MAIN AND DEVELOPMENT ESTIMATES OF SINGAPORE FOR THE FINANCIAL YEAR - 1ST APRIL, 1991 TO 31ST MARCH, 1992
Sir, I want to thank Mr Eugene Yap, Chairman of the GPC on Communications, and the other Members of the GPC for their comments, in particular Mr Yap, for his very kind words. Sir, my Ministry's mission is to provide transport and communications infrastructure and services of the highest quality at the lowest cost. We have excellent workers and officers in the various departments and statutory boards under the Ministry. And Mr Yap's compliments to them will, I have no doubt, motivate them to work even harder because the GPC, having scrutinised the performance of the Ministry, has recognised their efforts. Sir, the correct way of keeping cost down in any business is to have high productivity. And here Dr John Chen has touched upon a very important point, which is the important role of workers and unions. I want to take this opportunity to pay tribute to the unions of the various statutory boards under my Ministry's charge. They have worked very closely with management. And the end result - benefits for the statutory boards through high efficiency and productivity, benefits for the workers themselves, as some of these productivity gains are passed on to the workers, and then benefits for the public at large, because again the productivity gains are passed back to the public by way of lower cost. That way we keep Singapore internationally competitive and continue to attract investments into Singapore, giving our people better jobs. Sir, we have been practising that in the Ministry and in the process, our charges for services at the airport, at the port, and at Telecoms, are among some of the lowest in the world. But there is no room for complacency. We have to continue to press on. We have to continue to adapt to changes because the international economy is becoming more and more competitive. The proposed change to time-based local charges for telephone calls is one such example of adaptation to change. Sir, I would like to thank the Chairman for his suggestion that we should continue to look at ways of keeping cost of using the telephone down. Telecom's formula of 1.5 cents per minute comes from a study of domestic telephone traffic pattern, and that figure reflects as closely as possible the actual cost of providing that service. That 1.5 cents is also designed to make sure that the changeover will be revenue neutral, so that it does not add any additional overall cost to the cost of doing business in Singapore. Quite obviously, there have been some apprehensions among some members of the public. This is to be expected. Sir, last year I told the House, when I was answering a question by Mr Heng Chiang Meng, that if there were productivity gains in Telecom, I would ask Telecom to consider passing some of these productivity gains to the local calls, in addition to what we had been doing previously for calls overseas. And here I am happy to inform the House, Sir, that the staff of Telecom last year, in other words, for the year 1990, had achieved a very high productivity improvement of 20%. I have therefore asked Telecom to consider the possibility of reducing time-based charges from 1.5 cents to 1.4 cents per minute. Sir, the GPC has emphasised the importance of the telephone for people like students, senior citizens, community leaders and housewives. He has also mentioned the importance of the telephone for purposes of social interaction between friends and family. I agree. The telephone is indeed an important instrument. Many of these calls, particularly residential calls, are made in the evening and on weekends. I have therefore also asked Telecom to consider the possibility of giving a rebate for calls made in the evening. I have set the target for them to try and see if they can give a rebate of up to 30% for evening calls. Telecom will study to see what these off-peak hours should be when the economy rate can apply. I would expect to be able to give specific figures later on in the year after Telecom has completed their studies. Sir, Dr Chen has suggested the possibility of introducing some kind of an option scheme for a short period after the equipment for counting telephone calls and timing them has arrived. I agree with the objective, which is to convince the public, especially "the majority of the majority" who are going to have their bills lowered rather than increased. However, I think the suggestion is not a practical one because the pilot period between the arrival of the equipment and the implementation of the scheme will be relatively short. There are about a million subscribers of telephones. To ask that large number of people to go through an exercise of an option scheme, to last one or two months, can be disruptive and counter-productive. However, I intend to ask Telecom to carry out a pilot scheme, after the equipment has arrived, by sending subscribers their bills on a monthly basis. This will show them what their bills would be like, after we switch over to the time-based charging system. Sir, I am confident that the majority of subscribers will be pleasantly surprised and the anxieties that they will have to pay more, will prove to be unnecessary. Sir, I now turn to Mr Tang Guan Seng's comments on civil aviation. My Ministry has pursued its liberal air policy of open skies for many, many years. Indeed, we are renowned among the civil aviation authorities worldwide as a country that has probably one of the most liberal open sky policies. Often Singapore is the party that encourages our air services agreement counterpart to open up, to allow more flights between our two countries. So, in a sense, I am very surprised to hear from the Member that we have not been sufficiently liberal. Indeed, we have gone even to the extent of allowing the other country to fly to Singapore on a unilateral basis where Singapore carriers are not interested in flying to that county. It is possible that there may be occasional shortages of air cargo space. There may be occasional shortages of passenger seats. Some of these are seasonal problems. Some of them are due to specific reasons. For example, over the past few months, because of the Gulf crisis, there has been widespread cancellation of flights between Singapore and Europe, and between Singapore and countries in the Gulf. These are some of the contributing factors which may be responsible for consumers wanting flights either for passenger trips, or for air cargo, experiencing some difficulty. Now that the war is over, and many of the scheduled services have been resumed, I expect this problem to disappear very quickly. 2.30 pm Sir, I now turn to the subject of air cargo. Last year, a total of 624,000 tonnes of air cargo was handled by the airport. This is an increase of more than 8% over the previous year and is one of the highest in the region. Our strategy is a simple one, which is to maintain air cargo handling capacity ahead of actual demand. But at the same time, in land scarce Singapore, we must ensure that we maximise the use of valuable land - land that was put aside for the use as a free trade zone. We want also to maximise the use of very capital intensive infrastructure. Our long-term plans are as follows. We expect to build the fourth cargo agents building with an additional 20,000 square metres of warehouse and office space and have it completed either by the end of 1993, or early 1994. At the same time, commercial developers, such as SIA and CIAS, will be adding two more cargo terminals to provide another 70,000 square metres of warehouse and office space. What this means is that we will end up with double our present handling capacity. We will bring it up to a total of 1.3 million tonnes per year. This will be more than adequate to meet demands going all the way up to the year 2000. And beyond that, beginning 1997, CAAS will commence construction of Cargo Agent Building No. 5 and Cargo Terminal Building Nos. 8 and 9. Our long-term plan, way beyond into the 21st century, calls for a free trade zone, 2 1/2 times our present area, to give us close to half a million square metres. We will end up with a total of eight cargo agents handling buildings and 14 cargo terminals, with a total capacity to handle 2.5 million tonnes of air cargo. Sir, I believe our overall long-term plan will be more than adequate to meet the demands for air cargo handling. Sir, I now move on to talk about the points raised by Dr John Chen. Sir, productivity comes about from a number of different ways, from a number of different causes. Productivity gains can come from workers working smarter or working harder. Best if it is smarter, using new work procedures, and better equipment and as a result of that, increasing the overall efficiency. Productivity can also come from increased business volume so that there is greater economy of scale and therefore lower cost per unit. And most important of all, productivity can come from increased investment, in infrastructure, more machineries, faster computers, more sophisticated equipment. All these can give us greater productivity. How is this productivity gain to be shared out? Quite obviously, all productivity gains cannot go to the statutory boards or to the companies. Similarly, all productivity gains cannot go to the workers, nor can all productivity gains go to the consumers, the public. It has got to be shared and shared in an appropriate manner. And this is what we have been doing. PSA workers have been receiving higher bonuses, as Dr John Chen mentioned earlier on, because they have contributed to higher productivity. And it is very important that workers be rewarded for their increased performance. At the same time, we must return productivity gains to the public by way of lower cost to enable Singapore to maintain its competitiveness. And quite naturally, some of the gains must go back as returns on the increased investment that has been put in. Sir, I want to point out to Dr Chen that in addition to just dollars and cents, workers are also rewarded in other ways. Indeed some of the best benefits for workers are not necessarily hard cash. For example, one of the best ways of rewarding workers is to provide them with regular upgrading training, so that they acquire more skills and new skills that will enable them to earn more in the longer term. And this is what PSA and the other statutory boards have been doing. In addition to investing in mechanisation, computerisation and automation, we have also been investing in our workers, giving them extensive training and human resource development. Sir, last year, in 1990, PSA spent a total of $6.7 million or 3% of its wage bill on training alone. In terms of the number of hours, this is equivalent to one working week per employee and it is about 2 1/2 times the national average. We also provide other forms of rewards by way of variable performances to serve as an incentive for workers. We also provide outstanding work performances serving similar purposes. There are, of course, promotions and long-term service awards. All these, carefully structured with both the workers' interests in mind as well as the consumers' interests in mind, enable us to have a workforce in an organisation that gives the best service that we know how, and at the lowest cost. Sir, I would ask my colleague, Mr Mah Bow Tan, to address later some of the topics raised by Mr Yap on land transport.