(Paper Cmd. No. 2 of 2000)
Sir, once again, I would like to thank Members for their questions and interest in university policies. Our two public universities, NUS and NTU, aim for excellence in education, research and contributions to the community. They have initiated a number of innovative programmes, including broadening of undergraduate education, introduction of a core curriculum, collaborations with top foreign universities and establishment of inter-disciplinary research centres. The universities are also building niches of excellence in key areas where they can achieve global prominence. Steps have also been taken to enhance the vibrancy of campus life, by attracting foreign students. A new university admission system will be introduced in 2003. Sir, I shall come back to some of these points in greater detail later, but first, let me talk about how our universities can be more innovative and entrepreneurial. For example, whether we should privatise NUS and NTU, or certain facilities in NUS and NTU, as some Members suggested during the debate on the SMU Bill, or as suggested by Mr Iswaran today. I take it that when Mr Iswaran said to privatise the universities, he does not mean that the Government should stop funding them, except that we should let them spend the money the way they think they ought to spend the money. That is quite different. In academic matters today, the universities already have a considerable degree of autonomy. While the Ministry sets the overall level of public funding and spending on development projects, as statutory boards, NUS and NTU already have a fair degree of operational autonomy in financial and personnel matters. The internal allocation of resources is largely left to the two universities. They decide for themselves. The Ministry and the universities are currently conducting a review on university governance and funding to encourage NUS and NTU to be more innovative and nimble in responding to global competition, which is what Mr Loh Meng See referred to. The review will identify changes, either to promote innovation and enterprise in individual staff, or faculties and the university as a whole. However, while the Government wants to provide more autonomy and flexibility to NUS and NTU, the Government has no plans to privatise NUS and NTU. The launch of the Singapore Management University, on the other hand, provides us with an opportunity to try out a different governance framework. This will allow the governance experiences of NUS and NTU on the one hand, where they are governed in slightly different ways and SMU, on the other hand, to be compared and best practices to be applied, where appropriate, in all three institutions. Let me address this issue of endowment fund. First of all, what is an endowment fund? An endowment fund is a sum of money or some asset, which is put aside in order to generate a continuing stream of income. The endowment fund itself ought not to be seen as assets which the university should consume for current expenditure. Some comments have been made that the monies in the endowment fund can be used for the operating expenses for universities. That would go against what an endowment fund is for. The income from the endowment fund would help the universities. I will explain how a little later on. Secondly, what fund is this that we are talking about? This fund, which the NUS has used to make this investment, is called the General Endowment Fund. How did this fund originate? This fund originated from public contributions to finance the University of Malaya's development in the 1940s and 1950s. A princely sum of $3.342 million of this General Endowment Fund was used in the 1950s to purchase residential properties in the Bukit Timah area for use as staff and student housing. These were subsequently acquired by the Government in 1996 and the proceeds amounting to $242.4 million was credited to the General Endowment Fund. How to invest this endowment fund in order get the best continuing returns in the long term for the university is a matter for the university to decide. It has a finance committee and an investment committee and they make these decisions. Mr Iswaran is right. There is really no need for us to question how they make these decisions in Parliament because I have some confidence that the members of the investment committee will decide, in the best long-term interests of the university, to get both capital appreciation, as well as a continuing stream of income. 1.30 pm The university has other endowment funds, including the NUS Endowment Fund, for which the Government provides the matching grants and some special endowment funds of smaller quantities. The whole idea of these endowment funds comes to the question of what do we use these endowment funds for. The whole idea of these endowment funds is to allow the university to use these funds for projects and activities in line with the university's mission and which contribute to its long-term development, but which are otherwise not available from the budget, from Government grants or from the fees paid by students. The whole idea of these funds is to provide the university with the flexibility to do things, which it thinks it wants to do and for which we may not be able to completely agree on. So, the whole idea is to provide the university with some flexibility and autonomy in its operations in the areas of research and development, and perhaps student enrichment and so forth, which it wants to go into. So we are quite happy to see these endowment funds develop and provide the university with a continuing stream of income for which it can develop its resources. By the way, some of these funds can only be used for specific purposes, because donors, when they donated the money, specified its purposes. That is the story on the university endowment funds and how the monies are invested. Incidentally, in the case of the NUS, the decisions are made by the finance committee. The finance committee reports to the Council. The university's annual reports are audited by the Auditor-General or commercial auditors recommended by the Auditor-General, and the accounts are presented to MOE as well as to this House. However, autonomy alone is not going to guarantee excellence. Mr Loh Meng See has rightly identified remuneration and service conditions of academic staff as an important factor in the whole equation. The university could only flourish if it has capable and committed staff of high quality who can make use of this autonomy to bring the university close to its goal of attaining world-class standard. The NUS and NTU must therefore place priority on recruiting and developing excellent staff. The existing remuneration and benefits scheme in NUS and NTU is modelled after the civil service. There is some flexibility in deciding salaries, but the flexibility is still constrained by the salary scales for different grades of staff. As an interim measure, a market adjustment allowance has been provided to staff in certain disciplines, eg, medicine and in business. The current review of university governance and funding will give universities greater flexibility in remunerating staff. The ideas being studied include the injection of more performance based and market components into the remuneration system. Mr Loh has also asked about recruiting good foreign staff to teach at our universities. NUS and NTU have indeed been recruiting overseas staff for many years and, currently, more than 20% of the academic staff are foreigners, not including Singapore permanent residents. So, Sir, the number is actually higher than 20%. NUS and NTU are keenly aware that they need to cast their net globally and already have plans to step up such efforts. When looking for outstanding staff, whether locally or globally, to take our universities to greater heights, the universities must be able to provide a remuneration package that is globally market competitive. However, remuneration is only half the story when recruiting and retaining staff of high quality. The reward system needs to be supported by a rigorous appraisal system, so that there is a clear link between performance and remuneration. The rigour of the appraisal system signals that the university is serious about quality, and it is such a university that can attract and retain people of high calibre. An effective appraisal system serves three purposes. First, it encourages desired behaviour by setting out the expectations for the staff in the areas of teaching, research and service to the universities. Second, the appraisal system helps the universities assess how far expectations have been met and what improvements need to be made. Third, the appraisal system allows staff to be recognised and remunerated according to performance and/or potential. The review committee will come out with recommendations on how the current appraisal systems can be strengthened, so that this most critical resource in any university, its people, can be better managed. And only then can rewards be more meaningfully targeted and help to attract, develop and retain staff of high quality. Sir, let me now turn from staff of universities to students. Prof. Toh See Kiat has expressed some concern regarding the bond that foreign students need to sign. Prof. Toh is right. Foreign students studying in our tertiary institutions, including permanent residents, benefit from a considerable subsidy, and that is why in return, after they graduate, they have to work in Singapore for a minimum of three years. Prof. Toh asked how many there are, they currently constitute 20% of our undergraduate intakes. My Ministry acknowledges that it is inconvenient for foreign students to get guarantors, usually their parents or relatives who are based overseas, to sign the bonds. Hence, from this year, foreign students can send the tuition grant deeds overseas for their guarantors to sign in the presence of a notary public in their home country, rather than having to travel to Singapore to sign the papers. Sir, being a guarantor is a serious matter and guarantors should be aware of their legal obligations. I am not aware of the kind of poor advice that is provided by my Ministry officials. This is a serious matter, and if the Member has knowledge of specific cases, please let me know and I will advise my officers. As far as I know, these legal obligations are made known to them by my officials at the point of signing the deed. Prof. Toh would also be pleased to know that after serving their three-year obligation, a good number of foreign students continue to work in Singapore or Singapore companies in the region. Mr Inderjit Singh asked about training of lawyers well versed in intellectual property protection. The NUS' LLB curriculum has a number of subjects relating to intellectual property laws, eg, copyright and patents which attract a large number of students, and as Mr Singh has correctly said, this is an area of growth. So our budding young lawyers have an interest and they are quite quick to spot the market opportunities. In addition, the information technology law course deals extensively with intellectual property issues relating to computer technology and Internet. Many practising lawyers register for LLM or diploma courses at NUS. And the intellectual property law courses at these levels are also heavily subscribed. Mr Singh also asked about a second degree. He will be happy to know that this avenue is already open. In 1998, NUS launched the approved graduate programme whereby candidates with a first degree can complete their LLB programme in three years. On the suggestion to have a part-time law degree, NUS will consider it if there is sufficient demand. Sir, Mr Loh Meng See asked about university education for working adults and about the reduction in budget funding for the open university. The reduction in budget allocation for the open university is not an indication of future student numbers. The OUDP has been taking in an average of 14,000 students per year in the past three years. There are no plans to reduce this number. In fact, OUDP is a self-financing institution run by a private organisation. It is free to increase those numbers if it wants to and if there is a market demand. From the start of the programme, the understanding was quite clear that OUDP funds the operating cost, while Government would fund the initial development cost, including the cost of land, buildings, computer systems, consultancy by the UK Open University for course development. I think with the bulk of development coming to an end, the budget allocation has also fallen. I agree completely with Mr Loh Meng See regarding continuing education opportunities for working adults, but it should not be confined only to universities. I understand that we are talking about universities here, but most working adults really require upgrading opportunities, not at the university level but at the polytechnic level and at certificate level. And the polytechnics and ITE have really been providing quite a lot of opportunities here as well. Continuing education really is the next major wave in education - from mass primary, mass secondary and mass further education and, I think, now mass continuing education. No country has yet worked out a complete doctrine or system for this. The Ministry of Manpower, Members would have heard from Dr Lee, and the Ministry of Education are currently discussing how we can put such a system in place in Singapore which will provide Singaporeans the opportunity to carry on with continuing education and learn throughout their lives. Prof. Toh has asked about the course offerings in SMU. SMU was set up to focus on serving the business and finance sectors and SMU will start offering its Bachelor of Business Management programme this August. Although it is likely to expand its degree offerings to other related courses like Economics, it will continue to maintain its focus as a management university. There are therefore no current plans for SMU to offer courses in disciplines removed from business management, especially courses requiring heavy equipment or heavy capital investment. Perhaps the proposals that Prof. Toh made are certainly things which I am sure SMU will consider. The President of SMU is herself a lawyer. Dr Wang Kai Yuen and Dr Tan Boon Wan have asked about manpower forecasting and how many places we allocate to each discipline in the university. I agree with Dr Wang and Dr Tan Boon Wan that more forecasting and more data will be useful. But I am not optimistic that students and parents at the point at which they enter university will make sensible long-term choices for themselves, because, as Dr Wang and Dr Tan have pointed out, there is a considerable market lag. And what looks reasonable now may not be right at the time that the students graduate. For example, students tend to move away from architecture and civil engineering when there is a downturn in the construction cycle. That may well be the best time to start taking architecture and civil engineering because by the time they finish in four or five years' time, that is when the boom may start again. So it is a bit difficult to predict because there are long leads and lags in the system. And also we are talking about education for a lifetime. While more forecasting may be useful. I think we should really be looking at the longer-term trends and hence, for example, in our tertiary institutions, we have placed a high emphasis on science and technology. Because we think that in the long term, good foundation and training in science and technology will actually provide our students with a big advantage in being able to shift into other areas, and because science and technology is one of the fundamental drivers of the future world. As to why there are limited places for some courses, these are guidelines that were drawn up by the National Manpower Committee, and we want to make sure that what we expect the economy will require is reasonably balanced with the output from the various faculties. We also have to recognise that certain faculties do have more demanding requirements at entry for the students than others. So not all students who go to university may be able to go to these courses because some of the courses simply have more demanding requirements, and that is a reality which we have to accept. 1.45 pm Dr Wang has suggested that we cap the number of distinctions. In fact, it is capped. Under the current university admission system, we count three "A" level subjects. So a student who takes more than three "A" level subjects and scores distinctions for his five, six, seven, eight subjects, if a student has the energy to take that many "A" level subjects, is not going to have those counted for university admission. In fact, weightage is provided in other areas, like GP and mother tongue. With the new university admission system, as Dr Wang has suggested, we will be providing weightage to co-curricular activities as well. In order to de-weight the "A" levels so that students do not become overly obsessed with scoring that last mark in the "A" level examination, we have introduced SAT or a SAT-like test which gives us a different view of the student's abilities and readiness to undertake a university course. This is a test which a student can take a number of times. So the preparation level and so forth is not quite the same in intensity as taking the "A" levels. The content knowledge that is required for a test like that is really something which a student should already have if he has completed something like his "O" levels. I would also like to point out at this point that while we have spent some time on university education, there is really a wide range of high quality further education that is available and, as Dr Jennifer Lee has pointed out, we have actually one of the highest rates of higher education participation in the world. We have over 20% in university, 40% in the polytechnics. Even beyond that, for further education, we have the Institute of Technical Education. Mr Peter Chen has asked for this booklet on ITE to be distributed because over the last few months and years he has got questions even from Members of this House, which revealed quite a high level of ignorance as to what ITE is today. People still think that it is characterised by a vice on the table with people filing away in semi-darkness on a greasy table. It is quite a different institution from that today. The students who go to ITE are highly motivated, having finished four years in a secondary school, with a good grounding in computers, languages and Mathematics and science. They are quite well prepared for the future world. It will be quite a revelation and, if Members are interested, I am sure Mr Peter Chen will be happy to take them on a visit.