official languages. In English, we say, "Thank you". In Malay, we say, "Terima kasih". In Tamil, we say, "Nandri." In Mandarin, we say, "Xie xie".
Sir, I support the motion.
*Cols. 1101-1102.
3.12 pm
Dr Fatimah Lateef: Mr Speaker, Sir, I rise in support of the motion raised by the Deputy Leader of the House.
The Singapore language policy has always included a promotion of bilingualism, mastering English as a language for commerce, education and also administration, and certainly using Mandarin as a unifying language for the Chinese community. Passing this motion would be in line with the promotion of our cultural and lingual diversity in a multi-racial, multi-cultural and multi-lingual society. We, Members of the House, leaders in our community, must set the example and spearhead the efforts in Parliament. We shape our language and certainly our language shapes us as well. Using our mother tongues in our speeches will enable a greater connection with members of our community, especially those who do not understand and speak English.
According to the General Household Survey of 2005, for example, about 24% of Chinese households do not use English at all and we have a relatively similar number for Malay households as well. These are exactly the segment we will be reaching out to with this new policy. They will now be able to connect better with their Members in Parliament and follow and support their speeches closely. With a language familiar to them, they will be more at home, and we certainly cannot deny that certain issues when discussed and spoken of in a certain language can create and generate more emotions, greater passion and also impact than when stated in English. This is a known phenomenon and may be related to the way our brains encode messages and information in the limbic system. It is also human nature to click and connect with those with similarities to you and particularly those who speak and understand the same language. When we speak at our election rallies, we used a combination of languages. And it is timely indeed for this practice to be extended to this House.
Singapore is small in size but big on languages. This was reported as early as 1991 in the Business Times of 15th November and our parliamentary Chamber will now be more of a linguistic stage with diversity in languages co-existing in a very dynamic way, reflecting our national integration. It will also emphasise the conservation of our mother tongue and indeed a very positive step in fostering further rootedness among Singaporeans. There are already many other nations that have adopted the dual or multilingualism policy, and these would include Scotland, Malta, Wales, Canada and Hungary, just to name a few.
Many of these nations have agreed that members have the right to use their mother tongue when addressing Parliament and in their public service.
When we have visitors to our Parliamentary debates, it would be excellent to showcase our multi-lingualism, which is unique and inspiring indeed. Moreover, with more foreign talents coming to reside within our borders, this practice will raise the profile of our languages as it will be seen not only as being spoken at home, the markets and in the coffeeshops but in Parliament, where important issues are discussed and critical decisions are being made.
The importance of the usage of our mother tongue will also have far-reaching benefits in the region and, in particular, countries such as Malaysia, Indonesia, China and certainly India as well. Therefore, our bilingual capabilities are highly valuable and must be utilised as widely as possible. After all, when a real leader speaks in any language, people listen. Words in the appropriate language can do so much more. They can convey or create a mood, an attitude, an atmosphere or even an awakening.
Mr Speaker, Sir, I support the motion.
Mr Inderjit Singh (Ang Mo Kio): Sir, I support the motion moved by the Deputy Leader of the House to allow Members to use all four official languages in their speeches. Mr Low Thia Khiang was asking me whether I was supporting the use of Punjabi. It is not an official language, but I understand Malay quite well. I studied it until my A-levels.
Sir, I notice in the past that Members, in making their speeches, some of them felt quite constrained when they were forced to use just one language to deliver their speeches. Some Members were effectively Mandarin-speaking, and when they deliver their English speeches because they had to deliver speeches in English, they felt a bit uncomfortable. Similarly, those who were English-speaking and wanted to deliver Mandarin or Malay speeches, I could also sense an uneasiness when they delivered their speeches. Hence, if we had that flexibility in the past, I am sure Members would have delivered certain portions of their speeches in English and certain portions in their mother tongue and, therefore, making their delivery a bit neater and more interesting to listen to.
Today, more Members are bilingual and equally comfortable in both English and their mother tongue. So, I think we should not restrict them if they feel comfortable in making their speeches in any of the official languages that they choose to. We have a very efficient translation service in Parliament. So I do not foresee any reduction in understanding when Members switch their speeches from one language to another. Therefore, Members of this House should not feel that we will not be able to follow the speeches if the switch is made. Of course, I do not see any Member in this House speaking in all the four official languages. But if Dr Vasoo was still in this House, perhaps he may have been the one that could have delivered in all four languages.
Sir, I did ask a number of my grassroots leaders, some friends and also a few residents that I met, and every one of them told me that they actually liked the flexibility that they saw during the debate on the President's Address. Many of them told me that it added colour to the debate. As I said, I myself studied Malay as my second language. I enjoyed the speeches that were made in both languages.
Sir, I therefore feel that the motion is a move in the right direction and I support it.
Mr Mah Bow Tan: Mr Speaker, Sir, I thank all the Members who have spoken for supporting the motion. I cannot agree with them more on the sentiments that they have expressed. I think the most important point that all Members have made is that we are sending a signal, if Parliament approves this motion, that it reflects what Singapore is, ie, we are a multi-racial, multi-lingual society and we need to have this diversity of languages reflected in Parliament, especially where important matters are discussed. So, I hope that Members will approve this motion.
Let me, as an aside, explain to Mr Sam Tan that this motion is only for the duration of the Eleventh Parliament, because we will need to amend the Standing Orders if we wish to make this change permanent, and we do not intend to amend the Standing Orders until an appropriate time.
May I thank Members again for supporting the motion and I hope for Parliament's support.
Question put, and agreed to.
That, notwithstanding Standing Order No. 48(7), with effect from this day's sitting until the end of the 11th Parliament, a Member may use any or all of the four official languages in a speech in the proceedings of this House.
Column No : 977
Column No : 977
3.19 pm
Order for Second Reading read.
The Minister for Trade and Industry (Mr Lim Hng Kiang): Mr Speaker, Sir, on behalf of the Senior Minister, I beg to move, "That the Bill be now read a Second time."
Over the past few years, MAS has progressively liberalised the banking sector. At the same time, MAS has also sought to implement a risk-based supervisory approach that moves away from the one-size-fits-all rules and allows for well-managed risk-taking. The measures have resulted in more choices for consumers, new innovative products and competitive pricing. With the free play of market forces and the growing complexity and international nature of banking businesses, there will also be new risks to be addressed. For example, depositors are now increasingly exposed to the risks of both local and foreign banks’ expanding international operations.
MAS continuously reviews and refines its regulatory framework to ensure that it is robust and responsive, without adding undue burden and cost to the industry; a framework that upholds prudential standards and the interests of depositors, while fostering the growth of the sector. The Banking (Amendment) Bill is part of this on-going process. It introduces several new policies and measures to strengthen prudential standards, facilitate risk-based supervision and provide banks with greater operational flexibility.
In preparing this Bill, MAS has consulted extensively with the industry and the public on the policy changes and the draft Bill. The feedback received was carefully considered, and incorporated into the Bill where practicable and consonant with its regulatory objectives.
Mr Speaker, Sir, I will now go through the major amendments in the Bill.
Strengthening prudential safeguards
The first set of amendments is to strengthen the prudential safeguards. On this, I would elaborate on three main amendments.
First, is the revision of methodologies for limiting large exposures and related party exposures. Currently, section 29 of the Banking Act sets prudential limits on credit facilities extended by banks to a single borrower or a group of related borrowers. It also curtails unsecured credit facilities to parties related to the bank. These prevent the default of any single borrower from seriously impacting the financial strength of a bank.
MAS is introducing a number of changes to ensure that the prudential limits remain relevant and are in line with international best practice. First, instead of a limit based on credit facilities granted, the Bill introduces a more comprehensive measure based on exposures, which would include a bank’s equity investment in, as well as other transactions with a counterparty. The second key change is that MAS will recognise a bank’s efforts in mitigating risks, by allowing the bank to offset its exposures where these are secured by qualifying collateral, or to substitute its exposures to a counterparty with that of a credit protection provider of good rating. To reduce the risk of contagion and non-arm’s length transactions between a bank and a related party, the current limit on unsecured lending to related corporations will be widened to restrict the exposures of a bank incorporated in Singapore to its substantial shareholder groups, and exposures of a bank in Singapore to entities in which the bank holds a major stake. The industry will be given a two-year grace period to make the appropriate adjustments for compliance with the revised section 29.
Introduction of an asset maintenance regime
MAS’ liberalisation measures in the last few years have brought about greater foreign bank participation in our banking sector. While the competition has added to the dynamism of the banking sector, the banking system will increasingly be exposed to risks arising from the foreign banks’ international operations. Should a foreign bank fail, the resolution of a cross-border bank insolvency will be complex and drawn-out. The claims of depositors and creditors will be subject to substantial uncertainty.
The revised section 40 aims to strengthen the foreign bank regulatory framework by requiring foreign full and wholesale bank branches to maintain a minimum level of eligible assets in Singapore in proportion to their deposit liabilities. This would help to improve the recovery of assets from a failed foreign bank branch in Singapore to meet the claims of Singaporean depositors.
The asset maintenance requirement has been carefully calibrated to balance prudential objectives with the banks’ commercial interests, and determined after close consultation with the industry. A six-month grace period will also be given, for foreign bank branches to make necessary adjustments to their asset allocations.
Amendment of the priority ranking of deposit liabilities
Presently, both non-bank and inter-bank deposit liabilities of a bank rank ahead of other unsecured liabilities in the event of a winding up of a bank. In recognition that non-bank depositors are likely to be less well informed than banks and in greater need of protection, the Bill reorders the priority ranking under section 62 and places all non-bank deposit liabilities of a bank ahead of inter-bank liabilities, with the latter ranking pari passu with other unsecured creditors. This is consistent with the objective of protecting non-bank depositors and encouraging banks to exercise prudence and market discipline in respect of exposures to their bank counterparties.
Enhancing MAS’ role in bank resolution
The next set of amendments is with regard to MAS' role in bank resolution. While MAS seeks to promote and preserve stability in the financial system through high standards of licensing, regulation and supervision, like many reputable regulators, it does not aim to prevent the failures of all financial institutions. Such a "zero-failure" regime is neither feasible nor desirable as it leads to considerable moral hazard for the regulator and places an excessive regulatory burden on our financial institutions. When dealing with a bank in distress or insolvency, a private sector resolution option is often preferred by regulators, but in the event that this is not possible, international experience has shown that it is important for the regulator to be able to take action quickly to minimise losses to depositors and other creditors, and to maintain stability in the entire financial system. The Bill will accord MAS a wider role in the resolution process and a broader range of resolution options.
More specifically, the new section 54A provides MAS the right to be heard in insolvency proceedings of a bank and the power to approve the appointed liquidator. Part VIIA introduced by the Bill also empowers MAS, with the approval of the Minister in charge of MAS, to direct the sale of the business of a bank and in the case of a bank incorporated in Singapore, to require the issuance of new shares, to restructure the share capital or to sell existing shares to other investors. Before it can exercise these powers, MAS has to consider the interests of depositors of both the transferor and transferee, as well as the stability of the financial system in Singapore. The affected parties will be given a right to be heard prior to the Minister’s approval of such a transfer, except where it is not practicable or desirable to do so, for instance, where an expeditious transfer is crucial in maintaining financial system stability.
Facilitating risk-based supervision and allowing operational flexibility of banks
Let me now turn to how the amendments will facilitate risk-based supervision and allowing operational flexibility of our banks. Consistent with the risk-based supervisory approach
adopted by MAS, the Bill will allow the calibration of prudential requirements according to an individual bank's financial strength, its risk profile and its risk management capabilities. Let me provide a few examples. The revised section 29 allows MAS to raise the large exposure limits for individual banks where there are strong justifications. Under section 40, a higher asset maintenance requirement may be imposed on banks that pose greater supervisory concerns. The amended section 38 will allow banks the operational flexibility to draw down their liquidity reserves to deal with liquidity stress situations. In addition, in view of the industry's need to move nimbly in a fast-paced environment, the new section 76A will allow MAS to grant exemptions from requirements in the Act in specific situations where the prudential objectives are not compromised.
Under the current regime, only banks and non-bank financial institutions are subject to MAS' rules on the issuance of credit cards. The new Part VIII extends MAS' regulatory scope to all issuers targeting the Singapore market and not just banks and financial institutions. Entities that have not been approved to issue credit cards in Singapore will be prohibited from soliciting for or accepting card applications in Singapore, and this applies equally to third parties acting on their behalf. MAS will be empowered to inspect the operations of approved credit card issuers for compliance with MAS’ rules pertaining to credit card operations.
The proposed regime also clarifies that single party merchant credit is exempted from regulation. Such an arrangement, where the card is really used only for transactions with the issuer, is essentially a deferred payment scheme offered by merchants to their customers. In addition, a new exemption for cards granting credit in small amounts not exceeding $500 will be introduced. This allows flexibility in payments for small-ticket items without raising substantial concerns about Singaporeans spending beyond their means.
Let me now turn to the other amendments that are needed to update the banking regulatory framework:
(a) Section 22, which requires a bank to maintain a reserve fund. This will be repealed in light of enhancements to MAS' regulatory framework over the years, and the banks will be allowed to release their reserves over a five-year period.
(b) Section 5, which restricts the use of the word "bank" to protect consumers from being misled as to the status of the entity they are dealing with, will be amended to accommodate legitimate uses of the word, such as representative offices of foreign banks; international financial institutions like the World Bank, Asian Development Bank; and where it is used in a non-financial sense, such as "Blood Bank" and "Infobank".
(c) The amendment to section 4B will provide flexibility for MAS to exclude or include any financial product from or in the definition of "deposit". This is necessary to facilitate MAS’ response to innovative products that either legally satisfy the definition of "deposit" but do not meet the economic characteristics of a deposit, or conversely meet the economic characteristics of a deposit but do not satisfy the legal definition of "deposit". An example of the latter is a murabaha investment - an Islamic variant of a time deposit. Products that are prescribed as deposits will be accorded priority ranking in the event of a bank winding-up and protection under the deposit insurance scheme.
(d) The amendments to section 26 will permit MAS to disclose only non-customer information provided by banks to MAS under limited circumstances, such as for the purpose of sharing aggregate information at international fora and contributing to research projects. This is to balance MAS' responsibility for surveillance and supervision of the financial sector with its commitment to preserve the confidentiality of individual banks' information.
(e) To underscore the importance of accurate reporting of information to MAS, section 66 will be amended to extend the obligation - currently imposed on directors and executive officers - to any person who furnishes information to MAS to exercise due care in ensuring that the information is not false or misleading.
(f) Finally, the new section 54B will explicitly provide MAS with the powers to direct the removal of directors from the board of a Singapore-incorporated bank, if these persons fail to perform their duties and functions, to protect public interest and depositors. This is in line with international standards and the practices in reputable jurisdictions.
Conclusion
Mr Speaker, Sir, a sound and vibrant financial sector is an integral part of ensuring the success and resilience of the Singapore economy. These amendments to the Banking Act are part of an on-going process to enhance the robustness and responsiveness of our banking regulatory framework, in tandem with the growth in scope and sophistication of the activities of the banks in Singapore.
Sir, I beg to move.
Question proposed.
3.37 pm
Mr Inderjit Singh: Mr Speaker, Sir, I support the proposed amendments in the Bill. The Bill is definitely a step in the right direction when we consider Singapore's efforts to become a major world financial centre. I have comments on six areas of the proposed amendments to the Banking Act, as follows:
The first comment is on section 4B. The Bill proposes widening the possible definition of "deposit" in section 4B. This is a positive development and I welcome it. Sir, there is a trend of capital movement from the west to the east, particularly from the Middle East. We need to be ready for this expected surge in capital, including that from the Arab world, where many are owners of the capital.
I hope that the banks will take up the challenge to devise new, Syariah -compliant financial instruments, including deposits, that will give these owners options to invest their capital here. Additionally, Islamic banking instruments may also appeal to a wider population, as has been experienced elsewhere.
I would say that we may even need to go further because now is the right time for Singapore to position itself as the key centre outside the Arab world for Islamic banking. I was hoping to see more done to make Islamic banking a reality in Singapore. MAS therefore should form a focus Committee or workgroup to seriously develop Islamic banking options in Singapore.
Sir, however, the widening definition of "deposit" may catch some consumers unaware as they may view some products as principal-guaranteed when they may involve hidden risks or costs. What restrictions exist or are proposed to prevent the introduction and marketing of such products and, in particular, of them being labelled as straightforward "deposits"?
The second comment is on section 22 which is the abolishment of the reserve fund. I would like to ask the Minister how the reserve fund is presently maintained and whether the repeal of the requirement is expected to lead to an outflow of capital from Singapore. If so, will this not lead to excess supply of Singapore dollars on the market and lead to a risk of fluctuation in the currency value? Especially at a time when the US dollar is in a trough, it may not be wise to risk any fluctuation that we can avoid.
Sir, the third comment is on the prudential safeguards on the proposed amendments to sections 27 to 29 of the Act, I note that these amendments will likely involve some dislocation of certain parties, but that it will make for a stronger industry as a whole where the risks are acceptably spread out by the banks. This will also benefit consumers by giving them greater assurance of the stability of the banks where they entrust their money to. I welcome, in particular, the shift to an exposure-based regime of disclosure. What this change means is that banks that have large exposure to groups of related entities will have to scale back on this exposure.
Further, in the case of DBS Bank, which has large exposure to Government-linked companies (GLCs) in terms of supporting their financing requirements, I think that the proposed amendments will provide an impetus for a few things:
First of all, DBS will have to source elsewhere for business that it may have to forgo as a result of the Bill. This is a good opportunity for them to exploit other markets. Hopefully, it will also make DBS (and other such banks) more open to innovative funding arrangements, especially funding more SMEs.
GLCs will also have to source funding on market-driven principles, having to satisfy lenders not linked to the Government that they are viable credit risks.
Specifically, could the Minister enlighten us as to whether Temasek, which is a core part of Singapore's investment strategy, will face any significant challenges because of the proposed amendments since many of its related entities bank with DBS and Temasek also owns DBS?
Sir, MAS' ability to exempt certain banks or categories of banks from operation of these limits in its prudential safeguards, which is in section 29(3), is potentially sensitive, especially if it works in favour of local banks. I suggest that this be taken into consideration before any exemptions are made, which must be well-considered and judiciously made.
As regards the disclosure requirement itself in section 27(1) of the Act as proposed, it would require a statement on exposure by banks in Singapore. Checking on this looks like a difficult task for MAS. In the case of foreign banks, their exposure may be spread wider geographically than local banks. Has the feasibility of checking on compliance been considered by the Minister and MAS?
Further, some of this disclosure may involve clearance from regulatory authorities overseas due to their banking secrecy Act, for example, in the case of disclosures that involve exposure to banks or customers of banks overseas.
Finally, local banks are required to include their Asian Currency Units (ACUs) exposure in their calculations while foreign banks operating ACUs are presently exempted from this by reason of the transitional provision in clause 67(9) of the Bill. There may be a disproportionate impact on the numbers reported by local banks because of this. I hope that we are not unwittingly imposing more difficult conditions on local banks that would favour foreign banks.
The fourth comment is on sections 38 to 40, which are on the asset maintenance regime. I would like to seek some clarifications from the Minister.
Sir, on the proposed amendment to section 38 which concerns minimum liquid assets, the Bill contains new powers for MAS to deal with banks in relation to a minimum liquidity required, especially for liquidity stress situations. This is, of course, good for the consumers.
The Bill, however, also changes the period for altering the minimum liquidity to three days, instead of the previous one month, under section 38(3). MAS has clarified that, in practice, it will continue to act in consultation with industry, and the three-day period for altering the minimum liquidity will only be used exceptionally. If this is the case, why is there a need to reduce the statutory period for compliance to three days? Why not instead stick with a longer limit, while providing for a shorter limit to be no less than three days?
Sir, the three-day limit in the provision could seem very onerous for financial institutions. Hence, it may work against the long-term aim of making Singapore a financial hub. I therefore suggest that a ministerial check be written in as a safeguard for invoking this minimum period which means that we should not do it at the very first instance. Can this check be introduced in the Act?
In section 39 as proposed, and this concerns minimum cash balances, this provides flexibility to MAS to deal with different banks differently. In my opinion, this is also a good idea.
Also, the financial penalty provided for in section 39(7) should be provided for in the Act itself instead of being left to subsidiary legislation. Is there a good reason why it is removed from this Act?
Sir, in section 40, which covers the asset maintenance requirements and the related sections 49 to 55, which concern certain powers of MAS, could the Minister please enlighten the House on how other major financial centres handle such asset maintenance?
Sir, even the best of regulations cannot totally rule out flight risk of capital when banks are in stress. What is the experience of other jurisdictions in reducing flight risk of capital on impending insolvency and how can the chances be minimised in Singapore? What are the lessons learnt from other areas?
As regards the powers of MAS to step in and manage the affairs of banks in or approaching insolvency, what is the role of MAS when it moves in to control a bank as provided for in this Act? What are its objectives when it takes over the running of the operations of such an insolvent bank? Will the current insolvency procedures, applicable for all companies, not be sufficient? Why the need for these additional changes?
Sir, my fifth comment is on section 62, which concerns the priority ranking of depositors. The proposal to put non-bank depositors ahead of bank depositors is a welcome move as it will provide protection to the less sophisticated depositors. Could the Minister clarify whether it is expected that there may be a move by some banks to concentrate their deposits in other banks that do not accept significant deposits from non-bank depositors? This is so that they can avoid being pushed back in the queue.
The sixth comment is on sections 57 to 57G which are on credit cards and credit. This is a welcome move and we have seen many of our residents, who have been in this downward spiral of debt. In extreme cases, people borrow from one credit card company using one facility to service debt taken from another facility at a very punishing interest rate. They quickly run out of options and face a mountain of debt and also bankruptcy.
I therefore welcome the tightening of the rules that control credit card issuance and the extension of credit. Sir, I have a few questions for the Minister.
First of all, the proposed section 57(3) would catch advertisers, especially since section 57(8)(c) (not knowing that advertisement would breach the law) is difficult to apply, in my opinion. Can this be revoked to provide effective protection for advertising agencies when they have to apply this?
In section 57D(1), this gives the power to issue directions but subsection 4 provides for high fines for violations. Subsection (2) also provides that the directions are not subsidiary legislation. The combined effect of sections 57D(2) and (4) blurs the line between subsidiary legislation and directions. For subsidiary legislation, there is an obligation to publish it in the Gazette, so we cannot say that ignorance of the law is no excuse. Is it not more appropriate to have the directions instead published as subsidiary legislation?
As regards section 57E, there is no provision for informing the public upon revocation of a licence. There is also no requirement for a licensee whose licence is revoked to notify at least their ex-customers. Further, subsection (2), requiring the licensee to prevent the use of cards after the licence is revoked, is likely to be practically unworkable and may be difficult to comply with. Subsection 3, while preserving transactions that took place before revocation, says nothing about transactions that took place after revocation. There is potential impact on third parties that has to be addressed. Can this section, therefore, be revoked to take this situation into account?
What is the Government's policy on mass-providers of credit to lower income groups that are usually targeted with credit cards (ie, those earning income below $30,000)? For example, we have seen extensive advertising over the last year of lending of smaller amounts by a commercial credit provider that is not subject to the Banking Act. Advertisements for such credit are plastered all over MRT stations, taxis, among other places. Will this likely affect the market estimates on the credit and default and indebtedness problems arising from over-borrowing?
Do we want the Banking Act to be the only legislation governing mass-providers of credit? If so, what other changes would be necessary to other legislation, for example, the Moneylenders Act (Cap. 188)? Can we bring both of these Acts, or at least the institutions licensed under them, under the same monitoring agency to provide for better control of their activities? So, credit card debt is, therefore, not the only problem. It is the other type of debt that may exist.
Sir, in conclusion, this being a very technical Bill which is difficult to understand, but I managed to understand most of it, I hope that the Minister can clarify the points I have raised. But, overall, I think this is a good Bill and I support the amendments.
3.46 pm
Mdm Ho Geok Choo:
Mr Speaker, Sir, the amendments are comprehensive and will empower MAS to better manage the new dynamics of the banking sector in the years to come.
I have only one comment on the Bill. This relates to credit card advertisements and promotions by banks, section 56, subsection 5 (page 68).
How do Net advertisements or solicitations come under this section, if a foreign bank originates it outside Singapore but intended for a Singapore audience, or as part of a regional marketing exercise of which Singapore is one target market?
Sir, the Internet is still very much a grey area that transcends territoriality. Is it possible to develop more granular controls on Net advertisements and promotions?
Sir, I also have a number of other issues to raise relating to the development of the banking sector in Singapore. Unlike Mr Inderjit who has digested the technicalities, I am raising another perspective.
The first relates to developments in credit card technology.
Sir, we have seen recent cases of credit card skimming and credit card fraud perpetrated by foreigners, precisely because we use magnetic-striped cards. The continued targeting of Singapore by these fraudsters may undermine our reputation as a trusted financial hub. On the other hand, credit cards with embedded microchips have reduced card fraud by as much as 80% in countries like France.
Under these circumstances, I would like to ask if MAS would mandate the adoption of EMV microchip technology to replace magnetic stripe-based cards. I understand this may be a costly exercise for banks. But I would like to argue that the cost is worth our reputation as a trusted financial hub, as well as for the reputation of the banks themselves.
My second question concerns two-factor authentication. MAS has mandated that local banks adopt two-factor authentication (2FA) to provide stronger security for e-banking. But feedback by bank customers indicates that it may be inconvenient for them to carry multiple tokens for different bank accounts. I would like to ask if there is a better alternative that provides more convenience but does not sacrifice the added security.
Sir, my next question is about phishing or anti-phishing. Phishing is becoming more rampant around the world. Security experts tell us that phishing attempts are moving away from the USA and Europe to the Far East. Singapore banks have also been the targets of phishing attacks in the past. One reason why phishing continues unabated is because phishing sites are often located in servers in third countries where banking laws are not so strict. Many security experts believe the answer lies in more effective inter-governmental collaboration.
In view of this, I would like to ask: What are the prospects for increased inter-governmental cooperation in combating phishing? What are the prospects and challenges for a global or inter-governmental agreement in combating phishing and similar crimes?
Sir, one issue that crops up regularly among SMEs is the need for a SME Bank. As business organisations, banks naturally gravitate towards higher-yield activities. This, coupled with more stringent banking controls, may make financing for SMEs less attractive. SMEs, on the other hand, need a good source of funding to help them grow and regionalise. According to the 2006 SME Development Survey, a good 40% of SMEs depend on overdrafts as their main source of short-term funding. This is an expensive option for them.
While the situation has improved slightly in the past three years, the financing structure for SMEs has not changed at all. Overdrafts remain their main source of short-term funding (40%), followed by trade financing (32%), term loans (27%) and factoring (7%).
Sir, less than one in three SMEs (27%) are able to secure loans to finance their growth. Clearly, this structure needs to be corrected. Can MAS look into the feasibility of an SME Bank to assist SMEs finance their growth and to go regional? The SME Bank can provide a wide range of financing options designed for SMEs and on more competitive terms. This will, in turn, help our SMEs to become more competitive in their markets. The SME Bank can also provide first- or second-round funding for start-up companies, thus supporting our drive towards greater entrepreneurship.
Sir, I believe such a bank can be viable financially. More importantly, it can provide the much-needed impetus to help our SMEs grow and expand regionally.
Sir, my final comment relates to the marketing of financial products. We all know that banks do not make much money by accepting deposits. They do make money by selling their depositors additional products such as unit trusts, insurance policies or structured deposits. In the case of structured deposits or investment products, customers are not made aware of the many and often substantial hidden costs in these products. While they are promised protection of their principal sums, many of the management costs of these products are often deducted upfront. So, in cases where the returns on these products are minimal, depositors may actually lose part of their principal.
In light of this, banks must demonstrate greater transparency by advising their customers of the hidden costs of these products. A related area of concern is the way banks target specific customers who have deposits of a certain size. This clearly violates the privacy of the customer. Banks have obviously made use of privileged customer information to target their customers for cross-selling. Do customers have any safeguards to protect their information? MAS should mandate that banks do not use confidential customer information for any other purpose than normal transaction and communications.
MAS can also require banks to put up prominent warning labels to alert customers that there are risks attached to these ‘safe’ investments. This is similar to the warning labels put on cigarette packs.
Sir, I believe these are major issues that will require the attention of MAS to further strengthen Singapore’s position as a trusted financial hub and banking centre.
Sir, on these, I rise in support of the Bill.
Mr Lim Hng Kiang: Mr Speaker, Sir, I thank both Mr Inderjit Singh and Mdm Ho Geok Choo, who obviously have mastered the amendments very comprehensively and have suggested many comments and improvements. I believe Mr Inderjit Singh raised six points and Mdm Ho raised four. So there are 10 points altogether. I hope Members would bear with me as I go through these points.
First, Mr Inderjit Singh talked about Middle-Eastern funds and the definition of deposits. I agree with Mr Inderjit Singh that we have to deepen our engagement with the Middle East and attract Middle-Eastern funds into Singapore. Our aim is not so much to become a centre for Islamic finance but to build upon our existing strength as an international financial centre. In this regard, we are working with the industry to ensure we have a full suite of financial products and services, including Islamic products and services. We have been reviewing our legislative framework to ensure what we have is conducive to all these new Islamic financial products. Our approach has also been to level the playing field, ensure the neutrality of rules so that anybody coming up with innovative Islamic financial products will not find that they are operating against regulations which are not in their favour. So the neutrality of rules will therefore apply to both conventional and Islamic products and services wherever possible.
Mr Inderjit Singh suggested a Committee to address this. I think this is a good point. In fact, MAS has been working with industry players to tap the views of all the players as to how to develop their products and to make sure we are able to engage the Middle East and to be a player in Islamic finance. So I agree that MAS will continue to deepen its engagement with the industry players.
On the issue of definition of deposits, I recognise that consumers sometimes may be confused whether what they are buying into or what they put into is essentially a deposit or not. That is the reason why we have some of these amendments. Let me clarify that we are not widening the definition or the scope of a deposit. What we are seeking to amend the Act is to allow the MAS to recognise certain products that meet the economic substance of a deposit, ie, that the principal is guaranteed but does not quite satisfy the legal definition of a deposit. Some of these products relate to the Islamic financial products. By clarifying the definition, I think it makes it better for us.
When Mr Inderjit Singh refers to complex deposits, I suppose he is probably referring to structured deposits. Some of these products are advertised as deposits but they have features which require you to take a risk on your deposits. All structured deposits are, in fact, currently subject to higher product disclosure requirements, as set out in the Financial Advisers Act. These are the guidelines on structured deposits. This is to ensure that people who buy into such products know what they are buying into and they know that this is not a straightforward deposit.
The second point which Mr Inderjit Singh raised is the outflow from the reserve fund and its impact on the Singapore dollar and the flow of funds out of Singapore. Let me explain that the reserve fund is essentially the retained earnings that belong to the shareholders. This has been kept under section 22, and this was intended to raise the reserve requirements for the banks
as they build up their reserve requirements. Under section 22 previously, the banks were not allowed to distribute to their shareholders. There is now no longer this requirement to maintain the reserve fund and in fact we do not require the fund to be maintained in any particular form of asset. So with the repeal of section 22, and we allow this to be done over five years, we do not foresee any difficulties that Mr Inderjit Singh pointed out that there will be this huge outflow of funds affecting the Singapore dollar.
The next area that Mr Inderjit Singh raised is regarding the prudential safeguards, particularly the large exposure limits. Let me assure the House and Mr Inderjit Singh that MAS has conducted several consultations with the industry on the revised framework and we do not expect the banks to have any significant difficulty complying with these new rules. But, nevertheless, we still have a two-year transition period for the banks to modify their systems and to make the necessary preparations.
Mr Inderjit Singh asked whether the exemptions are necessary. Essentially, we need to strike a balance between setting out the requirements in a very transparent and stringent manner as well as giving MAS the flexibility to deal with the situation as it arises. So it is this flexibility that MAS needs. Especially in situations of restructuring or in a resolution of a bank failure, MAS needs some of these exemptions to give it the flexibility.
Mr Inderjit Singh cautioned that MAS' use of such exemption powers may be seen to be based on MAS own requirements and may not be seen to be transparent. So I think we have to strike a balance. Let me assure Mr Inderjit Singh that the exemption power does not relieve MAS of its duty to ensure that when it exercises such powers, it exercises it on good defensible grounds and where there are strong prudential justifications.
Mr Inderjit Singh also asked about the regulation of foreign banks and how the exemption of exposures booked in the ACU of a bank incorporated outside Singapore would present problems with us. We have to work closely with our counterparts in other jurisdictions, just as we regulate or supervise the branches of foreign banks here. Similarly, our counterparts in other countries would also supervise or regulate the branches of Singapore banks. This close regulation and cooperation between regulators will allow us to make sure that the regulations cover across borders.
The fourth area is the minimum liquid asset and the asset maintenance requirements. Basically, what we are confronted here with is the problem of maintaining liquidity when there is a stress on the banks. Liquidity risk is a critical risk for the banks and, in normal circumstances, of course, the liquidity requirements of a bank for its day-to-day operations can be reasonably anticipated, and the MAS has no reason to make any sudden changes to the minimum liquidity requirements. The three-day grace period that we are seeking for really only addresses when there is severe adverse liquidity position of a bank. We will only impose this after careful assessment of the situation. A bank which has insufficient liquidity to make its claims can very quickly accelerate into a crisis of confidence and bring down the bank. And if the MAS is prevented from acting promptly to deal with such stress situation and such crisis, then it can be even more damaging for Singapore's reputation as a financial centre.
On the issue of minimum cash balances, again, this is the need to balance flexibility and transparency. Again, when we made the changes of an imposed requirement, this will be put up as a subsidiary legislation and which will be gazetted when we notify the banks.
On the asset maintenance requirements, Mr Inderjit Singh asked what were the practices in other countries. Let me assure him that asset maintenance is in fact one of the prudential tools which enhance the protection of depositors and this is a practice which is commonly done in other jurisdictions. Basically, if a branch of a foreign bank faces problems, we want to be able to circle some of the assets they have here so that its assets can be protected and to pay the local depositors. Other jurisdictions in fact go further and require the bank to incorporate locally before they can accept retail deposits. So, in fact, the regime that we have here is fairly liberal. We allow the foreign banks to set up branches here, but we do want to introduce this new asset maintenance regime in order to be able to protect our depositors.
The fifth area is the priority ranking of depositors and Mr Inderjit Singh asked whether, with such a situation, banks would game and go for a situation where the inter-bank deposits will rank higher. I think this is a possibility. But I am sure when banks undertake activities with their counter parties, they do not just take this as a key consideration. Before entering into any transaction, I am sure the principal consideration of the bank is the creditworthiness of its counter parties, and not the ranking of its inter-bank deposits.
The sixth area is the credit card regime. Mr Inderjit Singh welcomes the tightening of the rules. But at the same time, he wonders whether we should have a single entity to regulate all the credit. I think we do want to prevent Singaporeans getting themselves into situations where, as Mr Inderjit Singh mentioned, they borrow money to pay earlier credit problems or loans and, as a result, they end up spiralling into a situation where it is very difficult for them to get out. At the same time, we cannot be overly stringent. If we cut off the limits on credit card applications too stringently and we prevent avenues for lower-income Singaporeans to borrow through, say, for example, the Moneylenders Act, then they have nowhere to go and they will probably end up with the loansharks. So this is where we have to strike a balance. Indeed, this is what we have done between the Ministry of Law which oversees the Moneylenders Act and MAS which oversees the Banking Act. You have noticed in recent months that we have coordinated the policies so that we have a consistent regulatory framework with regard to credit borrowing from Singaporeans.
Let me now turn to the four issues raised by Mdm Ho Geok Choo. The first issue is on SME financing and her suggestion of a SME bank. I think we have addressed this just now in a Question for Oral Answer. We have quite a wide range of avenues for SMEs to have access to financing, whether through trade financing, term loans, factoring, or through Government assistance, LEFS scheme and many other schemes, which I mentioned just now. We will continue to evolve and provide more opportunities. Right now, many banks in fact regard SME financing as an area of growth that they will be focusing on. I know of many banks who see that by developing the SME sector in Singapore as a template for which they can bring the business model to the regional countries and it is a way of expanding their business. So it is not true that the banks see the SME as a sector for which there are no good business prospects.
MAS will continue to welcome initiatives by the financial institutions to provide new financing options for the SMEs. For example, we have seen some initiatives put up to allow the SMEs to tap the capital markets and also to assess credit applications based on cashflow analysis, and not just simply on collateral. Let me also stress that MAS continues to be open to admitting financial institutions with specialised expertise in SME financing, so long as they are financially sound and meet our prudential standards. Some players in foreign markets who specialise in SME financing do not take deposits. In such instances, they will not require a banking licence from the MAS. There are a few of such players in Singapore already who are funded primarily in the capital market and which provides equipment leasing, factoring and other working capital loans to our SMEs.
Mdm Ho asked about the technology risks and whether our credit card technology can be updated to prevent fraud. On the whole issue of the appropriate technology to apply in credit cards, MAS' position is to leave it largely to the private sector. They are in the best position to decide for themselves. Let me tell the House that from the annual statistics that MAS has been collecting from the banks in Singapore on credit card fraud, in fact, credit card fraud losses have fallen significantly in the past few years. Between 2002 and 2005, credit card fraud losses have fallen by more than 50%, from $9.7 million to $4.5 million. So MAS does not see this as a very big problem. But, nevertheless, we will continue to monitor it and we will continue to encourage the credit card providers to adopt the right technology to prevent credit card fraud. They have to balance the likely losses from the fraud with the cost to be incurred in introducing new or very difficult technologies.
Mdm Ho also asked about the disclosure of product information. It is true that some of the banks are very aggressive in cross selling. For this, we have the Financial Advisers Act which regulates such cross selling and the market conduct of such cross selling. Under the Financial Advisers Act, all material information related to the product must be provided to the clients and such information disclosed must be clear, adequate and not false or misleading. So the rules are there and MAS will continue to enforce these rules. There are also similar rules, as I mentioned just now, on structured deposits which sometimes Singaporeans find difficulty in understanding the risks which they are undertaking in taking up these products.
Mdm Ho Geok Choo talked about advertisements on the Net. Basically, our approach to advertising on the Net for credit card is that if the advertising is targeted at Singaporeans, then it will come under the rules. I think that is the guiding principle.
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 Lim Hng Kiang].
Bill considered in Committee.
[Mr Speaker in the Chair]
The Chairman: The citation year "2006" will be changed to "2007", as indicated in the Order Paper Supplement.
Clauses 1 to 67 inclusive ordered to stand part of the Bill.
Bill reported without amendment; read a Third time and passed.
Column No : 1003
Order for Second Reading read.
4.16 pm
The Deputy Prime Minister and Minister for Law (Prof. S Jayakumar): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."
Sir, this Bill seeks to amend the Trade Marks Act to pave the way for Singapore to ratify the Singapore Treaty on the Law of Trademarks. That Treaty is the tangible outcome of a very successful diplomatic conference that the World Intellectual Property Organisation held in Singapore in March last year. The Treaty further harmonises trademark registration procedures and provides for electronic filing, making it more convenient for businesses to register and manage their trademarks globally.
For applicants filing trademarks in Singapore to gain from the benefits of the Treaty, we need to bring our domestic trademarks regime into full compliance with its provisions, and also for us to ratify the Treaty.
Provision for multiple-class system
Sir, our trademarks regime is already largely compliant with the provisions of the Treaty. But for full compliance, we need to amend the Trade Marks Act to enable IPOS to fully implement a "multiple-class" trademark registration system.
For trademark registration, goods and services are categorised into 45 classes as defined in the Third Schedule of the Trade Mark Rules. Currently, those wishing to register a trademark with IPOS in more than one class have to submit a separate application for each class. With a multiple-class system, they only need to submit one single application for all the applicable classes. This will make it more convenient for trademark owners and their agents, as they will be able to manage their trademark registrations in appropriate bundles instead of handling each registration individually. For example, only one registration will be necessary for all classes of goods and services claimed for the same trademark. These bundles of registrations can be assigned, renewed or licensed as bundles as well.
To implement a multiple-class system, clause 3 of the Bill amends section 17 of the Trade Marks Act to allow the registration of a series of similar trademarks in two or more classes of goods or services. To complement a multiple-class system, clause 2 introduces a new section 5A to allow the division of a trademark application into two or more applications. This is because there may be times when an applicant may wish to divide up a multiple-class application into two or more applications. For example, the applicant may wish to register the trademarks for those classes that do not face opposition first, instead of holding the entire multiple-class application back.
Relief measures for procedural oversight
Sir, the Treaty also provides for relief measures to alleviate procedural mistakes by trademark applicants so that they do not lose the rights to the trademarks filed. This is because there may be instances when they miss certain time limits to respond to objections or queries from the Registrar of Trademarks and their trademark applications then become treated as withdrawn. There may also be instances when applicants may need more time to respond to the Registrar. To comply with the Treaty, clause 5 amends section 108 for rules to be made on extending time limits and for reinstating withdrawn trademark applications.
For consistency with the other rule-making provisions in the Act, clause 5 also removes the technical requirement for the Minister to consult IPOS on rule changes since these are inevitably done in consultation with IPOS.
Other amendments: registration of licence of pending trademarks
Other than aligning our trademarks regime with the provisions of the Treaty, this Bill also seeks to provide businesses with greater flexibility in trademark management. Specifically, clause 4 amends section 41 to allow the registration of licences relating to pending trademarks and not just registered trademarks. This is to enable third parties to take note of the licensee’s interest in the trademark. It is useful even if the trademark is pending registration as some trademarks can quickly acquire goodwill and become highly desirable for licensing through franchising. This proposed amendment will enhance our business-friendliness and put Singapore on par with jurisdictions such as the UK and Australia.
To sum up, Sir, this Bill will bring about greater convenience to businesses as well as update our trademarks regime to be on par with international practices. It will also enable us to ratify and participate in the Singapore Treaty on the Law of Trademarks so that applicants filing trademarks in Singapore may benefit when the Treaty comes into operation. Consultations by IPOS indicate that the proposed changes have been welcomed by trademark applicants and supported by the trademark agents in Singapore.
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. - [Prof. S Jayakumar].
Bill considered in Committee.
[Mr Speaker in the Chair]
The Chairman: The citation year "2006" will be changed to "2007", as indicated in the Order Paper Supplement.
Clauses 1 to 6 inclusive ordered to stand part of the Bill.
Bill reported without amendment; read a Third time and passed.
Mr Speaker: Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 4.45 pm.
Sitting accordingly suspended
at 4.24 pm until 4.45 pm.
[Mr Deputy Speaker (Mr Matthias Yao Chih) in the Chair]
Column No : 1006
Order for Second Reading read.
The Senior Minister of State for Law (Assoc. Prof. Ho Peng Kee): Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time."
Sir, as its title implies, this Bill collates a number of amendments to several Acts which are mainly technical in nature. Let me highlight the key ones.
Amendments to various Acts relating to record keeping requirements
The Prime Minister and Minister for Finance announced in the Annual Budget Statement last year that a decision had been made to reduce the record-keeping period in a number of statutes, generally to five years with a view to reducing the burden and costs to businesses.
Pursuant to that statement, this Bill proposes amending 14 statutes to reduce to or specify a record-keeping period of five years. Amendments to the record-keeping period in a few more statutes will be made when those statutes are individually amended at a later time. With the exception of the Charities Act and the Income Tax Act, the amendments to the statutes covered under this Bill will apply to existing records to enable businesses to enjoy the benefits of the amendments as soon as they are brought into effect.
In the case of the Charities Act and Income Tax Act, the reduction in record-keeping period from seven years to five years under the Income Tax Act will take effect from year of assessment 2008 whilst that under the Charities Act will take effect from any financial year ending in 2007. These proposed effective dates for the Income Tax Act and Charities Act will give IRAS sufficient time to prepare for the transition and also give taxpayers and charities sufficient notice of the changes and the related transitional provisions.
Amendment to the Patents Act
Clause 6 makes several technical amendments to the Patents Act. Generally, these amendments will bring our patent system in line with two changes to the Regulations under the Patent Cooperation Treaty (or PCT) to which Singapore is a party.
The first is to provide an applicant with two more months after the statutory 12-month period to file his Singapore patent application and claim priority over an earlier relevant application that he has filed in a Paris Convention or WTO member state, provided the applicant can show that he missed the initial 12-month period unintentionally, or despite showing due care. Amendments to section 17 of the Patents Act, with consequential amendments to section 87, are proposed to effect this.
The second is to allow an applicant to include the description and missing parts in his Singapore patent application by making reference to an earlier relevant application which completely contains them, assuming his Singapore patent application has claimed priority over this earlier relevant application. This allows the applicant to secure or retain the original date of filing of the application, and is important as a later date of filing could expose the application to additional prior art that would decrease the patentability of the invention. To effect this, amendments to section 26 of the Patents Act are proposed, along with consequential amendments to sections 2, 28, 29, 36A, 80 and 84.
Sir, these PCT-related amendments demonstrate our continuing commitment to keep our patent system in line with international developments. Public consultations show that the proposed changes are expected to be welcomed by both applicants and patent agents for the added flexibility they bring to the patent application process.
Apart from these PCT-related amendments, other technical amendments are also proposed to clarify provisions in the Patents Act concerning the requirement for English translation of foreign language patent applications, the publication status of PCT applications entering national phase in Singapore, and the entitlement of persons to act as patent agents.
Amendment to the Plant Varieties Protection Act
Clause 7 aligns section 52 of the Plant Varieties Protection Act with corresponding sections in the Trade Marks, Patents, and Registered Designs Acts regarding composition of offences.
Amendment of Boundaries and Survey Maps Act and amendment of Land Surveyors Act
Sir, the principal amendments to the Land Surveyors Act, or "LSA" for short, are to provide for the licensing of Limited Liability Partnerships (or "LLPs") formed by registered surveyors to supply or engage in survey services.
Presently, the LSA only has provisions to grant licences to corporations and partnerships to supply or engage in survey services. There are no provisions to grant licences to LLPs.
The LLP is a business structure which is especially suitable for professional firms. The amendments will allow registered surveyors to form such business entities. This is a pro-business approach. Similar amendments have been made to the Professional Engineers Act and Architects Act to allow for LLPs.
The other amendments to the LSA are technical and minor in nature, whilst the amendments to the Boundaries and Survey Maps Act are consequential to the proposed amendments to the LSA to provide for LLPs.
Amendments to Schedule A of the Criminal Procedure Code
Sir, Schedule A of the Criminal Procedure Code (CPC) lists out Penal Code offences and provides whether the Police may arrest without a warrant and whether bail is available as of right. The amendments rectify the anomaly where sections 130B, 130C and 151A of the Penal Code have been omitted from the Schedule. Section 130B concerns piracy on the high seas, section 130C concerns piractical acts and section 151A concerns the making, printing or distributing of any document that incites violence or counsels disobedience to a lawful order of a public servant or is likely to lead to a breach of the peace. These are all serious offences. Other offences similar in nature and gravity are likewise also "seizable" offences. With these amendments, Police will be able to arrest offenders of sections 130B, 130C and 151A in the Penal Code without a warrant. These three offences will not be compoundable, and the offenders will not be entitled to bail as of right, but at the discretion of the court.
Amendment to the Immigration Act
Sir, the Immigration Act currently allows ICA to require the furnishing of security from the master, owner, charterer or agent of any vessel, aircraft or train arriving in Singapore, if ICA has reasonable grounds to believe that any person arriving on board, such as a member of the crew, a passenger, or a stowaway, may attempt to disembark in or enter Singapore illegally. The purpose of this security bond is to cover the cost of the maintenance and repatriation of the person if he is subsequently stranded in Singapore. The bond will only be enforced if any of its conditions is breached in contravention of the Immigration Act and its regulations.
Currently, the Act requires the security in such cases to be furnished by way of a bond, or a bond accompanied by a guarantee from the bank or insurer. The Act also requires the form of the bond and the guarantee to be stipulated. This restricts the types of security and the form of the bond and guarantee which ICA can accept. In addition, it limits the selection of the acceptable types of security which are available to the shipping community. Hence, clause 10 seeks to amend section 43(4) of the Act to vest powers in the Controller of Immigration to determine the manner and form of security required, so as to allow flexibility on the type or types of security which may be accepted.
Amendment to the Public Transport Council Act
Clause 13 makes a technical amendment to the definition of "ticket payment service" in the Public Transport Council Act to clarify that the service relates to "mode of payment for tickets" instead of "tickets". This reflects accurately the intention for the PTC to regulate a service provider who provides a service which relates to any "mode of payment for tickets". An example of a "mode of payment for tickets" is the ez-link card. The amendment does not expand the scope of the definition but merely serves to clarify it.
Amendment to the Public Utilities Act
Sir, clause 14 amends paragraph 1 of the Third Schedule to the Public Utilities Act to change the financial year of the PUB. Currently, based on the calendar year, it will be changed to start from 1st April and end on 31st March the following year. Consumers and suppliers will not be affected by this change.
Amendments to the Road Traffic Act
The proposed amendment to section 44(1) of the Road Traffic Act will remove the current stipulation in section 44(1) that the Deputy Commissioner of Police may keep a driver's conviction or disqualification record for a period not exceeding three years. At present, a certificate relating to the particulars of any conviction or disqualification maintained under section 44(1) is prima facie evidence of the conviction or disqualification, by virtue of section 44(2). The proposed amendment will allow a certificate relating to the particulars of any conviction or disqualification, recorded and maintained under section 44(1), to be prima facie evidence of the conviction or disqualification under section 44(2), when the conviction or disqualification occurred more than three years previously.
Amendment to Supreme Court of Judicature Act and Subordinate Courts Act as a consequence of the five-day work week
Sir, clauses 16 and 17 amend the Subordinate Courts Act and the Supreme Court of Judicature Act to reflect the days on which the Supreme Court and Subordinate Courts and their respective Registries must be open, following the introduction of the five-day work week in the civil service in 2004. However, notwithstanding the amendments, the Supreme Court and Subordinate Court Registries will continue to function on Saturdays. At the Subordinate Courts - Mentions Court 26, Family Court 1 and the Juvenile Court will also continue to remain open on Saturdays so that arrested persons may be produced before a Magistrate before the expiry of the 48 hour maximum detention period stipulated in section 36 of the Criminal Procedure Code. The amendments will also not change the position that a Supreme Court Judge or a judicial officer of the Subordinate Courts may lawfully sit on a Saturday, Sunday or a public holiday if in the opinion of the Judge or judicial officer, the business to be dispatched is extremely urgent.
Amendment to section 139 of the Women's Charter
Sir, under section 139 of the Women's Charter, the power to make rules to fix the fees and costs payable for matrimonial proceedings as well as the rules concerning the practice and procedure for matrimonial proceedings is vested in the Chief Justice and two other Judges of the Supreme Court. The Chief Justice is of the view that the judges of the Family Court ought to be formally involved in the making of rules governing matrimonial proceedings and that the rules should be relevant to the lay person. Clause 18 amends section 139 of the Women’s Charter to provide that the rules committee will comprise the Chief Justice, a Judge of the Supreme Court and a District Judge appointed by the Chief Justice and two practising lawyers appointed by the Chief Justice.
Other amendments
Sir, lastly, the Bill corrects a grammatical error in section 2(2) of the Parliamentary Elections Act.
Sir, I beg to move.
Question proposed.
Ms Sylvia Lim: Mr Deputy Speaker, Sir, I have some queries for the Senior Minister of State concerning the rationale for the reduction of the record-keeping period which is dealt with in clauses 2 to 4 and also in the Schedule of the Bill.
Sir, if I recall correctly, in October 2005, this issue actually came up before Parliament in the context of the Income Tax (Amendment) Bill. At that time, the House was told that IRAS needed to keep records for seven years and one of the reasons was that the Limitation Act still provided a six-year time bar for actions and IRAS needed that allowance for some actions where they have to recover back taxes.
Sir, as far as I know, the time bar under the Limitation Act still remains the same at six years for most civil actions. My question is whether this reduction in record-keeping to five years would risk destruction of relevant records which might be needed for court actions.
Assoc. Prof. Ho Peng Kee: To my knowledge, this amendment has been considered by the relevant agencies such as the Ministry of Finance which includes, of course, IRAS. They have all agreed that the five-year period is something we can move towards. I stand corrected, but it should not affect any substantive rights that would have accrued because these are technical amendments, and they only relate to the period of time in which the parties are required to keep the records.
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. - [Assoc. Prof. Ho Peng Kee.]
Bill considered in Committee.
[Mr Deputy Speaker in the Chair ]
The Chairman: The citation year "2006" will be changed to "2007", as indicated in the Order Paper Supplement.
Clauses 1 to 18 ordered to stand part of the Bill.
The Schedule ordered to stand part of the Bill.
Bill reported without amendment; read a Third time and passed.
Column No : 1014
5.00 pm
The Senior Minister of State for Home Affairs (Assoc. Prof. Ho Peng Kee): Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time."
Introduction
Sir, although the intent of this Secondhand Goods Dealers Bill to provide for the licensing and control of secondhand goods dealers remains the same as the current Secondhand Dealers Act (SHDA), MHA is proposing to enact a new Bill because most of the sections in the current Act have been amended.
The Secondhand Dealers Act was enacted in 1918 to regulate businesses that deal in the trading of secondhand goods. That is almost 100 years ago. This is because businesses that deal with secondhand goods trading have the potential to be a channel for criminals to dispose of stolen goods - or what is known as fencing. Hence, the need to regulate the secondhand goods trading industry.
The Act has been useful in solving some crimes. Members will know that, in recent years, handphone theft nearly tripled from 1,700 cases in 2001 to more than 4,800 cases in 2005 before falling to about 4,600 cases last year. Police's regulatory control of secondhand dealers, as well as other enforcement measures, has contributed to this improving trend. Apart from intensifying checks on dealers of secondhand handphones, Police compared the leads from cases of handphone theft against the transaction records of dealers. These efforts have improved our success rate in crime solving and this, in turn, has had a deterrent effect on thieves and errant secondhand handphone dealers. Clearly, the Act has been useful in helping Police deal with errant dealers who are responsible for the quick and easy disposition of stolen handphones.
While the intent of the Act remains the same, the crime situation has changed considerably over the years. This Bill before the House reflects a refinement of the existing Act to better serve today’s regulatory and investigative requirements. It also seeks to bring it up to date with Police’s current enforcement needs.
Sharper regulatory focus
Mr Speaker, Sir, the new Act will sharpen the focus of the regulatory regime for secondhand goods dealers. We assess that there is no need to subject all secondhand goods dealers to regulatory requirements, such as yearly registration and payment of fees, especially if the items they deal in are of little crime control value.
Hence, whereas the Schedule of the current Act contains a list of goods that are excluded from regulation under the SHDA, that is, a “negative list” approach, the new Act will take a “positive list” approach, that is to say, the new definition of secondhand “goods” in clause 2 of the Bill will cover only items that have considerable value and which have been identified to be common items of theft and easily disposed of to secondhand goods dealers by property offenders. To ensure that we can adjust quickly to changing crime trends, the Minister will have powers to amend this “positive list” by order in the Gazette.
This “positive list” approach in regulation will benefit dealers in secondhand goods that are not in the Schedule. Such an approach is also more pro-business.
But let me assure the House that, with this loosening of control over the industry, Police will still exercise regulatory control over dealers in secondhand goods which are of interest to the Police. Enforcement checks will continue to ensure that errant dealers are dealt with accordingly under the SHDA.
Expansion of scope
Sir, the second major enhancement to the current regime involves extending the definition of “shop” beyond physical shop premises, to include any place of business, whether a physical place or a virtual one like the Internet. The current Act does not cover dealers operating without a shop. We recognise that many secondhand goods dealers today actually carry on their business via other means, such as on the Internet, or in an open-air setting like Sungei Road. This is unacceptable, as thieves and robbers will simply get rid of their loot through these other dealers who do not have a shop-front.
MHA is hence widening the coverage of the law to include those dealers who do not operate within a shop. However, in keeping with the emphasis on a sharper regulatory focus, only dealers who trade in secondhand goods that are listed in the Schedule will come under the ambit of the Act.
Record-Keeping
Another important aspect of this Bill lies in clause 10, which requires selected dealers to keep transaction records and to submit these to the Police. Such records are valuable in facilitating Police’s work in crime control and investigation. Secondhand goods dealers are also required by law to retain the records for a period of not less than five years and to produce such records for examination by any Magistrate, Justice of the Peace, Licensing Officer or police officer.
Consolidate and update penalties
As the Act has not been amended for some time, the penalties in the SHDA are generally light in today’s context. Apart from the penalty of an imprisonment term of up to three years for dealers in used bicycles or bicycle parts, motor vehicles or motor vehicle parts, for failing to keep proper books of accounts, all other offences carry only a penalty of a fine of up to $1,000, and an imprisonment term of up to six months. These penalties are insufficient in today’s context as revenues of dealers’ trade are considerably higher. The law will then lose its impact, if it poses little deterrence.
Using the Pawnbrokers Act as a benchmark as the two Acts are similar in intent and purpose, MHA is consolidating all the penalties in clause 18 of the Bill, which imposes a stiffer general penalty of a fine not exceeding $20,000 or imprisonment for a term not exceeding 12 months, or both, to any person convicted of an offence under the proposed Act or its Rules. As this is only the maximum amount of the fine, the court will have greater leeway to impose the appropriate punishment in any particular case.
Composition of offences
Clauses 18 and 19 give Police more powers in bringing errant dealers to task. But, as not every case is serious enough to be prosecuted in court, the new Act will empower the Licensing Officer to compound any such offence prescribed as compoundable by the Minister, with a composition fine not exceeding $2,000. This is in line with the process Ministry of Law started two years ago to make some offences, where appropriate, compoundable.
Conclusion
Mr Speaker Sir, enacting this Bill will mean that, for a start, more than 900 existing dealers would no longer be licensed under the Act, as they are not currently dealing in goods in the Schedule or the “positive list”. This is in line with the policy to reduce regulatory controls on businesses. Police will focus their control over secondhand goods dealers who trade in high-end or profitable secondhand goods, using the new “positive list”.
Sir, in conclusion, the Government, through this new Act, is taking another important step to help ensure that our legislation keeps pace with evolving trends so that we can keep crime under control whilst allowing businesses as much room to operate as possible.
Sir, I beg to move.
Question proposed.
5.10 pm
Dr Teo Ho Pin: Mr Deputy Speaker, Sir, I rise in support of the Bill. The proposed Bill will provide a comprehensive legislative framework to regulate the trading of secondhand goods in Singapore, and prevent the sale of stolen goods through secondhand dealers. Sir, the rise in prices of consumer goods and the promotion of reuse or recycling of consumer goods for environmental protection reasons have created a market for secondhand goods in Singapore. This is especially so for secondhand goods such as precious metals, jewellery, computers, electronic devices, and antiques.
This growth in the secondhand goods market has at the same time also provided a convenient channel for stolen goods to be traded in secondhand goods shops or through the Internet. Thus, it is indeed timely to update the current Secondhand Dealers Act which was enacted in 1918 and to take into consideration the new range of secondhand goods, the avenues where secondhand goods are transacted, and the prevention of stolen goods being transacted in the secondhand goods market.
Sir, the proposed Bill has placed stringent measures to regulate secondhand goods dealers in terms of licensing, keeping proper records, facilitating Police investigation, and penalty regime. But there are certain shortcomings in the Bill with regard to the impact of the Bill on cost of business, control of secondhand goods shops, keeping of proper records, retention of secondhand goods , unfair practices, and protection of consumers purchasing secondhand goods.
(1) Cost of business and secondhand goods dealers
Sir, the proposed Bill will increase the business cost of secondhand goods dealers as there will be licensing fee, licence renewal fee, transfer fee, and cost of keeping proper records for five years. In addition, dealers are bound by the Act to provide information at their expense to facilitate Police investigation. Sir, I wish to ask the following clarifications from the Minister: (i) how much is the licensing fee as compared to the present fee; (ii) is the licence fee applicable for one shop outlet or multiple shop outlets for the same firm; (iii) what is the period of the licence; (iv) how much are the renewal and transfer fees; and (v) whether there are procedures and prescribed forms to ensure the standardisation of keeping proper records in English such as a master register of secondhand goods in possession, and those transacted stating the time at which and the person from whom he purchased or received such goods, including their particulars?
Sir, I propose that the Bill provide a standard procedure and the use of prescribed forms so as to ensure compliance, reduce business cost and facilitate Police investigation.
(2) Control of secondhand goods shops
Sir, licensing will ensure proper control of the secondhand goods dealers and the secondhand goods market. To further facilitate the enforcement of licensed dealers, I propose that we should include a clause highlighting the need for secondhand goods dealers to display their licences in a conspicuous place in their shops or sale outlets. These signages should also be of a certain size and type as prescribed by the licensing authority displaying such words as "Licensed dealer in secondhand goods". The display of licence and signage will also protect consumers who wish to purchase secondhand goods from authorised secondhand dealers.
The growth in Internet transactions, both locally and overseas, has made it challenging to control the sale of secondhand goods on the Net. I would like to clarify with the Minister as to how this proposed Act will regulate Internet sale of secondhand goods, especially for auction websites, where not much information of both sellers and buyers are needed for the transactions. Such Internet transactions may provide the loopholes where stolen goods can be channelled for disposal.
Sir, I wish to seek clarifications from the Minister as to whether licences are required for individual stall operators of flea market, trade fairs and ad hoc car boot sale operators, including community-based organisations.
(3) Keeping of proper records
Sir, the keeping of proper records is a costly process but a necessity for control purposes. In Singapore, many secondhand goods dealers are small and medium enterprises. Many do not have the resources to modernise their operations, such as using information technology to keep track of transactions and inventory control. Thus, the requirements of the Bill to keep five years proper records will have significant impact on these businesses making it difficult for them to comply.
Sir, I would propose that the Ministry spell out clearly the format and information required in keeping proper records for the purpose of crime prevention and investigation so that secondhand goods dealers can comply without undue financial commitments. In addition, the Ministry should also take this opportunity to encourage secondhand dealers to upgrade and computerise their operations and provide appropriate Government grant through SPRING Singapore to support these SMEs. The upgrading of business practices of secondhand goods dealers will also benefit the Police Force in its crime prevention efforts.
(4) Retention of secondhand goods
To deter the transaction of stolen goods and ensure recovery of such goods, it is necessary for the Act to specify the retention of certain specified secondhand goods, especially those which can be disposed of easily, for a certain period such as one month. There should be provisions in the Act to require licensed dealers who acquire secondhand goods other than from another licensed dealer to retain such goods in possession for a minimum period before reselling them or making modifications to the goods. This will provide more time for Police to effectively investigate and recover stolen goods. In this aspect, may I ask the Minister how effective is the Police in helping people to recover stolen property? If the recovery rate is low, we should put in place more measures in the Act to facilitate the recovery of stolen goods.
(5) Unfair practices
Sir, clause 11 of the Bill requires the secondhand goods dealers to provide information of stolen goods or lost secondhand goods to the Police upon notification. Failure to do so is an offence under the Act. This requirement is indeed very onerous on the dealers, especially when they have to deal with thousands of secondhand goods transactions and stocks, especially for small items such as handphones or electronic devices.
In practice, it may be difficult for the dealers to provide the required information on time to facilitate Police investigation or it will cost the business a lot to comply with every Police's request under clause 11. This practice, if frequently implemented, will be unfair to the dealers as their business operations will be adversely affected. I would propose that this clause be implemented with caution, and should only apply in situations where there is sufficient evidence that dubious dealers are deliberately concealing information on secondhand goods.
Sir, instead of penalising dealers for not collaborating, I would urge the Ministry to consider incentivising dealers who furnish information resulting in the solving of crimes. These good efforts by the dealers can be appropriately rewarded or recognised when renewing their licences. In this way, we can further encourage partnership between the Police and secondhand dealers in crime prevention and increase the chances of recovery for stolen goods.
(6) Protection of consumers purchasing secondhand goods
Sir, the proposed Bill does not offer any protection to consumers buying secondhand goods. While we practise the caveat emptor principle, the secondhand goods market is a complex market where consumers can be easily conned into purchasing stolen goods or misrepresented into paying new goods prices for secondhand goods.
To further protect consumers, I would propose that the licensing authority should maintain a directory of licensed secondhand goods dealers on its website so that consumers can authenticate these dealers when purchasing secondhand goods. The authority should also display dealers whose licences have been revoked or suspended. This will prevent such dealers from operating in our market and conning our consumers. I wish to ask the Minister what measures are in place in the Bill to protect consumers of buying secondhand goods.
Sir, I support the Bill.
Mr Lim Biow Chuan (Marine Parade): Mr Deputy Speaker, Sir, I just wish to ask the Senior Minister of State whether it is intended for secondhand goods dealers like karung guni men who deal occasionally with the goods listed in the Schedule of the Bill to be registered under this Bill. If so, bearing in mind their low educational qualifications, whether any form of assistance would be given to them to enable them to comply with the licensing requirements under the Act.
Assoc. Prof. Ho Peng Kee: Sir, I thank both Dr Teo Ho Pin and Mr Lim for their comments and, in particular, Dr Teo who has made some points which will enable me to explain how this Act will work out.
First, of course, this is not a new Act. This is an Act which has been in place for some time, but too long and therefore we are replacing it. When we look at how to improve the workings of the Act, we look at what is happening on the ground, at any loopholes that need to be filled up and, yet, at the same time to maintain, like I have said, a business environment that is friendly. In other words, one key focus of this Act is really to enforce with a lighter touch. So let me reiterate what we have done which is essentially working with a positive list. This makes it very clear that only those goods which are of interest to Police, and if you look at the Schedule, there are nine of them, will be regulated. In fact, the old Act had items, such as gunny bags, sail cloths, canvas, kerosene tins, oil drums and other similar empty receptacles, wooden and tin lined boxes and cases, and so forth. These are probably some of the materials that the karung guni men will deal in. So to modernise it, we look at what goods ought to be covered. This is number one. Already, with this approach, out of the 2,700 currently registered licences being issued, 900 licences would not need to be taken out. So we are reducing that straightaway.
In addition to that, the current Act in fact also provides an exemption scheme. In other words, currently, the approach taken by Police is that if some other Act already covers you, for example, the Pawnbrokers Act, because the intent of the Pawnbrokers Act is also to include people who may leave goods there and these may be stolen goods too, you will not be covered under the Moneylenders Act. But Police tells me that in working out this new regime, what they intend to do is to look at the track record of the licensee. If he has a good track record, they are prepared to exempt him from the licensing requirement. In other words, he need not pay the licence fee, but he would be required to notify Police of the fact that he is in business and he would agree to submit information as and when required. We have tried the exemption approach for various other regimes like the massage parlour scheme where we want to be able to also reward good conduct. So those who already have a good track record need not be burdened with the regulatory scheme. That is the first point.
Therefore, the question of business cost should be seen in this context. We are not there to increase business cost. In fact, we are very mindful of business cost. And that is why the fee regime will be retained. Currently, it is $150 for the whole year. It will be so. And in fact, if you look at the current Act, already the processes of transfer, renewal, and so forth, are there. So the current regime will stay. Indeed, there is an improvement because under the current scheme, the licence is taken to start from 1st January to end on 31st December. So if a new person comes on board in June, he has to renew on 1st January the following year. But now, with more flexibility, it will be one calendar year from the time the person is issued with a licence. That is why I am not minded, for example, to take up the suggestion of Dr Teo's that may in fact add to business cost. For example, if you say, "Why not require the dealer to keep the goods for one year?", that would mean that he would have holding cost; he would have compliance cost; he would have monitoring cost. That is why I do not think we need to do that. But I will show that by one or two things that we have done, the plight of consumers who may have lost goods and indeed the plight of consumers who may buy secondhand goods which are stolen will be somewhat ameliorated.
Why do I say this? This is linked to the second point which is the format of the reporting structure. Dr Teo very rightly pointed out that requiring dealers to keep information is important. But of course the framework that Police imposes must be reasonable. Five years is reasonable because, like I have just mentioned in my earlier speech in this House, amendments have been moved to standardise record-keeping periods in various Acts to five years. I think it is fair to ask the secondhand goods dealers to keep records for five years.
The format, again, will be a simple one. I take his point that if you want people to keep information and if you want the dealers to submit information as and when required, it should not be a very complicated and complex field. So Police has got that clearly in mind. In fact, he made a very good point too regarding whether or not we should encourage the secondhand goods dealers to submit through online. Of course, we are mindful that not all secondhand goods dealers are sophisticated. But Dr Teo urges that Police should take this opportunity to maybe work with SPRING Singapore to get more of them to be computer literate and to maximise and leverage on the benefits of computerisation. I think that Police can do. But the point of keeping it simple, I think, is important. Therefore, Police intends not just to have one language, but the explanation will be in four languages with the submission in English. But the dealers would know what to submit, as the explanation to them is given in four languages.
An additional important piece of information which Police would require that is different from the current position will be the identity of the buyer. Currently, it is not required. Currently, the focus is more on the seller - who the seller is, and so forth. But this is part of more effective tracing. So it is not so much whether the goods are physically there. But if they are not, who bought them. Hence, there will a new requirement where the identity of the buyer will also be required. Hopefully, this would assuage some of the concerns of Dr Teo.
Indeed, he is right in that one other area that we have to now fill up is this new area that has blossomed and bloomed, which is trading on the Internet. Currently, the Act, being framed in 1918, only covers physical shop fronts. So Police will take the opportunity to also fill up this gap. Every dealer who deals in secondhand goods, as set out in the Schedule, will have to apply for a licence. If they are not sure, then I would urge them to check with the licensing unit. There is a police licensing unit general enquiry line, 68350000. Basically, Police will be very friendly. They are not there to catch you off guard. They want to help you because some people may not be certain or sure whether they need a licence. And indeed, Dr Teo mentioned some of these. What if you just want to buy and sell your own things online, for example, you are occasionally a person who likes to refresh your wardrobe, will you be caught? Or a flea market, I know that some of our friends set up shop at Tanglin Mall fortnightly. I do not know whether it is first and third week or second and fourth week where you can set up shop and sell things. Or some of the trade bazaars that now dot the island. As a general guide, a person who sells a fairly large amount of goods, especially those of the same type, like handphones, and with some regularity, not once off, that means frequency of trade and especially if you are not selling your own goods or not buying goods for your own consumption, then you will probably be required to obtain a licence. But if you are not sure, just check. So the once-off guy who sells his own goods, I think he need not fear.
Sir, I have covered business cost. I have covered form of reporting. I have covered Internet transaction. I have also covered this point about whether you want to keep for one month.
One or two other points that I will ask the Police to consider will be, for example, the requirement to fix the licence on the shop front; also a directory to be kept online of licensees who have valid licences, especially those which have been revoked, although the Police tells me that, in fact, revocation is very rare. But I think the Member's point is that when you are dealing with a person selling you secondhand goods, you want to make sure that this in fact is a bona fide seller and records will be kept. That is fair enough. I will ask the Police to consider that.
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. - [Assoc. Prof. Ho Peng Kee].
Bill considered in Committee.
[Mr Deputy Speaker in the Chair]
The Chairman: The citation year "2006" will be changed to "2007", as indicated in the Order Paper Supplement.
Clauses 1 to 25 inclusive ordered to stand part of the Bill.
The Schedule ordered to stand part of the Bill.
Bill reported without amendment; read a Third time and passed.
Column No : 1029
5.32 pm
The Deputy Prime Minister and Minister for Home Affairs (Mr Wong Kan Seng): Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time."
Sir, increasingly, terrorists are using explosive precursors like ammonium nitrate as substitutes for explosives. Palestinian terrorists started using these in the 1990s when controls on access to conventional explosives were tightened. The local Jemaah Islamiyah network that ISD disrupted in 2001 and 2002 had planned to procure 17 tonnes of ammonium nitrate for the manufacture of truck bombs to carry out attacks in Singapore. Overseas, the Jemaah Islamiyah successfully used explosive precursors, nitrate-based chemicals and potassium chlorate mixtures respectively, to carry out the Bali and Jakarta Marriot bombings in Indonesia. The seizure of large quantities of ammonium nitrate in London in March 2004 and the theft of 1,200 kilograms of the same material from storage facilities in France in May 2004 highlight the need for control over explosive precursors. The foiled UK airline plot, with the intended use of such precursors, uncovered in August 2006 further reinforces the need to control explosive precursors in Singapore.
Background to the control of explosive precursors
The Arms and Explosives Act currently regulates the dealing in, importation, transportation, storage, purchase and disposal of explosives. It does not include explosive precursors, such as ammonium nitrate and potassium perchlorate. Explosive precursors are oxidizing agents with legitimate industrial use that, unfortunately, can also be easily converted into improvised explosive materials. After a study in 2002 for dual use goods, a list of explosive precursors was identified for control. The explosive precursors that have been identified are widely used for research, industrial and agricultural purposes. However, despite their legitimate uses in different industries, they pose a security risk should they fall into the wrong hands. Explosive precursors were assessed based on their chemical properties and their widespread usage in Singapore and also on their potential for use by terrorists in improvised explosive devices. However, in determining effective enforcement controls over these substances, security has to be balanced against stifling the commercial and research activities related to their usage.
Establishing a new licensing structure
With these amendments to the Arms and Explosives Act, the Singapore Police Force will take over the control of explosive precursors from the National Environment Agency. The amendments will establish a new licensing structure for explosive precursors to prohibit the possession, storage, importation, exportation, manufacture of or dealing in any explosive precursor unless the person is authorised by the Police. To ensure that the appropriate security measures are in-place to safeguard the precursors, Police will conduct threat and risk assessments on the applicants and storage sites prior to the approval of the licences. New sections 21A to 21H will provide for the licensing of explosive precursors, with sections 21A to 21E providing for the regulation of explosive precursors while sections 21F to 21H set out the provisions that apply generally to licences issued under the Act.
The types of licences required will depend on the activity that a licensee will be involved in. A single licence will cover all the explosive precursors for each type of activity, eg, storage, and it will state the description of the explosive precursors as well as their quantity cap. However, if a licensee is involved in more than one type of activity, eg, storage and deal in, the licensee will require different licences, one to store the explosive precursors and another to deal in the explosive precursors. This is because of the current limitations in the Police Licensing Computerised System. Police will be reviewing this and make it easier for applicants to apply for only one licence for all types of explosive precursors and activities. The detailed regulatory provisions will be set out in the Arms and Explosives (Explosive Precursors) Rules.
As new chemicals will be introduced in the market, and new synthesis methods will be developed with the advancement of technology, we will constantly review the list of explosive precursors and make appropriate changes when necessary. A new Schedule will be introduced to specify the explosive precursors that are to be regulated by the Act. There are currently 15 chemicals of concern locally, including ammonium nitrate, which are common explosive precursors used by terrorists. The Minister will have the power, by order published in the Gazette, to amend the Schedule, with the amendment of section 45, to add or delete chemicals according to the threat situation. Those chemicals currently controlled under Environmental Pollution Control Act will be taken off the Schedule once these amendments are brought into force. The Minister will have the power, by order published in the Gazette, to grant exemptions under the new section 44B, and make rules to regulate explosive precursors by the amendment of section 46.
However, Sir, not everyone who uses fertilisers and the related chemicals of interest will have to be licensed. To illustrate, only ammonium nitrate fertilisers with nitrogen concentrations of more than 28% will be controlled. This 28% threshold is consistent with the approach in other developed countries with similar legislation, such as the United Kingdom, which has identified ammonium nitrate with less than 28% of nitrogen content as not normally presenting an explosion hazard. The European Fertilisers Manufacturers Association grades ammonium nitrate with less than 28% nitrogen as Type C fertilisers and these are considered non-hazardous and non-dangerous. Moreover, there are also alternatives, such as calcium sulphate, that users can easily switch to so that the impact on the public will be negligible. For more information about the chemicals to be controlled, members of the public may contact the Police Arms and Explosives Branch or visit its website.
Penalty for corporations or persons
Sir, while it is not our intention to stifle the legitimate industrial application of explosive precursors, for example, in agriculture as fertilisers, the penalties for mishandling these must be commensurate with the possible threat it poses to society if it falls into the hands of terrorists.
Owing to their dual use nature, explosive precursors could be licensed to corporations and companies or directly to individuals. Having separate penalties for corporations and individuals is to hold them accountable for securing and preventing the misuse of explosive precursors. Corporations may be fined up to $100,000 if they contravene any sub-provision. For individuals, the fine is $50,000 or/and a jail sentence not exceeding two years. The penalties are consistent with that of the Chemical Weapons (Prohibition) Act and the Environmental Pollution Control Act. This, however, is still lower than the penalties for offences relating to breaches of licences for explosives, which attract a maximum sentence of three years' imprisonment. For offences with criminal intent, other legislation will be used.
Definition of arms, electronic dart guns and stun guns
The Ministry of Home Affairs is also updating other provisions in the Act to take into account changes in our security landscape. New definitions of “arms”, “electronic dart guns” and “stun guns” will be amended or introduced to provide for a wider range of new “arms”, “electronic guns”, “stun guns” and new weapon accessories in the market. The Minister will have the power, by order published in the Gazette, to specify any weapon, accessory, article or thing to be “arms” for the purpose of this Act.
District Courts to have jurisdiction to hear offences
Currently, offences under the Act can be heard in a District Court or a Magistrate’s Court. However, a Magistrate’s Court can only award fines not exceeding $2,000 or imprisonment not exceeding six months. This restriction curtails the punitive effect of the Act. With the amendments, the offences under the Act will be heard only in a District Court, and the Court will be given jurisdiction to hear and determine all prosecutions for offences under the Act, and to impose the full penalty or punishment prescribed under the Act, notwithstanding the provisions of the Criminal Procedure Code.
Impact on industry
Sir, MHA has consulted the industry players extensively and has taken into consideration their feedback. One example is the three-month grace period that will be given to all non-licence holders who possess, import, export, manufacture or deal in any of the explosive precursors to apply for a licence after the amendments come into force. During this period, they will be deemed to hold a licence until their application for licence is approved or the application is refused or withdrawn. For persons who do not wish to apply for a licence under this Act, they will have a six-month grace period
to use up their stock of explosive precursors or terminate their trade dealings in explosive precursors. For existing licence holders under the Environmental Pollution Control Act, they will be deemed to hold a licence under this Act.
Conclusion
Mr Deputy Speaker, Sir, in the current security climate, we cannot afford to be lax about the control of explosive precursors. Time and again, terrorists are known to have exploited the ease of acquiring common dual use chemicals for nefarious purposes. We need to tighten and put in place a comprehensive regime to regulate security sensitive material.
Sir, I beg to move.
Question proposed.
Dr Teo Ho Pin: Mr Deputy Speaker, Sir, I rise in support of the Bill.
The proposed amendments to the Arms and Explosives Act will expand regulatory control of explosive precursors such as ammonium nitrate and potassium. As part of our efforts in strengthening our security infrastructure against terrorism, it is necessary that a legislative framework be put in place to regulate the use of chemicals which can be used to make explosives.
Many of these explosive precursors have dual uses, meaning they can have both peaceful and hostile applications. To provide additional safeguard to our people, we must set up measures to control the use of explosive precursors in Singapore.
Sir, however, there are two concerns in the Bill which I would like to highlight.
First, licensing structure. Clause 6 of the Bill spells out the licensing structure for persons dealing with explosive precursors in situations such as possession, importation, exportation, storage, transportation and manufacture. In order to prevent the hostile use of explosive precursors, we need to control the entire supply chain of such chemicals ranging from its source to its end-user point. Therefore, we must have a single point control and have only one type of licence for all persons dealing with explosive precursors irrespective of their activities in the supply chain. This will ensure better accountability and facilitate monitoring and enforcement by the authorities.
To further minimise the security risks, we should classify the various types of explosive precursors according to their likelihood of converting into explosives, and the quantity used by commercial or Government agencies. A classification of licence by the types of explosive precursors and quantity handled would provide a more efficient and effective "risk-based" approach to regulate explosive precursors. Sir, as the control of explosive precursors forms a critical pillar in our security infrastructure, I would urge the Ministry to allocate resources to set up the licensing structure as soon as possible, including upgrading the IT system in the Police Force.
Sir, I hope that the Minister can also further clarify on how the licensing structure can help to better control the use of explosive precursors in Singapore.
The second point is on the monitoring regime. Sir, at present, explosive precursors is used in many applications. This, coupled with the introduction of new compounds with potential of converting into explosives, will pose challenges to the authority to enforce the Act and prevent hostile uses of explosive precursors. Sir, it is difficult to monitor the movement, storage and use of these explosive precursors at different locations at different times. This will increase the risk of having these compounds being put into hostile uses. Sir, I would urge the Ministry to set up a traceability regime where explosive precursors can be tracked closely without imposing too much cost on businesses. We can adopt the procedures as set up in the control of poisons as laid out in the Poisons Act.
Sir, firms dealing with explosive precursors should also set up control systems to monitor such compounds in their respective activities. A reporting structure, similar to the Secondhand Goods Dealers Act, should be put in place where persons dealing with explosive precursors must immediately report to the authority of any loss or missing explosive precursors so that appropriate action can be taken to prevent any hostile attacks.
Sir, may I ask the Minister how is the Ministry planning to monitor the use of explosive precursors in commercial applications.
Sir, I support the Bill.
Mr Wong Kan Seng: Sir, I thank Dr Teo for raising his concerns. In fact, I have given some information that is required by Dr Teo in my Second Reading speech. Indeed, Sir, the Police will adopt a risk-based approach to regulate the explosive precursors. The explosive precursors that have been included in the regulation were assessed based on their chemical properties and the widespread use in Singapore and also on potential use by the terrorists to make improvised explosive devices. We know that for some kind of explosive precursors, for example, ammonium nitrate, certain concentration levels are required in order for that to be useful. I have given examples of ammonium nitrate when we say that those with 28% or more concentration will be controlled. This is the same standard that other countries use. When we determine the kind of materials to be controlled, we will bear in mind the cost to the business in compliance.
In terms of the control of explosive precursors, Police will be the licensing authority and they will be the single point of control to regulate the people who want to import, manufacture, export or to deal in such explosive precursor materials. Right now, of course, we have a system that only allows one type of activity to be reported and controlled. We will look at it. As I have said earlier, I have asked the Police to see how we can further improve the licensing process so that they only need to approve one licence for the purpose of either storage, transport, sale, etc, of all these explosive precursors.
There will be regulations to control and monitor the movement and use of these explosive precursors. Dr Teo referred to it as the "traceability regime". In fact, that will be so. The dealers and the storage licensees will be required to maintain proper records for inspection by the Police. And in the event when they lose an item or when an item is stolen, they will have to report immediately to the licensing officer about the circumstances leading to the loss and to explain what further measures will be taken to tighten the security to safeguard the explosive precursors.
There will also be specific requirements set down in the transportation of such explosive precursors so that they do not just go all over the place, like we require hazardous material vehicles or vehicles that convey hazardous materials. We can also impose further conditions, such as requiring them to have armed escorts, as we now do for the conveyance of arms, explosives and guns, for example. We can require them to get armed security guards to escort them. The Police will also implement an audit regime. That means, they will go round auditing, checking and ensuring that the licensees comply with all the conditions imposed on the licensees when they carry out their trade. This will be done on a surprise basis.
We are very mindful that explosive precursors can be misused by those who have no reason to use it other than to cause harm to Singapore. Therefore, we will take steps to ensure that the problems arising from such misuse can be minimised by having a stricter control of the use of such precursor materials.
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 Wong Kan Seng].
Bill considered in Committee.
[Mr Deputy Speaker in the Chair]
The Chairman: The citation year "2006" will be changed to "2007" as indicated in the Order Paper Supplement.
Clauses 1 to 22 inclusive ordered to stand part of the Bill.
Bill reported without amendment; read a Third time and passed.
Column No : 1039
5.55 pm
The Minister of State for Education (RAdm (NS) Lui Tuck Yew): Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time."
Sir, the Education Endowment Scheme Act establishes the Edusave Endowment Fund (EEF). The interest income earned by EEF is used to finance the contributions to the Edusave accounts of eligible students, grants to schools and awards given to schools and students.
In its 2006 Budget Statement, the Prime Minister and Minister for Finance announced that Government would give a one-off grant of $48 million to Government and Government-aided schools, junior colleges and centralised institutes, independent schools, the Institute of Technical Education and MOE supported special education schools, to set up opportunity funds to level up co-curricular development opportunities for Singaporean students from lower-income households.
Except for 1993 when the EEF was first set up, the Act only allows funding voted by Parliament to be paid into the EEF as capital money which cannot be used for any purposes other than for investment. The Attorney-General has advised that section 6(2) of EEF Act needs to be amended to allow the Government the flexibility to inject funds directly into the EEF as income for disbursement to schools, colleges and institutes.
Once this clause is amended, the Government will transfer the $48 million into the income of the EEF and the income can then be disbursed as grants to schools, colleges and institutes for the purpose of setting up the opportunity funds.
In conclusion, Mr Deputy Speaker, Sir, the amendments proposed in the Bill will allow the Government to inject funds directly into the EEF as income for disbursement to schools, colleges and institutes.
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. - [RAdm (NS) Lui Tuck Yew].
Bill considered in Committee.
[Mr Deputy Speaker in the Chair]
The Chairman: The citation year "2006" will be changed to "2007" as indicated in the Order Paper Supplement.
Clauses 1 and 6 inclusive ordered to stand part of the Bill.
Bill reported without amendment; read a Third time and passed.
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Resolved,
That the proceedings on the business set down on the Order Paper for today be exempted at this day's sitting from the provisions of Standing Order No. 2. - [Dr Lee Boon Yang].
Column No : 1041
Column No : 1041
Order for Second Reading read.
6.00 pm
The Minister of State for Finance (Mrs Lim Hwee Hua): Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time".
The Income Tax (Amendment) Bill comprises two groups of amendments to the Income Tax Act. The first provides for the income tax changes announced in the Budget Statement in February 2006. The second group covers other amendments to the Income Tax Act arising from ongoing reviews to improve our income tax framework.
The Income Tax (Amendment) Bill was released for public consultation from June to July 2006. The draft Bill has been revised to incorporate a number of suggestions from businesses and members of the public.
Tax changes from 2006 Budget Statement
Let me first highlight the key tax policy changes that were announced in the 2006 Budget Statement.
(a) Maritime Finance Incentive (MFI) scheme
The Maritime Finance Incentive or MFI scheme was introduced to nurture the growth of ship financing activity so as to enhance Singapore’s position as a maritime hub. Under this scheme, tax exemption will be granted on the qualifying incomes of Approved Ship Investment Enterprises, with a concessionary tax rate of 10% for Approved Ship Investment Managers. The MFI scheme is introduced by clauses 2, 10, 35, and 44(f) of the Bill.
(b) Tax treatment of prescribed Islamic financing arrangements
To promote Islamic finance in Singapore, the tax treatment of prescribed Syariah-compliant financing arrangements entered into by a financial institution on or after 17th February 2006 will be harmonised with conventional financing arrangements to ensure a level playing field. Clause 21 of the Bill provides for these changes.
(c) Writing down allowances for the cost of acquisition of intellectual property rights
To boost Singapore’s attractiveness as an intellectual property hub, writing down allowances will be extended to companies which have acquired or will be acquiring the exclusive or substantial economic rights to approved intellectual properties in the window period running from 17th February 2006 to 31st October 2008, subject to conditions.
The Income Tax Act will also be amended to allow companies to claim writing down allowances for the full cost of acquiring an intellectual property on or before 31st October 2008 even if the payments for the acquisition were made on a staggered or instalment basis. The enhancements to the rules for claiming writing down allowances are covered under clause 16 of the Bill.
(d) Tax deduction for treasury shares for employee stock option and share award obligations
With effect from the year of assessment 2007, companies will be able to deduct against their income, the cost incurred in the purchase of treasury shares which are used to fulfil obligations on employee stock options and share awards. Clauses 11 and 12 of the Bill provide for these enhancements.
(e) Enhancement of the tax exemption scheme for foreign-owned funds
Currently, the tax exemption scheme for foreign-owned funds is limited to funds which are not tax resident in Singapore. To further support the growth in our asset and wealth management industries, tax exemption will be extended to foreign-owned funds which are resident in Singapore and approved during the period from 17th February 2006 to 16th February 2011. This enhancement is reflected under clause 10 of the Bill.
Off-Budget Tax Changes
I shall now deal with the other tax policy changes which require amendments to the Income Tax Act. Our existing tax policies and incentive schemes are reviewed regularly to ensure that they remain relevant. Let me now highlight three major changes to our incentives and policies that arose from these ongoing reviews.
(f) Penalty for failure to file an income tax return
Currently, the penalty for not filing an income tax return is significantly less severe than the penalty for under-declaring income. This creates an incentive for taxpayers to avoid taxation by not submitting their income tax returns. To discourage this practice, a penalty of double the amount of tax undercharged will be introduced for the failure to file a tax return in respect of any year of assessment within three years from the filing deadline.
I would like to clarify to Members that the new penalty will only be imposed on taxpayers who without any reasonable excuse fail to file their returns in a timely fashion, and is not targeted at taxpayers with valid reasons for late filings. The penalty is introduced by clauses 39, 40, 41, and 42 of the Bill.
(g) Enhancement of Parenthood Tax Rebate (PTR) for parents of legitimised and adopted children
The Parenthood Tax Rebate was introduced as part of the Marriage and Parenthood Package announced in August 2004 to married parents for their second, third, or fourth child born to them or legally adopted on or after 1st January 2004. My Ministry has reviewed the rebate and will be making the following enhancements:
Firstly, to further promote the importance of an intact family, the rebate will be extended to the natural parents of an illegitimate child born on or after 1st January 2004 if they marry before the child reaches six years of age.
Secondly, for parents of an adopted child, the child’s qualifying age for the parents to receive the rebate will be streamlined from the current age of 21 years to 6 years with effect from 1st January 2006. This means that parents who adopt a child on or after 1st January 2006 will qualify for PTR if the child is below six years old at the point of adoption.
The changes to the Parenthood Tax Rebate Scheme are reflected under clause 29 of the Bill.
(h) Adoption of the Financial Reporting Standard 39 for accounting purposes
I will be introducing a new section to institute the tax treatment arising from companies’ adoption of the Financial Reporting Standard 39 which relates to Financial Instruments: Recognition and Measurement, or FRS 39 for short. With FRS 39, companies will now have to reflect most of their financial assets and liabilities at market values in their financial statements. To minimise the tax adjustments arising from the adoption of this standard, the income tax treatment of financial assets and liabilities has been changed so as to be more in line with the accounting treatment. This new section is provided by clause 21 of the Bill. Members may wish to note that IRAS has already issued a circular on 30th December 2005 to explain the changes in detail.
Conclusion
Finally, 19 other off-Budget changes have been incorporated in this Bill as well. As many of them are technical in nature, or relate to improvements in tax administration, I will not put Members through the details of the remaining changes.
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. - [Mrs Lim Hwee Hua].
Bill considered in Committee.
[Mr Deputy Speaker in the Chair]
The Chairman: The citation year “2006” will be changed to “2007”, as indicated in the Order Paper Supplement.
Clauses 1 to 44 inclusive ordered to stand part of the Bill.
Bill reported without amendment, read a Third time and passed.
Column No : 1046
Order for Second Reading read.
The Minister of State for Finance (Mrs Lim Hwee Hua): Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time."
Overview of the Bill
The Bill seeks to repeal the Property Tax (Surcharge) Act with effect from 1st July 2006. This change was announced by the Prime Minister in his 2006 Budget Statement. The Property Tax (Surcharge) Act was enacted in 1974 to impose a surcharge, in addition to the property tax payable, for certain classes of properties held by foreign owners before 1st January 1974. The purpose then was to discourage foreigners from holding onto these properties during the time of housing shortage. The surcharge is no longer needed as, firstly, we now regulate property ownership by foreigners through the Residential Property Act (RPA), and, secondly, most of these landed properties bought before 1974 have either been sold to Singaporeans or to other foreign owners who have obtained approval under the RPA and who therefore are not required to pay the surcharge.
Key provisions
Sir, clause 1 introduces the Act and states that it will be in effect from 1st July 2006.
Clause 2 repeals the Property Tax (Surcharge) Act.
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. - [Mrs Lim Hwee Hua].
Bill considered in Committee.
[Mr Deputy Speaker in the Chair]
The Chairman: The citation year “2006” will be changed to “2007”, as indicated in the Order Paper Supplement.
Clauses 1 to 3 inclusive ordered to stand part of the Bill.
Bill reported without amendment, read a Third time and passed.
Column No : 1047
Order for Second Reading read.
6.15 pm
The Minister of State for Community Development, Youth and Sports (Mrs Yu-Foo Yee Shoon): Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time."
Sir, this Bill provides greater flexibility for the Government-Paid Maternity Leave and Adoption Leave schemes.
Government-Paid Maternity Leave
Let me begin with Government-Paid Maternity Leave. In 2004, we extended maternity leave from eight weeks to 12 weeks. For the first and second confinement, employers continue to pay for the first eight weeks, while the Government reimburses the last four weeks. For the third and fourth confinement, the Government pays for the full 12 weeks. However, based on current legislation, the mother must be married to the child's father before the child's birth, and the child must be a Singapore citizen at birth. Otherwise, the mother does not qualify for Government-Paid Maternity Leave.
A few mothers who obtained citizenship for their child or who married their child's father, shortly after the child's birth have appealed to my Ministry asking that they too be eligible for Government-Paid Maternity Leave.
Government-Paid Maternity Leave is an incentive scheme for intact families to have children who are Singaporean citizens. Whether the child is a citizen immediately at birth or shortly thereafter is inconsequential. Therefore, we are proposing to be more flexible by opening up Government-Paid Maternity Leave to mothers whose child obtains citizenship shortly after birth.
The Government-Paid Maternity Leave scheme should reflect our current social mores and norms. That is why mothers who give birth out of wedlock are not entitled to Government-Paid Maternity Leave. Having said that, our desired outcome is that children are brought up in intact families. Consequently, the proposed amendment allows for mothers who give birth out of wedlock, but regularise their situation by marrying their child's father shortly after birth to also be eligible for Government-Paid Maternity Leave.
As maternity leave is meant for the mother's physical recuperation and for her to care for and bond with her baby, the leave must be consumed within six months from the child's birth. Where the mother is married to the child's father before the child's birth, and the child is a Singapore citizen at birth, the first eight weeks must begin no later than the day of confinement, but the last four weeks may be taken flexibly, subject to an agreement between the mother and her employer. This is in line with the Employment Act. A mother whose child is not a Singapore citizen at birth or who marries her child's father after the child's birth will also follow this leave structure, except that she will be eligible for Government-Paid Maternity Leave only from the day the child becomes a Singapore citizen or the day she marries the child's father, as the case may be.
This change will apply not just to employees, but to self-employed mothers as well.
Adoption Leave
Sir, now let me move on to Government-Paid Adoption Leave. An adoptive mother can consume four weeks of Adoption Leave in a continuous block or flexibly before the child turns six months, similar to the practice for maternity leave.
However, when we first introduced Adoption Leave in August 2004, adoptive mothers could only take the leave after the adoption order was granted. The whole adoption process can take four to eight months to complete. In the case of a foreign child, the child must also have obtained citizenship. Therefore, few mothers qualified for the leave.
During my Ministry's Committee of Supply Debate in 2005, my Minister announced that we will allow mothers to go on Adoption Leave at a much earlier point in the adoption process. A mother who has applied to adopt a Singaporean child may now take Adoption Leave from the time when the court appoints the Director of Social Welfare in MCYS as Guardian-in-Adoption of the child. In the case of a child who is not a Singapore citizen at the time the adoption application is made, the Adoption Leave may be taken from the time when a Dependant's Pass has been issued for the child. This is almost the starting point where the child is physically with the adoptive family.
The change took immediate effect administratively from the date of announcement on 10th March 2005. We are now making the legislative amendments to formalise the change.
Children Development Account and Post-Secondary Education Account
Other than the changes to Government-Paid Maternity Leave and Adoption Leave, this Bill also contains a general amendment to the Baby Bonus scheme. The amendment would allow unused Children Development Account funds to flow through to another account in the child's name, and not just strictly to his Edusave account. This is in preparation for the introduction of the Post-Secondary Education Account, which the Prime Minister announced during National Day Rally 2005.
Sir, let me take this opportunity to reiterate the point that making Singapore a great place for families cannot rely solely on the Government's efforts. While my Ministry will periodically review and refine our policies to ensure that they remain relevant and useful, employers and individuals have to play their part. More than just policies, programmes and infrastructure, moulding a family-friendly society requires values and mindset change. Let us all work together to realise our vision of making Singapore a great place for families.
Sir, I beg to move.
Question proposed.
Mdm Halimah Yacob: Mr Deputy Speaker, Sir, I rise in support of the Bill.
The amendments provide greater clarity and remove some of the restrictions found in the existing law and are beneficial to women. Under the current law, entitlement to the paid maternity benefit will depend on the status of the mother or child at the time a woman gives birth. The amendment has modified this for the better. For example, with the amendment, a Singaporean woman whose baby is a non-citizen at birth can now enjoy the paid maternity benefit so long as the child becomes a citizen within the stipulated period. This is less onerous compared to the existing law, which denies the mother of the benefit if the child is not a citizen at birth.
Sir, I also support the amendment to section 2 which allows for the transfer of moneys standing in a member's bank account under the scheme to the Edusave Account or any other account as may be prescribed by the Minister. This provides for greater flexibility in the event that other uses are allowed for the moneys in view of recent suggestions on how continuing education can be supported by the Government.
Sir, there are a couple of points which I wish to raise on the proposed amendments. Under the existing law, which is further refined by the amendment, the Government will reimburse an employer who has granted paid adoption leave to a female employee who has applied to adopt a child. This is an important benefit as it provides support to childless couples or those who want more children but cannot have more of their own. However, there are practical difficulties that affect the effectiveness of this benefit. Paid adoption leave is not a common benefit in Singapore, as many employers do not provide such a benefit.
For this benefit to be truly effective, more should be done to encourage employers to provide paid adoption leave. One enlightened employer that provides such a leave is the public sector. Under the public sector paid adoption leave scheme, a female employee who adopts a child is given four weeks of paid leave, subject to mutual agreement between the Ministry and the officer concerned. In the private sector, two good employers come to mind - UBSAG and Microsoft. These are two examples of companies in the private sector that I know of that provide paid adoption leave to their employees. UBSAG provides up to 15 weeks of paid adoption leave, while Microsoft offers one month of this benefit to their employees. I wish to urge more employers to follow the public sector and the example of UBSAG and Microsoft, so that more women can benefit from the scheme provided in our law. There is little cost to employers as the Government reimburses up to a certain number of days. But this could be an additional incentive for employers to recruit and retain talents.
Sir, my next comment relates to section 9(3)(A) of the amendment as well as the existing section 3 of the Act. Both these sections provide that a pregnant female employee will not be entitled to the benefit if her employment is terminated due to whatever reasons. I feel that these provisions are harsh as they do not differentiate between situations where a woman loses her job because of her own fault, such as misconduct or when she voluntarily decides to leave the company during the benefit period, as against situations where she has no control, such as retrenchment, unfair dismissal or even upon expiry of her contract of employment in the event that she is on a short-term contract. I agree that when there is misconduct involved, then she should forfeit her entitlement. But in a situation such as retrenchment or unfair dismissal, for example, the job loss is not due to the woman's fault, so she should not be penalised. This is one area which the law should provide greater flexibility and I hope that the Ministry could look into this, instead of a blanket prohibition, and assess it on its own merits. Otherwise, what happens is a perpetuation of two wrongs. First, a female employee is denied of the benefit under the Employment Act, which is then followed by a denial of the additional benefit under this Act. This is painful for a female employee as the income loss is significant at the time when she needs it most and she has an additional mouth to feed and is no longer employed. It also runs counter to the very purpose of this Act which is to encourage women to have more babies.
Finally, Sir, this law has already been in place for a couple of years but we do not have a sense as to its effectiveness and whether or not it has reached its objective of promoting procreation among women and families. Are the measures adequate or do we need to do more to help women to have more children and, if so, in what areas? Perhaps, it is time that the Ministry conducted a survey to assess the impact of this legislation, which is an important piece of social legislation and make refinements, where necessary.
On this note, I support the Bill.
6.27 pm
Mr Zaqy Mohamad (Hong Kah): Mr Deputy Speaker, Sir, I support the amendments put forth in the Children Development Co-Savings (Amendment) Bill.
I am in support of this Bill as we focus on the importance of parent-child bonding and create the right environment to address our low birth rates. I have a couple of points I would like to add on the Bill in general. But please allow me to take the first point in Malay and complete the rest of my speech in English.
(In Malay): [For vernacular speech, please refer to Appendix A *.] Generally, I am in support of the amendments proposed in the Children Development Co-Savings (Amendment) Bill. It is the Government's policy that emphasises the importance of forming a family and children's development through the amendments to the adoption leave scheme, Government-paid maternity leave and Baby Bonus. Having a family is an important investment in Singapore because people are an important asset to the country. Therefore, assistance and incentive to the people are an investment by the Government for the future of the country. However, I suggest that we should take a more progressive approach to ensure that no one is left behind or neglected.
I feel that the assistance given must reach more than the first four children. True, this scheme is not a social assistance but it is more of providing a good headstart for the children. So I feel that we should not be concerned that, by extending this scheme, it would be seen as a social assistance to the lower-income families because there are already a number of specific assistance packages for them, like HOPE. In a family, there is a likely occurrence that children who are born later would not receive attention and benefits as good as their elder siblings and this is especially in the case of the middle and lower-income families. It is true that for families in this group, it is better for them to have a smaller family and do not burden the parents. However, if it happens that the family has more children, the children will be affected in the long-term. This may be detrimental to the country later because we are already having a low birth rate. Every child is important and they are our capital for our future. Every child has to be assisted to become useful citizens and we should not limit what they could benefit from.
(In English): The second point which I think should be considered is to extend the Government-paid Maternity Leave (GPML) Scheme to include fathers as well. Recently, The Straits Times featured France's turnaround in its birthrate on 18th January 2007. One of the success factors is that incentives were granted to either the father or mother, regardless of gender. In fact, certain studies in Europe have also shown that in some highly industrialised countries, women are choosing to have more children because of the support they get from family members, particularly their husbands. In these countries, we also notice that fathers have benefits too.
In Singapore's context, such a move is certainly very much in line to allow greater bonding between both parents and child. The role of the father is as important, particularly today, when both parents are working is commonplace. A father's role should not be seen as restricted mainly to one, ie, supporting the family financially. The Government should be more flexible in allowing either parent to be eligible for the leave scheme, particularly for the Government-paid component. Broadening the coverage of the GPML and adoption leave also sends the message that the role of the child's upbringing and bonding belongs to both parents, and this should apply, whether it is for adoptive or biological parents.
Lastly, I think that the Government can also make provisions, should the mother pass on at delivery. Though not very common, I believe that fathers should then be able to benefit from these leave schemes. I am aware that I have also been pushing for a bit more flexibility in the implementation of this Bill, with the child's welfare at the centre of focus. But I have also received feedback from the ground that on the extension of the Government-paid Maternity Leave Scheme to mothers who marry after the child is born could send the wrong signal to certain conservative parts of our society. Hence, I would like to pose a question to the Minister of State, because I am aware of MCYS' position on children out of wedlock and I would like to know how MCYS would plan to handle this sensitivity.
With that, Mr Deputy Speaker, I support the Bill.
6.33 pm
Ms Ellen Lee (Sembawang): Mr Deputy Speaker, Sir, clause 12A of the Children Development Co-Savings (Amendment) Bill states that the Government would reimburse any employer who has granted a married, widowed or divorced female employee paid leave of up to 24 days in connection with her adoption of a child below six months of age.
Sir, I applaud the Ministry of Community Development, Youth and Sports for initiating paid adoption leave, as this is an official recognition that women who adopt children are helping to contribute more citizens to Singapore. These women are responding to the Government's procreation and pro-family policies in a different way, and their efforts should be saluted. This Ministry initiative will also send a strong signal that adopted children are treasured. It would go a long way to remove a stigma long associated with adopted children that they are second-class children within their own family as they are not born in it but adopted.
However, I note that the proposed adoption leave could only be taken if the woman's employer agrees. I feel that leaving the discretion to the employer is as good as not having the leave in the first place, as I fear that many employers would never agree. I would therefore urge the Government to consider making the 24 days' adoption leave mandatory and, at the same time, consider granting leave to the male employee as well because parenting is a joint responsibility of the husband as well as the wife.
The current amendments grant any female employee, married, widowed or divorced, adoption leave only if she proactively seeks and obtains her employer's agreement. Should the employer disagree and disapprove of the request, the female employee will not be able to enjoy this benefit. Unlike mandatory maternity leave, adoption leave in this case is not compulsory and largely dependent on the organisation the female employee works in, ie, whether the organisation adopts pro-family policies.
Sir, many married employees choose to consider child adoption as their option primarily because they are unable to conceive after years of trying, and the decision whether to adopt is also not an easy one to make, and the consensus between spouses and their families is even harder to reach. The employees often expend much effort to try to adopt a child. In most cases, it does not come easy and, sometimes, it takes years before the adoption is finalised. When the adopted baby finally arrives at the adopted family's home, it is understandable that these employees, particularly the mothers, who are filled with joy, just like how first-time parents feel after the wives' delivery, would need much uninterrupted time to reorganise their lives.
Sir, it is reasonable to expect these employees' desires to want to be with their newly-adopted infants for the purpose of bonding and taking care of this new family member. Like any newborn babies, these adopted infants too need lots of assurance and love when they first arrive at the adopted family's home. Therefore, it is logical for these employees, particularly the female employees, to want to spend time with the adopted child for reassurance, especially the initial crucial months. Unfortunately, and realistically speaking, these female employees know that it is difficult to get the employers to agree because, to the employers, it is but an adoption of somebody else's child.
Sir, making the leave mandatory would be a step forward in our modern and mature state with low fertility rates and consistent with the Government's drive towards a pro-family environment in Singapore.
Sir, allow me at this stage to say a few words in Mandarin.
(In Mandarin): [For vernacular speech, please refer to Appendix A *.] Mr Deputy Speaker, Sir, I fully support the initiative by the Ministry of Community Development, Youth and Sports to provide female employees desiring to adopt a child to be given paid leave. This will send a strong signal that the Government supports parents to adopt children when they cannot give birth to their own children, so that they can fulfil the dream of having a full family. Such a move can send a very strong signal, ie, that the adopted child will enjoy a certain status, particularly when we realise that an adopted child may sometimes not enjoy the kind of esteem as natural children.
Although we have such a legislation, I feel that, unfortunately, the Government should not leave the discretion of granting paid leave to the employers. In other words, the employers can decide whether or not to award such paid leave to the employee because, generally, the employers may not think that the adopted child would be as good as their own children. They can say they are only adopting other people's children, so there is no necessity for the employee to be given this paid leave to look after the child.
I feel that the Government should make it compulsory. Unless it is mandatory, the employee will never enjoy such paid leave, except for a small minority of companies which are very rational and sympathetic in granting such paid leave to their employees. To adopt a child for parents who are unable to conceive, it is a very important decision. They must have thought through this very thoroughly and have made all sorts of considerations before they decide to adopt, and they have to pay a big price for it because, once a child comes to the family, the child will also need some time to build up bonding with their adopted parents so that they can actually enjoy the fun of being members of a family. If after spending a lot of time and money and the parents could not enjoy such paid leave to be with the child, it is very regrettable.
I hope that the Government will consider making it mandatory so that, by law, employers should provide such paid leave to the employees.
(In English): Mr Deputy Speaker, Sir, I will now continue in English, on what other countries have done in this respect.
Sir, we are aware that more and more societies have adopted pro-adoption policies in view of declining birth rates in most developed countries. For example, in Norway, the total amount of parental and adoption leave has been increased from 52 to 53 weeks at 80% of full pay, or from 42 to 43 weeks at full pay. In the UK, under the Paternity and Adoption Leave Regulations 2002, an employee, regardless of gender, enjoys ordinary adoption leave period of 26 weeks. In the USA, the federal government allows leave and work scheduling flexibilities for employees who adopt children. Under the Family and Medical Leave Act, each parent is also entitled to use a total of up to 12 weeks of leave without pay for adoption and care of a newly-adopted child.
Sir, as we can see from these overseas examples, there is an ever-growing trend in these societies to seek a balance between work and family commitments. I urge the Government to seriously consider making adoption leave mandatory, if not for the whole 24 days, then at least for 14 days as a start, and also to grant the fathers some leave as well so that, together, the family can truly experience the joy of parenthood. I am glad to know that the Government has actually provided for four weeks of paid maternity leave for adoption cases and I would urge the private sector employers to do likewise as well.
Sir, adoption leave is intended for married employees, widowed, divorced or those who have fewer than four other living children. In considering the mandatory adoption leave, I would suggest that, for the single females who never married for various reasons but would want to adopt a child to form their own family
to enjoy the benefits as well for the same reasons that I have stated.
Sir, with that, I support the Bill.
6.46 pm
Mr Seah Kian Peng (Marine Parade): Mr Deputy Speaker, Sir, I rise in support of the proposed amendments in the Bill.
In fact, I want to echo what both of my colleagues, Ms Ellen Lee and Mr Zaqy Mohamad, have said, which is that, too often, we keep saying that parenting is a shared responsibility but the proposed changes always seem to be skewed only towards the mothers. I would fully support what both Ms Ellen Lee and Mr Zaqy have said. In fact, one of the enlightened companies that Mdm Halimah Yacob has highlighted earlier, UBS, is one of them. I believe that for fathers who adopt children, they extend the same benefits to them as well. We highlight such enlightened companies in the private sector. I sincerely hope that the public sector should take the lead in many of these things. If the public sector does not set the lead, I think it is very difficult to expect the private sector to do likewise.
Mr Deputy Speaker, Sir, I support the Bill.
Mrs Yu-Foo Yee Shoon: Mr Deputy Speaker, Sir, I would like to thank all my colleagues for all the very well-said arguments and I also sympathise with some of the arguments. I agree with some, but for the others, we cannot implement them for the time being.
Sir, I want to put the whole Bill in correct perspective. The objective of the Children Development Co-Savings Act is to encourage procreation and parenthood in the context of marriage, as the Government's view is that a two-parent family provides the best environment for our children to grow up in and to fulfil their potential. I would like to assure Mr Zaqy Mohamad that the Government still believes in promoting marriages and promoting procreation within intact families. Therefore, for single mothers, we have not extended some of the benefits to them. However, single mothers still enjoy the 12-week maternity leave under the Employment Act and their children also enjoy equal treatment under KiFAS, CFAC, Edusave and also enrolment in schools. The mother can benefit from the Foreign Domestic Worker levy concession as well as child care leave and so on. Even for housing, the mother can also apply to buy or rent a flat from HDB jointly with her parents. Therefore, we have other assistance schemes to help them. Government-Paid Maternity Leave is not an assistance scheme. It is an incentive scheme to encourage intact families to have children, and to have more children.
Sir, let me address Members' comments and some of the questions that they have raised. I would like to thank Mdm Halimah for supporting the Bill. Mdm Halimah has also encouraged employers to follow the public sector’s lead to provide paid Adoption Leave. I am sure the public sector will take the lead. On Ms Ellen Lee's suggestion to make Adoption Leave mandatory, I would like to say that the paid maternity leave by the Government is primarily to allow the mother to recover from child birth. So the objective is actually recovery from delivery. But the Government is very kind and has extended this benefit to mothers who adopt as well. This only started in 2004. Let us try to implement this Bill first because, so far, according to my Ministry, there has been no complaint or appeal to make Adoption Leave mandatory. We will also work through our partners - NTUC, the Singapore National Employers Federation, MOM, the National Family Council, Centre for Fathering and so on - to encourage employers to grant the leave. I think the employers are quite receptive. MOM has also assured me that if there is any complaint, they will try their best to help convince the employer to give this leave to the adoptive mother. I am sure Singaporean employers or even MNCs are good community citizens. We call upon them to support the adoptive mother. Let us try this voluntary way to encourage employers.
On the extension of Government-paid leave to fathers, I am very pleased that both of my male colleagues have called for fathers to play a more important role in bringing up their children. This is a good sign. In 2004, the Government allowed working fathers to have two days of Childcare Leave per year if the child is below seven years of age. And together with the mother, they enjoy four days of Childcare Leave per year. This is only the beginning. I am sure that the National Population Committee, headed by DPM Wong, can look into the ways in which fathers can play a greater role in child raising.
On extending the Baby Bonus to beyond the fourth child, I would like to say that when we introduced the Act in 2001, we only extended the benefit to the second and third child. In 2004, we amended it to include the first and fourth child. The Government's stand is that, by doing so, we cover 98% of Singaporean families with children. Those families with a fifth child are in the minority. I should also say that most of them are from lower-income families. We do not encourage lower-income families to have more than four children because we hope that they can spend their limited resources on the three or four children and make sure that these children can really develop their potential. And if they cannot manage, they should not have more. Having said this, ComCare, Family Service Centres, CDCs and other schemes do help these families if they have more than four children. Those are assistance schemes. This is an incentive scheme and we do not encourage the lower-income families to have more than four children.
Mdm Halimah is also concerned about the effectiveness of this incentive scheme and whether it has been working well. The Ministry carried out a survey last year. I think DPM Wong also announced the results in 2006. We have seen some encouraging signs. In the recent survey of 3,000 married respondents by MCYS, 83% of them indicated that the parenthood package has created a friendlier environment for having and raising children in Singapore. In particular, the younger and higher income respondents were more likely to respond positively. 56% of the respondents also said that the parenthood package has influenced them to have or consider having more children, or have children earlier.
Mr Deputy Speaker, Sir, I would like to conclude by saying that it looks like the birth rate has presently stopped declining, and I hope that, maybe this year, we can see an upward trend. I thank the MPs for their suggestions and hope to further consider some of the points, especially getting fathers to share more parenting responsibilities.
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. - [Mrs Yu-Foo Yee Shoon].
Bill considered in Committee.
[Mr Deputy Speaker in the Chair]
The Chairman: The citation year "2006" will be changed to "2007", as indicated in the Order Paper Supplement.
Clauses 1 to 7 inclusive ordered to stand part of the Bill.
Bill reported without amendment; read a Third time and passed.
Column No : 1064
Column No : 1065
Dr Lee Boon Yang: Mr Deputy Speaker, Sir, I think we have had a rather long day and it is an appropriate juncture to adjourn Parliament. But before doing so, I would just like to remind hon. Members that Parliament will resume tomorrow at the same time to continue deliberation on the rest of the items on the Order Paper.
Resolved,
"That Parliament do now adjourn." - [Dr Lee Boon Yang].
Adjourned accordingly at
Seven o'clock pm.
WRITTEN ANSWERS TO QUESTIONS FOR ORAL ANSWER NOT
ANSWERED BY 3.00 PM
Column No : 1067
ONE-STOP CENTRE FOR PRIVATE HOUSING ESTATES
16. Ms Lee Bee Wah asked the Minister for National Development whether a one-stop centre, similar to Town Councils or HDB Area Offices, can be set up to serve the needs of those who live in private housing estates.
Mr Mah Bow Tan:
Town Councils were set up to perform estate management functions for public housing estates. Their role is to manage and maintain the common areas under their charge in HDB estates. The Town Councils are similar to the management councils for private condominiums. Both the HDB and condominiums residents pay monthly services and conservancy charges towards maintenance of common facilities. HDB Branch Offices are set up to provide lease and tenancy services to HDB flat lessees and tenants.
In private landed residential estates, the public areas and amenities come under the purview of various public agencies, which serve the needs of the residents by carrying out the routine maintenance and improvement works. For instance, the Land Transport Authority (LTA) looks after the maintenance and upgrading of roads, pavements and street lighting, whilst the Public Utilities Board (PUB) oversees drainage-related works.
Given the smaller scale and generally more exclusive living environment found in private residential estates, compared to the HDB estates, it is more effective for the respective public agencies to carry out such works directly. Nevertheless, MND will consider the request and review the need to set up a one-stop centre as suggested by MP Lee Bee Wah.
In addition, to address the concern that a member of the public may not know which is the right agency to call to convey his or her feedback, the Government has implemented a “No Wrong Door” policy since 2004. This means that the officer of a public agency receiving the call will help to put members of the public in touch with the right agency. In cases where the feedback or request requires the inputs of more than one public agency, the receiving agency will liaise with the relevant agencies to provide a coordinated response.
Column No : 1067
TRAFFIC SUMMONS FOR SPEEDING
18. Dr Teo Ho Pin asked the Deputy Prime Minister and Minister for Home Affairs in the last five years (a) how many traffic summons were issued for speeding; and (b) how many driving licences were revoked or suspended.
Mr Wong Kan Seng:
Traffic Police issued a total of 35,360 summonses for speeding offences in 2002. This number rose 38% to 48,930 summons in 2003, and a further 68% to 82,140 summons in 2004. This increase can be mainly attributed to the introduction of the portable Police Speed Laser Cameras (PSLC), which enabled more flexible and active enforcement by Traffic Police.
In 2005, as part of Police’s overall enforcement strategy, more resources were diverted to ensure greater police presence on our roads to deter motorists from flouting traffic rules. The public had by then become more aware of the PSLC deployment through Traffic Police’s website and radio. This contributed to the number of summonses issued for speeding falling 37% to 51,800 in 2005 as compared to 2004. In 2006, the number of summonses issued for speeding decreased 13% to 45,130 compared to the 51,800 summonses issued in 2005.
Under the Driver Improvement Points System (DIPS), a driver who accumulates more than 24 demerit points within 24 months is liable to be suspended. Over the last 5 years, the number of driving licences suspended annually has remained relatively stable, hovering between 400 to 540 per year, with 2005 registering a high of 587 suspensions. Suspension periods last from 3 to 12 months.
Table 1: No. of Driving Licences Suspended
|
Year |
2002 |
2003 |
2004 |
2005 |
2006 |
|
1st Suspension (3 mths) |
315 |
249 |
269 |
419 |
381 |
|
2nd Suspension (6 mths) |
125 |
131 |
157 |
145 |
134 |
|
3rd Suspension or more (12 mths) |
28 |
29 |
24 |
23 |
28 |
|
Total : |
468 |
409 |
450 |
587 |
543 |
In addition, a driver who is charged for very serious traffic offences such as causing death by dangerous driving (Sec 66 RTA) or causing death by a rash and negligent act (Sec 304A Penal Code) may have his licence suspended with immediate effect.
Under the Road Traffic Act, a driving licence may be revoked if the driver is certified to be medically unfit to drive by a doctor. A driving licence can also be revoked if a new driver accumulates 13 or more demerit points or if he fails to display the Probation (P) plate twice within the 12-month period after obtaining his Driving Licence. If the driving licence is revoked, the person must wait a year before being allowed to take a driving test.
There were 140 and 240 driving licences revoked in 2002 and 2003 respectively. In 2004, the number of licences revoked increased by 32% to 320. This was mainly due to new drivers who were caught for not displaying the P-plate twice or for chalking up 13 or more demerit points within the first year of obtaining their driving licences. Police has since worked with the driving schools to educate new drivers on traffic offences through their training packages, especially during the advance theory lessons.
The number of driving licences revoked has since fallen to 170 in 2005, which is 48% lower compared to 2004. In 2006, the number of driving licences revoked was 90 as compared to the 170 licences revoked in 2005. This reduction was partly due to a significant reduction in the licences revoked for probationary drivers.
Traffic Police takes a strong enforcement stance against those who drive dangerously, including those who speed on our roads, as they not only put their own lives at risk but also the lives of other road users. Suspension and revocation of driving licences take such errant drivers off the roads and help contribute to the safety of other road users.
Besides enforcement, Police, supported by private sector partners, has been organising many public education programmes. Police launched the Road Safety Outreach 2006 (RSO 2006) in conjunction with the Police Week Carnival in June 2006 as part of its on-going road safety public education efforts. The launch of RSO 2006 kicked off a year-long series of road safety activities, such as exhibitions and workshops, reaching out to all categories of road users to heighten their awareness on the importance of road safety, including the dangers of speeding.
Column No : 1071
USE OF COMMUNITY IMPROVEMENT PROJECTS COMMITTEE (CIPC) FUND
20. Ms Lee Bee Wah asked the Minister for National Development whether the Community Improvement Projects Committee (CIPC) Fund can be extended to include private estates so that they do not have to wait for the Estate Upgrading Programme to get the amenities they want in their estates.
Mr Mah Bow Tan:
The Community Improvement Projects Committee (CIPC) provides funding support for infrastructural and recreational facilities, and general amenities in HDB estates for the benefit of the residents.
For private estates, public agencies such as PUB, LTA and NParks carry out maintenance and improvement works to meet the needs of residents there. In addition, improvement projects can be conducted under the Estate Upgrading Programme (EUP). EUP works involve improvement to footpaths and lighting, upgrading of neighbourhood parks, fitness corners and playgrounds, as well as improving connectivity and accessibility.
My Ministry will study Ms Lee’s suggestion to see if funding for small-scale projects can be considered for private estates.
Column No : 1071
SECONDHAND DEALERS ACT
22. Mr Christopher de Souza asked the Deputy Prime Minister and Minister for Home Affairs whether the Ministry will inform secondhand dealers who sell and buy used handphones that they need both the telecommunications licence pursuant to section 5(1) of the Telecommunications Act and a secondhand goods dealers licence pursuant to section 6(1) of the Secondhand Dealers Act.
Mr Wong Kan Seng:
Many secondhand handphone dealers appear to have a wrong perception that they only need a Telecommunication Dealer’s Licence* from IDA in order to trade in secondhand handphones.
Police had therefore sought IDA’s assistance in August this year to put up a notification on the government's online business licensing services portal^ to inform secondhand mobile phone dealers that they need both the Telecommunication Dealer’s Licence from IDA and the Secondhand Dealers Licence from Police, in order to trade in secondhand mobile phones. The application guidelines for both licences are also available on IDA's website.
When a person comes to Police to apply for a secondhand goods dealers licence to trade in used mobile phones, Police will also inform him then that he needs a licence from IDA as well in order to operate as such a dealer.
________________________________________________________________________________
* Pursuant to section 5(1) of the Telecommunications Act:
Power to license telecommunication systems and services
5. -(1) A licence may, with the consent of, or in accordance with the terms of a general authority given by the Minister, be granted by the Authority either unconditionally or subject to such conditions as the Authority may impose and specify in the licence and either irrevocably or subject to revocation as therein specified for the running of such telecommunication systems and services falling within section 3 as are specified in the licence.
^ https://licences.business.gov.sg
FAQ #1 :
1 Do I need to apply for this licence?
You will need to apply for the Dealer’s Individual licence if you intend to manufacture, import, hire, sell, offer or possess for sale any telecommunication equipment other than approved telecommunication equipment or equipment set out in the First Schedule of the Regulations.
For details on the guidelines and licence conditions, please refer to "Guidelines on Licensing Schemes" - Guidelines for Telecommunication Dealers Licence.
For details of registering telecommunication equipment with IDA, please refer to "Registration of Telecommunication Equipment".
It is useful to note that the application for Dealer’s Individual Licence is based on per premises or outlet. A separate Dealer’s Individual Licence for each premises for selling non-approved telecommunication equipment is required.
"The applicant/registrant is required to seek the necessary approvals from other relevant authorities in Singapore relating to its business, where required. In addition to the IDA telecommunication dealer licence, secondhand dealers of telecommunication equipment are also required under Section 6 of the Secondhand Dealers Act to apply for a separate Secondhand Dealers licence from the Police Licensing Division. Information on the Secondhand Dealers Licence as well as the application form can be downloaded from http://www.spf.gov.sg/licence1/".
Column No : 1075
DISCRIMINATION AGAINST SINGAPORE WORKERS BY FOREIGN BOSSES
23. Mr Chiam See Tong asked the Minister for Manpower if his Ministry will set up a bureau to receive complaints of cases where Singapore workers are discriminated against in their application for jobs by foreign bosses.
Dr Ng Eng Hen:
The Ministry of Manpower already has a department to receive and look into complaints of discrimination faced by job-seekers or workers. If MOM finds that discriminatory practices are being employed, it will take appropriate action against the employer. This includes issuing a warning, counselling or other administrative measures.
The number of complaints related to employment discrimination each year is relatively small, and has remained stable over the past few years. MOM received 68 such cases in 2006. None of the cases concern an employer or manager who is a foreigner. If Mr Chiam is aware of any such case, I would encourage him to advise the job-seeker concerned to make a complaint to MOM, so that the case can be looked into.
To promote greater awareness of fair employment practices, the Tripartite Alliance for Fair Employment Practices (TAFEP), comprising key representatives from employers, unions and the Government, was formed in May 2006. It is co-chaired by Mr Bob Tan, Vice President SNEF/Council Member SBF, and Mdm Halimah Yacob, Assistant Secretary General NTUC. About 300 companies representing a broad spectrum of employers have responded to the recent TAFEP initiative to endorse an employer’s Pledge of Fair Employment Practices. I would like to encourage more employers to do so.
Column No : 1075
HOUSING AND DEVELOPMENT BOARD FLATS
24. Mr Chiam See Tong asked the Minister for National Development (a) what is the percentage of HDB flat dwellers over the age of 60 years old who have had difficulties with their monthly loan repayments between the years 2003 and September 2006; and (b) if his Ministry will consider extending the loan repayment period for those who have difficulty paying their monthly loan repayments.
Mr Mah Bow Tan:
The majority of HDB households whose youngest lessee is above 60 years old have no outstanding home loan. Only about 1% [1,037 cases] of these elderly households are in arrears of three months or more for their HDB loans*. The percentage has remained largely unchanged in the last three years.
Under HDB's mortgage financing policy, the maximum loan repayment period that HDB grants to its mortgagors is 30 years, subject to a 65-year age limit. It is not to the benefit of mortgagors for HDB to extend the loan repayment period beyond this. First, mortgagors will incur additional interest costs for longer repayment periods. Secondly, it will be increasingly difficult for those above 65 to service a mortgage loan, as they will also need to cater for their retirement needs.
To help mortgagors tide over temporary periods of financial hardship, HDB has in place several financial assistance measures. For example, Under the Reduced Repayment Scheme (RRS), mortgagors are allowed to make repayments ranging from 50% to 75% of their current instalments. HDB has no plans to extend the maximum loan repayment period.
* HDB does not have data on arrears cases for bank loans.
Column No : 1077
EMPLOYMENT OF THE ELDERLY AND EX-OFFENDERS
25. Mr Zaqy Mohamad asked the Minister for Manpower in view of the initiatives put in place by the Government to employ the elderly and ex-offenders, (a) what is the progress in helping these groups find employment in the Government and the private sector; and (b) for each of this group from 2004 to 2006, how many are employed in the Civil Service and in which areas.
Dr Ng Eng Hen:
Employment of older workers
The latest figures from the June 2006 Labour Force Survey show that more older workers are employed. The resident employment rate for the 55-59 age group increased from 55.9% in 2004 to 60.6% in 2006. Similarly the resident employment rate for the 60-64 age group rose by more than 8 percentage-points from 33.6% in 2004 to 41.9% in 2006. In absolute terms, these represent an increase of 41,200 workers in the 55-64 age group. These improvements are encouraging but we must persist in our efforts to help more older workers stay employed.
Between 2004 and 2006, the Civil Service recruited about 1,500 mature workers who are above age 40*, about 700 of whom are above age 50. In addition, 11% of about 3,800 retired civil servants were re-employed over the same period^.
The Workforce Development Agency’s career centres, which are run together with the Community Development Councils (CDCs) and self-help groups, have since 2004 placed over 28,000 mature workers in jobs across a variety of sectors.
Employment of ex-offenders
The Civil Service does not track the number of ex-offenders employed as it does not differentiate these employees.
For the private sector, since 2004, the Singapore Corporation of Rehabilitative Enterprises (SCORE) has assisted about 8,500 offenders and ex-offenders in their job search through its database of potential employees#. Another 500 ex-offenders found jobs through the WDA’s career centres.
* This includes retired civil servants who are re-employed.
^ This excludes those re-employed on a temporary basis and those providing services on a contract-for-service basis.
# The 8,500 figure reflects the number of offenders/ex-offenders whom SCORE has helped in the job search process. The actual jobs secured since 2004 is 6,472. This excludes those who found jobs through the on-line job portal and the latest Yellow Ribbon Job Fair in November 2006.
Column No : 1079
HOUSING AND DEVELOPMENT BOARD FLATS
27. Mr Zaqy Mohamad asked the Minister for National Development in view of the increasing average age of Singaporeans getting married, (a) will the HDB review its policy of allowing singles below 35 to purchase public housing; and (b) whether the HDB has surveyed the demand of HDB flats among young singles who wish to stay on their own.
Mr Mah Bow Tan:
Our public housing policies are designed to be pro-family in orientation. A proper family nucleus is thus required for the purchase of a HDB flat. Single citizens are considered as part of a family unit, and are encouraged to live together with their parents for mutual care and support.
Nonetheless, we recognise that there are some older Singaporeans who remain single and who may prefer to live on their own. To meet the housing needs of this group, HDB allows single Singapore citizens who are at least 35 years of age to buy resale flats. Single citizens who are first-timers are eligible for a CPF housing grant*.
In line with the Government’s objective to encourage family formation, there are no plans at this juncture to lower the qualifying age for single Singaporeans to buy a resale HDB flat. Single persons below 35 years of age who wish to live alone have other housing options, such as renting a room or whole flat from other HDB lessees under the Approved Subletting Scheme.
* $11,000 under the Single Singapore Citizen Scheme, or a higher grant of $22,000 under the Joint Singles Scheme.
Column No : 1079
LIFT UPGRADING PROGRAMME AND INTERIM UPGRADING PROGRAMME
28. Dr Fatimah Lateef asked the Minister for National Development whether the funds allocated for the Lift Upgrading Programme and Interim Upgrading Programme within the same group of blocks or precinct are transferable between both upgrading programmes.
Mr Mah Bow Tan:
The Interim Upgrading Programme (IUP) and Lift Upgrading Programme (LUP) are two separate programmes, each with its own budget.
The IUP consists of interim upgrading works to improve facilities at precinct and block levels such as repainting of blocks and new covered linkways. These works are meant for all residents in the precinct and the Government fully funds the costs involved at $2,400 per flat.
As for the LUP, this is offered to eligible HDB blocks to provide lifts that stop on every floor. There is a cap of $30,000 per benefiting unit. This cost cap is to ensure that lift upgrading is done in a cost-effective manner. The Government funds the bulk of the cost of providing lift upgrading, while benefiting residents and Town Councils co-pay a small proportion of the cost.
To minimise inconvenience to residents, these two programmes are sometimes offered together to applicable precincts as IUP Plus. However, as IUP and LUP have different objectives and funding considerations, it would not be appropriate to allow any transfer of budget between the two programmes even when they are being implemented concurrently as IUP Plus.
Column No : 1081
LAYING OF UNDERGROUND ELECTRICAL CABLES IN OLD PRIVATE ESTATES
29. Dr Fatimah Lateef asked the Minister for National Development if the cost of converting overhead electrical cables to underground ones can be incorporated under the Estates Upgrading Programme (EUP) funding for private estates as the cables in some of the estates are old and pose certain hazards.
Mr Mah Bow Tan:
The Estate Upgrading Programme (EUP) aims to enhance the living environment in private residential estates, by upgrading public facilities on state land within the estates. Common EUP works include the upgrading of park and road related facilities, improvement to connectivity and accessibility to and within the estates, as well as enhancement of estate identity. The upgraded facilities are subsequently handed over to the relevant public agencies for maintenance.
The Government does not own or maintain the electrical cables, be they overhead or underground. These cables are owned and maintained by the subsidiary companies of the Singapore Power Group (i.e. SP PowerAssets Ltd and SP PowerGrid Ltd respectively), which operate on a commercial basis. It is therefore not appropriate to use EUP funds to finance the replacement or maintenance of such private assets.
The use of overhead electrical cables is safe and widely accepted in many developed countries. In the maintenance of the overhead cables for safety and reliability of electricity supply, SP PowerGrid has to comply with the requirements imposed by the Energy Market Authority (EMA). Dr Fatimah may wish to contact SP PowerGrid if she has any specific concerns on the safety and maintenance of the overhead electrical cables.
Column No : 1081
PARK CONNECTORS
31. Dr Teo Ho Pin asked the Minister for National Development if he will update the House on the progress made in the implementation of park connectors in Singapore and what are the plans to expedite its implementation.
Mr Mah Bow Tan:
In the Parks and Waterbodies Plan of 2002, MND announced that 170 km of park connectors will be built by 2015. NParks has since developed 74 km, including the 10 km coast-to-coast connector, linking Pasir Ris Park to East Coast Park. Another 25 km of park connectors are currently under construction.
Park connectors are a key component of our plan to make Singapore a “City-in-a-Garden”. They will link up our parks and green spaces to create the sense that we live, work and play in one big garden. Besides enhancing the accessibility to our parks, park connectors are in themselves venues for recreational and healthy lifestyle activities. In view of their strategic value and usefulness, we have decided to accelerate the development of an island-wide park connector network.
NParks will double its development pace from the current 9 km per year to about 20 km per year, and complete 200 km of park connectors by 2012. In the development plan, NParks will focus on creating seven major loops, with multiple access points located close to population centres. These loops will route through major estates such as Bukit Batok, Pasir Ris, Bedok, Tampines, Ang Mo Kio, Bishan, Yishun, and Punggol. There are also plans to subsequently link up these loops to form a complete network.
Column No : 1085
WRITTEN ANSWERS TO QUESTIONS
Column No : 1085
UNSECURED OVERDRAFT-LENDING
1. Ms Sylvia Lim asked the Senior Minister if he will provide information on the default rates and the percentage and amount of unrecovered debt for unsecured overdraft-lending offered by financial institutions in the last 5 years.
Mr Lim Hng Kiang:
Unsecured household loans that have defaulted, defined as loans past due for 90 days or longer or loans that exhibited weakness in repayment capability, represented about 1.1% of total unsecured household loans as at September 2006. The figures are 2.6% in September 2004 and 1.8% in September 2005. (Data prior to 2004 are not available.)
Consistent with this decline, the credit card charge-off rate (defined as the amount of bad debts written off divided by total credit card receivables) has also fallen, from 2.9% in Q3 2005 to 2.7% in Q3 2006.
The most effective solution to managing debt is for individuals and households to learn how to better handle their finances. To this end, the MoneySENSE national financial education programme has been working with industry associations to disseminate messages on prudent spending and proper debt management through consumer guides, articles and events.
Column No : 1085
BAIL FOR CRIMINAL CASES
2. Ms Sylvia Lim asked the Deputy Prime Minister and Minister for Law (a) if he will provide the number and percentage of criminal cases in the last 3 years where an accused person was offered bail by the courts but was unable to post bail until disposal of the case; and (b) specify the distribution between foreign and local accused persons in the above cases.
Prof. Jayakumar:
The specific data requested by the Member is not tracked by the Courts. To compile such data, a massive exercise will have to be mounted to individually review thousands of case files to ascertain the reason why the accused person was in remand and not on bail. Even then, it would not be possible to state whether the accused person was in remand because he could not post bail or because he chose not to be on bail, e.g. because he intended to plead guilty and wished to have the period of remand taken into consideration for the purposes of sentencing. Therefore Court administrators have not been requested to embark on such an exercise.
Nonetheless, the Court administrators have tracked the accused persons who were in remand as at 31st December 2006. There were 373 accused persons who were in remand. After a period of about two weeks, of those remandees out of this batch of 373 accused persons who were still in remand, the assessment by the authorities is that only four of them were in remand because they were unable to furnish bail. Of course there were others in remand who chose not to be bailed out as they had indicated their intention to plead guilty and would subsequently request the sentencing court to take into consideration their period in remand for the purposes of sentencing.
Of these four accused persons, three of them are local while the remaining one is a foreigner. All four accused persons were in remand for less than four weeks.
Column No : 1087
ADDITIONAL FOREIGN RESIDENTS
3. Ms Sylvia Lim asked the Deputy Prime Minister and Minister for Home Affairs if he will provide a projection, for the next 5 years, of the number of additional foreigners the Government intends to add to the resident population of Singapore and for which skill sector or industries.
Mr Wong Kan Seng:
Projection on immigration
From 2001-2004, an average of 35,250 new permanent residents (PR) and 7,130 new Singapore citizens (SC) were granted per annum. In 2005, about 52,300 new PRs and 12,900 new SCs were granted. The average numbers of new PRs and SCs are 38,700 and 8,300 respectively, for the period 2001-2005. We could expect to add about 200,000 new PRs and 40,000 new SCs in the next 5 years if we get the same numbers of new PRs and SCs as in the last 5 years.
Profile of immigrants
Many new PRs and SCs in Singapore were employment pass holders, usually graduates or diploma-holders who are skilled professionals or managers working in our strategic economic sectors such as the finance, biomedical sciences and creative industries. Beyond education qualifications, we also look for those with relevant experience and/or specific skills that can add vibrancy and diversity, and meet the needs of our economy. As the nature and needs of our economy change, we will adjust our requirements accordingly to ensure that new PRs and SCs fit the relevant profile.
Competition for talented migrants
Singapore is not the only country grappling with population issues. Many countries are seeking suitable migrants to augment their population. For example, the US, UK, Canada, Australia, New Zealand and Hong Kong have programmes in place to target and attract suitable immigrants. Even Japan, traditionally a homogenous society, has begun to open its doors to non-ethnic Japanese immigrants. It was recently reported that there are more than two million such immigrants who are Japanese citizens today. The conclusion from this is clear – many countries are facing demographic challenges which will affect their economic vitality and viability if they are unable to augment their population and workforce. Immigration is a necessary and critical strategy in this regard.
Rationale for encouraging immigration
Our birth rate has been falling. In 2004 and 2005, we only had 1.25 babies born per woman, i.e. a Total Fertility Rate (TFR) of 1.25. This is way below the 2.1 level needed to replace ourselves. Falling birth rates is a common phenomenon among many other countries. Since 2004, we have put in place a comprehensive marriage and parenthood package to encourage more resident births. Nevertheless, it would require an attitudinal change towards a more pro-family mindset among Singaporeans. It is unlikely that we will be able to reach the TFR of 2.1 to replace ourselves. This is why our approach to augmenting our population is three-pronged: encourage more Singaporeans to get married and have more babies; keep our overseas-based Singaporeans connected and committed to Singapore; and top up our population and workforce with suitable immigrants.
Singapore must and will continue to welcome immigrants who can identify with our way of life and whose diverse talents can contribute to the vibrancy and viability of our country.
The Government will monitor our population growth closely to ensure that the quality of life and well-being of Singaporeans will not be compromised as our population grows through careful urban planning and development.
Column No : 1089
VALUATION OF HDB FLATS
4. Mr Zaqy Mohamad asked the Minister for National Development what is the valuation method used by the HDB to set prices for its new flats and how does the HDB value its subsidised flats at market prices when new flats are priced by the HDB and land prices are also set by the Government.
Mr Mah Bow Tan:
It is an established valuation principle that the best indication of the market value of a property is the price of similar properties in the vicinity, transacted on a willing-buyer willing-seller basis. Adjustments can then be made to the market value of the property, to account for differences in attributes between the properties under comparison such as location, floor area, lease term, age, view, orientation and storey height.
HDB adheres to the above principle when pricing new HDB flats. Specifically, the prevailing market value of new HDB flats are assessed using recently transacted resale prices of similar flats in the vicinity, with appropriate adjustments factored in to account for differences in attributes. HDB then sells the new flats below their prevailing market values, so that flat buyers enjoy a market subsidy when they buy the flats.
HDB prices its flats relative to their market cost rather than development cost (i.e. the land and construction cost), so as to reflect the flats’ real market values.
Column No : 1091
REVIEW OF HOUSING SUBSIDIES
5. Mr Zaqy Mohamad asked the Minister for National Development whether housing subsidies have been reviewed in the same way as the prices of HDB flats which are valued at market rate, to assist those in the middle income group who are not able to benefit from the additional housing grant.
Mr Mah Bow Tan:
The Government is committed to the home ownership programme and ensures that HDB flats are affordable to 90% of Singaporeans. To help eligible first-timers buy and own flats, HDB offers new flats at subsidised prices, and provides a CPF Housing Grant of $30,000 or $40,000 for those who choose to buy resale flats. HDB also offers mortgage loans at a concessionary interest rate to help buyers finance their flat purchase.
As a result, HDB flats are very affordable to the vast majority of Singaporeans, including the middle income group. Over 70% of all HDB loan mortgagors service their monthly instalments fully from their CPF account. Another 10% use a combination of CPF and cash. In 2006, the average new HDB flat buyer uses only about 20% of his monthly household income* to service his housing loan.
Nevertheless, the Government recognises that the lower income households may need additional help, given the economic pressures of globalisation. The Additional CPF Housing Grant (AHG) was thus introduced in March 2006 to provide further assistance to lower-income households to buy their first flat. The qualifying income ceiling for the AHG is set at $3,000, to ensure that the Government’s limited public housing subsidies are prioritised to help families with more pressing needs.
* This includes employee’s CPF contribution.
Column No : 1091
STREAMING IN SCHOOLS
6. Mr Liang Eng Hwa asked the Minister for Education in view of the introduction of subject-based banding to replace the EM3 stream (a) whether his Ministry has plans to refine streaming in secondary schools; and (b) whether categories such as Normal (Academic) are still necessary.
Mr Tharman Shanmugaratnam:
Streaming in schools is an educationally sound approach that has served us well. By offering teaching and learning approaches based on students’ different abilities and learning styles, it allows students to learn at an appropriate pace and progress as far as possible in their studies. This is how we have brought the attrition rate in schools down, to about 3% currently.
Through the years, MOE has been regularly reviewing and refining our approaches to streaming, so that we can help our students learn as best as they can.
At the primary level, we have made several refinements to the system, including as Mr Liang has noted, the introduction of subject-based banding to replace the current EM3 stream, starting from 2008.
At the secondary level, students currently take the Express, Normal (Academic) [N(A)] or Normal (Technical) [N(T)] courses. The N(A) course which Mr Liang asked about has allowed students who will have difficulty taking the ‘O’ levels in four years to prepare for the ‘N’ levels instead. Many of them go on to take their ‘O’ levels in Secondary 5. By doing this over five years, they learn at a more comfortable pace, and are able to do better.
Similar to the primary level, we have been introducing greater flexibility for students in secondary schools. To cater to late developers, we allow for transfers between the Express, N(A) and N(T) courses. For the N(T) students, we now allow for lateral transfers after Secondary 2, and beyond.* N(A) and N(T) students are also able to take up to two of their subjects at a higher level.^ Over 2,400 (or 20%) N(A) students sat for one or two ‘O’ Level examinations while in Secondary 4 in 2005. From this year, schools that are ready have also been able to allow selected N(A) students to skip the 'N' level examinations altogether, and take a five-year course aimed at preparing them for their ‘O’ level examinations.#
Some of our secondary schools have introduced further innovations to customise learning for their students. For example, Dunman Secondary School has adopted a form of subject-based banding for their students. Secondary 3 N(A) students who are strong in Mathematics attend classes with the Express students, while Secondary 3 N(T) students who are good in Mathematics attend classes with the N(A) students.
MOE will continue to review our secondary school landscape and streaming policies. We will learn from experience with the various flexibilities that have been introduced in schools, and explore ways to further refine secondary school education over time.
_________________________________________________________________________________
* From 2005, there are provisions for lateral transfers to N(A) course i.e. Sec 2N(T) to Sec 2N(A), Sec 3N(T) to Sec 3N(A) and Sec 4N(T) to Sec 4N(A). This change resulted in an increase in the number of N(T) students promoted or transferred to the N(A) course, from 210 in 2004 to 370 in 2005. The year refers to when the transfer was effected, i.e. 370 N(T) students transferred from 2004 N(T) to 2005 N(A).
^ For a start, Mother Tongue Languages (MTL) and Mathematics were offered. In 2004, it was decided that the range of examinations that N(A) students could sit for be expanded to the full range of ‘O’ Level subjects from 2006. Schools that were ready could offer the option to their students from 2005.
# The first batch of Secondary 4 N(A) students, who will be selected at the end of Secondary 3 in 2006, will skip the ‘N’ level examinations in 2007.
Column No : 1093
REDUCTION IN UNEMPLOYMENT
7. Ms Sylvia Lim asked the Minister for Manpower (a) whether the reduction in the number of long-term-unemployed from 2003 to date includes those not necessarily employed, such as those undergoing training, those who have given up the job search and those affected by other such factors; and (b) how much of these other factors contributed to the reduction in unemployment.
Dr Ng Eng Hen:
By definition, as adopted to conform with international standards, the long-term unemployed excludes those who are economically inactive, such as those pursuing education or training, or choose to retire or stay at home due to family responsibilities. In recent years, the proportion of the economically inactive – i.e. those who are not looking for jobs - has actually fallen as more chose to enter a growing job market. The economic inactivity rate in June 2003 was 37% but in June 2006, had actually fallen to 35%*.
The improvement in long-term unemployment rates reported recently for Singapore are due to good economic growth. As a result, more people are able to find jobs quicker and are now working. Compared to 2003, the employment rate in 2006 had increased by about 2%. A summary of the statistics is in Table 1.
Table 1: Resident Employment Rate, Long-Term Unemployment Rate and
Economic Inactivity Rate, 2003, 2004 and 2006 (As at June)
|
|
2003 |
2004 |
2006 |
|
Long-Term Unemployment Rate (%) |
1.5 |
1.7 |
0.9 |
|
|
|
|
|
|
Employment Rate (%) |
|
|
|
|
Aged 15 & Over |
59.5 |
59.6 |
62.1 |
|
Aged 25-64 |
71.8 |
72.3 |
75.5 |
|
|
|
|
|
|
Economic Inactivity Rate (%) |
|
|
|
|
Aged 15 & Over |
36.8 |
36.7 |
35.0 |
|
Aged 25-64 |
24.0 |
23.6 |
21.3 |
|
|
|
|
|
|
Resident Discouraged Workers |
|
|
|
|
Number |
7,300 |
6,100 |
6,000 |
|
As a % of Economically Inactive |
0.7 |
0.6 |
0.6 |
|
As a % of Labour Force (Inclusive of Discouraged Workers) |
0.4 |
0.3 |
0.3 |
Source: Labour Force Survey, MOM
Notes:
(1) Employment rate refers to the proportion of residents in the specific age group who are employed.
(2) Long-term unemployment rate refers to the proportion of the resident labour force (i.e. employed or unemployed) who have been unemployed for 25 weeks or more.
(3) Economic inactivity rate refers to the proportion of residents in the specific age group who are not in the labour force (i.e. neither working nor looking for work).
(4) Discouraged workers are persons outside of the labour force who are currently not looking for a job because they believe their job search would be in vain. Reasons cited for being discouraged include: (1) Believes no suitable work available; (2) Employers’ discrimination (e.g. prefer younger workers); or (3) Lacks necessary qualifications, training, skills or experience.
(5) Conceptually, a person can be classified as employed, unemployed or economically inactive. As such, the sum of employment rate and economically inactivity rate will not necessarily add up to 100%.
(6) June Labour Force Survey was not conducted in 2005 due to the conduct of the General Household Survey by the Department of Statistics, MTI.
* Data pertains to residents aged 15 & over. For residents aged 25-64, the economic inactivity rate has declined from 24% in June 2003 to 21% in June 2006.
Column No : 1097
SPECIAL NEEDS EDUCATION
8. Miss Penny Low asked the Minister for Community Development, Youth and Sports (a) if he will give an update on, and the reasons for, means testing for special needs education; and (b) whether there are sufficient safeguards to ensure that parents of children with special needs will send them to schools.
Dr Vivian Balakrishnan:
The Government has and will continue to do more to support the disability sector. However, resources will always be limited while the wish list is infinite. We need to allocate more funds to those who need them more. Those who can afford to pay should contribute their share. This way, we make sure that more money is channelled to families who are less well-off. This is the basis for means testing. It will ensure that lower income families which require more assistance than higher income families get the assistance they need.
Means testing was not introduced to save the Government money. Rather, the government is committed to spending more on programmes for the disabled. As an example, the Government’s contribution to Early Intervention Programmes for Infants and Children (EIPIC) and Community Integration Support (CIS) Programme, two programmes for children with disabilities, is expected to increase from $4.5 million in 2006 to $6.7 million in 2010. The National Council of Social Service (NCSS) through the Community Chest has also committed $4.8 million this year and will continue to generously support these services in the coming years.
As a result, EIPIC fees continue to be affordable even after means testing. They range from as low as $10 per month for the lowest income group to about $200-$400 plus per month for those with family income exceeding $3,500. In fact, two centres have reduced fees for the lowest income parents by some $40-$70*.
We would like to reiterate that families who still face financial difficulties despite the subsidy from MCYS and ComChest can approach their Voluntary Welfare Organisations (VWOs) for help. The social workers from the VWOs will make an assessment and see how they can further help the family on a case-by-case basis. For example, if a family has more than one child with disability, they would enjoy a higher level of subsidy.
The Many Helping Hands approach in ensuring a social safety net is in place has worked for us. Together, if each of us does our part - Government, Community and the Family - we can maximise the use of our limited resources and help more needy children with disabilities.
* Asian Women’s Welfare Association and Autism Resource Centre.