Hansard, 2004-04-19

Under the provisions of clause 2(d) of Article 46 of the Constitution of the Republic of Singapore, the following Members have been granted permission to be or to remain absent from sittings of Parliament (or any Committee of Column: 2692Parliament to which they have been appointed) for the periods stated: Name From (2004) To (2004) Mr Inderjit Singh 23 Mar 25 Mar 29 Mar 01 Apr 04 Apr 07 Apr 21 Apr 23 Apr Mr Chan Soo Sen 28 Mar 03 Apr Mr Lim Swee Say 28 Mar 01 Apr 05 Apr 11 Apr Assoc. Prof. Ho Peng Kee 29 Mar 03 Apr Mr K Shanmugam 29 Mar 02 Apr 19 Apr 19 Apr Dr Lee Boon Yang 30 Mar 02 Apr 19 Apr 24 Apr Mr Sin Boon Ann 31 Mar 02 Apr 06 Apr 08 Apr 19 Apr 23 Apr BG George Yong-Boon Yeo 01 Apr 08 Apr 12 Apr 18 Apr 19 Apr 19 Apr Mr Matthias Yao Chih 02 Apr 04 Apr 10 Apr 13 Apr Dr Vivian Balakrishnan 03 Apr 11 Apr Mr Raymond Lim Siang Keat 04 Apr 14 Apr Mr Ang Mong Seng 05 Apr 08 Apr Miss Penny Low 05 Apr 21 Apr Mrs Lim Hwee Hua 07 Apr 22 Apr Encik Yatiman Yusof 08 Apr 11 Apr Dr Ahmad Mohd Magad 09 Apr 14 Apr 16 Apr 25 Apr Dr Amy Khor Lean Suan 09 Apr 14 Apr Mdm Ho Geok Choo 09 Apr 14 Apr 20 Apr 22 Apr Dr Michael Lim Chun Leng 09 Apr 11 Apr Mr Seng Han Thong 09 Apr 11 Apr Mr Wong Kan Seng 09 Apr 11 Apr 15 Apr 18 Apr 28 Apr 02 May Mr Chiam See Tong 10 Apr 26 Apr Mr Cedric Foo Chee Keng 11 Apr 12 Apr Prof. S Jayakumar 11 Apr 24 Apr Mr Tharman Shanmugaratnam 11 Apr 23 Apr 28 Apr 02 May Column: 2693Mr David T E Lim 12 Apr 16 Apr 25 Apr 02 May 11 Jun 21 Jun Mdm Halimah Yacob 12 Apr 16 Apr 27 Apr 30 Apr Dr Tony Tan Keng Yam 12 Apr 25 Apr Mr Wee Siew Kim 12 Apr 14 Apr Mr Gan Kim Yong 13 Apr 14 Apr Dr Wang Kai Yuen 15 Apr 28 Apr Mr Chay Wai Chuen 16 Apr 18 Apr Mdm Cynthia Phua 16 Apr 18 Apr Dr Ong Seh Hong 16 Apr 24 Apr Encik Mohamad Maidin B P M 17 Apr 23 Apr Dr Balaji Sadasivan 18 Apr 24 Apr Mr Davinder Singh 19 Apr 19 Apr Ms Indranee Rajah 19 Apr 19 Apr Ms Olivia Lum Ooi Lin 19 Apr 23 Apr Mr Ong Ah Heng 19 Apr 19 Apr Mr Tan Soo Khoon 19 Apr 20 Apr Mr Lee Kuan Yew 20 Apr 20 Apr 21 Apr 27 Apr Mr Khaw Boon Wan 21 Apr 25 Apr Mr Lim Hng Kiang 21 Apr 29 Apr Dr Ng Eng Hen 22 Apr 29 Apr Mr S Iswaran 22 Apr 23 Apr 11 May 12 May 16 May 21 May Assoc. Prof. Dr Yaacob Ibrahim 27 Apr 30 Apr Dr Ong Chit Chung 29 Apr 30 Apr 10 May 12 May 20 May 21 May 25 May 28 May RAdm Teo Chee Hean 01 May 12 May Mr Hawazi Daipi 11 May 15 May Mr Heng Chee How 21 Jun 25 Jun

Parliament to which they have been appointed) for the periods stated:

Mr David T E Lim

ABDULLAH TARMUGI Speaker Parliament of Singapore

The following Bills were assented to by the President of the Republic of Singapore on the date stated:

22nd March,2004 (1) Supply Bill (2) Supplementary Supply (FY 2003) Bill ABDULLAH TARMUGI Speaker Parliament of Singapore

[Mr Speaker in the Chair]

1. Ms Irene Ng Phek Hoong asked the Minister for Transport (a) what are the measures taken to improve the security of Singapore's public transport system, especially the rail system, given the terrorist bombings in Madrid; (b) how effective will these measures be in thwarting terrorist attacks; (c) how much will the measures cost; and (d) how will the cost be paid for.

2. Mdm Cynthia Phua asked the Minister for Transport whether (a) there is any security system that can check to prevent harmful materials like explosive chemicals and bombs being brought into MRT stations; and (b) the security review on the MRT can be expanded to include big bus interchanges as well, as both transport systems have heavy human traffic.

Mr Speaker, Sir, may I have your permission to take Question Nos 1 and 2 together as they both address the same topic?

Yes, carry on.

Sir, Mdm Cynthia Phua asked if there is any security system that can prevent harmful materials from being brought into MRT stations. Today, various types of detection equipment are available for screening passengers and their baggage. However, with over 4 million passenger trips made on our bus and MRT systems each day, it would not be possible to impose 100% security check without severely degrading the efficiency and operation of our public transport system.

Let me assure Members that the Government, together with the train operators, has always taken a pro-active approach to making sure that our train network is safe and secure. Even before the Madrid train bombings, we had conducted security planning and surveys for our MRT system, and implemented many security measures. For example, the operators have tightened security of the access to vital installations, and have installed CCTVs to monitor the MRT network. LTA is also incorporating similar security features into the design of the Circle Line. In addition, the Police carry out routine patrols of the MRT stations. The transport operators, LTA and the security agencies have also conducted several exercises to ensure that we are able to respond effectively to security threats to our public transport system.

In light of the Madrid incident, the Government and our public transport operators have stepped up measures to increase the level of staff vigilance. As I announced last week, the Government has set up a high level Committee to continually review the security of our

public transport system. The Committee will undertake a comprehensive review of the public transport security arrangements, and will make its recommendations taking into account international "best practices". This review will cover both our rail and bus systems, including bus interchanges.

Ms Ng asked how effective these security measures will be. Experience elsewhere has shown that it is very difficult to fully protect any public transport system without drastically reducing its function and efficiency. However, the security measures that we have introduced, together with future enhancements, will help to deter and prevent a large scale attack that will seriously cripple the public transport system.

While the Government will continue to work closely with the operators to keep our public transport system secure, commuters also have an important role to play. We have thus embarked on a public education programme to increase public awareness and vigilance. The operators have put up security posters at MRT stations, and are regularly broadcasting security messages reminding commuters to report any unattended or suspicious packages. Similar measures will be extended to the bus interchanges. All commuters can help to ensure the security of our public transport system by being vigilant. This will ultimately safeguard their own safety.

The Member asked how much the additional security features will cost. This will largely depend on the recommendations of the Committee as it undertakes the review. However, since the public transport system is for the general public, the security of the system should be the collective responsibility of the Government, the public transport operators and the commuters. It is therefore reasonable

that the costs of security measures be shared. The Committee will ensure that only security measures that are necessary will be added so that the cost borne by the commuters will be minimised and kept reasonable.

Sir, may I ask the Minister when the recommendations will be out? May I also ask the Minister how minimal will be the price increase for commuters?

Sir, in fact, the Committee has been working for the last month or so and as soon as it finalises any recommendation it will proceed to implement it. Let me give an example - the decision to remove litter bins from the MRT stations. The moment that was decided upon, the operators were told to remove them. The decision to increase public awareness resulted in the posters being made and broadcast announcements being finalised and those were implemented straightaway. The Committee will not wait until all the decisions have been made before proceeding to implement them. They will decide and proceed to implement as and when they are made.

In terms of the quantum of increase, we do not really know, but I can assure Members that the Committee will ensure that whatever is implemented will be practical, cost effective and the cost increase will be kept to a minimal.

Can I ask the Minister how will the deployment of train marshals be carried out such that it will not cause undue alarm among commuters?

The decision to deploy train marshals has not been made yet. It is an issue that is being studied by the Committee.

Sir, since the Police has actually cut down the presence and operating hours of the Neighbourhood Police Posts due to lack of demand, would the Transport Minister consider working with the Police to site some of the NPPs at the MRT stations for better policing, control, checks and police presence?

Sir, I think the Member should direct the question to the Minister for Home Affairs.

3. Mdm Halimah Yacob asked the Minister for Transport whether the Australian authorities have agreed to allow Singapore Airlines or any Singapore-owned airline the right to fly beyond Australia to the United States, as Qantas is now allowed to fly beyond Singapore to Europe and to compete for the regional market from a base in Singapore.

Mr Speaker, Sir, the Australian government has not granted Singapore carriers the right to fly beyond Australia to the United States on the trans-pacific route.

Under the current Singapore-Australia air services agreement (ASA), which was last expanded in September last year, both Singapore and Australia designated airlines are restricted in their 5th freedom rights to fly beyond each other's country.

Given our close bilateral relationship, including the recently concluded Singapore-Australia FTA, and the many business and social linkages between our people, Singapore has always been ready to conclude a full Open Skies Agreement (OSA) with Australia. A full OSA will enable Australian carriers to freely fly to and beyond Singapore, without any restrictions, to all points, including major European and Asian destinations. Likewise, Singapore carriers will be able to fly

to and beyond Australia. Specifically, the Australian public will also have more choices of airlines to choose from on the trans-pacific route to the United States. An OSA will be a win-win outcome for both Singapore and Australian carriers. More importantly, it will bring significant benefits to both economies given the sizeable multiplier effects of increased air links between and beyond both countries.

However, Australia was not ready to conclude an OSA in September last year as the global industry had just begun recovering then. Nevertheless, Singapore and Australia had agreed "to continue to work towards the conclusion of an open-skies agreement and to consider further liberalisation, including trans-pacific rights, when there is greater stability in the global aviation environment".

Since then, the outlook for global aviation environment has been very positive. The International Air Transport Association (IATA) has in fact projected a growth of 7% in global passenger traffic this year. For routes within Asia Pacific, a growth of 14% can be expected because we are comparing against a very low base last year because of SARS.

Qantas Airways has also reported positive financial results. It had announced that the company's businesses have returned to profitability and that it is in good position to take advantage "of what appears to be a return to more stable market conditions". As there are enough indicators that the global and regional aviation environment has stabilised, we are engaging our Australian counterparts on realising the full open skies agreement.

As Mdm Halimah has mentioned, Qantas Airways has recently announced its investment in a new low cost airline to be based in Singapore. Singapore welcomes any foreign carrier to be

involved in a LCC venture in Singapore, if the proposal strengthens our hub status. In the case of Qantas, we welcome their decision as it will entrench their existing hub operations in Changi. The low fares of the LCC will stimulate greater traffic volumes between Singapore and regional cities. It would also enable Qantas to bring in more long-haul travellers from Europe and Australia to transit and transfer through Changi to the region. It is likely that some of these new travellers will stop over in Singapore, hence creating more jobs and boosting our tourism receipts. It is therefore in our national interest to have Qantas base its new LCC in Singapore and continue growing its hub operations here.

The establishment of new LCCs in Singapore and other new airlines in the region will change the regional aviation landscape in the years ahead. However, SIA will continue to share a symbiotic relationship with Changi and must continue to play an important role in enhancing our hub airport status. Therefore, we will continue to further liberalise our air services agreements and increase our air rights with other countries. With more air rights available, both SIA and other new Singapore carriers will be able to grow. In turn, their growth will strengthen Changi's role as a hub airport.

Sir, I would like to ask the Minister how long does he think this process of negotiation leading to the conclusion of an open-skies agreement will take, considering that there is already stability and the fact that Qantas will be already flying from Singapore in view of the recent developments here?

Sir, I can assure the Member that we are engaging the Australian authorities and I intend to press the issue very strongly.

4. Mdm Ho Geok Choo asked the Prime Minister in view of the need to increase immigration as a solution to our declining fertility rate, (a) what is the right number of immigrants as well as the timing under which they will be granted citizenship; (b) what are their required educational qualifications, skills and working experiences; and (c) how to assure Singaporeans that the increased immigration will not contradict our policy of nurturing committed and loyal Singaporeans and placing them at the core of our society.

Mr Speaker, Sir, Singapore has been an immigrant society from the beginning. Economic migrants from China and India, as well as Malays from the immediate neighbourhood, joined together and made Singapore what it is today. Thus, welcoming with open arms those with something to contribute to our economy and society is not a new idea. For those who can integrate well into our society, we want to encourage them to become permanent residents, and thereafter to take up citizenship. They will make long-term contributions to the well-being of Singapore, and build up commitment and loyalty with time. Their children, especially, will grow up in the local environment, studying in Singapore schools and serving National Service.

There is no correct number of immigrants to draw to Singapore. The test is whether they will be adding to the Singapore economy and society, and how well we are able to absorb them. But even while we welcome new immigrants, it is right that we differentiate appropriately between the privileges for the citizens as opposed to permanent residents, and of permanent residents as opposed to

foreigners who are only temporarily in Singapore.

There is the citizen core which the Government will always specially recognise - they are the ones who are raised here, for whom Singapore is the only home, and for whom Singapore is not only worth living for, but also dying for. Only they can vote, only they can buy HDB flats directly from the HDB at highly subsidised rates, only they can qualify for grants to purchase resale flats, only they qualify for asset enhancement programmes and such schemes as ERS and NSS.

What else can we do to acknowledge the role of our citizen core?

How do we attract more immigrants to sink roots in Singapore? The Working Committee on Population, as well as my Steering Group, are currently examining these issues and we will be presenting our proposals to the Government before August.

5. Dr Mohamad Maliki Bin Osman asked the Deputy Prime Minister and Minister for Finance (a) whether there are clear guidelines for non-profit organisations on raising funds from the public and on the utilisation of these funds; and (b) if there are, what is the monitoring mechanism in place to ensure compliance with these guidelines and thereby to ensure public confidence in such organisations.

Mr Speaker Sir, it is important to have clear guidelines on the raising and utilisation of funds to maintain public confidence in our non-profit organisations and their programmes. There are essentially three questions the public is most interested in. First, what methods are used to raise the

money? Second, how much of the charity dollar is used to raise funds? And, finally, how is the money spent or saved?

The Government launched the Council on Governance for IPCs in January this year to look at best practices for IPCs. IPC stands for Institution of a Public Character. IPC status is conferred under the Income Tax Act. IPCs are authorised to accept tax deductible donations from the public. They are regulated by IRAS or by central fund administrators, which are organisations authorised by IRAS to grant IPC status to other organisations whose objectives are similar to theirs.

The Council is chaired by Ms Lim Soo Hoon, Permanent Secretary of the Ministry of Community Development and Sports. It has seven members from the people sector with wide experience in the local charity scene, and three members from the public sector. The Council is studying ways to better improve fund-raising practices and ensure that IPCs' use of funds is transparent and in line with international best practices. It is working on a code of best practices for the IPCs, and will also recommend how existing fund-raising regulations could be refined to better support informed giving.

Let me now describe what the current rules are, which the Council will improve upon, as appropriate.

First, on fund raising methods. Today, we do not regulate fund-raising methods, except when fund-raising is conducted in public places. This is then regulated by the Police under the House to House and Street Collections Act. Under the House to House and Street Collections Act, any individual or organisation wishing to solicit donations in the streets or other public places is required to obtain a licence from the Police. One of the conditions is that fund-raising expenses must not exceed 30% of the total funds raised. Enforcement comes under the Police.

Second, on fund-raising efficiency. IRAS also imposes a 30% limit on all fund-raising expenses by IPCs. The 30% limit is stipulated under Income Tax Regulations 2004 and enforcement is by IRAS and the central fund administrators.

Third, on effecitive use of funds. Currently, there are no benchmarks for measuring the effectiveness of IPCs as they cover a wide range of activities and charitable sectors. The Council on Governance for IPCs will be studying this matter. All IPCs are required to submit their audited financial accounts to IRAS and their central fund administrators every year. IPCs are also required to post their financial reports online, hyperlinked to IRAS' website, so that the public can better scrutinise their use of funds. This requirement to post financial information online began in 2002. At that time, only about 15% of the IPCs or 170 of the bigger IPCs were required to post their key information online. However, from 1st January 2004, all IPCs are required to post their financial information online to allow free public access. Today, all 821 organisations with IPC status have done so.

Donors have an important role to play in demanding accountability for the way their donations are used. They should be aware of the financial needs of different IPCs, choose the charities they wish to support, and be satisfied about how their donations flow through to the beneficiaries. IPCs, on the other hand, must understand that increasing accountability to the public is critical for ensuring a continuing flow of donations for their causes. The Government believes that charity dollars will go up with informed giving.

Sir, can I ask the Minister what is the basis for the 30% cap on the funds that can be used for fund-raising

expenses? Does the Minister think that this is high, eg, if we take a donation of $6 million which allows the organisation to use up to $1.8 million just for fund-raising expenses alone? What is the basis and whether this is high in his opinion?

Mr Speaker, Sir, our general approach to regulating the charities is to adopt a very light approach. I think we do not want to over burden the charity sector with very tight regulations. As Members know, the charity sector comprises a wide range of causes. Some are very small organisations, others are larger organisations. So, when we had this rule of 30% for fund-raising expenses, we were looking more at the majority of charities, which are much smaller organisations, and therefore to stipulate a 30% rule is not unreasonable, because the amounts they raise are small and the costs of overheads of raising funds are also high. But, of course, if the organisation is large, then I will agree with the Member that 30% seems on the high side. We urge all organisations to always look carefully at the amount they spend in raising each donation dollar and to make sure that this expense is kept as low as possible.

Sir, do I take it that it is also not within the remit of the Council on Governance to determine how much a charity or an IPC can keep as its reserve in its accounts in order to meet its future expenditures?

Sir, as I mentioned, there is a wide range of charitable causes. Some require long-term commitments when they take on the role of looking after their beneficiaries and, therefore, it is prudent for them to have a sensible policy, especially those which are able to raise sufficient funds that will see them through multi-year projects. So, we do not have a specific rule on how much chari

ties should set aside for their reserves. But we urge all charities to disclose this adequately in their statments.

Sir, could the Minister tell us whether the National Kidney Foundation is in full compliance with all the current guidelines that he mentioned just now in the collection and utilisation of the funds that it receives from the public?

Mr Speaker, Sir, the NKF is in full compliance with the regulations.

Sir, while I understand that the Minister wants the IPCs to have some say in how they want to use the money, surely, within the spirit of good governance, would they not want also to give an indication of how they plan to spend the money, so that they will know how much money they are going to keep, what they are keeping the money for the future, to give an indication why so much money is kept?

Sir, I would not disagree with that motherhood statement. We would like all charities to disclose fully. I think what the Member is probably referring to is the NKF. As the NKF has explained in their press releases, when they take on a kidney dialysis patient, it is not for one month, it is not for one year. They are committed to the patient for the rest of his life. And I think it is a very prudent policy for them to maintain sufficient reserves to keep the organisation going for many years. If we look at the reserves of the NKF in relation to their annual expenditure, their annual expenditure is in the region of $50-$60 million, and their reserve is about three or four years' worth, that, in my opinion, is not unduly large.

Sir, could I ask the Minister when will the Council of Governance

come up with the improved set of guidelines? Secondly, what is the assurance that we can have under the current system of guidelines? I heard the Minister's anwer to Mr Charles Chong on the computation of the beneficiary dollar. What goes into that computation under the current set of guidelines, and how will this be improved upon under the revised system?

Sir, the Council has started work recently and I think they have made good progress. They understand the need for their rules, code of conduct, practices and regulations to be completed as soon as they can. I think they are working very, very hard. I do not know what the deadline they have given themselves. But I can assure Members that Ms Lim Soo Hoon is diligently working and I am sure she will put up the rules for consultation and implementation as soon as the Council is able to.

As for the definitions, I think we will try to improve the definitions as we go along. But I would like to urge Members to understand the charitable sector. It is a wide range and I think it is very hard to have one set of rules to regulate everybody. Sir, I still believe that our approach of regulating with a light touch is the right approach. I do not think we want to over regulate this sector.

Sir, recoginising the fact that there are many different types of organisations with different sizes, and picking up on what the Minister said just now, I would like to ask again whether there is a need for us to have a different set of caps in relation to what they can use for fund-raising dollars. Because if we have a large organsation and the guideline is still 30%, how do we know that they are using it excessively or not excessively if, at the end of they day, they say that they are within the 30% guideline?

Sir, ultimately, it is up to the donors. When you give your donation dollar, you must check how the organisation you are donating to is spending the money. And if you are not happy, then you donate to some other more worthy causes. I think the idea is to put the disclosure out and for donors to decide for themselves.

Sir, could I ask the Minister what would be the terms of reference for this Council in terms of transparency issues as well as in terms of how space can be created for the smaller charities?

Sir, the general term of reference of the Council is to look at the corporate governance of charities. I think the Council, having drawn from representatives from different parts of the charitable sector, has a very good feel of what is needed, and I think it will look at the interests of the smaller charities as well as the interests of the larger charities.

6. Mr Steve Chia Kiah Hong asked the Deputy Prime Minister and Minister for Finance, in view of the Goodwood Park Hotel's substantial shareholders disclosure reporting fiasco (a) whose responsibility is it to ensure compliance with the Companies Act and the Securities and Futures Act concerning public disclosure; and (b) how do the authorities intend to detect non-compliance.

(for the Deputy Prime Minister and Minister for Finance): Mr Speaker, Sir, under the Companies Act, it is the responsibility of

a substantial shareholder of a listed company to disclose his shareholding to the company, within two business days after becoming a substantial shareholder or when his shareholding changes. Failure to comply with the requirement is an offence, with a fine of up to $5,000 on conviction, and a further fine of $500 for each day the offence continues after conviction.

In addition to reporting to the company, it is also a requirement under the Securities and Futures Act (SFA) for the substantial shareholder to report his shareholding to the SGX. Failure to comply can attract a fine of up to $25,000 and a further fine of $2,500 for each day or part of the day the offence continues after conviction.

The Accounting and Corporate Regulatory Authority (ACRA) and MAS investigate cases of failure or delays in reporting substantial shareholdings under the Companies Act and SFA respectively. Where a listed company suspects that there has been non-disclosure of substantial shareholdings, it can enquire further into the beneficial ownership of the shares held by any shareholder and bring it to the attention of ACRA and MAS. Suspected breaches are either investigated by the agency concerned or referred to the Commercial Affairs Department (CAD) of the Police Force for further investigation.

CAD is currently investigating the under-disclosure of substantial shareholdings in several listed companies involving the late Mr Khoo Teck Puat. Adequate, accurate and timely disclosure is key to a disclosure-based regulatory regime and any non-compliance will be investigated thoroughly.

Sir, from the Minister's answer, does it mean that not all non-compliance would be known?

If the substantial shareholder did not actually make a disclosure, it would not

be known - am I right to say that - and there is no way to know.

As I explained in my answer, the onus for disclosure is upon the shareholder. If he fails to disclose, then he faces a conviction and a fine.

So, does that mean that there is no way to detect non-compliance?

Mr Speaker, Sir, this is the whole basis of a disclosure-based regulatory regime. The onus is on the person to disclose. Of course, the regulatory agencies have other means of getting feedback and sources of information. But, no, we do not actively sit out there and check on the shareholding of everybody. We leave it to the shareholders to disclose their shareholdings if they cross the bar of what is deemed as a substantial shareholder.

7. Dr Teo Ho Pin asked the Minister for National Development (a) what is the number by estates of unsold HDB new flats; (b) will HDB consider reducing the prices of these unsold flats; and (c) what further measures are being taken to sell or rent them.

Mr Speaker, Sir, HDB has about 10,000 flats available for sale. Of these, about 8,000 are located in the non-mature estates such as Choa Chu Kang, Woodlands, Jurong West, Sengkang and Punggol. These are either flats previously built under the now-suspended Registration for Flat System, or are surplus SERS replacement flats that have become available after meeting the rehousing needs of SERS lessees.

In pricing flats, HDB takes into account the attributes of the flats, such as the age, facing and storey height, as well as the prevailing resale prices of comparable flats. The prices of HDB flats are pegged below their equivalent market prices at the time of offer so that eligible flat buyers enjoy a subsidy.

The large number of unsold flats is due to the economic downturn, when demand for flats dropped sharply. To take into account the weaker resale prices and the age of these flats, HDB has adjusted their prices downwards when re-offering them for sale. HDB has also implemented new modes of sale for these flats. Those that are in ample supply are offered under Walk-In Selection, which allows buyers to walk in and book a unit on the spot. The more popular flats, such as SERS replacement flats located in the mature estates, are offered through regular balloting exercises. These have proven effective in enabling HDB to sell its unsold flats.

HDB will continue to promote the sale of the unsold flats to eligible families, while scaling back new supply of flats. HDB has in fact stopped building new 5-room flats for sale to the public since 2002. It will do so until the current stock of unsold 5-room and larger flats is reduced. HDB will also employ various marketing initiatives, such as roadshows and media advertisements, to reach out to prospective buyers. I expect the demand for HDB flats to improve, with the improvement in the economy, and the unsold flats will be taken up in due course.

Sir, may I ask the Minister whether the Ministry can consider a hire-and-purchase scheme for these unsold flats where you allow more flexibility for Singaporeans to rent these flats, based on annual value, and thereafter to allow them to purchase them when they become eligible?

Sir, I presume the purpose of such a scheme, as proposed by the Member, is to help the families who are not eligible for loans to get a flat. First of all, I would like to assure the House and the Member that HDB does exercise flexibility and consider loans for such families on a case-by-case basis. It will give them a concessionary loan after looking into the merits of the case and, if there are extenuating circumsances such as hardship, they will grant such a loan.

Of course, there are other alternatives available, including the financial assistance schemes offered by the HDB. Those who wish to downgrade can also make use of their proceeds to buy a smaller flat. In fact, for such families, I would say further that it makes more sense for them to buy than to rent. Because if they buy, they can actually make use of their CPF to pay for their mortgages, whereas they would need to use cash for their rentals. But having said that, there are those who still prefer to rent for whatever reasons, and here there are other schemes that are available for such families to rent, such as the Rent and Purchase Scheme. There is also the Public Rental Scheme. And we have recently revised the eligibility for the Public Rental Scheme. Then, of course, there are HDB flats which are available for rental, as a result of the relaxation of some of the rules for subletting that were introduced in October last year.

So, with all these options available, I would say that the proposal of the Member for a hire-and-purchase scheme may not be so necessary at this stage.

The final point I would just like to mention is, of course, that some of these flats that are being offered for sale are really not suitable for rental. They are not fitted out; they do not have proper flooring, lighting, etc. So it would require some effort to actually fit them out and to offer them for rental. But I would say that this is a practical problem which can

be overcome. The main crux of the matter really is that there are many other options available to such families who are in difficulties, and I hope that these options will be made use of.

Sir, can I ask the Minister, among the 8,000 flats that are in non-mature estates that are not sold currently, what is the percentage or proportion of them that is already built for five years and not being bought yet, and how long does HDB think it takes to sell them off? They are not being purchased after five years already. Are there any plans to get them sold off as quickly as possible?

I do not have the exact percentage of the flats that are five years and older. It is not very high. But whether they have been built five years or earlier, they would still be in the system. They would be sold eventually. As I indicated in my reply, I believe that they will eventually be taken up because, first of all, the demand is growing and, secondly, the supply is being cut back. I believe that as new households are being formed, there will be a demand for such flats, especially when the prices have been reduced to what, I think, are very attractive levels.

Sir, some of these flats are still around after more than three years, and they are still unsold. They actually pose some maintenance problems because the flats are not occupied. What are the measures taken by HDB to look after all these unsold flats?

Sir, there are certain areas or particular blocks where the number of unsold flats is much higher. For these areas, HDB would pay particular attention to the issue of security. And the Town Councils have also been alerted, so that when it comes to issues like

maintenance and cleaning and so on, particular attention is paid to them.

I come back to the main point, which is the 10,000 flats that are availabe in these estates. It is not a very large number and I guess, as the demand picks up, they will be sold. So, this is a temporary problem. So long as HDB and the Town Councils are aware of it and take the necessary steps, I do not think that there is any cause for concern.

8. Dr Chong Weng Chiew asked the Minister for National Development (a) what is the current arrears of service and conservancy fees; (b) what is this amount as a percentage of total billing; and (c) whether his Ministry has plans to offer assistance to Town Councils to help them negotiate the delicate balance between helping households in genuine financial difficulties and the efficient collection of such fees.

Mr Speaker, Sir, as at end-January 2004, 51,450 or 5.9% of HDB residential households were in S&CC arrears for three months or more. The total amount of arrears outstanding is about $24.7 million, which is slightly more than half the total monthly S&CC billing by all Town Councils.

Sir, the Government has been helping Town Councils to finance their operations through an annual operating grant. In FY2003, this amount was $84.3 million. This has enabled Town Councils to keep their monthly S&CC very affordable. For households who are in genuine financial difficulty - and there are some - most Town Councils assist by allowing these

households to pay their S&CC arrears in instalments. They may also approach the Community Development Councils or other social service agencies for assistance. However, for those who have the means to pay but refuse to, eg, they give higher priority to paying other expenses, Town Councils will need to step up their enforcement actions.

The Government has also helped HDB households cope with the economic recession and GST increase by helping them pay part of their S&CC through the monthly S&CC rebates and S&CC waivers. The Government will continue to grant S&CC rebates to HDB households until 31st March 2008, as part of the GST-offset package.

The fact that there are different committee members managing different Town Councils, would the Ministry consider setting a guideline as to the standardisation of the collection of all these arrears for the different Town Councils?

Sir, the Ministry keeps a watching brief on the Town Councils' operations but, ultimately, the Town Councils must be responsible for the operations of their own Town Councils. The Ministry of National Development looks at the arrears and flashes the warning sign to some Town Councils. It is up to the Town Councils to take enforcement actions.

9. Dr Teo Ho Pin asked the Minister for National Development (a) whether the public sector contracts will provide for a fluctuating clause for building material prices; (b) what measures are being taken to prevent the escalation of building

material prices; and (c) how much has construction cost increased over the last 3 years (2001, 2002 and 2003).

Sir, the Public Sector Conditions of Contract (PSSCOC) has an optional price fluctuation clause for building materials. Public sector agencies decide for themselves whether to adopt it, depending on the nature of their projects.

The agencies are as concerned as contractors about the potential impact of increases in building material prices on their projects. A number of them, such as PUB, MOE, CAAS and LTA, have incorporated the price fluctuation clause for reinforced steel, for example, in some of their contracts. Others such as HDB and DSTA are considering doing the same for new contracts. This could help to alleviate the financial risks of contractors in public sector projects.

Building material prices are affected by various factors such as the global supply-demand imbalance and increases in raw material costs, freight charges, and export levies. These are largely beyond our control, as in the recent hike in steel price. BCA helps the construction industry by monitoring the prices of key building materials such as cement, bricks and steel, and providing regular information updates to the industry

At the same time, contractors should diversify their supply sources for the key construction materials so that they would not be caught by any steep price increases from any single source. To this end, BCA will continue to help explore and facilitate alternative sources of materials supply for the construction industry.

On Dr Teo's question on the actual construction cost increases in recent years, BCA's Tender Price Index showed that the increase was 2% from 2001 to 2002, and 6% from 2002 to 2003.

Sir, may I ask the Senior Parliamentary Secretary actually how many contracts were awarded with this fluctuating clause in the contract, and whether the inclusion of this fluctuating clause for materials will make it a fairer contract, in view of the very dynamic global conditions?

Sir, some agencies do include this price fluctuating clause in their contracts. Not all agencies do that. There is a good reason. Because some contracts have long gestation duration and are heavily dependent on basic raw materials. If you have steel structures, then you might want to have a price fluctuating increase clause inside there. But for standard building, the cost of steel, for example, is only about 5% of the total construction cost.

So, in the last quarter, we saw a 50% increase in steel prices. This means a 2.5% increase in total construction cost. So, for projects like that, both the agencies as well as the contractors might not need a price fluctuation clause. In any case, these sharp increases in prices of steel over the last few months were a normal thing because the events that took place in the last few months had caused this sudden increase. But in the last 10 years, basic material prices had actually fallen and many contractors in the years preceding the last six months were not in favour of price fluctuation clauses. They would rather have a lump sum tender because, in a price fluctuation clause tender, when prices go down, the agency reserves the right to claim back the savings.

10. Dr Amy Khor Lean Suan asked the Minister for Community Development and Sports (a) how far have the Work

Assistance Plan (WAP) and the Home Ownership Plus Education (HOPE) programme been working to fulfill their objectives; (b) what other measures, if any, will be put in place to help as many of the underclass as possible; and (c) how will the Government encourage community help groups to step in to care for the disadvantaged without creating a sense of dependency.

Sir, Dr Amy Khor has asked for an update on the Work Assistance Programme (WAP) and the Home Ownership Plus Education (HOPE) Scheme. I am pleased to report that since the launch of WAP last October, over 2,100 Singaporeans have been placed on the scheme by end February 2004. Some of the remaining applications are still being processed. Over 40% of these beneficiaries were successfully placed in employment. About 10% were referred for intensive employment-related counselling.

I am also pleased to say that the response to the HOPE scheme, which was launched in January this year, has been encouraging. For the first two months, the CDCs had received 370 applications of which over 65% were assessed to be eligible. While the response has been good, it is rather premature at this point to assess how the families have been faring. We will continue to monitor and support the families' progress through the mentoring programme.

Dr Khor also asked what other measures will be put in place to help the disadvantaged. Earlier in March, my Ministry announced the Self-Reliance Programme which will replace two existing schemes - namely the Interim Financial Assistance and the Rent and Utilities Assistance Scheme with effect from January next year. The Programme will provide more targeted help for families

whose adult members are not able to work in the short term due to illness or care-giving responsibilities. The package of assistance includes cash allowances, utilities subsidies, educational allowances and medical subsidy and will be customised depending on the needs of the family. Families on the programme, particularly those with young children, will have to play their part to improve their own situation. They will be given case management support and will be required to follow the intervention roadmap drawn up by their case manager in consultation with them.

While we will continue to strengthen our social safety net to provide more targeted help to those in need, it is equally important that the individuals and families understand the crucial role they play in lifting themselves out of the situation. They must play their part and make use of the opportunities to improve their situation. The Government's efforts alone are not enough. We certainly look to complementary support from our various community partners, such as the self-help groups, the CDCs and social service agencies. Community groups can help widen our outreach to these needy families and point them to the help available. Social service agencies play a critical role in the mentoring aspects of our programme - for example, by providing the guidance to families on the HOPE and the Self-Reliance Programme to enable them to work towards independence. As I mentioned in the recent Committee of Supply debate, some agencies have, on their own, started good initiatives to help low income families. We welcome more of such initiatives and will facilitate the sharing of effective interventions among our community partners.

Sir, I would like to ask the Minister what is being done for the 50% unsuccessful

WAP applicants, some of whom, I am given to understand through my meet-the-people session, could be chronically unemployed in the long term. Are they transferred to other schemes?

Sir, what will happen is that the CDC officer will make an assessment. If the applicants are not eligible for WAP, they will be considered for other schemes which are provided either through the Government or through some of the schemes offered at the local or CDC level.

Sir, one more supplementary question. I would like to ask the Minister if there is any guideline given to the CDCs, for instance, as to how long the applicants would have to be on the WAP programme before they are transferred to other schemes. Because very often, I have people who come and say that they have not had any response or they are still on the WAP scheme waiting for a job.

There are guidelines from the Ministry. But we recognise that each case may be different and the CDCs have been informed and have exercised flexibility on their part to ensure that none of the applicants on WAP remain over too long a period. As you know, there is an obligation on the part of the applicants to go out, take the job referral that we have given to them and to ensure that they continue to make an effort to secure a job. If they are unsuccessful, we will continue to assist them. But if they have been negligent on their part, we will have to take some form of measure to make sure that they get back on to the roadmap that we have developed for them. But, nonetheless, I would like to assure the Member that we will try our very best to help every Singaporean that is placed on the WAP so that they can get the jobs as soon as possible.

Sir, how does the Ministry monitor whether the CDC is following the guidelines of the Ministry and whether the CDC is efficient in handling such cases and in a reasonable time, because I have also received similar complaints as Dr Amy Khor?

Sir, my officers are in constant contact with the CDCs and we do monitor the progress. As these are Government-funded programmes, we would require the CDCs to submit to us the number of applicants. We are quite happy with the performance of the CDCs at this stage. But I think we have to recognise that, as far as the CDCs are concerned, these are new things which they have taken on board and to develop the capability in a short period of time, I think, would be asking too much. But rest assured that the CDCs are committed to helping Singaporeans. If there are instances that both Dr Amy Khor or Mr Low would like me to look into, I would be most happy to look into, in this particular instance.

Sir, can I have the Minister's clarification that, of the 35% who are ineligible for the HOPE programme, how many of them or what percentage of them are the borderline cases, for example, one spouse meets the eligibility requirement but the other does not, and whether the Ministry has started looking at this on a case-by-case basis to allow them leeway to get into the programme?

Sir, I do not have the details of the 35% that we have rejected. They may be borderline cases. But we have left it to the CDCs to exercise flexibility. My only reply to the Member is that, at this point in time, we are still new in implementing this scheme. It is only over two months. I think let us develop as we go along. And if there are

instances whereby we can move at the margins, I think we will certainly consider that.

Sir, I would like to ask the Minister whether there are any key performance indicators set up by his Ministry to monitor the work of the CDCs, in terms of how fast they respond to requests for assistance, what is the progress and whether they will track all this.

Sir, this is an entirely separate question. But I would like to assure him that we do monitor the performance of the CDCs. There are indicators. There are service standards that we ask of the CDCs, and thus we are very satisfied with the CDCs.

11. Dr Amy Khor Lean Suan asked the Minister for Trade and Industry (a) how significant is the relocation of our small medium enterprises as well as Multi-National Corporations to other countries; (b) how will this trend affect our local job market; and (c) what measures have been or can be taken to counter any job losses due to such relocation.

Mr Speaker, Sir, as our economy restructures, new companies are set up, while others may expand or re-locate. MTI does not track the number of companies that are set up overseas without a presence in Singapore. Instead of company level information, we track total FDI inflows and the net stock of inward FDI in Singapore. These macro-level figures provide an indication of the competitiveness of our economy, and its ability to generate jobs and economic growth.

Between 1999 and 2003, EDB managed to attract net investment commitments in the manufacturing sector worth $42.9 billion, of which $33.4 billion was foreign investment. Total business spending by services firms was $9.3 billion over this period. EDB estimates that these investments, in total, would create about 111,000 jobs in Singapore when fully realised.

While some jobs have been lost due to relocation, the Ministry of Manpower's Labour Market Survey indicates that overseas relocation has not been the main cause of retrenchments. Of the companies that retrenched workers last year, only 7% did so because part of their operations were relocated abroad. According to the survey, the number of workers retrenched due to overseas relocation has been coming down in the past five years, from 4,455 in 1999 to 2,360 in 2003.

However, what is important is that, in international rankings, Singapore continued to be ranked as highly competitive. The 2003 World Competitiveness Yearbook ranked Singapore the second most competitive small economy worldwide. In new growth areas, such as outsourcing, we did well too. A.T. Kearney has ranked Singapore the fifth most attractive global location for outsourcing in its 2004 Offshore Location Attractiveness Index. Singapore ranked ahead of low cost Philippines and Brazil, as well as developed countries like Canada, New Zealand and Australia. Top Indian IT software companies have set up in Singapore, with many having their regional HQs here. As their operations expand, they would create many well-paying jobs in Singapore.

Dr Amy Khor asked what could be done to stem job losses. Attracting high value investments to Singapore must remain a key priority. Such investments can generate a variety of jobs for Singaporeans. For example, the expansion

of Hewlett Packard's manufacturing activities in Singapore over the next five years is expected to add significantly to its current staff of engineers, IT professionals, as well as assembly line workers.

Promoting entrepreneurship will also lead to the creation of many good jobs. Between 1990 and 2000, local SMEs accounted for 52% of net employment creation in Singapore. We must continue to foster a conducive environment for entrepreneurship. As more people venture into business, start-ups will become an increasingly important source of employment.

Similarly, the development of new industries, such as the biomedical industry, as well as the expansion of services sectors like education and healthcare will create new jobs. We are also seeking to revitalise older industries, such as textiles, food and furniture. We will help companies in these sectors to upgrade and to gain a competitive foothold.

While many jobs will be created, not all will be jobs that Singaporeans are accustomed to. Therefore, workers must have the right skills and attitude to take on new jobs.

The Workforce Development Agency (WDA) has been spearheading efforts to re-skill our workforce. For example, in recent months, WDA has placed and trained some 200 Singaporeans for the electronics sector. WDA is doing likewise to train Singaporeans for the aerospace industry. A National Skills Framework is being developed to identify the industry-specific skills needed for our workforce.

Apart from skills, to create and maintain jobs, we must also ensure that wages are competitive, and adjust flexibly to changing business conditions. A survey commissioned by the Ministry of

Manpower in 2003 found that workers are now more aware of the challenges of global competition and are prepared to accept variable wages based on performance. This resilience and adaptability of our workforce, coupled with sound policy measures and continuous restructuring by companies, will allow us to respond quickly to fast-changing economic conditions, and to generate new jobs and to create new sources of growth.

Sir, I would like to ask the Minister if the Ministry conducts a study to find out the key reasons for the relocation of SMEs and MNCs overseas and, if so, what have been the key reasons cited.

IE Singapore, which is a statutory board with the mission of helping Singapore companies internationalise, conducted a survey in June 2003 of 200 companies and asked them for the reasons for overseas investment. About 87% of the respondents cited market seeking opportunities, while 49% cited lower cost of production. Other reasons of venturing abroad include skilled labour at the investing destination and developed financial and technological infrastructure.

12. Ms Irene Ng Phek Hoong asked the Minister for Trade and Industry (a) what are the specific factors leading to the Government's decision to now consider the possibility of setting up a casino when it was against the idea for many years; (b) whether it will consult the broad range of Singaporeans and weigh the social costs and implications before making a decision on the matter; and (c) when will the decision be finalised.

The Minister of State for Trade and Industry (Dr Vivian Balakrishnan) (for the Minister for Trade and Industry):

Mr Speaker, Sir, during the Committee of Supply, Minister George Yeo said that we are prepared to consider having a casino as part of an international resort and residential development on the Southern Islands and Sentosa.

For a long time, the Government has been averse to having a casino in Singapore because of its potentially negative social impact on our local population. This concern remains valid. Should we decide to have a casino, access to it by Singaporeans will have to be controlled. In many countries, locals are not allowed free access to casinos. For example, in London,

only members are allowed and the membership criteria are very strict. In Korea and Monaco, locals are not allowed entry at all. We will have to do a careful study of the regulations in other countries before deciding on what we will do here.

The reason we are now prepared to consider having a casino is because of the rapidly changing tourism landscape in the region. Billions of dollars are now being invested in Macau to make it a Las Vegas of the East. Thailand is considering new laws to allow casinos. Cruise ships have already become floating casinos in international waters, with cruises to nowhere during weekends. In Batam, we all know there are many casinos operating. With the rapidly growing affluence in Asia, we have to upgrade and broaden our tourism product offering in Singapore. In the coming years, we will make major investments in the tourism industry so that it continues to be an important generator of jobs for Singaporeans. While we do not want to be a Las Vegas or a Macau, we need to consider all possibilities. At one end of the spectrum, budget airlines will make air travel cheaper, for which we need to build more 2- and 3-star hotels. At the other end of the spectrum, we must be able to attract our share of the rich and famous, for whom casinos may

be an attraction. However, I want to stress that we will not rush into a decision on casinos, but will first study the implications carefully and consult widely.

Sir, would the study that the Ministry will be conducting also include a study on what would be the social implications of having such a casino on Singaporeans, in particular, their indebtedness, and how that would affect families?

Mr Speaker, Sir, we are all painfully aware that there are potential social implications and, as I alluded to earlier in my answer, when we construct the rules and regulations around any potential casino that we have in Singapore, our key objective must be to minimise the potential negative social impact on the more susceptible members of our population.

Sir, the Minister of State did not answer the third part of my question, which is when would the decision be finalised. Also, there have been reports that MTI is already consulting some major casino operators. Can I ask whether this is true?

The decision will be made, hopefully sometime in the next two or three quarters, but I cannot be more definite about that.

As far as consultation is concerned, she would have read a lot in the press. The press tends to indulge sometimes in speculation. We are still having internal discussions first. Of course, we would also be seeking the advice of Singaporeans who have had ˆ’ I am not sure whether it is the advantage or disadvantage of actually patronising casinos ˆ’ but we have not entered into any formal consultations with any casino operators to date.

Mr S Iswaran (West Coast):

Sir, the Minister has outlined eloquently the alternatives available to Singaporeans who wish to gamble. Given these readily available alternatives, with the indications that there may a different treatment of Singaporeans versus non-Singaporeans in terms of access to this casino that has aroused a lot of passion among several groups of Singaporeans, it is the principle, not the effect, as it were, I would like to ask the Minister, in the examples he has cited, like in London, etc, are these decisions made by the private operators in the interest of their business in terms of controlling access, or are they licensing conditions imposed by the authorities?

There are two parts to this question. I will deal with the latter part, about London. I am not aware of the detailed regulations there, but I presume that, to a large extent, these are licensing impositions made by the authorities.

The earlier part of his question refers to alternatives which, unfortunately, exist even today as we talk about it. People can go to cruise ships, they can go across the causeway to Genting, they can go to Batam or travel overseas and do it. There is a limit to how much we can protect, insulate or prevent people from making these decisions. We can do our best to educate, advise and immunise, but we cannot have an absolute barrier.

The follow-on question to that line of reasoning then is that since there are alternatives, why bother to put any resistance at all in the way of Singaporeans. I must say I am not totally persuaded by that line of argument because, although something is available, it does not mean we need to go out of our way to facilitate it. Given the fact that we know that some people would be more susceptible, and perhaps unwisely so, I have made it very

clear in my answer that our objective, if at all we do embark on this, is to address the tourism market and, therefore, it is focused on tourists and not on our local market. As far as our local population is concerned, our chief preoccupation has been and remains the social impact of gambling on some susceptible members of our population.

Sir, would the Minister agree, while this is purely for tourists, that the intention is for tourists, that it would have an impact on Singaporeans, as there will be a class consciousness being created, as we are creating a playground for the rich, and one of the pleasures of living in Singapore is that the rich do not flaunt their wealth?

Mr Speaker, Sir, we run a free economy in which people's access to goods and services consumed are affected by their earning potential or the assets that they have. This is an immutable fact of a free economy. So, we are not doing this to set up class consciousness. We are doing this, as I said earlier, if at all we do decide to go ahead with this, to broaden our tourism appeal to a wider segment of people.

As far as tourists are concerned, I have also said that we are trying to attract a wide spectrum of tourists. We will build more 2- and 3-star hotels, because we recognise that, with the onset of low-cost carriers, it is quite likely, indeed we hope, that more tourists of perhaps a humbler background will also choose to come to Singapore. But we also have to recognise that there are other types of tourists who have, in a sense, money to burn or money to lose. And if they are going to lose that money, and lose it our way and in that way create jobs and help strengthen our own economy, then this is something which we should not, as a matter of reflex,

ignore. If we do so, we do so at our loss. So, all I am saying is that there are strong arguments, both for and against. There are good reasons to be cautious, but let us go into this with our eyes wide open, being very clear of our objectives, being very clear of the dangers, and also being very clear that there are some practical measures which we have to take.

This is not a time to indulge in creating or highlighting class consciousness or looking for social dispartity or creating cleavages within our population. I think if we adopt this in our uniquely Singaporean manner of being pragmatic, realistic and sensible about it, we might be able to fashion a win-win solution, although that is not typical of gambling.

Mr Speaker, Sir, it appears to me from the Minister's argument that the main motivation for allowing a casino in Singapore is an economic one, ie, to attract tourists. I would like to ask the Minister in this regard whether casino operation is a fundamental element of a successful resort or tourism industry, and whether the Ministry has explored other possible models before we jump into a conclusion to allow casinos in Singapore.

I thank the hon. Member for that question. No, it is not a fundamental pillar of our tourism industry. If indeed it was, I would be very, very worried. But what we are saying is that we are at a point of our development when we need to have our options open, and we need to broaden that spectrum of attractions which we have. And if this is one end of that spectrum which we can tap, and tap carefully, then we should consider it. But it is not the centrepiece of our strategy. And that is why I said we have no intention of becoming the Las Vegas of Asia. We have no intention of transforming Singapore into a Macau. Singapore must remain uniquely ours, with certain attributes which have

brought us thus far. But if we can add on other attributes and thereby broaden our appeal and accelerate the pace of our development, then we will go ahead.

So, I want Members to have no doubts in their mind that this is not a panic reaction or a hastily-conceived idea. This is just one of many proposals which we are considering carefully.

Sir, could I ask the Minister, in this considered and cautious approach, whether some studies will be done on the vice rings around the gambling prospect, in particular relating to prostitution and drugs?

I thank the Member for that question. Members will recall a statement made by the Minister for Home Affairs that they would obviously take a very close look at any other potential criminal or undesirable behaviours which may accompany such a development. Again, I would stress to the House that, in our own pragmatic Singaporean way, we will find ways to minimise the impact of such negative activities or vices.

As part of the feasibility study, I am just wondering whether we have estimates of the potential revenue impact on the Government and the potential job growth rate for such a project to see if we are really talking of a sizeable potential investment that has a lot of benefits for Singaporeans at the end of the day.

No, I do not have any firm estimates on potential revenue and jobs but, as the Member has correctly stated, these should be part of our points for consideration before we make any final decision.

Sir, I find it hard to be persuaded that we can insulate

Singaporeans if we have a casino for foreigners only. Since it also involves creating jobs, Singaporeans would have to go to casinos to work in jobs like croupiers, blackjack dealers, showgirls and what-nots. Therefore, there will be social implications, no matter how hard we try to insulate it. Hence, I would urge the Minister to kindly consider this very carefully and take into account the various studies all around the world that show that casinos do lead to higher family breakdowns, bankruptcies, gambling addicts and other social ills.

I will certainly take the Member's warnings on board. Thank you.

I think we have "gambled" enough time on this question. Dr Amy Khor, your next question, please.

13. Dr Amy Khor Lean Suan asked the Minister for Home Affairs in the light of the recent incident of the three robbers who fled from Johore and landed at Pulau Tekong (a) what are the measures taken to protect our coastline from intruders; and (b) what further measures will be taken to beef up protection of our territories and prevent such an incident from happening again.

Sir, the Ministry of Home Affairs has various measures in place to safeguard Singapore from intrusions from the sea.

Within Singapore Territorial Waters, the Police Coast Guard (PCG) undertakes law enforcement and security policing. PCG has increased its manpower establishment by 134 posts, to strengthen security deployment within Singapore Territorial Waters. PCG has also boosted

its operational capabilities. For example, PCG has enhanced its surveillance and monitoring capabilities of our coastline and waters. The surveillance system comprises coastal radars and electro-optical sensors. This system is complemented by regular patrols by PCG crafts that track on any suspected intrusions or suspicious activity. The number of PCG patrols has increased by 30%, and the number of checks conducted has increased by 160% since September 11.

Sir, the PCG has also purchased new training simulators to improve their officers' skills and experience to deal with a range of scenarios. All these efforts improve the effectiveness and professionalism of our PCG officers.

On land, physical barriers are erected at vulnerable spots along the coast to deter attempts to land and to slow down intrusions so that the intruders can be more easily arrested. At sensitive coastal sites, land forces are also deployed to provide another layer of defence against intruders.

The Police also work closely with their counterparts in Malaysia and Indonesia, exchanging information to proactively stop intrusions. The Tekong incident was an example of this close cooperation where the Royal Malaysian Marine Police informed PCG once the motorised sampan carrying the three robbers entered our waters.

PCG's enforcement efforts thus far have been effective. Hence, there has been only one reported

sea robbery incident within Singapore Territorial Waters since 1990. We have also received intelligence that our enhanced security measures have made it difficult for human smuggling syndicates to convey illegal immigrants into Singapore by sea. They have now resorted to asking the illegal

immigrants to swim to our shores under the cover of darkness.

Sir, as for future plans, PCG will be enhancing its surveillance capability by acquiring better surveillance equipment and increasing the number of surveillance locations. PCG also continually reviews its capabilities and deployment to deal with new maritime threats.

However, it is not possible to ensure that no intruder will ever slip in. This is especially so with our close proximity to Malaysia which, at some points, are as close as 400 metres. Thus, it is important that we also have in place a response system to deal with such intrusions. The swift and decisive action taken by the Police and the SAF in dealing with the three robbers who landed on Pulau Tekong shows that we are able to do so.

My Ministry will work with MINDEF to determine what more can be done to improve security on the island. Possible measures include the erection of physical barriers similar to those that had proven effective elsewhere in Singapore, as well as having additional patrols and surveillance sites around the island.

Sir, I would like to assure the House that protecting our coastline remains a top priority for the Ministry of Home Affairs.

I would like to ask the Senior Minister of State if there were any other intrusions besides the reported Pulau Tekong incident and whether the added measures that we have taken for Pulau Tekong would also be extended to other offshore islands, in particular, where the oil refineries are sited.

Sir, this is the first incident of such a nature, ie, of armed robbers having committed a robbery in Malaysia and then dashing across. Of course, for other intrusions, illegal immigrants always try to slip

across, for these, we have been able to detect them, which is shown by the numbers. The number of illegal immigrants arrested, in fact, has come down, from 14,700 ˆ’ that was at the height in 1998 ˆ’ to 5,500 last year. Let me assure the House that this is something that we do ˆ’ take a step ahead of the illegal immigrants all the time. The trends change. When we tightened up the land checkpoints, they came in by sea, and when we patrolled the coast, they now try to swim across. We try to keep a step ahead of them.

14. Mdm Halimah Yacob asked the Acting Minister for Health arising out of the recent announcement that patient records in the public hospitals and outpatient clinics will be pooled in order to ensure prompt action and treatment during emergencies and public health crises, will his Ministry consider including private hospitals and outpatient clinics under the same arrangement.

Mr Speaker, exchanging medical records electronically is not a trivial exercise. We are therefore taking a cautious incremental approach.

Our first priority is to get the key components in place and stabilise them within the public healthcare sector. This will allow us to bring the benefits of this application to 80% of Singaporean patients in the shortest possible time.

When the Electronic Medical Record Exchange is running well within the two clusters, we will consider inviting the private sector to join the system if they wish to do so.

15. Mdm Cynthia Phua asked the Acting Minister for Health what is the standard procedure for a doctor to refer a patient for counselling in order to help them cope emotionally and psychologically with their condition after having been diagnosed with cancer or any other serious illness.

Sir, it is always devastating for a patient when diagnosed with a serious illness like cancer.

The medical team looking after the patient is the first line of support. This comprises the attending doctors, nurses and the nurse educators. They have a heavy responsibility. Besides rendering medical care, they also assist the patients and their families to cope emotionally and psychologically.

If the medical team assesses that the patient needs special counselling, they will refer the patient to the medical social worker for the necessary emotional and psychological support. At the same time, the patient may also be introduced to community-based support groups. Often, the patient's family and care-givers are also involved.

In some cases where the patient is excessively distressed, he will be referred to a psychiatrist.

Mr Speaker, Sir, in view of the suicide case of a woman and her two children, had she been counselled by a medical social worker? How many cases were referred to these medical social workers in the last year? Would the medical social workers alert family members of patients who come under their counselling as a precautionary measure?

Sir, is the Member talking about a specific suicide case?

Yes, I think it was reported that the lady committed suicide with her two children.

As far as I could gather, she was not a patient of our public hospitals.

16. Dr Mohamad Maliki Bin Osman asked the Acting Minister for Health (a) what has been the progress in the research to develop a vaccine for SARS; and (b) have the efforts put in this research been as rigorous as when the issue of SARS was at its height last year.

Sir, the development of a vaccine against an infectious disease is a long and time-consuming process. There are three key stages.

First, you need to develop an experimental vaccine which you can then test in animals for (a) safety, (b) ability to elicit a good immune response, and (c) effectiveness against infection and disease.

Second, the experimental vaccine is then tested in humans as the response in humans and animals to the vaccine may be very different.

Finally, the ability of the vaccine to protect people against disease can only be fully evaluated during an actual outbreak.

The efforts to develop a SARS vaccine are underway in several countries including the United States of America, Canada, China and Singapore. None has gone beyond the first stage of animal testing.

For instance, the US National Institutes of Health Vaccine Research Centre

has reported last month that it had developed a DNA-based vaccine against SARS that appears to be effective in mice. But no human clinical trials have been conducted yet.

Locally, the National University of Singapore and the Institute of Molecular and Cell Biology are working with other institutions to develop a SARS vaccine. The research is currently still at an early stage.

In short, SARS vaccine research development efforts are still being actively pursued. The World Health Organisation has estimated that it would take another four to five years before a SARS vaccine can be commercially available.

Sir, can I ask the Minister how much resources have been placed locally with regard to such a research?

As much as the researchers can secure. This comes under the Ministry of Trade and Industry, and A*STAR supports this. During the SARS crisis, they set aside a certain amount of their research money to support, not just SARS vaccine development but also SARS diagnostic kits. At the end of the day, coming up with a vaccine is an uphill task and requires huge resources. No single country can achieve it. It is now a global effort, a global network, everybody plays a part. So our local efforts ˆ’ NUS and A*STAR ˆ’ they work and collaborate with international partners, commercial as well as academic partners. Hopefully, they can succeed.

17. Dr Mohamad Maliki Bin Osman asked the Acting Minister for Manpower (a) what is the number of former work

permit holders currently banned from entering Singapore for marrying Singaporeans without his Ministry's written approval and despite their marrying Singaporean spouses only after they have ceased to work in Singapore; (b) how long will the ban last before they can be allowed to re-enter Singapore; and (c) whether his Ministry will consider exempting Singaporeans from seeking written approval to marry ex-work permit holders who have ceased being a work permit holder for a certain period of time.

Sir, it is a requirement for all work permit holders to seek approval before marrying a Singapore citizen or Permanent Resident, even after they have cancelled their work permits. The length of time an ex-work permit holder has stopped working in Singapore is also one of the factors considered for marriage approval.

We have imposed this regulation because Singapore has a large population of 500,000 current work permit holders, and larger numbers who have worked here before. Our social system will be strained if these workers from many nationalities decide to marry and settle here. Foreign workers who choose to work here have understood this because this is an explicit condition and they have agreed to abide by this explicit condition.

For the same reason, and to serve as an effective deterrent, an entry ban is imposed on those who contravene the stated work permit condition of marriage approval. My Ministry determines the period of entry ban based on the individual circumstances of each case.

Sir, the Minister has not answered the first question, that is, the number of work permit holders who have currently been banned.

Sir, I would rather answer what is the stated intention of the policy. The policy is not that they try to apply and see whether they can get married because if they understand the context of this policy, it is stated explictly that they come here and work. And because of the large numbers, we take a very stringent view in terms of approval. Yet, at the same time, we are not completely heartless and, on a case-by-case basis, that we will not approve.

On the other hand, I would not like to publish numbers and encourage those who come here, explicitly knowing that they are not to settle down, to now try and meet partners, cultivate relationships or let relationships form, and then apply, knowing that we are very stringent on approval. The point of the policy is that this is an explicit condition. There are large numbers of work permit holders here and we tell them that they should not think of settling here before deciding to work.

Sir, I am actually referring to cases of those who have gone home, stopped being work permit holders, Singaporeans meet them and marry them. I am quite concerned about the ban because we are separating family members - husbands, wives and and children. I wonder how long is the ban going to last, if they have been banned. And have there been any cases of such bans being lifted, and under what circumstances are such bans being lifted?

Sir, we are mindful that once they get married and have children, it is not our intent to break up families. It is for this reason that we say that, please be very careful when they have formed relationships while they work here and only choose to work here if they understand that they are coming here to work and that the chances of them having an approval for marriage are very slim. If they choose to contravene the marriage

restriction which they themselves have agreed to before they work here, then to serve as an effective deterrent, we ban such work permit holders. Having said what I have just said, we have approved certain cases based on individual merits when Members of Parliament have appealed on their behalf.

I would like to ask the Minister what recourse would the Singaporean spouses have if they are caught in such a situation with regard to the foreign wives not being able to come to Singapore.

I would advise them to realise that work permit holders have this explicit condition and not to be in that situation in the first place.

3.00 pm

Order. End of Question time.

[Pursuant to Standing Order No. 21(3), Written Answer* to Question No. 25 on the Order Paper is reproduced in the Appendix. Question Nos. 19, 20, 22-24 and 26-30 have been postponed to the sitting of Parliament on 20th April, 2004.]

* Will be reproduced in the printed copy of the Singapore Parliament Report.

"to amend the Societies Act (Chapter 311 of the 1985 Revised Edition)",

presented by the Minister for Home Affairs (Mr Wong Kan Seng); read the First time; to be read a Second time on the next avilable sitting of Parliament, and to be printed.

"to amend the Statistics Act (Chapter 317 of the 1999 Revised Edition), and to make

consequential amendments to the Goods and Services Act (Chapter 117A of the 2001 Revised Edition) and the Income Tax Act (Chapter 134 of the 2004 Revised Edition)",

presented by the Minister of State for Trade and Industry (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.

"to amend the Singapore Armed Forces Act (Chapter 295 of the 2000 Revised Edition)",

presented by the Minister for Defence (RAdm Teo Chee Hean); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

Order for Second Reading read.

Mr Speaker, Sir, I beg to move, "That the Bill be read a Second time."

Building Maintenance and Management Act

Sir, two pieces of legislation currently govern the management and maintenance of buildings in Singapore. These are the Land Titles (Strata) Act (LTSA) and the Buildings and Common Property (Maintenance and Management) Act (BCPA).

This Bill proposes to merge Part IV and Part VI of the LTSA and the entire BCPA into an integrated "Building Maintenance and Management Act". Part IV of the LTSA governs the management of strata sub-divided buildings. Part VI relates to the Strata Titles Boards, which provide an avenue for resolving management disputes in strata developments. On the

other hand, the BCPA governs the maintenance of all buildings, and management of strata developments prior to the formation of the Management Corporation or MC.

The current BCPA will be repealed. For ease of administration and convenience to the public, the new Act will come under MND's purview. The Ministry of Law will continue to administer the reduced LTSA, which covers the set-up of the strata scheme and the en-bloc sales of property.

Transferring Strata Titles Boards to MND

The Government has also decided to transfer the administration of the Strata Titles Boards from the Ministry of Law to the Ministry of National Developemnt. This takes into account that most of the disputes heard by the Strata Titles Boards are related to the management and maintenance of buildings, which are under the purview of MND. However, the Strata Titles Boards will continue to hear disputes on en-bloc property sales, even after the transfer from the Ministry of Law.

Need for Change

Sir, let me explain why there is a need for change. Both the LTSA and the BCPA have served us well. However, some shortcomings and unanticipated problems with the provisions of the Acts have surfaced over the past few years. I should also point out that since the last major review of the LTSA, which was in 1987, the number of strata units and their MCs have more than doubled to 170,000 strata units and 2,700 MCs respectively.

Sir, this Bill seeks to provide for more effective management and maintenance of strata developments, recognising differences in interests amongst stakeholders. Our thrust is to provide flexibility by empowering MCs to make decisions, and

therefore encourage self-regulation. This will then allow Government to reduce its involvement in the affairs of the MCs.

In undertaking the review that culminated in the preparation of the Bill, the Building and Construction Authority (BCA) has studied similar legislation in Australia and Canada, consulted extensively with the industry, and held an open consultation session involving members of the public. Discussions were also held with relevant Government agencies as well as the GPC for National Development. Useful features found in these foreign legislation as well as feedback from the industry and public have been incorporated in the Bill.

Amendments to the LTSA

I shall now elaborate on the key amendments in this Bill, beginning first with those related to the LTSA.

Providing for Mixed-use Strata Developments

The present system for managing strata developments allows only one MC to be formed for each strata development. However, in a mixed-use development, eg, a mixed shopping, office and residential complex, there are various user groups whose interests and priorities are likely to be different. Each group would be more concerned about the management and maintenance of common properties that have a direct impact on it. The MC would have difficulty implementing improvements to common properties, as the benefits may be perceived to accrue more to a certain group than to others.

We do not have a long enough experience in managing mixed-use strata developments. The LTSA was enacted only in 1967. Our laws have not adequately provided for such conflicts to be

resolved. Therefore, we have looked at more established strata management models in other countries, such as Canada and Australia, which have a longer history.

Sir, this Bill proposes to introduce an option of a two-tier MC system for mixed-use developments, adapted from the British Columbia model. There will be a main MC responsible for the property common to all subsidiary proprietors (SPs), while sub-MCs will manage the "limited common property" intended for the exclusive use of their respective user groups. These sub-MCs will have the right to levy contributions from them for its maintenance or improvement.

This option will also be extended to residential developments with different types of strata lots. For example, a residential development may have high-rise tower blocks and low-rise walk-up blocks or town houses. There could then be one sub-MC for the high-rise towers and another sub-MC for the low-rise blocks or town houses. This would address the usual complaint that certain common properties serve only a particular group of residents, eg, lifts in high-rise blocks.

Sir, the intention is neither to create segregations within a community nor to encourage the proliferation of MCs. The spirit behind this provision is to allow for flexible management of strata developments, with clear differentiation in the interests of various user groups, and clear physical delineation of common properties.

For a start, the two-tier MC system will be applicable only to new developments. Once we gain more experience, we can consider applying it to existing developments. There is a provision allowing the Minister to approve the conversion

of an existing single MC to a two-tier MC, provided the MC is able to pass a comprehensive resolution for the conversion.

Improving Management Framework

The Bill also proposes several other amendments to improve the clarity of the existing provisions and the effectiveness of the strata management framework. For example, the Bill explicitly sets out the documents that the developer has to hand over to the MC at the first AGM or make available for inspection. There were cases in the past where the MCs had to resort to legal action to obtain certain documents and records from the developers. With the provision in the Bill, I hope such disputes will no longer occur.

Some MCs were also in the news lately. Various issues and allegations involving them were widely reported in the media. These include:

Irregularities in collection of maintenance contributions;

Managing Agents (MAs) canvassing for votes on behalf of certain groups;

SPs elected to office while in arrears of maintenance contributions; and

Council members or MAs failing to declare their interests when making decisions on behalf of the MC.

The Bill seeks to curb such abuses or undesirable practices. An SP, who is in arrears, would no longer qualify for election as a council member. MAs will not be allowed to canvass for votes on behalf of a SP or council member. To prevent any conflict of interests, SPs can serve as MAs only with the approval of the MC. For better corporate governance, the tenure of the treasurer in the council will be limited to no more than two consecutive terms.

To strengthen the management framework, the Bill also proposes to reduce the "initial period" when the developer is managing the development, from a maximum of 24 months to a maximum of 12 months or on the day of the first AGM, whichever is earlier. With this change, the MC can then take over the management of the development within a shorter time. The Bill also proposes to reduce the quorum for general meetings from 50% of the aggregate share value to either 30% of the share value or not less than 100 SPs present, whichever is lower, either in person or by proxy. The purpose of this is to make it easier for MCs to convene a general meeting on urgent issues.

Decriminalising Non-Compliance

Consistent with the objective of reducing Government intervention and enhancing self-regulation, the Bill proposes to decriminalise those offences in the existing law that do not have a significant impact on public interest. Only offences related to fraud and cheating or regulatory provisions where the obligation is to the Government would be retained, eg, furnishing false information, or failing to comply with the lawful demands of the Commissioner of Buildings.

Some examples of offences that will be decriminalised are: failure of SPs to pay maintenance charges; breach of the by-laws by SPs; failure of the MC to provide information to SPs; and failure of any person to hand over records or information to the MC. Notwithstanding that such non-compliance is decriminalised, the aggrieved party could still seek recourse through the Strata Titles Boards or take civil action via the courts.

Enhancing the Powers of the MCs

The MC should be the supreme decision-making body of a strata development. However, when a common

property is altered that benefits any SP, the MC presently does not have the power to alter the maintenance contributions arising from that alteration. Under the Bill, the MC would be able to decide on changes to such contributions by passing a comprehensive resolution; in other words, obtaining the consent of at least 90% of the aggregate share value of all the lots in the development.

The MC will also no longer need to obtain the Commissioner of Buildings's approval before altering or erecting structures on common property during the initial period, when the developer is still maintaining the strata development. The MC could proceed with the work by passing a special resolution, ie, obtaining consent of at least 75% of the share value of the valid votes at a general meeting.

The Bill will also empower the MC to lease out common property or confer special privileges for its use to SPs and others. Decisions on short-term leases of up to one year can be made without the need for a resolution to be passed at a general meeting. However, leases up to three years will require a special resolution, ie, consent of 75% of valid votes, while longer leases will require 90% of valid votes.

Amendments in the BCPA

Sir, I will now move on to the key amendments related to the BCPA.

Making the developer contribute to the maintenance of unsold units

Currently, the law is not clear on the liability of the developer to contribute to the maintenance of unsold units in a development. As a result, there are varying practices in the industry. Under the Bill, the developer would have to set up a maintenance fund when any

purchaser starts to pay contribution, and pay maintenance contributions to the fund for all unsold units, as well as for sold units that have not been handed over to purchasers.

Furnishing copy of audited accounts of the maintenance fund to purchasers

Developers are currently required to furnish a copy of the audited accounts of the maintenance fund to the COB, but are not required to extend a copy to the purchasers. In fact, some developers have refused to do so upon purchasers' request. As the purchasers contribute to the maintenance fund, they have a legitimate right to know how the money is spent. The Bill will require the developer to furnish a copy of the audited account of the maintenance fund to purchasers upon request, as well as to allow them to view relevant records and documents.

Removing the requirement for the developer to place a deposit

An existing provision in the BCPA requires the developer to place a deposit with the COB that is to pay for any defects rectification in the common property occurring within three years after the certificate of statutory completion has been issued. Unused deposit would be released to the developer at the end of the period.

Since the introduction of this requirement in 1982, the COB has rarely been called upon to use the deposit. The obligation of the developer to rectify defects is already spelt out in the sale and purchase agreement. Where defects in the common property are concerned, recent court decisions have established that the MC could seek redress from the developers, even after the defects liability period. The administrative provision requiring developers to place deposits with

the COB is therefore of little value in today's context and will be removed.

Sir, this Bill will substantively improve the existing framework for the management and maintenance of strata developments in Singapore.

Sir, I beg to move.

Question proposed.

Mr Speaker, Sir, the proposed Bill marks a milestone in the maintenance and management of buildings and common property of both strata title and non-strata developments in Singapore. It merges the existing Land Titles (Strata) Act and the Buildings and Common Property (Maintenance and Management) Act to form a new Act, which is the Building Maintenance and Management Act. The Act will be administered by one Ministry (ie, the National Development Ministry), instead of two Ministries presently.

There are five key amendments in the Bill as follows:

Provision for the management of mixed-use strata developments;

Promotion of self-governance among management corporations;

Ensuring more equitable sharing of maintenance costs;

Definition of roles of all stakeholders; and

Administration of the new legislation.

Sir, the amendments will have impact on more than 2,600 management corporations and over 170,000 units of strata title and non-strata developments in Singapore. It will affect both existing and future subsidiary proprietors and property

owners. The impact will be more pronounced and differential for subsidiary proprietors of mixed-use strata developments. At the same time, various stakeholders of property development (ie, developers, managing agents, and management corporations) are also affected. As the Bill has a wide ranging impact on many interested parties, I would urge the Minister to consider committing the Bill to a Select Committee for public consultation and scrutiny.

Fundamental questions to address

Sir, there are three fundamental questions which need to be addressed before debating on the proposed Bill:

Is the concept of communal living in strata title developments successful in Singapore?

Are subsidiary proprietors ready for self-governance in strata title developments?

Will the Bill affect the standard of maintenance of strata developments in Singapore?

Although the concept of communal living in strata title development was introduced in the 70s, many subsidiary proprietors are still still not aware of their roles and responsibioities. The general lack of community spirit and apathy among subsidiary proprietors has posed much problem in the management of such developments. Common problems include lack of quorum to convene general meetings, lack of volunteers to be council members in the management corporations, lack of understanding of the roles of developers, management corporations, managing agents and subsidiary proprietors, abuses of powers resulting in corruption and malpractices, failure to comply to various statutory requirements and the lack of understanding of

the Land Titles (Strata) Act, resulting in disputes among various stakeholders.

These problems are further aggravated in mixed-use strata developments where the interests of various stakeholders are very different. As such, much time and resources were wasted to resolve these problems, and many stakeholders have called on the Government to review the Land Titles (Strata) Act. Sir, I hope the Minister can highlight to the House the key desired outcomes of this Bill.

Sir, in my opinion, there are three attribtues of success in strata title developments which will enhance professional management and strenghten communal living:

We need a clear set of legislation defining the roles and responsibilities of all stakeholders of a strata title development.

We need a strong community spirit and a "give-and-take" attitude among

subsidiary proprietors.

We must adopt a professional approach towards maintenance management by the management corporations and their agents.

The proposed Bill may address the first attribute by better defining the roles and responsibilities of owner developers, subsidiary proprietors, management corporations and managing agents. But it has not facilitated the development of a strong community spirit among subsidiary proprietors and provided adequate measures to increase the professionalism of managing such developments. Sir, let me now discuss the key items in the Bill.

Clearer definition of roles of stakeholders

Sir, I support the various amendments to better define the roles of the owner developers, management corporations, council memebrs, managing agents and subsidiary proprietors. The key objective of these changes is to ensure the election of council members with integrity and bona fide intention to look after the interests of all subsidiary proprietors. It also laid out rules on the code of conduct and ethics of council members, managing agents and subsidiary proprietors so as to avoid corruption and malpractices.

But the amendment does not define clearly the role of the owner developer in handing over documents to the management corporation at the first Annual General Meeting. At present, the Act requires the developer to hand over "all plans, specifications, certificates (other than certificates of title for the lots), diagrams and other documents relating to the parcel or building to the MC at the first AGM". In practice, there are disputes between developers and management corporations concerning the definition of these documents. To avoid unnecessary or unreasonable demand from either party, it will be clearer if the Act can define these documents.

Sir, in order to ensure that owner developers hand over all relevant documents to the management corporations, I would propose that we specify clearly the list of documents and items to be handed over to the MC at the first AGM in clause 25(4)(a). The proposed list should include the following:

Building plans;

Share value allotments;

Strata title plans and strata roll;

As-built drawings on architectural, structural, M&E and open area items;

Operation and instruction manuals;

Electrical diagrams and plumbing schematic drawings;

Guarantees/warranties/indemnities when assigned/novated to MCST;

Certificate for Statutory Completion;

Current insurance policies;

Legal covenant, caution and restrictions on use of land in the title, if any;

Current maintenance service contracts;

Notices/directions from Government or any authorities, if any;

Keys to all common properties;

Inventory list of furniture and equipment in common areas and common properties.

Records of accounts and book-keeping;

Audited accounts and reports related to the period after the MC is legally incorporated; and

Any other records relevant to the management of the strata development.

In this way, the MCs will be better positioned to maintain the property in a good and serviceable condition.

Sir, I would also urge the Minister to further define the roles and responsibilities of subsidiary proprietors in keeping their strata title lots in a good and serviceable condition. Today, many subsidiary proprietors are still not familiar with their responsibilities to maintain their own strata title lots, and many are not sure which elements in their strata lots are common property or their own property. Such lack of understanding has led to many disputes

and unauthorised alterations in some strata developments which may pose safety hazards.

The recent falling of external windows is an example which illustrates the lack of understanding of responsibilities of unit owners. Although the external facade of the windows comes under the responsibility of management corporations, subsidiary proprietors are responsible to keep the windows in a good and servicable condition, including conducting periodic inspections on the windows. Sir, we need to re-emphasise the individual responsibility of subsidiary proprietors in maintaining their own strata title lots.

Mixed-use strata developments

The Bill proposed a two-tier MC system for mixed-use strata developments and residential developments with different types of residential lots to provide more effective management. This serves to delineate areas to better cater to the needs of different users in mixed-use strata developments, and at the same time provides a more equitable maintenance contribution formula. These amendments arise mainly due to various problems faced by management corporations and subsidiary proprietors of mixed-use strata developments. The common problems may be listed as follows:

Different and conflicting interests among different users of mixed-use strata developments such as residential, commercial or office units;

Car parking problems such as allocation of car parks lots, car park fees, indiscriminate parking and congestion, and car park lots for visitors and the general public;

A lack of representation of council members from different user groups;

Security and access problems between subsidiary proprietors and the general public;

Maintenance fee contribution and fund allocation for maintenance purposes; and

"User Pays" attitude among subsidiary proprietors.

Sir, in the United States, common property is divided into various categories, namely, common element, residential limited element and commercial limited element for management purposes.

The Bill proposes a similar approach in delineating the common property into two main categories, namely, common property and limited common property. This is based on the exclusive benefit of two or more subsidiary proprietors of those proposed lots in the land parcel.

Prima facie, this arrangement seems to cater to the needs of different groups of users. But, it has the inherent "divide and rule" impact on the development. Thus, potential problems of cross-boundary conflicts may arise from the two-tier MC system. This arrangement is also unlikely to promote community spirit and bonding among the different tiers of MCs and subsidiary proprietors. In today's apathetic climate among the subsidiary proprietors to serve in MCs, I am concerned whether a two or more tier MC system is a sustainable solution in managing mixed-use strata developments.

Sir, instead of fixing the problems downstream where the design of the mixed-use strata developments has resulted in these problems, we should tackle the problems upstream at the planning and design stage. Many problems faced in mixed-use strata developments can be resolved through proper planning and design of the development. For example, clearer delineation of functional and physical common property, and the provision of separate facilities or

access will reduce potential conflicts among users.

We should adopt a dispute avoidance strategy, instead of legislating, to manage disputes among subsidiary proprietors. Potential purchasers of mixed-use strata developments must fully understand the implications (that is, the conveniences and the inconveniences) of staying in such developments before making purchase decisions. This will facilitate better understanding among subsidiary proprietors and the management corporations.

In addition, property buyers must be given more accurate information on the basis and amount of maintenance contribution at the time of purchase. Such transparency will help to avoid disputes at a later stage. I would urge all developers to be more transparent and provide more accurate representations of their developments when marketing their properties.

Promotion of self-governance

Sir, I support the move to promote self-governance by MCs and reduce Government intervention in the management of strate title developments. Except for safety and public health matters, we must empower the MCs to take on more responsibilities in the management of their estates. A common conflict among subsidiary proprietors is the allotment of share value and formula for maintenance contribution. The present method of allotting share value is a "one size fits all" computation based on floor area groupings in 100 square metres. Thus, a unit of 101 square metres and one of 199 square metres are allotted the same share value as they are in the same grouping. I would propose to amend the schedule for the share value allotment by the Commissioner of Buildings, as stated in clauses 10 and 11 of the Bill.

Sir, a more equitable method would be to compute the share value based on the built-up floor area of each lot. This will align the share value of each lot to be proportional to its built-up floor area. Thus, each subsidiary proprietor will contribute towards the maintenance fund based on the built-up floor area (rounded to the nearest square metre as stated in the Sale and Purchase Agreement).

Once the share value allotment is agreed and approved by the Commissioner, it should be made known to the purchasers by stating it in the Sale and Purchase Agreement. The share value should not be changed once it is accepted and should form the basis of contribution by all subsidiary proprietors towards the management of the development.

But I support the amendment in clause 40 to empower MCs to alter the maintenance contribution formula so that more equity could be achieved among subsidiary proprietors. This is especially so when there are changes in the common property which benefit certain subsidiary proprietors. As such, different groups of SPs may levy different maintenance contribution based on the circumstances and consensus of the subsidiary proprietors. This empowerment includes the use and rental of common property. The amendment will also encourage SPs to take more ownership of their common property.

Professional management

The management of a property to satisfy the needs of many owners is a complex task which requires professionalism and good management practices. If the Government were to promote self-governance in strata developments, we need to establish a framework to ensure that professional property management services are carried out to maintain these developments properly so as to safeguard the interests of all stakeholders and the

general public. Statutory compliance with regard to safety and public health must be complied and enforced stringently. The recent case of sewage water flowing into water tank clearly highlights the importance of statutory compliance and the need for professional property management.

At present, the "cut throat" competition among property management firms has resulted in severe fee undercutting. This has compromised the standard of professional services rendered, resulting in an unhealthy state of affairs in many MCs. While many SPs demand high standard of maintenance, not many are very forthcoming when it comes to paying for professional management and maintenance services. This dichotomy has led to a situation where SPs, MCs and MAs are all unhappy with the management of their developments. This situation is further compounded by the lack of understanding of council members of the Land Titles (Strata) Act and various abuses of power by some council members.

Sir, unless we adopt a professional approach towards maintenance, more disputes will surface in the future. These disputes are time consuming, and waste national resources. Many of these disputes have ended up in courts and soured relationships among SPs.

To improve the professional management of strata developments, we need to train and register property management professionals. The fact that we need to amend the Act to include a new clause, clause 67, to prohibit the activity of

managing agents in lobbying for votes clearly reflects the unprofessional conduct of some managing agents in practice. This clause will not be easily enforceable as it is onerous to gather evidence of managing agents lobbying for votes.

Thus, I would urge the Minister to consider inserting a clause to appoint managing agents or property managers who are professionally trained and registered to manage strata title developments. The professional code of practice of managing agents or property managers can be clearly defined in the Act too. With professional management, the MCs will be properly guided to formulate maintenance policies which will look after the interests of all subsidiary proprietors. This will avoid non-compliance with statutory requirements, abuse of powers, and unauthorised practices in strata developments.

Sir, I support the Bill, but would urge the Minister to commit the Bill to a Select Committee for further refinements to better represent the interests of all stakeholders in strata title developments and, at the same time, to gain their support for the Bill.

Sir, before I begin, I would like to declare my interest on this Bill as Chairman of the Singapore Institute of Surveyors and Valuers, a professional organisation whose members include land surveyors, quantity surveyors, property consultants, valuers, agents and property managers, many of whom act as managing agents in property developments.

As noted by the Minister, the last major review of the LTSA relating to the maintenance and management of strata subdivided buildings was close to two decades ago in 1987. Over the years, whilst the legislation has helped to provide a sound framework for the maintenance and management of strata subdivided buildings in Singapore, various shortcomings have surfaced. For instance, the current floor area grouping method used for share value allocation in residential developments has led to complaints from smaller unit owners that it is unfair to impose the same maintenance charge on them as the owners of larger units in

the same grouping. Larger unit owners, on the other hand, say that it is inequitable that the smaller units should have the same share of the undivided common property and voting rights.

There have also been complaints of abuse of power by MCs. The recent high profile People's Park Centre and People's Park Complex fiasco, where the MC Chairman managed to get re-elected year after year, despite owing substantial maintenance fees, are cases in point.

After having run their course for nearly two decades without any major revisions, except in 1999 which relates specifically to collective sale, the LTSA together with the BCPA are clearly in need of urgent revision to ensure their continued efficacy.

Whilst I agree with the general intention and objectives of the Bill, as well as most of its provisions, I would like to highlight five provisions which warrant further consideration and refinements.

Firstly, limited common property and subsidiary management corporations. Sir, again, as noted by the Minister, to facilitate the management of mixed-use developments and certain types of residential developments as well as address the operational problems currently faced by the MCs of such developments, the Bill proposes to introduce the option of a two-tier system. This is indeed a major fundamental change made to the present legislation, and may I venture to add, can be viewed positively as a 100% improvement over the current one-tier system.

The sub-MC for a user group will be responsible for managing the "limited" common property intended for the exclusive use of that user group, such as the use of the swimming pool by the residential user group. The sub-MC will

have the power to levy contributions for the maintenance and improvement of that "limited" common property. This should result in more equitable sharing of maintenance contribution in mixed-use developments.

Clause 76(1) of the Bill explicitly spells out the formation of sub-MCs under three different scenarios, firstly, mixed-use developments, comprising residential and non-residential uses; secondly, non-residential developments, comprising different uses, such as shops and offices or shops and hotels; and thirdly, residential developments, comprising different types of residential units, like high-rise apartments and townhouses.

The Bill, however, does not explicitly allow for the formation of separate sub-MCs for non-residential developments, comprising units of similar use, but which can be delineated as separate buildings, for instance, the five separate and distinct office towers in Suntec City and the two office towers in Ngee Ann City.

Restricting the creation of one sub-MC per user group would not help resolve the problem where owners of an office tower may want to upgrade their lifts but are unable to do so as the owners of the other office towers are opposed to the idea. Presumably, this scenario could come under the ambit of clause 76(3) which allows the Minister to approve other forms of subsidiary MCs. However, such non-residential developments, comprising strata lots of similar use but located in separate buildings, are likely to become more and more common in the future, particularly with the development of the Business Financial Centre.

Hence, to facilitate such developments and at the same time provide more clarity, I propose that clause 76(1) be amended to explicitly allow for the formation of sub-MCs, not just for subsidiary proprietors of non-residential lots if they use

their lots for significantly different uses, but also for lots located in buildings that can be delineated separately. However, to address the concern that if there is no restriction of one sub-MC per user group, there may be too many sub-MCs in a single development which could lead to more problems, a minimum total strata area of, say, 5,000 square metres, could be stipulated before such a sub-MC could be formed.

Secondly, one too many types of resolutions. Under "Interpretation", clause 2(2) of the Bill, it has provided for six different types of resolutions. The six resolutions, of which the first three are found in the existing Act are: ordinary resolution, special resolution, unanimous resolution, 90% resolution, comprehensive resolution with 90% consent, and resolution without dissent. I would like to ask the Minister if there is indeed a need to have so many different types of resolution. Can we not resolve to keep to just the three existing types of resolutions, that is, ordinary resolution, special resolution and unanimous resolution? Or, if we really need it, allow at most, say, four, including the comprehensive resolution required for the creation of limited common property or the changing of the maintenance contribution formula.

We need to bear in mind that MCs comprise owners of strata units who are often laymen and not lawyers. Therefore, the provisions of the Bill should be made as clear, concise and simple as possible to reduce ambiguities in interpretation.

Furthermore, I note that the definitions for special and unanimous resolutions have been changed in the Bill. For special resolutions, the definition is now changed to "at least 75% of the aggregate share value of the lots of all eligible subsidiary proprietors vote for", instead of the present "not more than 25% vote against". A similar change is also made to the definition of unanimous resolutions, where

it now stipulates "everyone votes for" instead of "no one votes against". It would be more expedient to have the existing definitions of special and unanimous resolutions retained. This is because the new definitions require supporters to make the effort to vote for the motion, which is more difficult to fulfil in practice than requiring those who object to vote against.

The apathy of many individual owners has resulted in poor attendance at general meetings. In most instances, very few individual owners, besides the office bearers themselves, attend the general meeting. Moreover, very often, those who make the special effort to attend are normally those who may have some unhappiness over the way the development is managed and are therefore likely to vote against and not vote for. Of course, proxy votes can be used but, again, the general apathy of owners means that it would be easier to allow for the converse, ie, that as long as not more than a certain percentage vote against, the resolution can be carried through. This should also apply to the other resolutions.

Thirdly, managing agents. The Bill provides for the appointment of managing agents by the MC and allows the latter to delegate all of its powers, duties and functions to the MA. However, the Bill does not stipulate some minimum qualifications and standards required of the MA. Hence, as it stands, anyone can offer his services as a managing agent. This is in contrast to the stringent requirements imposed for other professions, such as insurance agents and financial advisors. In fact, even maid agencies are now required to be accredited.

As the MC comprises owners who generally have neither the expertise nor the time to devote to the maintenance and management of the building, most, if not all the duties of the MC are commonly delegated to the managing agent. Further,

managing developments, particularly large-scale projects, requires some minimum knowledge and understanding of various technical fields, such as building and engineering services, legislation relating to property, and even the proper conduct of meetings. Ignorance or a lack of knowledge and understanding of property maintenance and management matters may lead to costly oversight and mistakes which can pose hazards to the occupiers of the premises, as well as affect the reputation and, ultimately, the value of the property.

It is thus proposed that the Bill should require that the managing agent engaged by the MC should possess at least a certain minimum qualification and standard. Alternatively, if the Ministry prefers a more hands-off approach, the Bill could simply require that the managing agents be accredited managing agents of recognised professional bodies representing them, such as the SISV and the Association of Property and Facility Managers. This will ensure that the managing agents appointed possess a minimum standard of competence and are subject to some control by the relevant professional bodies. The appointment and the regulation of managing agents could be provided for under clause 132 of the Bill, which allows the Minister to make regulations for carrying out the provisions and purposes of the Bill.

Fourthly, responsibility of the MC to maintain windows. Under clause 28(1)(iv), the Bill specifically places the onus of properly maintaining and upkeeping windows where a side of the window is part of the common property, ie, part of the external wall, on the MC. However, there ought to be a distinction in liabilities between windows installed on external walls which can be opened, and those which are fixed, such as curtain walling. In the case of windows installed on

external walls and which can be opened, I am of the opinion that the MC should not be held responsible for their maintenance. Instead, the individual owners or subsidiary proprietors should be responsible for maintaining such windows, since he has access to and controls the use of the windows, not the MC.

Indeed, this will then be in line with HDB's current stated policy that HDB flat owners are responsible for maintaining their windows. Otherwise, as the Bill now stands, external windows are defined as common property. Hence, the onus of maintaining these windows will not rest on the individual HDB flat owners but the MA which, in this case, would be the town council. The MC should only be responsible for maintaining fixed external windows, such as curtain walling, where it would not be practical for the subsidiary proprietors to engage specialist contractors to clean the windows, eg, a gondola system may be required.

However, there is then this vexing issue and dilemma regarding the need to consider third-party liability in the event of falling windows. While MCs should not be held responsible for external windows which can be opened and are essentially controlled by the owners, MCs are in a better financial position to purchase third-party insurance, unlike subsidiary proprietors. In such instances, should the MC take up third-party liability insurance on behalf of the subsidiary proprietors? How then would the cost of this third-party liability insurance be apportioned and/or recovered? There is thus clearly a need to further explore these issues and provisions.

Additionally, it is noted that while the Bill specifically spells out the duty to maintain and upkeep windows and other common property, there is no specific provision as regards the penalty for failure to properly maintain such property, which could lead to damage, injury or death.

With the recent concern over falling windows as well as the continuing concern over killer-litter from high-rise flats, should not the Minister consider including provisions in the Bill on the responsibilities of the appropriate parties to properly maintain and upkeep property, and their liabilities for failure to do so?

Lastly, jurisdiction of the Strata Titles Board (STB). The types of disputes which the STB has jurisdiction over are limited to those spelt out under clauses 100 to 113 of the Bill. Disputes which are not covered under these clauses would have to be settled via the courts, which can be time-consuming and very costly. It is thus proposed that the STB's jurisdiction be widened to deal with conflicts relating to management and operation, so that parties need not resort to court proceedings. For instance, the Bill does not provide for the Commissioner of Buildings to approve the demarcation of boundaries for the limited common properties. Hence, disputes over boundaries between the main MC and sub-MCs or even between sub-MCs would have to be resolved via the courts. It would be more efficient if such disputes can be adjudicated by the Strata Titles Board. The STB could also be given the powers to adjudicate on operational conflicts between the main MC and the sub-MCs.

In conclusion, I wish to acknowledge that the amendments proposed in the Bill have been the culmination of extensive discussions and feedback with various stakeholders, including SISV, which is the institute I represent. These amendments, when adopted, will definitely make the legislation governing the maintenance and management of strata-title developments more relevant and effective, and overcome many of the shortcomings and loopholes of the present legislation. However, further refinements, such as those I have highlighted amongst many others, are needed to make sure that the Bill takes into account all relevant

concerns and issues, and ensure its robustness when implemented.

As this is an important piece of legislation that will affect the more than 170,000 owners of private apartments and condominiums and other developments, as well as many more future property owners, I therefore propose that this Bill be committed to a Select Committee of Parliament to receive further feedback from individuals, managing agents and professionals, as was the case for the 1987 major revamp of the LTSA.

As the Minister of State for National Development, Dr Vivian Balakrishnan, noted, "The issues in the review of the LTSA and BCPA can be complex and involve many stakeholders. It is important that all stakeholders are consulted and that the proposed changes be thoroughly considered from all perspectives." If past practices are anything to go by, it could be well another 10 to 20 years before this legislation is reviewed again. Hence, I urge the Minister to put this Bill to a Select Committee to allow all stakeholders to submit their views for careful consideration.

Sir, with this, I support the Bill.

Mr Speaker, Sir, I believe that this Bill will result in more effective management of buildings and will improve the quality of management in strata title properties. The Bill also attempts to resolve the conflict between owners of residential units and owners of commercial properties in a mixed development. Sir, I have some specific issues which I hope the Minister will clarify.

Clause 75. By virtue of this clause, it seems that the subsidiary management corporation and limited common property will only apply to new developments. But the Minister may publish in the Gazette to extend the application of this division to other developments. The Minister had

earlier explained the reason, and I think it is wise to apply to only new developments for the time being. But I would like to know under what circumstances the Minister will decide whether or not to extend this division to existing developments, and whether there is a timeframe in which this division will be extended to all existing developments.

Clause 79(4) requires "At least one member of the executive committee of a subsidiary management corporation to be a member of the council of the management corporation." I want to know what is the role of this sole member of the council who sits on the executive committee of the subsidiary management corporation. This person's role, duties and powers are not spelt out in the Bill. Would there be legal complications, since the subsidiary management corporation by itself has its own legal status?

Clause 81(1) states that "A management corporation's by-laws shall apply to the limited common property", but the subsidiary management corporation can make amendments. This seems more like adding to the conflict of interests than resolving them. One can make by-laws, but the other can amend them in relation to the limited common property. So, what is the intended objective of this clause?

Under the First Schedule, paragraph 3, on quorum of general meeting, it was stated that a quorum shall consist of either 100 subsidiary proprietors or 30% of the aggregate share values of all lots, whichever is lower. I wonder why specify the number of "100 subsidiary proprietors" instead of saying that the 30% requirement is applicable to all. In a large development, 100 subsidiary proprietors could be just 10% of the aggregate share values of all lots. Does the Minister deem this sufficient to form a quorum?

Sir, what this Bill seeks to resolve is the conflict in estate management between residential and commercial lots in a mixed development. We must also bear in mind that, in practice, there are many things that may not be divided so clearly between the management corporation and the subsidiary management corporation. Driveway access may be common to both. Other services, such as water supply pipes and electrical main switchboards may not be so easily divisible. In an economic sense, there are things which, when divided, will cost more to maintain. For example, external facade cleaning may be more expensive if done separately, and accessibility will involve more cooperation and coordination, since there are now two separate bodies, ie, the management corporation and subsidiary management corporation. What would be the implications when one portion of the development is well maintained while the other part is mediocre?

Singapore will probably see more mixed developments, as the URA sells more white sites, such as the development of the new Downtown and with the "Work, Live and Play" planning objective. This Bill is timely to ensure that the commercial part of an upmarket development stays vibrant and is able to cope with fast-changing retail market circumstances. I think it will also help to preserve the value of commercial properties in a mixed development.

Sir, I support the Bill.

Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 4.20 pm.

Sitting accordingly suspended

at 4.00 pm until 4.20 pm.

Sitting resumed at 4.20 pm

Debate resumed.

Mr Speaker, Sir, thank you for allowing me to speak on this Bill.

Firstly, I would like to congratulate the Ministry of National Development for taking the bold step to review many of the issues arising from the management of mixed development strata properties. There are three areas which I wish to highlight.

First, effective use of the two-tier system. The two-tier MC system will only be offered to new mixed use strata developments as an alternative option to a single MC system. This option will not be offered to existing mixed use strata developments so as to allow time for MND to assess the effectiveness of the new system and then apply retrospectively to the existing developments. Singapore is already a built environment and there are many existing mixed developments. The amendments arise because of feedback of real issues on the ground, and hence the review.

I would like the Ministry to put these recommendations to a Select Committee. This will enable the amendments in the Bill to be extensively consulted and discussed to ensure the relevance of the amendments in the actual management of the MCs.

Secondly, I would like to urge the Ministry to consider implementing this two-tier MC system not only to new mixed developments, but also to selected existing mixed developments. This would enable the review to be made at a faster pace. For any new development, it takes

about two years before the development forms its first MC to allow the two-tier system to work. It takes another few years for the MND to assess the effectiveness of this two-tier system. This would stretch the review to at least to 4-5 years before any effective review can be done. Even after the review, it takes perhaps one or two years for the Ministry to make its decision. This would end up in a really long wait for the existing mixed development MCs which had already been waiting for a long, long time for a review of these Acts so that they could manage effectively.

If the two-tier system could be allowed to be implemented in some of the newly registered MCs of the mixed development, that is, developments that have been handed over by the developers to the MCs, the review of the two-tier MC system could be made faster and many of the issues arising from the existing mixed developments could be resolved, and the mixed developments can be better and effectively managed.

Second, more equitable sharing of the maintenance contribution in mixed use developments. Under the two-tier system, the developer is allowed to set up a main MC with several subsidiary MCs. All the unit owners of the development will be members of the main MC, which will be responsible for managing only the common property shared by all the unit owners. Examples quoted were the driveways and car parks. My contention is with the car parks. The car parks should not be classified as a common property of the main MC. Many mixed developments already have a separate designated car park for each of the different users. By classifying the car park as a common property of the main MC will not resolve the conflicting interest that many MCs face today. Let me give you an example.

The residents from the residential units would like to have the least visitor lots in the car

park, firstly, for ease of parking by residents and, secondly, for less maintenance requirements. However, for the commercial lessees, the car park is essential to the attraction of customers for the commercial units. It means business for the commerical units and this will translate into higher rentals for the commercial units as well. In deciding for the use of the car park and the charges, this is always in dispute and has always ended up with the decision made by the residents, rather than by the commercial lessees, in view of the majority of respresentations.

Many of the mixed developments have car park charges that are high and deter shoppers from patronising the commercial shops. Let me show you the sensitivities of the car park charges. We know how popular the IMM shopping centre in Jurong is because of the free car park facilities. We heard recently that when the new owner took over and decided to charge customers for the use of the car park, because he wanted additional revenue, the number of customers fell tremendously. And as a result, the car park was reverted to free parking the next day.

The Ministry should consider the car park as a limited common property, intended for the exclusive use of the user group. This would allow the correct user group to decide on the charges and the need of the car park spaces. If, for the older development, where the car park is shared, the quantum of the car park lots for the regular users could be logically determined and sub-divided and classified as a limited common property under each of the sub MC.

Third, the relationships between the main MC and sub-MCs, the roles and responsibilities of the sub-MCs and in relation to the MCs, the main MC and vice versa. This is not clearly defined in the amendment Bill. Issues such as, if there is

an inefficient sub-MC resulting in a deficit in the sub-MC's funds or vice versa, how would this affect the main MC? If one of the sub-MCs did not efficiently and effectively manage the common property, resulting in deterioration in the maintenance or management of the mixed development as a whole, what is the role of the main MC or vice versa, the sub-MC then? If one of the sub-MCs has committed offences under the Act, what is the role of the main MC? Would the main MC be responsible for the acts of the sub-MCs or vice versa? Finally, would the decisions made by the main MC need to be adopted by the sub-MCs or vice versa?

This feedback is for the Ministry's consideration. I support the review of the Acts and wish to request the Ministry to commit the Bill to a Select Committee of Parliament for further deliberations. These amendments in the Bill concern many buildings and developments, including implications on the management and maintenance of HDB flats by the Town Councils, as the Town Councils Act was originated based on these two Acts, ie, the Land Titles (Strata) Act and the Buildings and Common Property (Maintenance and Management) Act.

Secondly, I share the concern of my parliamentary colleagues here that there should be a provision in the Bill to prosecute persons responsible for killer-litter, for example, falling windows and hanging flower pots which are still prevalent despite the many joint efforts by HDB and related agencies. This is most important and critical, as this is the review of the Building Maintenance and Management Bill for buildings.

Mr Speaker, Sir, I rise to support the Bill.

Sir, the Buildings and Common Property (Maintenance and Management)

Act (BCPA) and the Land Titles (Strata) Act (LTSA) were last amended in 1987. Sir, I support the changes to be introduced in the new Building Maintenance and Management Bill, as well as the LTSA which are now required to ensure that we meet current needs to provide higher standards of maintenance and management of condominiums and other strata title developments. There is also the need to improve the clarity of existing provisions in the two Acts.

Mr Speaker, Sir, over the last five years, there was a large increase in the number of condominiums and other strata title developments in my constitutency. And residents in these developments have, from time to time, sought my assistance on problems of poor management and maintenance of the common areas of their development by the developer or the Management Corporations and the Managing Agents they appointed.

Sir, the poor maintenance includes such things like unkempt grounds, mosquito nuisance, poorly maintained car parks, cracks and defects in certain parts of the buildings, leakages in the roof and so on. This led to disputes between the residents

and the developer and management corporation which sometimes became very protracted. The Commissioner of Buildings has been very helpful to help resolve some of these disputes. Now, with the changes in the Act, the Management Corporation should be better empowered to take decisions to deal with these issues. Sir, I hope that with the improvements in the clarity of the existing provisions as well as the introduction of new provisions which would provide clearer definition on the roles of developers, Management Corporations (MCs), Managing Agents (MAs) as well as the owners or occupiers of residences in condominiums and other strata title developments, the problems and disputes can be more expeditiously resolved.

However, the MCs and MAs would have to improve their management and decision-making capacity, and they would also have to strengthen the community spirit in their developments.

Sir, I agree with my colleagues that Managing Agents would have to be accredited and that they should have at least minimum qualifications to manage properties.

Sir, I welcome the proposal to amend the LTSA to introduce an option of a 2-tier Management Corporation system for mixed-use strata title developments, to provide for more effective management of different parts of the common property. I believe that this will help to prevent disputes between parties in the development arising from the perceptions or misperceptions of one party or group in the development that the MC is more concerned with the priorities or interests of only one group at the expense of the other. Although this will be limited to new developments, the Minister has said that with experience gained in the implementation of the system, it could be later applied to existing developments.

As this Bill would be of interest to owners of units in the condominiums and other strata title developments, MCs, MAs and developers, I agree that we should give them the opportunity to provide their views, feedback and proposals on the Bill. So, I support the proposal that the Bill be committed to a Select Committee.

Sir, we should have safeguards that the common property and grounds of the condominiums and other high-rise strata title developments are safe, healthy and hygienic. This would be the case if the owners of the units in the developments take great care to maintain high standards of maintenance of their units and other premises in the buildings. For instance, as Members have mentioned, in view of the recent spate of falling windows and other

killer litter, we should consider a provision in the Bill to enable quick prosecution action against owners who fail to maintain their properties. After all, this is a Bill to provide for better management and maintenance of buildings. Would the Minister consider this proposal?

Sir, on this note, I support the Bill.

Mr Speaker, Sir, I would like to support the Building Maintenance and Management Bill.

Obviously, a lot of work has gone into it. That is why it is such a thick Bill. This Bill is all about improving the efficiency of building management. It is also about allowing private individuals to have much greater freedom in the management of their own affairs with minimal Government intervention.

It is a very timely recognition of the vast changes that have taken place in terms of our residential landscape, as has already been said that there has been a huge increase in terms of condominiums and also other shared housing developments. And now we are looking at technology parks which will combine factories and other residential as well as recreational facilities. So, as more and more Singaporeans get affected by laws governing such developments, it is timely to refresh the laws and to update them so that it can be made much easier and much more pleasant for people to live and to work together.

Sir, the Bill seeks to give much more authority to management corporations. It is good to see that they will have the ability to reformulate maintenance contributions, to have the ability to erect and alter structures and also have the ability to grant exclusive use or rental of common property.

The Bill also seeks to decriminalise minor offences, and this is a positive step in the right direction. Because if you want to give more responsibility to people, then it is right that the law should not come down too harshly on them if they commit minor transgressions. But, of course, the option for the aggrieved party to take such people to court is always there, although now it does not become the duty for the State.

Quite apart from self-regulation and self-governance, this Bill seeks to enhance the effectiveness and efficiency of management corporations. A more significant change, as has been said, is that of having 2-tier management corporations to recognise the mixed-use developments which we are now accustomed to in a residential versus commercial development. And this approach is in line with practices that have taken place elsewhere, and so it is a logical step towards addressing issues pertaining to conflicting interests because we have different groups of people. I should also add - this has also been brought up - that even among different groups of commercial occupants, it would be worth our while and advantageous for them to also have separate tiers of management corporations.

When people live together or work together, invariably, conflicts are bound to arise. In the case of residents having to cope with shopowners, they have diametrically opposite views. One would like, of course, privacy. The other would like bustling crowds. One would like security. The other would like unlimited access. So, this approach towards having a 2-tier, or even 3-tier management corporation, will seek to address some of these issues. It will not address all issues entirely, but it would give greater flexibility to groups of people to manage their affairs better.

I think it has to be recognised that no one system can ever be perfect. And

although a multi-tier system will better address or cater to the differing needs of people, it will not be perfect. There will be problems and there will always be conflicts and sub-committees may well engage themselves in court, but let it be. Let there be flexibility and let there be greater ability for different groups of people to better manage their differing needs.

When we call for more management corporations, it will also mean that we need more people to get involved. And given the generally high level of apathy, the question is whether we will be able to get enough people. But I think this is one challenge that Singaporeans ought to rise up to. Dwellers of condominiums are generally richer. They are usually much more successful in business. They are more successful in their careers. These are the very people we would like to encourage to step forward and contribute to their community. So, their immediate neighbourhood is perhaps a good place to start with, and these people can really help to resolve conflicts which are bound to arise when people live together and share common facilities.

These problems are not exactly unique to Singaporeans. I read in a recent article that in Britain, the one thing that people complain most about is their neighbours. So, in these days, it is not so easy to live with one another, and we wish that we could all have the kampong spirit back, but we do not really wish to go back and live in a kampong. So, if gifted people can step forward and offer themselves in order to develop a more peaceful, a more caring and a more comfortable environment, I think we have a chance of reviving that kampong spirit.

The Bill also seeks to bring about a much higher level of determining strata title and yet, at the same time, it also gives enough protection for minorities as well. With more freedom given to

management corporations, it is also hoped that management corporations would go beyond just managing premises and would also bring about the development of community spirit. We talk about how to cope with infant care, how to cope with after-school care, how to cope with elder care and so on. If management corporations can extend themselves beyond just looking after premises, I think we have a good chance of also developing the community spirit, which Dr Teo Ho Pin talked about earlier on.

The Bill also seeks to equip management corporations with authority and to get things done. As I look through the provisions, consensus of approval is still required. A very high level of majority approval is still required. We talk about 90%, we talk about 75% and so on. These are still clearly very super majorities which, in this day and age, is very hard to attain. As many Members have asked for this Bill to be committed to a Select Committee, I wonder whether this super majority should also be reviewed because it is clearly not achievable and perhaps unrealistic too.

Sir, I would like to say that it is a good Bill, and we should all try to make it work. When we talk about self-governance and self-regulation and we have apprehensions about it, I think we ought to rise to the challenge. It is no use saying that we lack awareness and we lack experience, because it is really up to Singaporeans, at the end of the day, to make the society which we hope we like to belong to.

In summary, I would like to say that, at the end of the day, it is a matter of choice. If we choose to live in condominiums, if we choose to live and work in mixed developments, then we have to understand the limitations that come with it, and there is a clear need to compromise. The law can only provide for provisions and guidelines as to how everybody can live and work happily toge

ther and therefore efforts made to make the laws much more flexible as well as to get people more fully involved in the management of their own affairs are clearly welcome.

The other point is that the Bill also seeks to set general guidelines as to the type of people who should be on management committees. I think it is very crucial that we get the right people on management committees and therefore whilst the law can make provisions as to who can be left out and considered unsuitable to represent the constituents, it is more important for residents to choose with care who should be on management committees and able people should step forward and offer their services to serve their residents.

Sir, on that note, I support the Bill.

(In Mandarin ): Mr Speaker, Sir, I support the Bill which seeks to merge the Land Titles (Strata) Act and the Buildings and Common Property (Maintenance and Management) Act, which is to be administered by the Ministry of National Development (MND). I think it is a very wise move. MND has rich experience in building and maintaining public housing. This Bill will enable the MND to have good and proper management over private properties as well.

The new Bill will also deal with arrears of management fees and the other problems. It will decriminalise such acts of violation and breaches of the rules. Under the Bill, these cases will be dealt with by the management corporation, which will decide whether it would institute civil actions against the offenders. The management corporation will have more space for consultation and negotiation between the subsidiary proprietors and the other parties. For example, the

management corporation may waive some of the management fees owing by subsidiary proprietors on ground of financial hardship, or allow them to pay the arrears by instalments, so as to avoid facing criminal sanctions. In this way, the management corporation will be in a better position to communicate with the subsidiary proprietors, and resolve their problems in a more humane manner, thereby creating a better and cordial living environment for all.

Thirdly, the new Bill also provides for the developer to pay the management fees of the unsold units to the management corporation. I think this is reasonable. At the moment, this is being practised in the public housing sector. When the Housing and Development Board has sold a block of flats, it shall be responsible for the payment of maintenance fees of any unsold units to the Town Council, and continues to do so until such time when the units are sold. Thereafter, the new owners will take over the payment of the S&CC. Under this system, the Town Council will have sufficient funds to manage and maintain the buildings and the common property, thereby providing a better living environment for all the residents. This Bill brings the private housing estates in line with the present system of the HDB estates, thereby ensuring a better living environment for their residents. .

Fourthly, under this new Bill, all those who are in arrears of the maintenance fees will not be eligible to stand for election as members of the management corporation. This is very logical. As a member of the management corporation, the subsidiary proprietor concerned should set a good example, so that the other subsidiary proprietors will emulate. If the management committee members themselves are in arrears, and yet they are holding important positions in the management corporation, this will send a wrong signal to the others, and it will not

be easy for them to implement their policies and execute their duties. So, under this new provision, those who are in arrears will not be eligible to stand for election in the management corporation. I think it is very logical.

Fifthly, the managing agents should not go around collecting the proxies from the subsidiary proprietors for the general meetings. The managing agents' main duty is to help the management corporation look after the estate, using their professional expertise. They should look into the daily maintenance, accounting and other administrative work. They have no part to play in the election of management corporation members, nor shall they be involved in the canvassing or campaigning for votes for any particular group of candidates. I think this is a very good provision under this Bill.

Sixthly, under this Bill, there will be provision for two-tier management corporations. I have some reservation about this. In order to resolve some of the problems and disputes in multi-purpose property, I think this two-tier management corporation may not be the ideal way to settle these problems. In fact, the establishment of more sub-MCs will also give rise to more conflicts of interest and disputes. If the dispute arises because of money, I think we should look at it from the monetary aspect. Maybe we should import the concept of the Town Councils, ie, we set up just one management corporation, but we can have separate accounts for the various sub-groups. At the moment, Town Councils have to look after a great number of HDB flats as well as common property. There may be the Town Centre, the Neighbourhood Centre, the car park and the various maintenance work. The Town Councils set up different accounts for each aspect of their work, eg, one for car parks, one for landscaping, one for general cleaning, etc. This is quite similar to that undertaken by the manage

ment corporation of the private condominiums.

In the Town Council, our system has been working well. There has not been any dispute over these accounts. When the conservancy charges are received, they will be allocated to the various accounts for their specific purpose. So, as far as the accounts are concerned, they are very clearly divided. If the Town Council wants to do any maintenance work, it will just look into the financial situation in the respective accounts, and then plan the budget accordingly. This is very effective and transparent. I am sure this same method can be applied to the private condominiums. I think the management corporations can make a study of the system in the Town Councils - to set up separate accounts, rather than having sub-MCs. Otherwise, even if there are many sub-MCs, it will not be able to solve the matters. I think they will only complicate matters and give rise to more disputes. I hope that the Minister will consider my suggestion.

Mr Speaker, Sir, first of all, let me thank all the Members who have spoken for their support of the Bill and for their very comprehensive and detailed comments.

As I mentioned in my Second Reading speech, we have had extensive consultations with members of the public, industry stakeholders, and members of the GPC for National Development. But I accept that this Bill is highly technical and the issues are very complex. In fact, the Bill itself runs to more than 200 pages. The provisions of this Bill have a far-reaching impact on many people in Singapore, not just those who live in strata title units, condominiums, etc. There are some 170,000 of these households and they form a significant proportion ˆ’ something like 15% ˆ’ of the total number of households or dwelling units in Singapore. Apart from that, there are also the management

corporations (2,700 of them). There are the managing agents who have been hired by the management corporations to look after these units, and so on and so forth. So there are many stakeholders involved in this issue. Therefore, I agree with Members ˆ’ Dr Teo Ho Pin, Dr Amy Khor, Mr Othman Haron Eusofe, Mdm Cynthia Phua, and other Members ˆ’ that we refer this Bill to a Select Committee. This will allow the Bill to be more thoroughly scrutinised, and all relevant views, and views which have not yet been heard, can be so heard before it is finalised and enacted.

Sir, since the Bill is going to a Select Committee, I will not address all the points that have been raised by the Members, especially some of the more technical ones. But I will respond very briefly to some of them, before I touch on the more general intent behind the proposed amendments in the Bill.

Dr Teo Ho Pin mentioned the various kinds of documents, what kind of documents as well as how many documents to hand over to the MCs. I think this is something the Select Committee can consider and discuss. He also asked how we allocate share values, and also what is the code of practice for managing agents. These are issues which I hope members of the public as well as members of the industry will raise.

Dr Amy Khor asked under what circumstances we allow sub-MCs for new as well as existing developments. Again, as I have explained, we would like to start off with the new developments, because I do not think this is a totally trouble-free proposal, and I expect that there will be problems associated with creating another level of management corporation in mixed developments. Will they be in conflict? How will they delineate common property, and so on and so forth? So, I think it is wise for us to implement it first for new

developments and to learn from this experience and after a while, to then apply it to existing developments, if they wish to opt for it. This is a more cautious approach. Yet, at the same time, the Bill also allows the Minister to approve existing developments which so wish to have multi-tier MCs under certain circumstances. These circumstances are many and, again, I would suggest the Member can raise these at the Select Committee hearing, and we can go into it in greater detail.

She also asked, why so many resolutions? She counted six resolutions in all. In fact, this was a result of some feedback from the industry that, depending on the issue concerned, we need to have different levels of consensus. The more serious the issue, obviously the higher the level of consensus required. And I think this is a reasonable proposition. But, again, let us discuss this at the Select Committee.

She mentioned another significant point, which is windows. Yes, it is correct that windows are currently considered to be part of common property. Dr Khor proposed that we should now make a distinction between those windows that can be opened and consider those windows to be the responsibility of subsidiary proprietors, and to make the fixed windows, such as curtain walls, the responsibility of management corporations. I think this is a good suggestion. But I think I should bring to her attention the fact that this decision to make windows part of common property was taken at the last Select Committee hearing in 1987 when the last major review of the Land Titles (Strata) Act was undertaken.

And, in fact, this decision was made at the request of MCs of the SISV, as well as the Law Society, for I believe, aesthetic reasons, to make sure that the subsidiary proprietors do not change the windows. But I think times have changed and it is timely for us to relook at this provision. So, I

would like to thank her for this suggestion.

The other point she made was whether we can widen the mandate or the ability of the Strata Titles Board to deal with different types of conflicts. I believe we can consider this, to widen the jurisdiction of the Strata Titles Board. But I would like to allow representations from the industry before we do this.

Mr Low Thia Khiang asked several very specific questions. I hope that these questions can be raised at the Select Committee. But I thought I should respond to a few of them. For example, why do we require a quorum of only 100 SPs? Why so few? Does it mean that the issue at hand is not so important? No. The answer is a practical one. This is something that has been fed back to us which is that, for many large developments, the requirement to have 30% of SPs present to form a quorum is not very easy to achieve. In fact, say, for large developments of 1,000 units or more, 30% is equivalent to 300 SPs, and many a time, they find it very difficult to gather these 300 SPs. And this is the reason why, in the spirit of making it easier for AGMs to be convened, the quorum has been reduced to either a minimum of 100 SPs or 30%. But these are not hard and fast numbers. The industry has made this suggestion. There has been a consensus so far, but let us leave this for discussion at the Select Committee.

Mdm Cynthia Phua made the same point about whether we should implement, not just for new developments but also for existing developments, the idea of a two-tier MC. I have the same response I gave to Dr Amy Khor just now - let us start off with the new developments, learn from the experience and then, if necessary, we can transfer the experience and the lessons learned and extend it to existing developments subsequently.

Sir, let me now touch on the general intent behind the proposed amendments in this Bill. In putting forth this Bill, we recognise, as I have explained earlier, that we do not have a long history of strata title or managing strata developments. We enacted the LTSA only in 1967. This was 37 years ago. Then, the last major amendment to the LTSA was made in 1987, almost two decades ago. Since then, the number of strata units and the number of MCs, which already formed a significant percentage of total dwelling units, have grown and will continue to grow in the years to come. So the legislation needs further amendments to provide for more effective management of strata developments and to recognise that, with more mixed-use developments, there will be more differentiation of interests. There will be different interest groups within a particular development. And this is the reason why we introduce this option, and I stress the word, it is an "option" of a two-tier MC system. We can then provide flexibility to MCs to make decisions on common properties, on the one hand, that are used by everybody and also limited common properties that are used by specific groups.

I stress that there is no intention to segregate groups within the strata development, a concern that was raised by Mr Ang Mong Seng. The interactions between the different groups can still be facilitated within this two-tier system through the main MC. The reason why we went through this exercise was because there has been a significant amount of feedback concerning the problems of mixed-use developments where you have got disputes between MCs, you have got management problems and, basically, many of these complaints relate to the governance of the MCs. So what we must do fundamentally is to recognise that the MC is the supreme decision-making body in the strata development which has been elected by the SPs to take charge of their well-being but, at the same time, we also

recognise that there are different interest groups. So it makes sense to empower the MCs to decide on issues related to the estates for the benefit of the subsidiary proprietors.

I agree with the sentiments expressed by Members that the legislation should strive to enhance and strengthen the community spirit among the SPs. I think the point that was made very strongly by Dr Teo Ho Pin. I hope Members would agree with me, however, that this community spirit, like attitude change, like mindset change, cannot be legislated. This is the sentiment behind what Mrs Fang Ai Lian was talking about - getting more people to be involved.

Strata developments are founded on the concept of community living - community living with shared ownership of common property and individual ownership of their own unit, their strata title. So, with this concept, community living must require of each resident a certain amount of give and take and it must require of each resident, of each subsidiary proprietor, a knowledge of what are his legal rights and responsibilities, what are his duties and liabilities. The legislation can only create a framework, one, which I have explained, will be based on self-governance and a clear definition of the demarcation of responsibilities among the different stakeholders. So, hopefully, this framework, together with a large dose of the give and take, will create and foster this conducive environment for various parties to work together to resolve issues and to do something for the common good of the community. To achieve this goal, SPs as well as other stakeholders will have to take on more responsibilities and they will have to exercise these responsibilities fairly and wisely within this framework of greater self-governance. And that is the reason why we have decided that we will

decriminalise many of the offences, those offences that will not generally affect public interest, and to reduce the extent of Government involvement.

Here, I would agree with Mrs Fang Ai Lian that we should encourage strata title owners to be more aware of their rights and responsibilities of ownership to come forward and to get involved. I know it is very difficult to do so. Many condominium MCs have difficulty in getting people to come forward to serve. But it is their own property that they are being asked to manage. And if they abdicate this responsibility, they do not exercise those responsbilities, then the danger is that those who do come forward may actually do something that they may not agree with ultimately, and then it is too late for them to complain. Nevertheless, I would ask the BCA, together with the industry associations like SISV, and so on, to take steps to educate owners, MCs, SPs, MAs, about how the changes in the Act will affect them.

Talking about managing agents (MAs), I would agree with Dr Teo, Dr Amy Khor and others that there must be greater professionalism among the managing agents. Here, again, I come back to my point, Government can only provide the overall framework and we can facilitate the professional development of MAs. But the industry itself has to take the lead in this. And the issue of whether to legislate and, if so, to what extent, we can discuss this at the Select Committee. But I note that there are plans by industry associations, like the SISV, to accredit MAs in Singapore to help raise the standard of professionalism in the management of strata developments. I believe this is a step in the right direction, and I would support this.

Sir, I also share the views and the concerns of Members, like Mr Othman Haron Eusofe and Dr Teo Ho Pin, that we must do something about the mainte

nance culture in Singapore. There is, I believe, not a strong culture of awareness of maintenance in Singapore. If Members would recall recently, BCA had to enact legislation to make it compulsory for building owners and individual households to fit or refit the airconditioners in high-rise buildings. Then we had the problem of falling windows. I cannot emphasise enough the dangers that are posed by dislodged windows, falling airconditioners, tiles, or any other external parts of buildings, particularly in our predominantly high-rise developments. And this matter needs to be taken seriously because lives are at stake. So owners must assume responsibility for building maintenance.

When I last spoke about the issue of falling windows in this House, I mentioned that we would be looking at ways to mitigate this issue. We have two choices. We can continue with public education alone, or we can strengthen the legislation to inculcate a strong maintenance culture. Or we can preferably do both. In this way, we reduce the dangers to the public of objects falling down from high-rise buildings, whether they are private or HDB flats. I suggest, again, that this matter be deliberated at the Select Committee, and we will consider introducing appropriate provisions in the Bill to prosecute owners who allow their fittings to fall and endanger the public, as has been suggested by several Members.

I had also announced previously that BCA would be considering legislating the mandatory periodic inspections of windows. Having carefully considered the public and industry feedback on the subject, I wish to say that BCA will not proceed with the mandatory window inspection proposal at least for the time being. However, BCA will work towards introducing legislative changes to ensure safety standards upstream concerning the design, installation and retrofitting of windows, and this will involve separate

amendments to another Act, namely, the Building Control Act and Regulations.

Sir, once again, I thank Members for their very detailed inputs and I look forward to discussing this further at the Select Committee.

Question put, and agreed to.

Resolved,

"That the Bill be committed to a Select Committee consisting of Mr Speaker as Chairman and the following Members:

Assoc. Prof. Koo Tsai Kee

Mr Zainul Abidin Rasheed

Dr Teo Ho Pin

Mr Low Thia Khiang

Ms Indranee Rajah

Mdm Cynthia Phua

Mrs Fang Ai Lian

and Mr Mah Bow Tan." - [Mr Mah Bow Tan].

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. 1. - [Mr Mah Bow Tan].

Order for Second Reading read.

5.15 pm

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

The Constitution of the Republic of Singapore (Amendment) Bill before the House contains six amendments. The first amendment relates to the Accounting and

Corporate Regulatory Authority. The second amendment concerns the transfer of reserves between entities governed by the Protection of Reserves Framework. The third amendment has to do with the Personnel Boards of the Public Service Commission. The fourth amendment deals with Singapore's contribution to the International Development Association (IDA). The fifth amendment pertains to grant of citizenship by descent, and the sixth amendment, pertaining to Article 22P, is technical in nature.

Accounting and Corporate Regulatory Authority

Mr Speaker, Sir, I turn first to the amendment pertaining to the Accounting and Corporate Regulatory Authority. Currently, under Article 18, the Chairman of the Public Accountants Board is a member of the Presidential Elections Committee. As the Public Accountants Board was merged with the Registry of Companies and Businesses to form the Accounting and Corporate Regulatory Authority (ACRA) on 1st April 2004, Article 18 is amended by changing the reference from the Chairman of PAB to the Chairman of ACRA.

Transfer of reserves

Mr Speaker, Sir, I turn now to the amendment relating to the transfer of reserves. Currently, Article 22B and Article 22D of the Constitution enable the transfer of reserves from

Fifth Schedule statutory boards and Fifth Schedule Government companies to the Government, and between Fifth Schedule statutory boards, without such transfer being regarded as a draw on their past reserves. The Constitution, however, has no provision to enable similar transfers of reserves from the Government to Fifth Schedule statutory boards and Fifth Schedule Government companies, and between Fifth Schedule statutory boards and Fifth Schedule Government companies, without such transfer being regarded as a draw on their reserves.

Putting in place a more comprehensive framework for transfer of reserves between protected entities will enable more timely responses by the Government to changing economic or business conditions. For example, reserves may need to be transferred from the Government to new Fifth Schedule statutory boards and Fifth Schedule Government companies quickly to seize opportunities in new areas of growth and existing Fifth Schedule statutory boards and Fifth Schedule Government companies may need to be restructured, merged or corporatised to better deliver public services and manage Government assets.

Article 22B and Article 22D are therefore amended, and a new article 148I is inserted to complete the framework for the different transfers of reserves between protected entities.

The President has been consulted and agrees with the above amendments of the Bill.

Personnel Board

Mr Speaker, Sir, I move now to the third amendment. This pertains to allowing every Personnel Board to delegate its authority to any of its members.

The functions of the Public Service Commission (PSC) were devolved to a system of Personnel Boards by constitutional amendments in 1994. To facilitate decision-making, Personnel Boards often assign individual members the authority to decide on the appointment, confirmation and emplacement, promotion and transfer of the public officers under the Boards' purview. However, as the assigned member is only acting on behalf of the Board, the Board's covering approval is required.

Consequently, each and every decision made by an assigned member on the appointment, confirmation and emplacement, promotion and transfer of an officer has to be circulated to all the other Board members for confirmation. If there are no objections after a certain timeframe set by the Board, the Board is regarded as having approved and adopted the member's decision as its own.

This practice is increasingly impractical. For Personnel Boards that look after large Ministries like the Ministry of Education and the Ministry of Home Affairs, Board members receive many submissions each month on appointments, confirmations and transfers of officers, mostly straightforward, for their approval. The covering approval of the Board has become a formality and, in effect, has no material impact, as the decisions of the assigned members have consistently followed the Public Service Division's approved rules on such matters. Since 1995, no Board member has raised an objection to any decision taken by an assigned member, because there was no reason to do so as long as the rules have been followed.

Article 110D of the Constitution is therefore amended to include three new clauses to empower each Personnel Board to delegate, in writing and subject to such conditions as it thinks fit, its powers to any of its members. The Board's member must exercise that power in accordance with the terms of the delegation. Any act or thing done by the delegate of a Personnel Board will have the same force and effect as if it had been done by the Personnel Board.

After the amendment, any deviation from the approved rules and any adverse decisions will continue to be considered by the entire Board and the powers of the delegated member will be limited to following the rules laid down by PSD.

International Development Act

Mr Speaker, Sir, I next move on to the fourth amendment, and this pertains to the International Development Act. The IDA Act is being amended to allow the Minister to make contributions other than membership subscriptions to the IDA, which is a World Bank lending facility for poverty reduction programmes. To do this, it is also necessary to amend Article 144(3) of the Constitution to add the IDA Act to the list of Acts for other international organisations, so that future IDA contributions can similarly be made using Article 144(1)(b) of the Constitution.

Under Article 144(1)(b), the Government is allowed to make guarantees or raise loans, with the President's concurrence, to the list of statutes under Article 144(3). With this amendment, we will standardise our procedures for contributing to the IDA with those applicable to other international organisations.

Citizenship

Mr Speaker, Sir, lastly, I move on to the fifth amendment. This pertains to relaxing the restrictions on grant of citizenship by descent and increasing the length of time a person may spend away from Singapore when considering the residence period for citizenship applications.