Hansard, 2005-08-15

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 Parliament to which they have been appointed) for the periods stated: Name From (2005) To (2005) Dr Tan Cheng Bock 22 Jul 21 Aug Dr Wang Kai Yuen 24 Jul 29 Jul Dr Teo Ho Pin 28 Jul 03 Aug Dr Warren Lee 29 Jul 30 Jul 28 Aug 05 Sep Mr Yeo Guat Kwang 30 Jul 01 Aug Dr Ahmad Mohd Magad 01 Aug 04 Aug 17 Aug 19 Aug 27 Aug 06 Sep 27 Sep 30 Sep Dr Lily Neo 01 Aug 04 Aug Dr Lee Boon Yang 02 Aug 05 Aug Mr Lim Swee Say 03 Aug 04 Aug Mr Zainul Abidin Rasheed 03 Aug 05 Aug Mr Lim Hng Kiang 04 Aug 05 Aug 22 Aug 25 Aug Mr Charles Chong 07 Aug 10 Aug Mr Heng Chee How 08 Aug 10 Aug 05 Sep 07 Sep 11 Sep 14 Sep Mr Chew Heng Ching 10 Aug 11 Aug Dr Vivian Balakrishnan 10 Aug 12 Aug Mr Wee Siew Kim 10 Aug 12 Aug Mr Lee Yock Suan 13 Aug 21 Aug Dr Ong Seh Hong 13 Aug 17 Aug Mr Lawrence Leow Chin Hin 15 Aug 19 Aug Dr Tan Sze Wee 15 Aug 18 Aug Column: 1177Mr Yeo Cheow Tong 15 Aug 18 Aug Mr Abdullah Tarmugi 18 Aug 18 Aug Mr Lim Boon Heng 18 Aug 18 Aug Mr George Yong-Boon Yeo 22 Aug 23 Aug Mr Teo Chee Hean 22 Aug 23 Aug 27 Aug 08 Sep Mr Cedric Foo Chee Keng 23 Aug 23 Aug Mr Mah Bow Tan 23 Aug 28 Aug Mr David T E Lim 25 Aug 29 Aug 12 Sep 15 Sep 24 Sep 10 Oct Dr Ng Eng Hen 01 Sep 03 Sep Dr Ong Chit Chung 05 Sep 07 Sep Mr Raymond Lim Siang Keat 06 Sep 12 Sep Dr Tan Boon Wan 11 Sep 15 Sep Mr Teo Yock Ngee 18 Sep 23 Sep

Mr Yeo Cheow Tong

ABDULLAH TARMUGI Speaker Parliament of Singapore

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

4th August,2005 (1) The Copyright (Amendment) Bill (2) The Town Councils (Amendment) Bill (3) The Central Provident Fund (Amendment) Bill ABDULLAH TARMUGI Speaker Parliament of Singapore

1. Mdm Ho Geok Choo asked the Minister for Defence, in view of the heightened terrorist attacks, what measures have been put in place to ensure tighter security in the premises of the Singapore Armed Forces camps.

Mr Speaker, Sir, since September 11 2001, MINDEF and SAF have put in place several security measures and initiatives to protect SAF installations against intrusions. These measures include both a refinement of existing security procedures, and the introduction of new hardware and technology. Our forces providing security at the various SAF facilities have undergone additional training to familiarise themselves with the new threats. Security awareness programmes have been instituted throughout the SAF, including for new recruits, to raise security consciousness and vigilance among all personnel.

The 'hardware' measures put in place at our SAF facilities include the installation of intrusion detection devices along security fences and the use of CCTVs to enhance the monitoring of remote places. These are complemented by guards who make frequent patrols to provide added deterrence. These patrols are deliberately executed at irregular intervals so as not to make the routine predictable.

All public and commercial access to SAF facilities are regulated by stringent layers of checks. X-ray machines and walk-through metal detectors are employed to screen visitors and

servicemen prior to entry. Physical searches by security personnel may also be enforced. Vehicles are also subject to inspections by undercarriage mirrors or cameras and explosives-trained sniffer dogs. To avert the possibility of vehicles charging in at high speeds into our SAF facilities, barriers have been erected to deny vehicles a straight run towards a facility. At key installations, mechanical retractable bollards and rising kerbs have also been installed and can be activated by security personnel should an unauthorised vehicle attempt to barge into an SAF facility.

I thank the Minister for the comprehensive reply. I would like to ask the Minister how regular are audit checks carried out, especially at access points, in the monitoring of NSmen, military personnel or even reservists, and vendors in and out of the premises.

Sir, for entry and exit to SAF camp, there is a procedure which each one has to adhere to. So, those procedures are carried out on a daily basis whenever people come to the camps. The safety and security procedures at the camps are audited in the same way as other procedures in SAF units are audited by the inspection agencies. I do not have the frequency of the inspection intervals.

2. Dr Chong Weng Chiew asked the Minister for Home Affairs what are the standard operating procedures for the new Police MRT units, particularly with regard to their patrols of MRT stations and other public areas and the use of firearms in these places.

Mr Speaker, Sir, Police

have deployed dedicated armed officers at Mass Rapid Transit (MRT) stations and on board trains starting from today. The mission of the new Police MRT Unit is to deter and detect potential terrorist attacks in the MRT through armed police presence, high visibility patrols and security checks.

The deployment of Police officers at MRT stations is not a new initiative. Since 9-11, Police have increased patrols at MRT stations as well as at places where there are large crowds. However, the skills required for MRT Unit officers are distinct from those of NPC officers. They will be equipped with specialised skills and knowledge to handle typical incidents in MRT stations, eg, response to improvised explosive devices (IEDs), bomb hoaxes, suicide, molest and pick-pocket, to conduct searches of persons, buildings and vehicles. The dedicated Police MRT Unit will complement the existing security measures adopted by the two MRT operators, which include the use of surveillance CCTVs and the deployment of private security guards.

Officers from the Police MRT Unit will concentrate primarily on security duties and be on the lookout for suspicious persons and items. However, the officers will also respond to a crime report and apprehend the suspect at the scene, if possible.

The officers will be equipped with revolvers. The rules of engagement on the use of firearms are similar to those of other police officers from the Police Divisions or Neighbourhood Police Centres. This is governed by the Singapore Police Force's Use of Force and Firearms Doctrine. Under this Doctrine, if an officer is confronted with a situation where there is immediate danger to life, he is authorised to use necessary force to remove the danger, and this may extend to the use of firearms.

Let me reiterate, Sir, that implementing enhanced Police measures on the MRT system is not an indication of a specific threat against the MRT or any public transport infrastructure. Rather, it is part of our ongoing efforts to keep Singapore safe and secure. Members of the public are advised not to be alarmed, and they should also play their part in the safety and security of Singapore and remain vigilant.

Sir, I would like to ask the Minister whether there would be sufficient public education, as this is a new Police Unit. I think, to many members of the public, they would not know what are the standard operating procedures that the Minister has talked about earlier on.

Sir, I am confident that Singaporeans are aware of public education as in the form of alerting the public as to what they should look out for when they come across suspicious items or persons and report them to the police; and many of them are already playing a role in this. Of course, the message needs to go down further so that everyone gets involved and plays a deeper role.

The Police MRT Unit officers are dressed differently from the normal NPC officers. They are dressed like the Special Operations Command officers and their role is to patrol our MRT and transport system. So when members of the public see these officers, they will be able to distinguish the Police MRT officers from the rest. Over time, members of the public will get used to the idea and know what our officers are supposed to do.

I would like to ask the Minister whether there would be any drill exercises for MRT commuters,

like we would do for fire drills, so as to prepare citizens on how to actually react in response to a crisis situation.

As Members are aware, the Singapore Civil Defence Force has conducted a number of such civil defence exercises using the MRT stations as exercise areas and this has been going on for years, and members of the public are involved, including our grassroots leaders. In the case of Pasir Ris, for example, I think they had a large community turn-out to support the "Heartland Alert" exercise which they did last year and this year.

I want to encourage all advisers of grassroots organisations to take advantage of that and make full use of the resources made available by the SCDF and the Police to conduct such exercises. At the same time, security agencies like the Police, SCDF and others involved in the security of Singapore, including MOH for example - because we need the hospitals to help with the medical treatment of those who may be affected by a bomb explosion or by any civil disaster - are involved in such exercises. And we have from time to time conducted such exercises. There will be a major exercise coming up in November in which we will simulate several incidents in different MRT stations, and we hope that the public can also get involved to get an idea of what it means and what to do when they unfortunately have to experience such an incident in the MRT station.

Can I ask the Minister whether our Police Officers have a similar kind of instruction that the London Police have, which is to shoot to kill any suspected suicide bomber on the spot? In the recent case of London, they actually shot an innocent person. Can the Minister please enlighten us?

Sir, we have evolved our doctrine of rules on engagement according to the circumstances. In our context today, we have not come across a suicide bomber case, and we hope that we will not come across one. But I would not rule that out because suicide bombing is one of the preferred tactics of the terrorists to frighten and intimidate normal citizens. In the case of other countries where they have experienced this, they have indeed adopted a shoot-to-kill policy because they cannot leave it to chance that this person may turn out to be a suicide bomber, as we have seen in the case of London. But, in our case, the Police Officer has to use his judgement. He has to assess at the time when he is confronted with a person who may appear to be a suicide bomber and, in his opinion, to neutralise the threat, he may have to take such an action.

May I ask the Minister, with the introduction of the MRT Police, is that due to a special threat posed in terms of our general public transport situation that MRT stations are more vulnerable to attacks? Is there any other arrangement also made for other public transport systems, like buses, ferries and so on?

Sir, I have mentioned that we do not have specific information now with regard to any threat to the MRT system. But Members will be aware that when we exposed the various cells of the Jemaah Islamiyah in 2002, some of the cells did consider, and they did recce, the MRT system. So we are aware that some of them do think about this, as we have seen in the case of Madrid and London. So we cannot rule out the possibility of the MRT system or any part of our transport system being vulnerable. In fact, the public transport system is one of the most vulnerable areas where terrorists would want to

cause harm to Singapore. And we have to continually step up our measures and continually review the measures we have taken so that we will be ahead of the terrorists. This is what we have been doing over the last two or three years. We have also involved not just the security agencies and the Government departments but also the transport operators. In the case of the MRT system, for example, the two MRT transport operators have indeed been involved in the security planning as well as in the deployment of guards and other CCTV systems in their MRT platforms and trains, and so on.

In the case of other parts of the public transport system, the bus interchange is an area which we have also paid attention. Members would have noted that we have also started putting in cameras at these bus interchanges.

The other component of the public transport system is the taxi drivers. Since early this year, in fact, last year, we have started talking to the taxi operators as well as the taxi drivers' associations. We have recently mounted an exercise to brief them on how to look out for suspicious persons who board their taxis. This exercise is still going on and many talks and seminars have been held for our taxi operators, and we will continue to do so. We will do it also for the other agencies or businesses that would have a role to play in our security. Take the example of the major shopping centres and shopping malls which have security guards. We, too, would want to involve them in the security of the building, not just in looking out for crime but also in looking out for suspicious parcels and individuals who may want to attempt a bombing in their building.

Mr Speaker, I would like to ask the Minister how the Police would respond to the possibility of a chemical or biological

terrorist attack in the MRT. We know, for example, that in the attack on the Tokyo underground system, they were caught off guard because they were just checking luggage and they might not have cast a wide enough net to catch suspicious objects. Unless you monitor air quality, you might miss this until it is too late.

Sir, whether it is an explosive device, improvised explosive device or a parcel containing chemical or biological agents, these could be suspicious items, and the staff and the operators of the MRT and the public transport system have been and will continue to be trained to look out for these objects. Once that item is identified to contain chemical and biological agents, the Civil Defence has the capability to deal with it. We have learned from the example of the Tokyo sarin attacks in 1995. Since then, the Civil Defence has built up its unit as well as the resources and expertise in coping with such devices.

Last question. Ms Irene Ng.

Sir, there have been instances where the MRT services were disrupted because suspicious parcels were found but they were found to be actually litter left behind by Singaporeans, such as food parcels, drinks and cups. Can I ask the Minister, given the higher vigilance being put upon residents and Singaporeans to make sure that these things are reported, whether we can at the same time educate Singaporeans to be more mindful about not leaving behind parcels, such as their own litter?

I entirely agree with the Member that we need to educate Singaporeans not to leave things behind on the train, otherwise they may not just be considered as lost items. If the items

look suspicious, they may even cause inconvenience to other travellers, and I would urge them to be very careful about leaving any parcel behind. And such an exercise goes on all the time. Even on the MRT trains and stations, we have posters advising commuters to look out for items left unattended. When they see such posters, I hope they will also be reminded that they should not leave such items behind that may cause suspicion. The train operators and the staff are also trained to look out for such items.

There are people who want to play pranks on the MRT and cause inconvenience to the public transport commuters. I would advise them not to do this, because when the person is caught, the penalty can be very heavy. Just in June last year, there was a staff of one of the MRT operators who was not quite happy for some reason, and he decided to put a parcel under a seat. Unfortunately for him, that act was captured on the CCTV and that man is now serving a three-and-a-half-year jail sentence. There were also instances where people think that they could call up and make bomb hoaxes. If they think they can get away with it, think again, because two individuals, who either sent letters to people and threatened them or made phone calls to threaten them, were also sentenced to long jail sentences.

Under our current situation and the threat that we are facing, we will not look kindly on anyone who wants to cause such a prank. Just this morning, two persons were charged in court for doing such a thing.

3. Prof. Ivan Png Paak Liang asked the Minister for Home Affairs (a) whether our civil aviation authorities proactively assess the risk of the various airports from which

flights to Singapore originate and take precautionary measures accordingly; and (b) if he will encourage the airport authorities of other countries to strengthen their terminal security and, in particular, follow Changi Airport's example of building isolation rooms at the gates so that passengers can be effectively screened immediately before embarkation.

Sir, our security agencies regularly conduct risk assessments on all flights coming into Singapore. Our airlines assist to provide inputs for a security assessment of foreign airports. In addition, the Ministry of Home Affairs' officials also conduct regular security audits on the ground operations of Singapore Airlines abroad. Appropriate security measures are then taken, based on the assessed level of risk. We have been pursuing agreements with many foreign authorities also to accommodate air marshals on select flights. This is an on-going process.

Security measures at the Changi Airport have also been stepped up considerably since 9-11. Apart from out-bound checks, which are staple in all airport security regimes, we also subject all arriving passengers not just to immigration and customs checks by the Immigration and Checkpoints Authority at the Arrival Hall, but also security screen in-coming passengers when our security risk assessment requires it. Although some inconvenience is caused to passengers, let me assure the House that the security agencies are constantly working with the Civil Aviation Authority of Singapore to reduce the inconvenience without compromising security. Sir, as to whether we encourage other airport authorities to strengthen their security screening of departing passengers in the same way as Changi Airport, the International Civil Aviation

Organisation (ICAO), which is the governing body of all international civil flight operations, spells out guidelines and requirements on aviation security for member states to meet. The specific security measures to adopt to meet these guidelines and requirements are left to individual member states to decide and enforce, because the design and security considerations differ for every airport. For example, Changi Airport screens departing passengers at the individual gatehold rooms immediately before boarding, but other airports prefer to centralise security screening for all passengers at the point of entry into the Departure Hall. Because our configurations are different, we have arranged the security screening in the way we want. As the considerations differ from airport to airport, Singapore is, therefore, not in a position to prescribe a specific method of security screening for other airports. This would be left to the ICAO to audit. However, there are close cooperation and regular exchanges of information and best practices between us and our foreign partner airport authorities.

Sir, I thank the Minister for the comprehensive and candid reply. May I ask whether the authorities take due care even with flights originating from what might seem like large world powers, such as the United States. In particular, may I ask the Minister if our security agencies are aware of a recent report published by the US Congress' General Accounting Office which reports:

"The Transportation Security Administration lacks adequate internal controls to provide reasonable assurance that screeners received legislatively-mandated basic and remedial training and to monitor its recurrent training programme."

I further quote - this is in regard to covert tests run by the Transportation Security Administration:

"These tests identified that overall weaknesses and vulnerabilities continue to exist in passenger and check-baggage screening systems at airports of all sizes."

Sir, we, of course, pay great attention to whatever other airports are doing and, particularly, when there are reports of their inadequacies or reports of slip-ups or lapses of security screening. We will pay close attention to them and find out why. Let me also say here that we can have the best of systems, procedures and equipment but, ultimately, it must depend on the person who implements those procedures, executes the various security measures and screens the passengers. That is the part which we must also pay attention to. It is not just buying the best equipment. So, when there are airports which we discover to be lacking, we will also pay particular attention to them.

4. Mdm Halimah Yacob asked the Minister for Manpower what action will be taken to help Singaporeans better plan for their retirement following the recent Monetary Authority of Singapore study which shows that only 24% of Singaporeans plan for retirement and a large number do not know how much to save for retirement or details of financial products in the market.

Sir, I agree with the Member that Singaporeans must exercise individual responsibility in setting aside enough for their retirement needs. The CPF system is the main pillar to provide retirement funds, but individuals must plan carefully to maintain a balance between their

retirement, medical and housing needs. The Government will assist by stepping up efforts in helping to educate the public.

In this regard, MoneySENSE was launched as a national financial education programme in October 2003 to enhance Singaporeans' financial literacy. This programme is driven by the MoneySENSE Financial Education Steering Committee, which comprises representatives from MAS, MCYS, MOE, MOM, CPF Board and the People's Association.

Since the launch of MoneySENSE, industry associations, grassroots and other organisations have been involved in raising public awareness about planning early for retirement. For example, a series of "Financial Planning for Families" seminars will be conducted in community centres across the island to educate families on how to plan for retirement. Particular attention will be paid to reaching out to low-income families and housewives to raise their awareness of how to plan for their retirement needs.

The CPF Board, too, has been proactively enhancing the education in this regard for the members. In March 2004, the Board launched a website called "my cpf" to educate CPF members on retirement matters at important life stages. Members, who wish to project how much they would need to save for their retirement to support a desired retirement lifestyle, can also make use of the CPF Retirement Planner on the website. CPF Board also provides information to members to help them plan their finances when purchasing a property. CPF Board will advise members on the amount of CPF funds they may use to service their mortgages. CPF Board also provides timely alerts to members when CPF withdrawal limits are reached.

To reach out to segments of the public which do not have access to the Internet, the Board also organises retirement planning seminars and roadshows in the

heartlands, such as the one held last month at the HDB Hub that was attended by about 50,000 people.

However, the private and people sectors also have a role to play in educating the public on their retirement needs. For example, both the CPF Board and financial institutions can help CPF members invest prudently. In this regard, CPF Board has been tasked to look into strengthening the oversight of the CPF Investment Schemes (CPFIS) and their products, so that they better serve the objective of enhancing returns on members' savings.

Two follow-up questions, Sir. What other measures can the Ministry of Manpower consider, because I have heard about MoneySENSE and the CPF website but, despite that, the survey done by MAS does show that a large proportion of people still do not understand very much about retirement planning? Many people still do not understand how much they have to save to meet their retirement needs. That shows quite a significant portion, ie, 24%, are not aware. What is even more worrisome is that 42% of those surveyed thought that the amount the CPF will give them monthly will be equivalent to their last-drawn pay, whereas the reality is that, in 2004, of those who reached the age of 55, only 40% were able to reach the Minimum Sum.

Sir, let me try to put this in perspective. The survey found that, generally, Singaporeans are quite well-versed with the ways and means to save so that they can support themselves when they have retired. They save regularly, they spend within their means and are generally prudent about loan decisions. However, as Mdm Halimah said, quite a number of Singaporeans do not appear to be very clear about how much to save for their retirement and on

financial instruments that can help enhance their savings for retirement.

In this regard, CPF Board, together with other agencies that form MoneySENSE, will organise a series of seminars at the community level so that they can reach out to even low-income families. I have said earlier that the workers and family heads are quite well-versed in matters pertaining to savings, on how much to save, and so on. These are particularly those who are Internet-savvy. To reach out to those who may not be well-versed in the use of the Internet information, a series of seminars will be conducted. But the CPF Board and its partners that support MoneySENSE should be supported by community organisations in order to educate members of the public. We will also reach out to schools so that students will have better information about the importance of savings and how to save so that they can start saving even before they start working.

We recognise that people generally start acting on savings and financial planning when they reach certain important milestones or stages in their life - when they get married, when they want to buy houses, when they have their first child, and so on. So, CPF Board will target such groups of people so that they can have the best information on and alternatives for savings as well as for enhancements of their savings.

I wish to thank the Senior Parliamentary Secretary for the explanation. But I think there is a need for the education programme to be more targeted and focused. One area is specifically to educate people on how much they need to save for their retirement because, right now, the programme is very general and not so specific.

One suggestion would be that the Ministry could work with the grassroots

organisations and even think of coming out with brochures and handouts in the four languages. I think that would be helpful if they are in simple language for people to understand.

Yes, I think the CPF Board and the other agencies are already doing that, but more can be done. We can seek views from members of the public, and Members of Parliament too, on how much better we can help educate members of the public on how to save and how to enhance their savings so that they have enough for their retirement.

5. Dr Amy Khor Lean Suan asked the Minister for Manpower (a) how many errant employers were prosecuted each year, over the last five years, for illegally redeploying their foreign workers to work in jobs they were not approved for; and (b) what other measures will his Ministry take to deter such illegal practices, which work against current efforts to recreate and reclaim jobs for retrenched and other Singaporeans.

Sir, in the past five years, a total of about 3,180 employers were prosecuted under the Employment of Foreign Workers Act, or EFWA, for illegally deploying or employing foreign workers. This has averaged around 637 errant employers per year.

To deter illegal employment and deployment of foreign workers, MOM has significantly stepped up the level of enforcement. Between January and June this year, 386 employers have been prosecuted under the EFWA. Several key initiatives were put in place to support this enhanced level of enforcement.

Firstly, MOM has also doubled its enforcement force in the past four months.

Secondly, instead of responding to public complaints, the Ministry's enforcement intelligence capability has been built up to guide our enforcement actions. This has enhanced our operational effectiveness. In addition, we have moved to a more integrated approach in our enforcement. For example, when we investigate an employer for suspected infringements of MOM regulations such as non-payment of salary, or health and safety violations, we would also now check for other infringements such as illegal deployment of foreign workers. To send a strong deterrent message, errant employers who employ and/or those who aid in illegally deploying foreign workers will be severely dealt with.

Sir, I would like to ask the Senior Parliamentary Secretary from which sectors do these illegal foreign workers originate mainly from. How is it that when we imposed quotas on foreign workers, yet there appears to be a surplus in some sectors? To which sectors are these foreign workers illegally redeployed? Has the Ministry studied why there is a shortage in these sectors? Are there any plans for the Ministry to try and mitigate the mismatch between the different sectors?

Sir, foreign workers given work permits to work in certain industries have been deployed to various industries and sectors, in particular, the service sector. If the Member can ask me very specific questions, I can find the figures for her at the next opportunity.

How is it that some sectors which are said to need a lot of foreign workers actually have surpluses? We will have to base it on the current economic activities

within the industry and we work with the other agencies in order to identify the needs. But what is important to note is it is impossible to really eradicate completely illegal deployment or employment of foreign workers. However, to deter abuses, MOM will step up penalties and enforcement. We want to do this so that we will reduce the number of illegal deployment of foreign workers in Singapore and, at the same time, create jobs for Singaporeans.

Sir, I would like to ask the Senior Parliamentary Secretary, for instance, on this particular report on illegal workers who were working in a Town Council. From which sector were they from because, obviously, they must have been hired in a particular sector and it must have been surplus labour and that was why they were capable of being redeployed illegally, no doubt, to the Town Council?

I would also like to ask the Senior Parliamentary Secretary if the Ministry actually studies or reviews regularly the foreign worker requirements, say, in different sectors, to try and minimise this kind of mismatch as well as to try and minimise the structural unemployment because of the mismatch. Obviously, if quotas are actually implemented for certain sectors and yet these sectors may time and again be found to be committing such an act of illegally redeploying the workers, then should their quotas not be revised?

The workers who might have been caught working with Town Council contractors may come from the construction or marine industry. Does the Ministry study closely the manpower needs? Yes, we do that all the time. We are quite prudent about the issuing and the renewal of work permits. I can assure Members that we will do this continuously not only so that we do not have too many unnecessary foreign workers in Singapore

but also so that we can create jobs for Singaporeans.

I would like to ask the Senior Parliamentary Secretary, in the event of a direct employer actually bringing in these foreign workers through an agent - it could be a situation where this employer has various types of businesses in different industry sectors and, for some reason, the workers taken in for a particular sector were redeployed to a service sector - in such a situation, how does the Ministry actually view the practice that was committed.

Sir, work permits are issued to foreign workers so that they can be engaged in one particular sector and one particular company. Deploying them to other companies, or to other industries would be infringing the Employment of Foreign Workers Act. If a company has many different operations, we will have to take a look at whether it is cross-deployment or whether or not it constitutes illegal deployment of the foreign workers on the basis of whether the operations are under the same company or in a separate legal entity.

6. Dr Amy Khor Lean Suan asked the Minister for Manpower (a) how many contractors have been prosecuted each year, over the last five years, for selling their foreign worker quota or Man Year Entitlement; (b) what measures have been, or will be, implemented to mitigate this problem; and (c) if any changes will be made to improve the Man Year Entitlement scheme and prevent such illegal practices.

Mr Speaker, Sir, Man Year Entitlement (MYE) trading involving a corrupt act or fraudulent applications are

offences under the Prevention of Corruption Act and Penal Code respectively. Therefore, such cases are referred to the CPIB or Police for investigations. In the past five years, a total of 31 employers have been prosecuted. In addition, MOM would debar these contractors from future work permit applications. The Member asked if improvements have been made to the MYE system. Since April this year, we have also made several changes to enable the construction sector to better use their workers. Contractors can now renew the work permits of workers who have worked here for six or more years outside the MYE system. In other words, such renewals do not require MYEs. Contractors are also allowed to deploy their workers to work for other contractors, during lull periods.

Sir, I would like to ask the Minister, as the Minister noted earlier, that since April, some changes were made to the Man Year Entitlement system to make it more flexible, how is it then that it was reported in the Straits Times of 29th June, that the practice of selling quotas to labour agents is so rife that it is actually an open secret. Is MOM following up on this issue? Are steps being taken to verify these reports and to determine how is it that such a situation has arisen? Again, does it mean that contractors have been over-allocated with Man Year Entitlements whilst some other sub-contractors have actually suffered from a shortage and are forced to buy from these labour agents? Would the Ministry consider other forms of allocating Man Year Entitlements, such as allocating the Man Year Entitlements to a neutral agency to be awarded to sub-contractors, besides the main contractors?

Sir, if the Member knows of any instances, please inform the Ministry and we will follow up. As I have said, in the last few years, we have prosecuted 30 persons. Out of the 31 cases, three were prosecuted for corruption under the Prevention of Corruption Act and for cheating under the Penal Code. Offenders who were convicted under the Prevention of Corruption Act were fined between $40,000 and $250,000. In cases where custodial offences were meted out, jail terms range from one to four months. We cannot stop people from rampantly or indiscriminately disobeying our rules. But if anyone knows of any figures or facts, or any particular instances, please inform MOM and we will follow up.

Do we want to change the system and allocate MYEs to a neutral party, assuming that the neutral party would be law-abiding? I do not think it would quite work. The issue is enforcing, and enforcing it rigorously. However, we do recognise that the industry needs certain flexibility, for example, different contractors in different periods may face peaks and troughs for contracts. And that is why we introduced two measures to allow them to do that. Previously, the MYEs were allocated to that contractor. Now, with the consent of the worker, one contractor can deploy his worker to another. At the same time, we have also allowed companies to apply for work permits outside the MYE system. In other words, you do not need a MYE system. There is no quota system. But these are for skilled workers who have worked here for six years or more. Since we introduced this, a number of companies have applied for this, and there were 794 companies, which means that they find this useful. We will monitor this particular measure to see whether greater flexibility can be introduced subsequently.

Sir, I would like to ask the Minister, for the errant

cases that were caught, how were they actually brought to the attention of the Ministry. Was the Ministry informed of this? A related question would be: would the Ministry then utilise its Intelligence Unit, as was referred to by the Senior Parliamentary Secretary, to actually try and flush out such errant labour agents because it was reported again in the press that a call by the reporter actually revealed that she was offered such workers from a labour agent?

Sir, sometimes, MOM acts proactively and sometimes reactively. We do react to complaints. At the same time, in terms of intelligence capabilities, when our officers do identify certain syndicates, we act upon them. As I said to the Member, if she knows of any particular instances, please let us know and we will act on them.

7. Mr Low Thia Khiang asked the Minister for Health whether there is a shortage of beds at Tan Tock Seng Hospital and, if so, (i) how long has the hospital faced a shortage of beds; and (ii) what is the solution to the situation.

8. Mr Low Thia Khiang asked the Minister for Health whether the standard of medical care at the Accident and Emergency Department (A&E) of Tan Tock Seng Hospital is compromised since patients deserving admission are being held at the so-called observation ward of A&E for a long time waiting for beds.

9. Mr Low Thia Khiang asked the Minister for Health (a) whether it is productive and appropriate that the first counter of the Accident and Emergency Department of Tan Tock Seng Hospital is manned by medical staff whose role is to counsel patients seeking treatment to go

to other hospitals; and (b) what is the rationale for requiring patients who refuse to go elsewhere to sign a letter of indemnity.

Mr Speaker, Sir, with your permission, I would like to take all the three questions by Mr Low Thia Khiang on the over-crowding problem in Tan Tock Seng Hospital together.

Please do.

Sir, Tan Tock Seng Hospital is, at times, over-crowded, apparently with more patients than it can cope. But Tan Tock Seng Hospital already has over 1,100 beds. This is not a small hospital. After the Singapore General Hospital (SGH), it is now the second largest general hospital here.

The key issue is whether Singapore is overall short of public hospital beds. Here, the answer is no. Our public hospitals have an average bed occupancy of about 80%; this has been so for quite a few years. If necessary, we can expand the public hospitals by several hundred more beds in the short to medium term.

The current congestion at Tan Tock Seng Hospital arises because it is the general hospital nearest to the north. For historical reasons, all public general hospitals are located in the south. With the growing population in the north, Tan Tock Seng Hospital ends up with a patient load larger than expected.

Its accident and emergency patient load today exceeds that of the Singapore General Hospital. Traditionally, SGH has the largest emergency patient load, but, nowadays, Tan Tock Seng Hospital saw 21% more attendances than SGH's current patient load.

We are monitoring the overcrowding situation carefully. Tan Tock Seng

Hospital had been planned with a little more room for expansion, and we can open another 150 beds in stages. However, I want to exhaust other avenues first before doing this, so that our healthcare budget can be stretched to its maximum.

First, we should spread out the patient load across the hospitals, to make maximum use of available beds. As with other hospitals, high demand for beds varies from day to day. We can try to spread the load across hospitals, because not all public hospitals experience the same high demand at the same time. Second, at any point in time, there are some 40 patients (40 beds) in Tan Tock Seng Hospital who are waiting to be transferred to community hospitals or nursing homes due to administrative delays. We are working to shorten this bureaucratic delay, so as to free up more beds for new admissions. Third, some of Tan Tock Seng Hospital's beds are clogged up by foreign workers down with chicken pox. Practically all, if not most, do not need to be hospitalised. So we are fixing this problem.

In the medium term, the thorough solution to this problem is to build a new general hospital in the north. That is why I brought forward the construction of the Northern General Hospital. Planning is underway and we hope to open Phase I of the hospital at Yishun before 2010. And if we are lucky, maybe in 2009.

Let me now address the services rendered at the Tan Tock Seng Hospital Emergency Department. All emergency patients are triaged upon arrival. This is a standard operating procedure throughout the world. The purpose of triage is to assess the severity of the medical conditions so that medical care can be suitably prioritised. This is largely done by experienced senior nurses. But during

peak periods, Tan Tock Seng Hospital would deploy a doctor to help accelerate the screening process. This is to provide swifter preliminary diagnosis and to initiate treatment.

Mr Low also commented on the Observation Ward. The purpose of the ward is to cater to patients who are in the intermediate category, between those who clearly can be discharged and those who require immediate admission. At the Observation Ward, the patients will be rendered the necessary tests and preliminary treatment to stabilise their condition. So, they are not simply just "waiting for beds". Those who respond to treatment and get better are discharged. Those who require admission are constantly monitored and provided necessary treatment, and are admitted as soon as a bed becomes available.

Mr Low is worried that medical care for patients in the Observation Ward might be compromised. It is not. In fact, in the US and UK, many hospital emergency departments have such "Short Stay Wards" for patients whose conditions can be addressed by short and directed medical treatment.

Finally, there are patients whose conditions are not severe at all. They will have to wait their turn while we attend to the more seriously ill. In fact, most of these patients should not be in the hospital's emergency ward. As part of patient relations, Tan Tock Seng Hospital tries to keep them informed of the expected waiting time, which is likely to be long. The purpose is to give them an option of seeking medical attention at other hospitals if they wish.

For those who chose to wait, Tan Tock Seng Hospital had previously asked them to acknowledge this decision through signing an indemnity form. However, upon review, Tan Tock Seng Hospital has terminated this practice.

Sir, I would like to ask the Minister for the rationale for Tan Tock Seng Hospital to ask people who refuse to go somewhere else to sign an indemnity form, which reads:

'I hereby confirm that I have chosen to seek medical attention at Tan Tock Seng Hospital despite having been informed that TTSH is currently experiencing full house situation. Therefore, I shall not hold TTSH or any of its employees, servants or agents liable in any way whatsoever for any loss, bodily injury, mishap, accident, loss of life and of property arising directly or indirectly as a result or in connection with my consultation/treatment with TTSH.'

Sir, if Tan Tock Seng Hospital is not concerned about its medical standard being compromised because of the situation, why is there a need to get patients to sign an indemnity form?

Secondly, is it fair to turn away a patient who goes to a particular hospital, especially near his home, in an emergency and is asked to go away and seek treatment somewhere else? If not, the patient has to sign an indemnity form as though he is selling his life, never mind whether he is dead or not.

Mr Speaker, Sir, the practice that Mr Low highlighted is a local innovation, purely within Tan Tock Seng Hospital. It is not a Ministry of Health's directive. I have run practically every public hospital in Singapore, except Tan Tock Seng Hospital. And in all those hospitals, we never have such a practice. But, like all innovations, some are good innovations and some are bad innovations. As part of a creative economy, we allow for local innovations to take place. But when it was highlighted, I myself thought that it was quite a silly innovation. So I am quite glad that, upon review, they have terminated it.

Sir, I would like to know from the Minister whether he was aware of the shortage of beds situation prior to the question being filed, and how the Ministry of Health supervised the hospitals since he said that it was a local innovation, bearing in mind that this local innovation, whether creative or not, can cause a lot of suffering and anxiety to patients who seek treatment. My question is: how close is the supervision? Secondly, is the Minister aware of the incident and also the bed shortages? And what has he done prior to the problem, which, I believe, is quite acute now?

Sir, I disagree with the intensity of the criticism. I do not think the situation was acute on a nation-wide basis. I have given a very careful and fairly comprehensive reply to the Member. What is important is that we are a little red dot. You can go anywhere within half an hour or one hour. It is not like the UK. If there are bed shortages in one corner, it means that there is a possibility of emergency patients not getting medical attention in time.

We have to look at it on a nation-wide basis. Are we short of public hospital beds? I have given the Member data to show that we are not. But, yes, there are local problems which we have to resolve them locally. So it is not because of Mr Low's parliamentary question that I suddenly wake up and discover this problem in Tan Tock Seng Hospital.

Sir, the problem, on a nation-wide basis, is not as acute as what Mr Low has tried to paint it. But I agree that there are difficulties at Tan Tock Seng Hospital.

Let me take some time on this matter, if you do not mind, Mr Speaker. Running public hospitals requires trade-offs between three objectives which are often contradictory. First, keep clinical

standards as high as possible. This means employing top brains - doctors, nurses, and equipment. Second, keep cost as low as possible, because we want to make sure that people can afford health care. Third, keep what I call "non-clinical customer service" as best as possible and as high as possible, equivalent to a five-star hotel. And we know that all three are very difficult objectives. Any politician who promises you that he can deliver all three is a liar! But I feel that our job of running public hospitals is to try to balance these contradictory objectives. And if you ask me, my priorities are in that order - first, high clinical standards; second, keep cost as low as possible; and, third, non-clinical customer service, like waiting, as best and as high as possible. It is not possible to match all three but where we can, we try to do our job as well as we can.

So, if you want customer service to be as best as possible - meaning there is no waiting, doctors, nurses and beds waiting for customers to come in - I can do that, but it means very high cost. Our private hospitals can achieve that, but look at their average occupancy rate, it is less than 50%. So, cost is high, but they can easily pass it on to the patients. I can do so in public hospitals too, but I am quite sure Mr Low will be the first one to protest and say, "Why are fees going up?" So this is the magician's act that we have to perform daily. I am not very proud of the non-clinical customer service at Tan Tock Seng Hospital A&E Department today. But we can try to resolve some of these problems, and we will.

So, I think building the Yishun General Hospital is a major fundamental step which we will speed it up. But, in the meanwhile, I think we can try to ease the burden as much as we can.

Let us bear in mind one point. When we run heavily subsidised public hospitals,

sometimes deliberately squeezing supply, keeping occupancy rate high is not something to sniff at. It is an important part of the strategy if we want to keep overall healthcare cost as low as possible. If we have plenty of resources or plenty of money that people are willing to pay or to subsidise, sure, we can open up as many beds. I can actually open up another 150 beds at Tan Tock Seng Hospital tomorrow. I can if I want to. But is that the right solution? If I do that, then problems like chicken pox patients who are kept in Tan Tock Seng Hospital will persist. This came out during the review in the last couple of months.

When Singaporeans are down with chicken pox, what do we do? We send them home. But now, our beds are being clogged up by foreign workers, who are being dumped at Tan Tock Seng Hospital, because, for some historical reason, we heavily subsidise these foreign workers with chicken pox, when the right solution for the employer is to vaccinate them.

Years ago, when I was running the hospitals, I know many of our beds were clogged up, and SGH too, by NS personnel with chicken pox. Then when we introduced proper transfer pricing to MINDEF, the right decision was made, ie, MINDEF started vaccinating NS personnel. So, today, no more beds are being occupied by NS personnel with chicken pox. But, obviously, we have not applied the lesson to foreign workers, who are being dumped at Tan Tock Seng Hospital, at the expense of patients who genuinely require emergency care and beds.

But I want to highlight to Mr Low that no seriously ill patients are being turned away or being sent from hospital to hospital. Those indemnity forms, which I accept were not a clever innovation, only applied to those who should not have been in Tan Tock Seng Hospital, or any hospital's Emergency Department, to begin with.

Sir, is it true that one of the reasons for over-crowding in Tan Tock Seng Hospital is that ambulances find it convenient to send their patients there and, since it is the only hospital in the north, that problem is going to be more acute? So, in the meantime, has the Minister thought of any solution to that?

Certainly, it is the location of Tan Tock Seng Hospital. When I was discussing this with the CEO of Tan Tock Seng Hospital, in a light-hearted manner, he said, "Our feng shui is very good", ie, its location is best and, therefore, all patients flock there. But feng shui aside, we have to solve the problem, and the problem is really to speed up the development of the northern General Hospital. As I explained, for some historical reason, all the hospitals were built in the south, because the history of Singapore started from the south, from the mouth of the Singapore River. But in the last few years, we have not been adding new hospital beds in the other parts, definitely not in the north. It is high time we built one in the north. That was also a political promise made by Prof. Ho Peng Kee, and I shall discharge that on his behalf.

Let me illustrate this by looking at SGH. I gave the example just now that, 15 years ago, when I was running SGH, I remember the A&E Department patient load was 500 patients per day. It was the largest A&E Department in Singapore. It has dropped from 500 to 310 today. It is not even the second biggest A&E Department. The second biggest A&E Department is now at Changi General Hospital, which has 320. Tan Tock Seng Hospital - 380. What does it mean? Had we not built Changi General Hospital, SGH today would be an even madder house than Tan Tock Seng Hospital. So the same thing would be resolved in a few years' time.

Sir, I am afraid that the political promise made by Prof. Ho Peng Kee, delivered by the Minister for Health, is a bit too late because the promise was made in the last election. Perhaps, it is not too late because the election is coming, I believe, that is why he is speeding up the northern hospital. Sir, the Minister mentioned in his answer that there is a high cost vis-a-vis the non-clinical part of the service, like waiting time. So he is saying that perhaps the patient should tolerate and bear, otherwise the cost will be high. My question is: to what extent and at what expense should the patient pay for a relatively lower medical cost? What is deemed acceptable to the Minister? For instance, waiting time at the A&E Department may be stretched to three to five hours. Is it acceptable? Or is the waiting time for a bed from the Observation Ward of A&E Department to a normal bed of 24 hours acceptable to the Minister? Whilst the Minister says that the medical standard has not been compromised, does he not agree that those who are waiting at the Observation Ward have very little time to rest because they cannot even bathe, they do not have privacy, there are a lot of activities going on there? And does he not further agree that patients, who are kept at the Observation Ward, are attended to by doctors and nurses who are trained in emergency medicines and not so much, I understand, in internal medicines which patients really need in order to recuperate?

I remember, just a few months back, I published an occasional paper on waiting times in the Emergency Departments. This was maybe about five or six months ago. Regularly, I would look at those data, and I will continue to publish them. If you look at those papers, you will discover that, other than Tan Tock Seng Hospital, all the

other Emergency Departments do not fit the description that Mr Low mentioned. Even Mr Low's description of Tan Tock Seng Hospital Emergency Department was exaggerated. So, please take a look at those data. I have to rely on data - unless data are being cooked up - and those are data faithfully taken. The situation was not as what he has described.

Clarification, Sir. My question was not what is the fact now and whether I exaggerated and what is the situation based on an occasional paper published. My question is: to what extent and what is the standard that the Minister for Health is prepared to accept vis-a-vis cost, ie, cost and non-clinical standards, eg, waiting time, that the Minister is talking about?

It varies from country to country. Last night, I was a bit amused when I read a paper published on the UK NHS, and it was talking about waiting of a different kind. This was not waiting at the Emergency Department, but, just as an illustration, waiting for surgeries, and they were measuring it in terms of months but it actually means years, whereas here we are talking about days and weeks. So, everything, as we said, is relative. But I take his point that, certainly, if it is a true emergency, that patient cannot be waiting for hours. And if it is a true emergency, nobody in Singapore's public Emergency Department waits for hours. He only waits for minutes. And if you are truly on high priority, or what we call P1, immediate treatment is rendered. I do not know how Mr Low got the feedback. Was he a patient in Tan Tock Seng Hospital recently or was he a resident around there?

Yes, I was a patient. I got some feedback, but I did not verify the feedback.

So, please, take a look at our published occasional paper on waiting times in the Emergency Departments. Clinical standard, as I said, is not being compromised. Customer service, yes, I agree, is not the best.

Dr Geh Min, last question.

Mr Speaker, Sir, the Minister has stated quite correctly that, in order to keep standards up and cost down, customer service must take a relatively lower priority. But I would like to point out that, when a patient goes to the Emergency Department, he does not know whether it is urgent or not and neither do his relatives. Could I ask the Minister whether there could be better coordination between the different hospitals and even the different hospitals in the different clusters? Perhaps, the Ministry could start a hotline, like we do for roads, so that a patient who thinks he or she has an emergency and needs to go to a hospital will be able to get quick information as to which hospital has a long waiting list or has no available beds, and better not go to that one? I think this sort of information should definitely be given to ambulance drivers, for example.

I suppose better coordination is something we can take a look. But having spent many years in healthcare now, a layman's understanding of what is emergency is difficult to explain. You can always try to educate. I think to educate Singaporeans to detect suspicious parcels is a lot easier. Once you are sick with fever, everything is an emergency. That is why you need triage when you come in. To do triage over the telephone is not possible. And for a real emergency, living around Tan Tock Seng Hospital, that is critical, because that is my constituency. You want immediate attention, zoom, go straight to Tan Tock Seng Hospital Emergency Department.

And, so far, if you are a true emergency case, you will be attended to immediately.

10. Mdm Ho Geok Choo asked the Minister for Health following the amendment to section 13(1)(b) of the Central Provident Fund Act, (a) what kind of assistance will be rendered to Singaporeans who are financially inadequate such as the aged, the unemployed and the retrenched in the lower income group such that they can continue to pay for their premiums for the MediShield Plan; and (b) if he will clarify the rationale for the limit of $660 per person on the withdrawal from Medisave account for the annual premium payment for the MediShield Plan.

Mdm Ho Geok Choo wanted to know how needy Singaporeans could be assisted to remain covered by MediShield. As Members are aware, the MediShield was reformed last month so as to enhance its effectiveness as a catastrophic illness insurance plan.

But let me first clarify that the amendment to section 13(1)(b) of the Central Provident Fund Act is not directly related to the MediShield reform. The amendment is merely to regularise an existing administrative practice whereby Singaporeans can withdraw their Medisave savings for medical treatments and approved insurance premiums, without having to first set aside the Medisave Minimum Sum.

As for the reformed MediShield, almost all Singaporeans who work would have enough Medisave to pay for the premiums.

For those who are not working, either permanently or temporarily, many can rely on their past Medisave savings. Some 150,000 Singaporeans are able to rely on their family members' Medisave savings to pay for their MediShield premiums. They form about 10% of all MediShield policyholders.

In addition, from time to time, when the budget position allows it, the Government will top up Singaporeans' Medisave accounts. Just last month, the Government transferred some $320 million into Singaporeans' Medisave accounts. This will help Singaporeans pay their MediShield premiums. The largest top-ups, at $350 per account, went to Singaporeans above the age of 60.

For the minority without adequate Medisave savings or family support, the additional safety net is the Medifund. We have, over the years, built up the principal sum to $1.1 billion. We will increase it to $2 billion eventually.

Mdm Ho also asked about the rationale for setting the Medisave withdrawal limit at $660 for the annual MediShield premiums. This limit was set in 1995 and has been sufficient to cover the annual premiums for the basic MediShield package. Currently, the highest premium rate is $510 per year which is well within the Medisave withdrawal limit.

The Medisave withdrawal limit, of course, is not permanent and will have to be raised if and when prevailing premiums exceed it. As I indicated in this House last month, my Ministry is reviewing the MediShield age cap. If we decide to raise it beyond 80, the premiums for the new age band may well exceed the current Medisave withdrawal limit. And, if so, it will be raised at the same time.

11. Dr Amy Khor Lean Suan asked the Minister for Community Development, Youth and Sports (a) whether he will provide an update on the take-up rates of the various schemes under the parenthood package introduced last year; (b) what is his Ministry's assessment of the effectiveness of these schemes; and (c) if any of these schemes will be further refined.

The parenthood package was only announced in late August last year. Even if couples had responded immediately and if you take into account the gestation period, the question by the Member is a bit premature. The earliest cohort of babies that you would expect would only be born some time between May to June this year.

Nevertheless, there are encouraging signs. We had around 3% more citizen births from May to July this year compared to the equivalent period in 2004. It is also heartening to note that

the number of first-time visits for outpatient pregnancy consultations at the restructured hospitals has risen by about 4% for the first half of 2005, compared to the equivalent period in 2004 and 2003 respectively. These are small but modest gains.

In addition, we have also exercised greater flexibility in the implementation of the Baby Bonus Scheme. For instance, from December this year, parents can use the co-savings to purchase MediShield or MediShield-equivalent insurance packages for their children.

In addition, parents can also deposit any amount of savings at any time before the child turns six years old, and the

Government will match the contributions dollar for dollar up to the maximum cap. From July 2005, parents of disabled children have been able to use the Baby Bonus co-savings for early intervention programmes for their children at centres which are registered with the Baby Bonus Scheme. I would like to assure the House that we have been and will continue to monitor, review and refine the Baby Bonus package to ensure its relevance for all Singaporeans.

12. Mdm Halimah Yacob asked the Minister for Community Development, Youth and Sports, for 2004 and the first half of this year, (a) how many children from low income families had benefited from the Kindergarten Financial Assistance Scheme and Centre Based Financial Assistance for Childcare; and (b) what was the total amount disbursed under these schemes.

Mr Speaker, Sir, Mdm Halimah would like to know how many children from low-income families have benefited from the Kindergarten Financial Assistance Scheme and Centre-based Financial Assistance Scheme for Childcare.

The Kindergarten Financial Assistance Scheme (KIFAS) and the Centre-based Financial Assistance Scheme for Childcare (CFAC) are schemes under ComCare Grow, which is focused at the developmental needs of children from low-income families, and these schemes are also meant to encourage and support low-income mothers to work full-time or part-

time. There were about 12,600 children from low-income families on CFAC and KIFAS as of end of December last year. As of end of June this year, there were about 13,200 children on the two schemes. Between January and December 2004, we disbursed a total of $10.76 million under CFAC and KIFAS. For the first six months of this year, we disbursed a total of $6.65 million under the two schemes.

Will the assistance and grant given under this centre-based financial scheme for childcare actually be extended to home-based infant and childcare provided by grandparents or even private care nannies?

Mr Speaker, Sir, so far this subsidy is only extended to centre-based, not home-based, childcare.

Sir, I am asking whether the Government will consider extending the subsidy to home-based infant care.

So far, under ComCare, we are reviewing centre-based assistance. I am sure the hon. Member knows from the newspaper reports that ComCare will be looking into various schemes for families whose income is below $1,500. But we have not taken into consideration home-based assistance. Let us settle all the institutional care first. We have not yet considered his request.

Sir, can I just clarify with the Minister of State, once the assistance for centre-based childcare has been more or less organised, the Government will look into how it can actually subsidise home-based childcare?

Let us look into institutional care and its supply and demand situation first. Mdm Halimah's question is on whether we are doing

enough for those children under institutional care.

Sir, I would like to ask the Minister of State whether it is possible to increase the subsidy for KIFAS, because the feedback I get from some families is that even the present level of subsidy is not sufficient. My second point, Sir, is that the CFAC requires the mother to already have a job. Some mothers have said it is a chicken-and-egg problem. They cannot go and get a job if their child is with them, but yet the CFAC said they must have a job first. Is it possible to review the scheme?

Actually, there is some good news for Mdm Halimah. At this moment, the KIFAS subsidy is up to $50 per month. The Prime Minister has just announced during the ComCare launch that we are going to increase the KIFAS subsidy to $65 a month. So, in this case, it is another $15 more. On CFAC, basically, we encourage working mothers to send their children to childcare but not the non-working mothers. At this moment, for working mothers, they get CFAC, plus the $150 Government's child-care subsidy per month. For the non-working mothers, they only get the Government child-care subsidy of $75 per month. But for mothers who are prepared to apply for jobs, we would also consider referring them to MOM. If they have seriously registered themselves for some training and are prepared to enrol themselves for a job, we will also consider helping them. Especially those who are first-timers to childcare, we even encourage them to apply for the start-up grant, up to about $1,000, to help their children pay for deposits, uniforms, and so on. For those retrenched women who are prepared to go back to work, we will also consider them on a case-by-case basis.

Sir, could the MOS tell us when

the extra subsidy, ie, the $65, will be effective?

The extra subsidy will commence in January 2006.

13. Mr Wee Siew Kim asked the Minister for Community Development, Youth and Sports, in view of the prevalence of families where both parents are working full-time, whether his Ministry will consider conducting a detailed long-term study to investigate (i) the actual parenting and childcare practices in Singapore; (ii) the effects of alternative childcare arrangements on the development of children; and (iii) both parents' and children's perceptions of the consequences of various childcare practices.

Mr Speaker, Sir, MCYS supports families by creating an environment conducive for parenthood. One of the key considerations is the availability, affordability and accessibility of a variety of childcare options. These include centre-based full-day, half-day, flexible care and home-based care through the Family Day Care Services.

A survey conducted by MCYS in 2001 showed that 46% of working mothers preferred self-care, 24% preferred grandparental care and 15% preferred centre-based care. Only 5% would opt for care by maids at home, while 6% preferred care by a nanny or relative at home. Another MCYS survey completed

in 2004 indicated that the majority of parents still preferred to care for their children themselves, followed by care by family members or friends, and then centre-based care. Parents preferring self-care believed that they were best placed to take care of their children's physical and emotional needs. Parents who preferred grandparental care felt that the grandparents could provide guidance in the children's upbringing, and felt safe leaving their children with the grandparents.

Our MCYS 2001 survey also showed that parents who opted for centre-based care cited having confidence in the quality of care and education provided by the centres. Parents surveyed also indicated that such programmes contributed to their children's development, especially in their acquisition of social skills. An NIE study conducted in the year 2000 confirmed that parents were aware of the factors that made for good quality child-care centres. Parents placed emphasis on factors, such as the quality of caregivers, the length of time for children to interact, and the quality of children's activities.

Many studies conducted locally and overseas show that it is the quality of the care that matters in child development, not where or by whom the care is provided. For example, an American study from the University of North Carolina in 1999 found that quality of care had the strongest and most consistent, positive associations with cognitive and social development across different childcare arrangements. MCYS will continue to conduct research on childcare. We are in fact planning a comprehensive study on the impact of various child-care arrangements on a child's development. We hope to commission the study early next year and complete it by end 2006 or early 2007.

I would like to ask the Parliamentary Secretary whether

any studies have been made on the extent of latch-key children in Singapore and what kind of assistance programmes are we rendering to them.

Sir, the issues of latch-key children were addressed several years back, and with the problem of latch-key children came the services which were initially known as the Before-and-After-School Care. Subsequently, we called it the Student Care Services. It has been provided by various voluntary welfare organisations in the community. So, these services effectively provide care for children whose parents are working. These kids are primary school-going children, so that care is given to monitor both their academic as well as social development when their parents are at work. They go to these centres before or after school hours.

Sir, I thank the Parliamentary Secretary for the answer. I have just one clarification. Considering that our society continues to evolve, I think the trend will be towards more and more dual-income families, especially in the younger age group. Would the Parliamentary Secretary consider that in his long-term study, and he would consider making the results progressively available so that young parents can make informed decisions? As he rightly pointed out, there is a balance to be struck between having high-quality childcare and improving the social development and cognitive skills of the child versus having close attachment to the parents which actually leads to other social behaviours as well.

Sir, in the ideal state, a lot of academics especially would love to do longitudinal studies. Any studies on impact of any forms of care arrangements are best done longitudinally, ie, that you actually track the person from the day the child goes into a certain care arrangement to a later

stage. Such studies are, by nature, laborious as well as resource-intensive. At this point in time, I take the Member's point that such studies are important. We are doing what we call cross-sectional studies to look at the current situation and factors that could possibly account for certain types of outcomes. But I will not discount the possibility of doing longitudinal studies. But the nature of longitudinal studies is that it takes a longer time for results to appear and it does take a longer time for us to appreciate and in understanding those factors. But I take the point that these are important things to consider also.

14. Mr Ang Mong Seng asked the Minister for Home Affairs what is (i) the main cause for the increasing number of rioting youths, from 250 in 2001, 446 in 2002, 493 in 2003 to 512 in 2004; and (ii) the profile of these youths in terms of per capita family income, family size, educational level and ethnic group.

Sir, first, let me give some perspective to the figures Mr Ang cited in his Question. The number of youths arrested for rioting has actually stabilised between 2002 and now. It declined significantly between 1997 and 2001, from 539 arrests to 250 arrests. Between 2001 and 2002, there was a spike upwards, in line with the general crime trend. In 2004, there were 512 arrests. The numbers arrested for the first half of this year, compared to a similar period last year, actually came down from 255 to 212. But, as I have said many times before in my speeches, even one arrest is one too many.

Sir, there is no one root or main cause leading to riotous behaviour amongst

youths but rather a multiplicity of factors that interplay with one another.

A key cause identified by Police is that more youths are now hanging out in groups. Most of the youths arrested for rioting were congregating in groups of five to 10. They hang out in public housing estates at void decks, lift landings, and also at common public areas, such as the streets and playgrounds, which are locations where the bulk of these rioting cases occurred. In addition, some youths look out for "action" by deliberately targeting other groups or individuals by starting fights on the pretext of previous disputes or staring incidents.

Youths arrested for rioting have been predominantly male. In 2004, the percentage was 84%. The majority are aged 14 to 17 years. Last year, 43% of youths arrested for rioting were students below 16 years with secondary school education. The next largest group of youths arrested for rioting are unemployed youths, accounting for some 17% of arrests last year. Half of the youths arrested for rioting are Chinese, with Malays, Indians and youths of other races accounting for the other half. Seven out of ten youths arrested for rioting are first-time offenders. Police does not have records or data that profile such offenders based on their per capita family income or family size.

To tackle youth rioting, regular Police operations are conducted in the public housing estates, neighbourhood town centres, shopping centres, as well as entertainment outlets where rioting incidents among youths are likely to occur. Youths who are out late at night and gathering in large groups are checked during Police operations. These checks and operations are stepped up during the school holiday period.

Sir, beyond Police checks and operations, the Inter-Ministry Committee on Youth Crime (IMYC), which I chair, coordinates a series of measures encompassing preventive education, deterrence, enforcement and rehabilitation involving several Ministries and agencies such as MHA, MOE, MCYS and the National Youth Council.

3.00 pm

Order. End of Question time.

[Pursuant to Standing Order No. 22(3), Written Answer to Question No. 18 on the Order Paper is reproduced in the Appendix*. Question Nos. 15-17 and 19-26 have been postponed to the next available sitting of Parliament.]

"to establish a Deposit Insurance Scheme in Singapore for the purpose of providing limited compensation to insured depositors under certain circumstances, to make related amendments to the Banking Act (Chapter 19 of the 2003 Revised Edition), the Finance Companies Act (Chapter 108 of the 2000 Revised Edition) and the Monetary Authority of Singapore Act (Chapter 186 of the 1999 Revised Edition), and for matters connected therewith",

presented by the Minister for Education (Mr Tharman Shanmugaratnam); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to amend the Administration of Muslim Law Act (Chapter 3 of the 1999 Revised Edition)",

presented by the Minister for the Environment and Water Resources and Minister-in-charge of Muslim Affairs (Assoc. Prof. Dr Yaacob Ibrahim);

read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to amend the Education Endowment Scheme Act (Chapter 87A of the 1993 Revised Edition)",

presented by Mr Tharman Shanmugaratnam; read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to establish the Community Care Endowment Fund for the purposes of providing assistance to citizens and permanent residents of Singapore and their family members living in Singapore, who are in financial and other difficulties, and for matters connected therewith; and to terminate the charitable trust known as the Community Assistance Fund",

recommendation of President signified; presented by the Minister for Community Development, Youth and Sports (Dr Vivian Balakrishnan); 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 now read a Second time."

Sir, this Bill seeks to amend the Money-Changing and Remittance Businesses Act (Chapter 187). The amendments aim to refine and better reflect MAS' supervisory approach towards holders of remittance licences and money-changing licences. I should

state at the outset that MAS' supervision of these activities focuses on anti-money laundering and countering the financing of terrorism. MAS does not supervise holders of these licences for their safety and soundness. This approach of focusing on anti-money laundering rather than safety and soundness of remittance houses and money-changing operations is similar to those adopted by other reputable financial centres. It places responsibility on customers to choose their remittance channels wisely.

Remittance houses perform a useful service in transmitting money from Singapore to recipients in other countries, at a relatively low cost. The industry has grown over the years but most of the remittance houses remain small players. Many are sole proprietorships or family-owned partnerships who operate through informal networks such as friends, relatives or overseas agents, operating on the basis of relationships or trust, to deliver funds to the intended recipients. These small players often may not have the resources to put in place the same degree of internal controls that larger financial institutions like banks have. The same is true of most holders of money-changing licences. Their modus operandi and, more importantly, the fact that they pose no systemic risk to our financial system make it impractical and unnecessary for MAS to supervise them for purpose of ensuring their safety and soundness. Other reputable jurisdictions such as Australia, Hong Kong, Switzerland and the United Kingdom adopt the same regulatory approach.

MAS' supervision of holders of remittance licences and money-changing licences will continue to focus on anti-money laundering and countering the financing of terrorism. Like other established financial centres, Singapore is committed to the global fight against the laundering of proceeds from criminal and terrorist activities.

Sir, this Bill carries two messages. First, MAS intends to raise the anti-money laundering standards and countering the financing of terrorism standards in this industry. Second, consumers have to take personal responsibility and exercise discretion in choosing remittance channels for transmission of funds to people in other countries. They should not assume that the MAS or the safeguards in the Bill will insulate them from losses or ensure the safety and soundness of remittance houses.

To raise the anti-money laundering and countering the financing of terrorism standards in this industry, we will be pushing up the entry requirements. We will be requiring the holder of a remittance licence to be incorporated as a company with a minimum paid-up capital of $100,000. This higher entry requirement will help to weed out the weaker remittance licensees. We will also extend the present anti-money laundering and countering the financing of terrorism regulations to the inward remittance business, not just the outward remittance business. And we will strengthen market discipline by publishing MAS' regulatory actions against errant licensees.

To raise the level of public awareness of the scope of MAS' supervisory approach, remittance licensees will be required to post cautionary statements at their business premises to alert the public that MAS is not supervising remittance licensees for their safety and soundness. MAS will also be working with the Ministry of Manpower to educate foreign workers, who are the main users of remittance services, on what to look out for when remitting their money overseas.

But the Bill is not intended to remove all safeguards for customers. Basic safeguards are built into our regulations, and the Bill enhances certain safeguards

which serve to mitigate against potential losses by customers. First, MAS will continue to conduct background checks on applicants to prevent undesirable persons from conducting money-changing and remittance businesses. MAS will also maintain the requirement for remittance licensees to furnish a security deposit of $100,000 for due performance of their obligations. This security deposit may allow customers to recover some of their losses in the event that a remittance licensee fails. But it is not intended to nor can it insure customers against losses. To do so will require a prohibitively high security deposit that will render many remittance businesses unviable.

In addition to these existing measures, the Bill will now provide that officers, partners or managers of businesses holding a money-changer's licence or remittance licence may be made personally liable for losses suffered, if the court finds the licensee to have carried out its business with the intention to defraud or for any fraudulent purpose. These measures are aimed at discouraging fraudulent practices and providing customers and creditors with some recourse, should losses occur.

In sum, MAS cannot for practical reasons supervise remittance houses to ensure their safety and soundness, although we will retain certain basic regulatory safeguards that serve customers' interests. This is unlike the case of banks or other financial players whose failure can pose systemic risks; for such players, MAS has to engage in close and active prudential supervision, in addition to regulatory safeguards such as minimum capital requirements. It is therefore important for the public to understand that MAS cannot prevent failure of remittance businesses. In cases of failure arising from fraud, the Bill provides an additional avenue for

customers to pursue the assets of the guilty partner or officer. But customers have to take responsibility to weigh the benefits and risks of using the remittance services offered by the various businesses in the market, including the services offered by banks regulated by MAS.

The introduction of higher entry requirements for remittance licensees will weed out the weaker players in the industry. However, I would like to assure the House that the new Bill will not deprive the public of remittance and money-changing services. Over the last two years, MAS has allowed six banks to set up additional outlets aimed exclusively at providing remittance and money-changing services. Large international remittance houses such as Western Union also continue to operate in Singapore. There are also established companies, such as Singapore Post Limited, with an extensive distribution network that also offer remittance services.

Sir, I shall now highlight the key amendments that are proposed in the Bill.

Key Amendments

Incorporation requirement for holder of a remittance licence

Currently, a remittance licence can be granted to a sole proprietor, a partnership or a company. The Bill requires the remittance licensee to be incorporated as a company with a minimum capital of $100,000. This aims to raise the professional and anti-money laundering standards in the industry by ensuring that remittance licensees have a minimum level of financial resources needed to put in place anti-money laundering procedures for their operations.

Scope of MAS' powers

The Bill expands the scope of MAS' powers to revoke or suspend a money-

changer's or remittance licence to include cases where the licensee has failed to comply with any written direction issued by the MAS. These powers will enable MAS to deal with recalcitrant licensees more effectively. In addition, the Bill spells out the circumstances under which a money-changer's or remittance licence will lapse, expire, or is voluntarily surrendered.

As I have mentioned earlier, the Bill empowers MAS to issue directions to require a remittance licensee to display cautionary statements at its place of business. The cautionary statements aim to alert the public on what MAS does and does not supervise with respect to the business of the remittance house.

Currently, the inward remittance business is not a regulated activity. The Bill will empower MAS to issue directions in respect of a money-changing or remittance licensee's inward remittance business, to strengthen our anti-money laundering arsenal.

Personal liability for losses

Presently, many remittance and money-changing licensees operate as sole proprietors or partnerships, where the sole proprietors and partners are personally liable for any loss suffered by the business. This is not the case for officers of a company or partners and managers of a limited liability partnership. Therefore, the Bill will provide that officers, partners or managers of holders of money-changing licences or remittance licences may be made personally liable for losses suffered, if the court finds that the licensee has carried out any of its business with the intention to defraud or for any fraudulent purpose.

Approval of substantial shareholders, partners and directors

MAS will be empowered under the Bill to approve the appointment of directors,

partners and substantial shareholders of a money-changing or remittance licensee, as such persons may be in a position to influence the management of the business.

Closure certificate

The Bill requires the holder of a remittance licence to submit a closure certificate to MAS upon the cessation of remittance business. This certifies that all customers' funds have been received by the intended recipients and that adequate provision has been made to meet unforeseen liabilities in respect of the remittance business.

Publication of information

The Bill will give MAS the power to disclose regulatory actions taken against the remittance or money-changing licensee, where it is in the public interest to do so. This is aimed at enhancing market discipline in the industry.

Quantum of penalties

For more effective deterrence, the Bill will increase the quantum of penalties for certain offences. For instance, the penalties for persons carrying on an unlicensed money-changing business or remittance business will be increased from $50,000 to $100,000.

Other clauses of the Bill that I have not elaborated on are minor technical amendments to clarify or expand the existing provisions, or to remove obsolete provisions.

Sir, in conclusion, the Bill introduces changes which enhance MAS' oversight of holders of remittance and money-changer's licences, for purposes of anti-money laundering and countering the financing of terrorism. It aims to raise the

level of professionalism in the industry over time without depriving the public of affordable remittance and money-changing services. The Bill reflects MAS' supervisory approach, which does not extend to the prudential supervision of remittance licensees and money-changing licensees. While the Bill retains existing safeguards and introduces new measures to discourage fraudulent practices, these cannot insulate the public from all losses. Customers have to take personal responsibility and exercise discretion in choosing the channels through which they want their funds transmitted.

Sir, I beg to move.

Question proposed.

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

Sir, I believe the proposed amendments in this Bill are timely, as it contains several elements aimed at tightening the legislation and the supervision of money transaction activities that may potentially lead or be linked to money laundering by financial institutions.

Sir, I also see such amendments as critical in maintaining the equanimity of our financial system and in protecting the interest of bona fide financial institutions and their respective customers in the light of money laundering activities increasingly posing a threat to the international financial system.

Singapore, in its endeavour to position itself as a leading global financial centre, must keep in tandem with changes in the international financial system, which has been active in reviewing and imposing new anti-money laundering regulations. A recent report in the Straits Times dated 29th July this year indicated that a startling $85 million in dirty money was

seized by the Singapore authorities since the year 2000 against a backdrop of increasing suspicious transactions which may be connected with money laundering and terrorism financing. This is in spite of intensive efforts by our authorities to clamp down on such menaces. The stated seized amount is a trickle compared with US$800 billion to US$2 trillion estimated by the International Monetary Fund in potential global funds that money launderers and terrorists have in their chests.

Today's Business Times reported that while the cost of prevention of money laundering can be costly for banks and financial institutions, the potential cost of failure could lead not only to devastation of a bank but also the entire country.

Sir, the demand for money-changing and remittance services in Singpaore has increased quite significantly in the last 25 years since the Act was first introduced in 1979. Singapore's growth as a leading regional and international business centre, the increasing number of tourists visiting Singapore, more Singaporeans travelling overseas on business or leisure, the large number of foreign workers among other factors have helped the industry to grow and remain healthy. Traditional money-changing and remittance services under this Bill predate modern or western banking regimes. Prior to the development of a comprehensive banking system here, the operations of money changers and remitters were a fundamental component of the commercial and financial infrastructures. The Chinese system is referred to as chop shop and terms used in the Indian sub-continent include chitty, hundi and hawala. For the purpose of brevity, I will refer to all these regional remittance practices as hawala. Not all hawala operations fall on the wrong side of the law. "White hawala" is used to refer to legitimate transactions and remittances, while the term "black hawala" concerns illegitimate transactions

such as money laundering and narcotics trafficking. As this Bill is aimed at fortifying the existing legislation to prevent the abuse of services offered by "white hawala" business owners, it is fair to expect that the MAS does this by alerting the relevant community of changes in its scope of surveillance and supervisory functions while also providing ample time for current operators to embrace the proposed changes.

In broad terms, deterrence could be achieved by increasing the penalties for illegal remittances, whether conducted by licensed money changers or remittance agencies, controlling and streamlining the methods employed to ensure legality of remittances and by enforcing greater degree of compliance among the hawala businesses which also include a large segment of the SME community. I believe this is what this amendment Bill seeks to also implement.

In this regard, Sir, I would like to ask the Minister whether the amendments to sections 13 and 16, as provided by clauses 10 and 13 of this Bill respectively to increase the penalties from $10,000 to $50,000, represent sufficient deterrence, considering the large sums of floating "black" money that I cited earlier. Considering that hundreds of thousands or even millions of dollars may be involved, particularly in financing terrorism activities, should a corresponding jail term also be considered in such cases?

Second, in the interest of the livelihood of existing money changing and remittance business owners, I would like to ask the Minister to clarify how the MAS, under the newly re-enacted section 7(3) and section 7A(3) respectively would render an existing money changer or remittance business owner ineligible to have his licence renewed. The new sections provide MAS with the full authority to "consider the application and may grant a money-changer's licence vis

-a-vis a remittance licence with or without conditions or refuse to grant a licence" without assigning any reasons.

Third, Sir, the minimum sum of $100,000 for a remittance licence holder remains unchanged since the last amendment in 1996, except for the requirement that the holder must now be incorporated as a company with a corresponding amount in paid-up capital. Considering the much higher quantum of transactions in today's context, should the Minister not consider increasing the minimum paid-up capital to reflect the current context?

Fourth, Sir, some reforms that countries like the United Kingdom have implemented are to require most transactions by financial institutions, including money remitters, to be fully computerised. In doing so, the disclosure of full details of originator information, such as name, address, telephone contacts and account number on money transfers, are required to enhance traceability in situations where fraudulent activities are suspected. I would like to suggest that MAS consider the implementation of such a system if it has not already done so.

Finally, I would like to ask the Minister the extent of how the amendments proposed in this Bill are connected with the customs regime, considering that money could also be represented by items of monetary value which may not be transmitted via the financial system but through land borders, ports and airports.

In conclusion, Sir, I know for a fact that our country has done much in regularly reviewing and revising our financial legislation to keep abreast of global changes and the dynamics of the international financial system. But legislative changes in the prevention of

money laundering, particularly in areas which are prone to terrorism financing, are certainly an area that we cannot afford to neglect. I applaud the initiatives aimed at addressing existing shortcomings and therefore wholeheartedly support this Bill.

Mr Speaker, Sir, I would like to thank the Member for Pasir Ris-Punggol, Dr Ahmad Magad, for his support for the Bill and for his very useful comments.

First, his observations on the importance of countering money laundering and terrorism financing. It is a growing concern for all countries and particularly for international financial centres like ourselves. The Money-changing and Remittance Businesses (Amendment) Bill that we are now discussing is part and parcel of our overall effort to strengthen our anti-money laundering and countering of financing of terrorism measures. It is part and parcel of the overall arsenal that we are putting in place for the purpose in the financial industry.

I should mention that we are not held in bad odour. Two years ago, Singapore completed the IMF-World Bank financial sector assessment programme. This assessment by the IMF and World Bank, which pooled together a team of international experts for the purpose, found that Singapore has a comprehensive legal, institutional, policy and supervisory framework to combat money laundering and terrorism financing. They also noted that our financial institutions have a strong compliance culture with regard to requirements to combat money laundering and terrorism financing.

Nevertheless, we remain vigilant. An inter-agency working committee is looking comprehensively into the new recommendations of the Financial Action Task Force (FATF) which is the

international standard setting body for anti-money laundering and countering of terrorism financing matters. The areas covered will include not just the financial businesses, but non-financial businesses and professions such as casinos, for instance.

As far as the financial sector is concerned, MAS will continually review our framework for anti-money laundering and countering of terrorism financing, including the remittance houses and money-changing operations. I quite agree with Dr Magad that we should give sufficient time for businesses affected by these legislative changes to adapt. The Bill provides for a one-year transition period from the date of commencement of the Act to allow existing operators to meet the new requirement to be incorporated as a company with minimum paid-up capital of $100,000.

Dr Magad also referred to section 13 of the Bill. Under the current Act, the section imposes a fine not exceeding $10,000 or one year's jail or both on any person found guilty of wilfully providing a false or misleading statement when applying for a licence or for renewal of a licence. Let me clarify that we are not doing away with the jail term. The amendment Bill will increase the fine to $50,000 but the jail term will remain. The quantum of $50,000 is comparable to those provided under the Financial Advisers Act and the Securities and Futures Act for similar offences.

However, as for offences relating to terrorism financing, which I think Dr Magad was particularly concerned with, these are punishable under the Terrorism Suppression of Financing Act. As an example, the offence of directly or indirectly fostering the financing of a terrorist act is punishable on conviction with a fine of $100,000 or 10 years' jail or both.

As far as MAS' authority relating to the non-renewal of licences is concerned, this is an existing provision which requires licensees to apply to the MAS for renewal of their licences. The provision states that in considering an application for renewal, MAS has to be satisfied as to the good character of the applicant, the financial condition of the applicant and whether the public interest will be served by granting the licence. Licences are usually renewed, unless the licence holder is unable to meet the fit and proper test or if there are serious breaches of the Money-changing and Remittance Businesses Act. Based on applications received in the past three years, only one application for remittance licence was not renewed.

On the minimum sum of $100,000, first, I would like to clarify that the new requirement for remittance licensee to be incorporated as a company with a minimum paid-up capital of $100,000 is over and above the existing requirement for them to furnish a security deposit of $100,000 for due performance of their obligations. So we are adding on to the existing security deposit requirement.

Dr Magad has a useful suggestion on whether we should in fact raise the minimum paid-up capital requirement in view of the higher quantum of today's transactions. We will have to consider this carefully. If we pitch it too high, we will not just drive some remittance houses out of business, we will drive others underground. So we will have to monitor the appropriate quantum of security deposit as well as the minimum capital requirement in future as we go along. But let us keep the business above ground.

On computerisation of operations, Dr Magad has a useful suggestion that remittance licensees be required to computerise their transactions. He mentioned the UK. In fact, the UK issued a consultation paper three years ago but it

has not yet implemented the recommendations of the consultation paper. It will certainly improve the efficiency of retrieving customers' records, which is particularly important when we are investigating suspected offences. But there are practical issues to consider if we mandate it across the whole system for every single player. There are costs in implementing such a system. MAS has not yet made it mandatory for the industry to computerise their operations but we do not rule out the option in future.

Dr Magad also mentioned having full details of originator information on money transfers. I think he was referring to the recommendations of the Financial Action Task Force that there be complete originator information; in other words, not just where the last source of the funds came from but where it previously came from and the entire chain of transactions, starting from the original sender. This information will certainly aid authorities in their investigation of suspicious activities. Singapore, being an FATF member, has already issued a consultation paper on anti-money laundering which incorporates this requirement. MAS is currently reviewing the comments received from the industry and will be implementing this recommendation in due course.

On Dr Magad's last question

regarding the customs regime, the amendments proposed in this Bill are not directly related to the customs regime. But I think his concerns on money laundering risks arising from items of monetary value are valid. The FATF has also recognised the issue and recommended ways for countries to deal with it. This is one of the implementation issues that the inter-agency working group that I mentioned earlier is looking at.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Mr Tharman Shanmugaratnam].

Bill considered in Committee; reported without amendment; read a Third time and passed.

Order for Second Reading read.

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

Introduction

Sir, this Bill seeks to amend the Subordinate Courts Act to rationalise the law relating to transfer of civil cases between different courts and to give the courts greater flexibility to allow transfers in appropriate cases.

Any civil litigant has to estimate the quantum of his claim and decide on the appropriate court to begin his action. Sometimes, after commencing the action in one court, it may be necessary or desirable to transfer a case to be dealt with by a higher or lower court.

The Subordinate Courts Act currently allows the transfer of civil cases from the Magistrate's Court to the District Court only in very limited situations. The Act does not allow transfers of cases between the Magistrate's Court and the High Court, or transfers from the District Court to the Magistrate's Court.

In practice, these limitations have posed problems as there are instances where there is good reason to transfer a

case to another court with lower or higher jurisdiction.

In a civil action, when the plaintiff has to commence action in either the High Court, the District Court or the Magistrate's Court, this decision is fairly straightforward, as the main factor is the value of the claim made, and filing the writ in the court with the monetary jurisdiction of the appropriate level.

For a claim not exceeding $60,000, the plaintiff will commence action in the Magistrate's Court. For a claim higher than that but not exceeding $250,000, the plaintiff will commence action in the District Court. For any claim above that, the plaintiff will commence action in the High Court.

Sir, however, difficulties arise where the plaintiff's claim hovers at the monetary jurisdictional limit of one of the Subordinate Courts, or when there are unexpected changes in the expected damages claimed or counter-claimed that may require a litigant to transfer his case after an action has been commenced in a specific court. Let me give some examples. First, the plaintiff's injuries, especially in personal injury cases, may have worsened or are of a continuing nature such that if he is to revise his claim after he has already filed his claim in a lower court and, before the case is heard, he may need to transfer his case to a court with higher jurisdiction in order to receive an award that the lower court has no power to award; second, the allowable damages might have been raised by court decisions that dealt with similar cases, after the filing of the action in a lower court; third, the amount counter-claimed by the defendant might be higher than what the lower court in which the plaintiff who commenced the action can give; or, fourth, the plaintiff might have inadvertently filed his claim in the wrong court.

Sir, if the courts have limited powers to transfer cases, a plaintiff may have to discontinue his action and start afresh. This increases costs and wastes judicial time, especially if the case had proceeded to an advanced stage before the inadequacy became known. If the limitation period had expired, the plaintiff will be time-barred from restarting his action altogether. This would be unfair, particularly if the need for transfer was not due to any default or neglect on his part.

Indeed, a series of Court of Appeal and High Court decisions decided between the year 2002 and this year had highlighted deficiencies in the current system.

Consequently, the Law Reform Committee of the Singapore Academy of Law which has representation from the Judiciary, practitioners, academics and legal officers from the Legal Service, reviewed the law and made a number of recommendations to amend the Subordinate Courts Act.

MinLaw has accepted these recommendations which are encapsulated in this Bill.

The proposed amendments

Sir, this Bill will widen the existing ground for transferring civil proceedings from the Magistrate's Court to the District Court (clauses 54A and 54F).

This Bill will also widen the mechanism for transferring civil proceedings: (a) from the Subordinate Courts to the High Court (clauses 54B and 54E); (b) from the High Court to the Subordinate Courts (clause 54C); and (c) from the District Court to the Magistrate's Court (clause 54D).

The Bill also clarifies that a party intending to avail himself of reciprocal

enforcement arrangements, should such be available under overseas legislation, may proceed with his claim in the High Court, notwithstanding that his claim falls within the ordinary jurisdiction of the Subordinate Courts (as found in the Explanations in the proposed new sections 54B and 54C).

Sir, as fees may vary between different courts, the Bill also addresses the issue as to which court has jurisdiction to determine whether costs should be pegged at High Court or Subordinate Courts' level in these transfer proceedings (clause 54G).

Some existing provisions made redundant by the proposed amendments will be repealed (sections 24, 37, 38, 40 and 53).

A consequential amendment will also have to be made to section 26 of the Government Proceedings Act to cater for the transfer of proceedings from one Subordinate Court to another.

Conclusion

In conclusion, Sir, these amendments will rationalise the law relating to transfer of civil cases between different courts and ensure that litigants are not denied access to justice because of procedural rules on jurisdiction. They will enable the courts to dispense substantive justice without being fettered by procedural hurdles and this, in turn, will lead to more efficient use of judicial resources.

Sir, I beg to move.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Assoc. Prof. Ho Peng Kee].

Bill considered in Committee; reported without amendment; read a Third time and passed.

Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 4.00 pm.

Sitting accordingly suspended

at 3.40 pm until 4.00 pm.

[Mr Speaker in the Chair]

Sitting resumed at 4.00 pm

Order for Second Reading read.

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

The Professional Engineers Act was enacted to provide for the registration of professional engineers to regulate the conduct of professional engineers, and to license corporations that supply professional engineering services in Singapore. The last set of amendments which came into operation on 1st January 2004 set in place requirements for continuing professional development. With the changing needs of the construction industry today, my Ministry has undertaken a comprehensive review of the Professional Engineers Act. The focus was on the areas of professionalism, construction safety and the promotion of engineering services. The proposed amendments will also give the Professional Engineers Board more autonomy as well as streamline their operations. My Ministry has sought the views of the Institution of Engineers Singapore and the Association of

Consulting Engineers Singapore during the preparation of the Bill. These professional bodies have given their support for the Bill.

The key features of the Bill are as follows:

To enlarge the composition of the Board and allow for election of Board members;

To streamline the scope and requirements of registration as professional engineers;

To introduce categories of registration for specialist professional engineers;

To set up a two-tier disciplinary process comprising the Investigation Committee and Disciplinary Committee;

To deter unprofessional conduct by tightening penalties against errant professionals; and

To allow for the licensing of limited liability partnerships to provide engineering sevices and revise start-up requirements.

Sir, I will elaborate on the proposed amendments.

To enable the Professional Engineers Board (PEB) to undertake its functions more effectively, the membership of the PEB will be expanded from 10 to 15. The expanded Board will also be able to take on new functions, such as administrating the examination system for registration and registration system of specialist engineers. Election of Board members will be introduced. Up to six members will be elected. The Minister will appoint up to another six members. The President of the Institution of Engineers Singapore and the Commissioner of Building Control will continue to be ex-officio members. There

will also be one representative from the Board of Architects. Similar to the approach taken by the medical and dental professions, all registered practitioners will be required to vote in the election of the six representatives. Those who fail to do so without valid reasons will not be entitled to apply for practising certificates. The President of the PEB will no longer be appointed by the Minister. Board members will elect from amongst themselves, other than the ex-officio members and the representative from the Board of Architects, their President.

Sir, the Bill will also simplify the criteria on work experience for registration as professional engineers. Currently, in addition to acceptable academic qualifications, applicants must have at least two years of professional experience in Singapore and passed an examination, or five years of professional experience, including at least two years of practical experience in Singapore, or ten years of practical experience in engineering works.

The proposed amendment will streamline the criteria on work experience to a single level of at least four years. To maintain registration standards, the PEB will introduce an examination criterion. These streamlined qualifying requirements will align the registration process here with those of advanced countries, such as the US.

The Bill will also help the PEB focus its efforts on the development of key engineering disciplines. Presently, although the PEB registers 12 engineering disciplines, only professional engineers in the three construction-related disciplines of civil, mechanical and electrical engineering are required to submit plans and certificates to the public authorities for approval. As a result, very few engineers in non-construction-related disciplines choose to be registered. Engineers registered in the non-construction-related disciplines account

for only 4% of the total register of 3,161 professional engineers. In the past two years, only one engineer has requested for registration in a non-construction-related discipline. In view of this, the Bill prescribes that only the three construction-related disciplines will be regulated. Provisions are in place for other disciplines to be regulated in the future, should the need arise.

In May 2005, the Government accepted the recommendation of the joint MND-MOM Review Committee on construction safety to require deep excavation works to be carried out by professional engineers specialised in geo-technical engineering. The Bill thus makes provisions for the PEB to register categories of specialist professional engineers who will be required to take on specialist areas of work.

Sir, this Bill will also revise disciplinary procedures to provide for greater transparency and expedite the handling of complaints against professional engineers. The proposed two-tier disciplinary process is modelled after the medical, dental and accounting professions in Singapore. An Investigation Committee will first investigate complaints and make recommendations to the Board. If the Board decides that the complaint should be proceeded further, it will appoint a Disciplinary Committee to inquire into and decide on the case.

To step up deterrence against unprofessional conduct, the Bill will impose stiffer penalties against errant professional engineers. The maximum period of suspension will be increased from one to two years. If a professional engineer is de-registered following a disciplinary inquiry, he will have to wait three instead of two years before he may re-apply for registration. The Bill also allows the Board to impose a combination

of disciplinary actions, such as de-registration, suspension, fine and censure, as well as to recover legal costs incurred during the disciplinary proceedings.

Sir, other amendments wlll also be made to facilitate the promotion of engineering businesses. The Limited Liability Partnership Act, which came into effect in April this year, provides for a new corporate entity called the Limited Liability Partnership (LLP). This Bill allows the Board to license LLPs which can supply professional engineering services. The licensing requirements are consistent with existing ones for corporations and multi-disciplinary partnerships. To facilitate start-up companies to supply professional engineering services, the Bill will reduce the paid-up capital requirement for limited licensed corporations from $1 million to $500,000. A limited corporation must continue to be insured against professional liability to qualify for the licence. For licensed unlimited corporations, the proportion of directors, who must either be professional engineers, architects or land surveyors, is halved from 100% to a simple majority. This requirement is aligned to that of licensed limited corporations.

Sir, the challenges facing the engineering profession as well as the entire construction sector in the years ahead will be to uphold high professional standards, raise quality and safety standards. The amendments proposed in this Bill will enable the Professional Engineers Board to play a more effective role in helping the engineering profession meet these challenges.

Mr Speaker, Sir, I beg to move.

Question proposed.

Mr Speaker, Sir, thank you for allowing me to speak on this Bill. Before I begin, I have to declare my interest. I am

a mechanical engineer by training with a Bachelor and Doctorate degrees in mechanical engineering.

I just have a few queries to raise on this Bill. The first is the new section 2(f) on the definition of "professional engineering services" to include consultancy or advisory services that requires a person to engage in professional engineering work. Sir, would this definition include all engineering educators, ie, all the lecturers in the polytechnics, ITEs and the universities? Would the Minister clarify further on this? And, for example, in the US, the US Texas Board of Professional Engineers actually has a separate category of PE called the Engineering Educator Licence. So would the Minister consider a separate category of engineering educator licence to cater to the various engineering lecturers that we have in the polytechnics and the universities?

Next, in new section 4A, the Act is amended to include compulsory voting. I would like to ask the Minister to clarify on the rationale for this compulsory voting.

The next query I have is on section 8, which provides for the creation of a new register of specialist professional engineers, and section 15A provides for the registration of these specialist professional engineers. What are the aims and objectives of introducing this new category of professional engineers called the specialist professional engineers? Is it specially to cater to those graduates who have a post-graduate degree? I hope the Minister can further clarify on this. And what are the branches of professional engineering services that will fall into this category of "specialist professional engineers", besides considering the qualification of the applicants for this particular category of PEs? And in looking at the post-graduate degrees that will be considered, can the Minister also provide more details on what kind of post-

graduate degrees are we considering, eg, Master of Science, Master of Engineering, doctorate degree?

The next query I have is on section 15, which changes the qualifying requirement for the registration of PE to include an examination. Sir, for the registration to include an examination by the Board, what kind of examination would this be? Would it be a written examination or an interview, for example? I hope more details can be provided on this examination.

My next query is on this examination to be passed by the applicants. In the US, many PE Boards in the different states actually provide for an eligibility requirement for waiver of examination, ie, applicants can apply for a waiver of this examination, so that they can be exempted from taking this when they apply for a PE. The current Bill itself does not provide for such a waiver. So, would the Ministry consider providing such an alternative, an examination waiver to the applicants?

Mr Speaker, Sir, I thank the Member for her comments and questions.

First, on the intention behind defining the category of engineering services, it is to enable the set-up of limited liability corporations to provide such services. That is why you will see in the definition that it points to the provision of consultancy services in this area of engineering. Therefore, for the Member's question on lecturers, academic staff members who lecture in the subjects of engineering, it is not the intention to cover them under this particular definition.

As to the Member's question on compulsory voting, actually we would assume that every professional would be keenly interested in the affairs pertaining to his own profession. So, such a

requirement would actually not impose any heavy burden on any professional. Indeed, it is to signal the interest of the Government that people of that profession should actively know what is going on and, for a Professional Engineers Board to be formed, who leads it and so on. They should participate in the decision-making leading to the election of that Board.

On the question of why do we want to license specialist engineers, one big part of the reason came out of the joint MND and MOM study post-Nicoll Highway, and it was found that there are certain categories of specialist engineers, eg, those doing geo-technical works, these are important specialisms, and, therefore, they should be looked at very carefully. So, this was set up in order to keep a keen eye on this particular category. But the provisions also enable us to include other categories in future, if there is a requirement for that.

As to the question on the examination, it will be a written examination. The idea now is for the PEB to offer it at least twice a year, or more often if there is a need. As to the suggestion whether particular pre-existing qualifications can be considered for a waiver, the Ministry will take that into account when drawing up the rules.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Mr Heng Chee How].

Bill considered in Committee; reported without amendment; read a Third time and passed.

Order for Second Reading read.

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

The Architects Act was enacted to provide a framework for registration of architects and to regulate ethics, conduct and professionalism of architects. The Act also enables the Board of Architects, or BOA, to license corporations to supply architectural services in Singapore. Similar to the Professional Engineers Act, the last set of amendments came into operation on 1st January 2004 to provide for continuing professional development as well as some other consequential amendments.

In the changing landscape of today's industry, Registered Architects face similar challenges to those outlined earlier for the Professional Engineers. The BOA would need to streamline their operations and have greater autonomy, and place greater emphasis on upholding the professional standards of Registered Architects. As such, a comprehensive review was also done for the Architects Act. My Ministry has actively consulted the Singapore Institute of Architects during the preparation of this Bill. The Institute has given its support for the Bill.

Sir, as the architectural and engineering professions are closely linked to each other, the changes proposed in the Architects (Amendment) Bill are largely similar to those recommended in the Professional Engineers (Amendment) Bill. The following amendments are replicated in this Bill:

to enlarge the composition of the Board and allow for the election of representatives;

to set up a two-tier discipliniary

process comprising the Investigation Committee and Disciplinary Committee;

to deter unprofessional conduct by tightening penalties against errant professionals; and

to allow for licensing of limited liability partnerships to provide architectural services, and revise start-up requirements.

Power to reject names of new architectural practices

In addition to these four key features, this Bill has another amendment to allow the BOA to reject the registration of names of new architectural practices, if it deems that proposed names are likely to cause confusion to the public.

Architects attach a high value to the name of their practice because the design of the completed building is highly visible to the public. Buildings are often associated with the architects who designed them. This is why successful Singapore architects are being commissioned to design buildings overseas such as those in China, India, the Middle East and elsewhere.

Building designs are the intellectual property of the architect and the firm to which the architect belongs. The Board has received complaints that some newly formed practices have chosen names that are very similar to established firms. This will cause confusion to potential clients. The proposed amendment will empower the Board to reject the registration of names of new practices where there is a high likelihood of such names causing confusion.

Conclusion

Sir, the challenges that are facing the architectural profession would be to uphold professional standards and raise

the quality of architectural designs. The amendments proposed in this Bill will enable the Board of Architects to play a more effective role in helping the profession meet these challenges.

Sir, I beg to move.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Mr Heng Chee How].

Bill considered in Committee; reported without amendment; read a Third time and passed.

Order for Second Reading read.

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

Objective

Sir, the key objective of the Housing and Development (Amendment) Bill is to put in place the legislative framework for the new Design, Build and Sell Scheme (DBSS). Under this scheme, the private sector will step into HDB's shoes to build and sell HDB flats. The Bill will introduce a new Part IVB under the Housing and Development Act to give effect to this. The Bill also seeks to introduce other amendments to the Housing and Development Act. These include allowing special upgrading works, eg, lift upgrading, to be offered in relation to two or more buildings to link them together, expanding the composition of the HDB Board, and widening certain powers of the HDB to facilitate its operations.

Let me now explain the various key provisions.

Design, Build and Sell Scheme (DBSS)

Sir, I announced in Parliament earlier this year that MND and HDB will be piloting a new Design, Build and Sell Scheme in the second half of the year. Under this scheme, the private sector will undertake the development of public housing. Upon building completion, the development will be vested in HDB. HDB will remain the lessor of the flats and administer their leases, while the Town Councils will manage and maintain the common areas. Under the DBSS, developers will bid for the land through open tender and the successful tenderer will have the flexibility to decide on the design of the flats, the flat mix and their pricing. This allows greater scope for market forces to work.

So far, our public housing has been developed entirely by HDB. Most of them are designed by HDB's in-house architects. The DBSS represents a major shift in the way our public housing programme is implemented. This new scheme will enable the private sector to play a bigger role in the public housing market. Our public housing programme will be more responsive to the needs and aspirations of Singaporeans. Market competition will also benefit HDB flat buyers by injecting fresh ideas into the design of public housing, giving them a wider choice of flats and, hopefully, better value for money.

As the DBSS is a new scheme and different from how public housing has been implemented in the past, we will move cautiously at first. We will carry out some pilot projects, test the various features of the scheme, and gather feedback from the industry and from buyers to ensure that the objectives of the

scheme are met. We will study the outcome of the pilot projects and make refinements and modifications to the DBSS scheme, if necessary.

The DBSS is not the only way we will engage the private sector in the provision of public housing. Under the Design and Build (D&B) Scheme, HDB outsources the design and consultancy services of new HDB flats as well as the building works, as one package, to the private sector. This is a tried-and-tested method. HDB will continue to be the developer, and set prices, for the bulk of the new flat supply. HDB-developed flats, together with HDB resale prices, will set benchmark prices for DBSS flats, thus ensuring that they are affordable to flat buyers.

Over the past year, HDB has met up with industry players and associations to get their feedback on the scheme. Based on their inputs, we have refined the details of the scheme and put in place a suitable legal framework for the implementation of the DBSS.

The bulk of the legal provisions related to the DBSS will be introduced as new provisions under the new Part IVB of the Housing and Development Act, which is outlined in clause 11 of the Bill. It allows the Minister to appoint approved developers to implement DBSS projects. It also sets out the functions and duties of an approved developer. These include developing public housing on the land parcels specified by the Minister and selling the flats in accordance with the provisions in the Act.

Under the DBSS, private developers will bid for the site and pay the land premium before commencing development. The approved developer will hold the title to the land. As DBSS projects are public housing, upon their completion, HDB will take over the ownership of the common property and commercial properties, such as the shops or social

communal facilities, and be the head lessor of the flats. This will, in turn, allow Town Councils to manage and maintain the common areas in the development.

Clause 11 thus provides for the vesting of the land parcel in HDB upon issuance of the temporary occupation permit or the certificate of statutory completion for the development. Specifically, the parts that would be vested are the commercial properties, the common property, as well as the reversionary interest in the flats sold by the developer. HDB will indicate upfront the amount of consideration it will pay the approved developer for the properties to be vested, so that developers can take it into account when they submit their land bids.

Currently, HDB flats are sold under Part IV of the Housing and Development Act and are subject to the terms and restrictions stated therein. These include restrictions pertaining to the purchase and resale of flats, HDB's right to compulsorily acquire flats of lessees who infringe on the terms of the lease, and restrictions on the sale and mortgage of the flats.

Clause 11 allows the various terms and conditions currently stated in Part IV to apply to flats built under the DBSS under Part IVB. This is to give HDB the necessary powers to regulate the sale, purchase and use of these flats and to administer their leases, so as to ensure that the public housing nature of DBSS flats is preserved. For example, HDB will need to be able to enforce the various conditions for resale and sub-letting, since public housing is intended primarily for owner occupation. At the same time, some flexibility may be given to modify the terms and conditions, where appropriate. This is essential as our intention is for HDB to experiment and modify the parameters of the DBSS, if necessary.

Clause 11 also includes provisions to cater to the scenarios where a buyer dies or ceases to be eligible to purchase the DBSS flat before taking possession of it. These provisions are similar to those stipulated under the Executive Condominium Housing Scheme Act. In addition, just as the use of DBSS flats by lessees will be regulated by HDB, uses of unsold units by the developer will also need to be regulated. There is, therefore, a provision to allow the Minister to prescribe the allowed uses for such unsold units.

As with new and resale HDB flats, buyers of DBSS flats can obtain mortgage financing from HDB, subject to them meeting the prevailing eligibility conditions for an HDB concessionary loan. Clause 4 of the Bill amends the current section 13 of the Housing and Development Act to expand HDB's functions and allow it to grant mortgage loans for the purchase of DBSS flats.

Finally, clause 11 allows the Minister to make rules necessary for the implementation of the DBSS. An example would be to prescribe the format of the sales contract between the approved developer and the buyer. As provided for in the Bill, the approved developer will be exempt from the sale and purchase documents prescribed under the Housing Developers (Control and Licensing) Act, which apply to private properties.

Let me now explain the amendments to other Acts that are necessary for the implementation of the DBSS.

First, clause 13 makes related amendments to the CPF Act to allow buyers to use their CPF savings to finance the purchase of flats built under the DBSS. A charge on the flat will be created to secure repayment to the CPF of the amount used in the purchase of the flat. The Home Protection Insurance Scheme will also be extended to flats built

and sold under the new Part IVB of the Housing and Development Act.

In addition, clause 14 provides for related amendments to the Residential Property Act, to exempt flats built under the DBSS from the various provisions and restrictions under the Act, as is the case with HDB-developed flats today. This will allow Singapore PRs who are married or engaged to Singapore citizens to purchase these flats.

Mr Speaker, Sir, I have briefed the House on the various legislative amendments required for the implementation of the DBSS. Once they take effect, HDB will be able to proceed to put the land parcel for the first pilot DBSS project up for tender. My Ministry will monitor the outcome of the pilot closely before proceeding further.

Special upgrading works

Let me now turn to the provisions for special upgrading works stipulated under Part IVA of the Act.

Sir, Part IVA lays down the guidelines for the implementation of special upgrading works and polling. Special upgrading works are defined as any works necessary or ancillary to installing lifts in a building, or other items of upgrading works for the convenience of residents which may be prescribed by the Minister.

In the context of lift upgrading, works currently permitted under the Act are confined to the provision of new lifts or lift shafts to individual blocks. Provision of new lifts and lift shafts that are shared between blocks is not permitted, even if it is feasible and more cost-effective, for example, for blocks that are already connected, or can be connected, by link bridges.

The proposed amendments in clauses 9 and 10 are therefore aimed at giving HDB greater flexibility in implementing the Lift Upgrading Programme, and making it clear that lift upgrading works need not be confined to works in a single building but may include works relating to more than one building.

To facilitate the polling for such works, HDB will be given the flexibility to conduct the poll jointly across buildings and for the 75% majority required for a successful poll to be computed based on the total value in votes of the owners across the buildings. However, I would like to emphasise here that we will pursue such options only if it is more cost effective to do so. The cost cap of $30,000 per benefiting-unit will continue to apply to such blocks.

Amendments to other sections

Sir, I shall now move on to the other proposed amendments in the Bill.

Section 6 of the Act currently stipulates that the HDB shall consist of a Chairman, Deputy Chairman and between three and seven other members. Clause 2 seeks to increase the maximum Board size from the current nine persons to 12 persons, by allowing a maximum of 10 members instead of seven. This is to allow a wider range of expertise to be brought into the Board. With the expansion in the Board size, the quorum for Board meetings will be correspondingly increased from the current three members to four members, by way of clause 3.

Clause 5 amends section 27A of the Act to allow HDB the flexibility to compound any offence under the Act instead of proceeding with prosecution in Court. Currently, section 27A only allows HDB to compound offences under rules made under section 27. At the same time, the maximum composition fine will be raised from $1,000 to one-half of the amount of the maximum prescribed for

the offence, or $2,000, whichever is lower. This is in line with the Criminal Procedure Code and ensures that the fine will be commensurate with the offence committed.

Clause 6 of the Bill amends section 51 to make it clear that, in addition to prohibiting the voluntary creation of trusts over an HDB flat, the Act also prohibits any person from becoming entitled to a HDB flat under a resulting trust or constructive trust. This will help to prevent a situation where a person who is ineligible to own an HDB flat may become entitled to own one, for example, by paying the purchase price of the flat on behalf of the owner.

Section 52(2) of the Act sets out the guidelines for the transfer or sale of a flat, house or other building upon the death of the owner. Under the current provisions, a Grant of Letters of Administration or Grant of Probate must be taken out within 12 months of the owner's death and, thereafter, HDB's consent for transmission or transfer must be sought within six months. However, there is no timeframe for administrators or executors to transfer or sell the flat after HDB's consent is obtained, which implies that they can remain as legal owners of the flat indefinitely. Clause 7 seeks to address this by requiring the transfer or sale of the flat to be completed within 12 months from the date of HDB's consent. If the transfer or sale is not completed on time, HDB can take action to have the flat vested in HDB. We will, of course, invoke this provision only as a last resort.

Section 60 of the current Act states that it is an offence for anyone to make a false statement to HDB in relation to any purchase, mortgage, sale or transfer of a HDB property. Clause 8 repeals and re-enacts section 60 so as to expand the scope of the offence to include making false statements in relation to any other applications to HDB for its permission,

consent, approval or licence under the Act or any subsidiary legislation. It will also make clear that the section covers any type of statements made, including those made electronically. The amendment is timely in view of the different types of applications which may be made to HDB and the wider usage of electronic applications today.

Finally, clause 12 amends section 80 of the Act to expand HDB's investigative powers. Apart from requiring proof of identity from any person whom it believes to have committed an offence under the Act, the clause will also empower HDB to request for other types of evidence, call for the attendance of witnesses and inspect records.

This will allow HDB to deal more effectively with offences under the Act. One such example is cash-back transactions, where the buyer, seller and housing agent may make false statements about the transacted price of the resale flat.

Sir, I beg to move.

Question proposed.

Sir, I believe, if carefully implemented, the DBSS scheme, which the Bill primarily seeks to introduce, has numerous benefits for all stakeholders.

For the Government, the scheme allows HDB to tap private developers' expertise in housing design and service delivery. It would inject some degree of competition into the market, as hitherto public housing was the monopolistic purview of the HDB. In turn, this should foster greater innovation in building and design.

For the buyers, unlike new flats built by the HDB, DBSS flats could come complete with finishes and fittings similar

to private developments. These finishes and fittings could be priced into the flat's selling price.

4.40 pm

Purchasers of such flats would thus be able to avoid incurring out-of-pocket renovation costs or taking up separate renovation loans. This would be attractive to first-time home-owners who may be cash strapped as they are just starting out in their careeers. Looking at it in broader terms, the DBSS should improve the responsiveness of the public housing market to the needs of the residents, leading to greater housing choice for flat buyers.

The DBSS is also congruent with the philosophical shift of subjecting the provision of public services to market testing. I applaud the Ministry for heeding the call for more private sector participation in the public housing market and adopting this refreshingly bold approach, which some might even consider radical by current HDB practices!

Nonetheless, as the Minister for National Development has acknowledged, this idea is untested and unfamiliar to not just flat buyers but also to the HDB. In fact, I think developers are just as unfamiliar with the idea, and many could be adopting a wait-and-see attitude when the pilot project is launched.

It is likely that, initially, only the social conscience developers like NTUC Choice Homes or the contractor-types would have the motivation and confidence to go in for the pilot project due to their familiarity with HDB construction. In fact, I hope they will be the pioneers of the schemes, so as to get it off to a good start.

While this approach is generally positive and could bring benefits to all stakeholders, there are inherent risks and concerns. And as with so many ideas and policies, the devil is in the details.

I would thus like to raise four areas of concern which I urge the Ministry to carefully consider when implementing this scheme.

First, land allocation and determination of reserve price. As announced by the Ministry, land under this scheme would be allocated to the developers via open tender. Presumably, there will be a reserve price set for the land, below which the land is unlikely to be awarded.

Speaking as a licensed real estate appraiser, I would suppose that for the first plot of land at Tampines under the pilot project, the reserve price of the land is likely to be determined as the residual value after relevant construction costs, including access roads, landscaping of common areas, etc, are deducted from the estimated gross selling price of all flats that can be built on the plot of land, and the consideration to be paid by HDB for the common property and the commercial properties.

The selling price of the flats could be estimated by using the prices of new and resale HDB flats in the area as a guide, with appropriate adjustments. This is because there is no market evidence of the value of such land currently.

However, for subsequent tenders of land under this scheme, the successful bid from this inaugural tender could be used as a benchmark for determining the reserve and bid prices for the land by the HDB and the private developers respectively.

In fact, this could also influence the price which HDB sets for the new flats

that it subsequently builds. Here, I wish to sound a caution. If developers bid aggressively for the land, will this inadvertently lead to HDB revising its new flat prices?

The land market is unfettered, but hardly smooth in its functioning. It is what economists call "inefficient" because of its lumpiness, heterogeneous and inherently cyclical nature. Consequently, a high bid price at one or two tenders may not reflect what ought to be the market clearing price.

Even though the Ministry has given the assurance that the HDB will continue to be the main developer of public housing, this does not ensure that too much reliance would not be placed on the land and flat prices achieved under the DBSS. This is because such prices are market-determined, and thus very compelling evidence of the market.

In a rising market and when the scheme takes off, there could be a virtuous - or vicious, depending on whose view you take - cycle of upward price creep affecting the entire new HDB flat market. Consequently, the Ministry needs to guard against being too unduly influenced by the prices secured under the DBSS.

Sir, the affordability of public housing must always remain the top priority of the HDB. Hence, new HDB flat prices set by the HDB must first and foremost take cognisance of the income levels and needs of Singaporeans, especially first-time home buyers.

Second, allocation of flats under the DBSS. Developers will be given a free hand to decide on the pricing of the flats as no ceiling has been set on the flat prices. Presumably, developers would also be given a free hand as to the mode of allocation of flats to buyers.

Based on market practice, this could be on a first-come-first-served basis, but subject to compliance with HDB eligibility conditions, such as the ethnic integration ratio. An advantage of this is that flat buyers may be willing to pay some premium for the flats, simply because the waiting time for the flat is likely to be shorter under the DBSS with the first-come-first-served mode of allocation.

However, in a first-come-first-served marketing situation, there could be some practical difficulty in complying with the ethnic integration ratio which should be resolved at the outset. This is needed to make the process transparent as, otherwise, potential buyers may be wary of unfair practices by the private developers.

Developers are unlikely to adopt the build-to-order approach for the DBSS if they have to incur holding costs once they are awarded the land which is on lease for a fixed term of years. This would be the case unless some kind of concession, say, in the form of a lease deferment or extension, for the period, from the date the land is awarded to the developer to the date before the trigger point, ie, where, say, at least 75% of the units are booked.

Conversely, if the developers do not rely on the build-to-order scheme on the basis of receiving high interest for the flats before proceeding to build, they may end up with unsold flats if demand is poor.

Based on the existing practice for HDB-developed unsold flats, it is likely that the developers would not be allowed to rent out these unsold flats. I would thus like to ask the Minister if there would be any guidelines as to how developers are to sell and allocate the flats under the DBSS.

The proposed section 65P(1)(b) of the Bill requires that any unsold flat built by the developer be vested in the developer. If these flats are not taken up in order to cut cost and/or losses and dispose of the unsold flats, the developer may resort to lowering prices, as is common in market practice in the private sector. In some instances, the price reduction could be hefty. Whilst this is quite normal market practice, particularly in the private sector, and HDB has itself also been cutting prices for its unsold flats, HDB flat buyers who paid higher prices under the DBSS should be made aware of this, so that they will not feel aggrieved or shortchanged.

I raise this point because the Minister for National Development had noted in this House, when commenting about making downward price revisions for HDB's unsold flats, that these adjustments are moderated compared to the actual fall in resale flat prices. He noted that this helps to stabilise the property market and preserve the value of the existing HDB flats.

However, developers, who understandably would be driven by the bottom-line, are unlikely to place "preservation of the value of existing flats" as their priority. Hence, the DBSS is likely to inject more volatility into the public housing market.

Third, housing subsidy and resale levy. Under the DBSS, to ensure affordability, first-time buyers will receive a Government housing grant of $30,000 or $40,000, similar to the grant for first-time buyers of HDB resale flats. Eligible buyers are also able to get HDB concessionary loans.

As private developers are in the business to make profits, guided by existing new and resale HDB flat prices

and an understanding of market conditions, the prices they bid for the land under the DBSS will give a strong indication of how much the market values a plot of land for public housing. The developers would also have factored in a profit margin.

This practice of allowing private developers to build and market HDB flats will provide an interesting profit/loss comparison with regard to the housing subsidy enjoyed by buyers of HDB flats - a contentious issue which has been hotly debated and, if I may be so bold to say, still little understood and therefore worth revisiting.

In the case of the DBSS, if the developer makes a profit from the project - and we have to assume that this is likely to be so in most cases - after having paid for the land via tender, then the subsidy given to the flat purchasers is in effect the $30,000 or $40,000 grant plus the HDB concessionary loan, if the flat buyers are eligible for them.

Otherwise, one could say that the flat buyer is not really enjoying a housing subsidy since the differential pricing, say, between the flats sold under the DBSS and those of HDB-built new or resale flats can be attributed primarily to the different sets of restrictions, criteria of allocation, etc, applicable to them.

In valuation parlance, the value of a property is not just determined by its physical attributes, such as flat size and location, but also by its bundle of legal rights. All things being equal, the smaller the bundle of rights or the more restrictive these rights, then the lower the value of the property.

Does the Ministry then need to relook at the whole issue of subsidy and how this is to be determined and allocted, as well as the related issue of resale levy and how this is to be imposed? Firstly, the

housing grants to first-time buyers ought to be reviewed from time to time to ensure that they keep pace with affordability levels. Secondly, the mode of computation of the resale levy to be imposed when a flat owner sells the first flat he purchased under the DBSS, or direct from the HDB, and opts to make another direct purchase ought to be reviewed.

According to the Ministry, the resale levy is a mechanism to claw back some of the subsidy that the Government is handing out on the second flat. It is to make sure that the distribution of the subsidy is equitable across-the-board. However, a fall in flat price could have technically wiped out any subsidy or housing grant enjoyed by the purchaser on the first flat. For such cases, even if they benefit from another subsidised flat, the real total subsidies they enjoy from both flats would be lower than those who did not sell their first flat at a loss.

As some members of the public have voiced in letters to the press, the imposition of resale levy on a percentage of the sale price of the first flat hurts them, and may prevent them from downgrading to relieve their financial pressure. Furthermore, in the case of the DBSS, there could be purchasers who, in reality, enjoy little, if any subsidy, on the second DBSS flat they purchase, if they do not qualify for the HDB concessionary loan. Hence, in the light of the changing public housing market landscape and circumstances, it is timely to review the rationale for and mode of imposition of resale levy. I would thus like to urge the Minister to do so and to do so as soon as possible.

Finally, flat quality. Another nagging question with the DBSS is whether developers are able to build housing of even better quality than HDB-developed flats at affordable prices on land that is purchased through competitive tender. A

developer who refused to be named commented, "If you want to build a super-duper HDB flat, consumers may not be able to afford it. It will be a challenge for developers if you want to have better designs and still keep it affordable."

The worry is that if the developer is not able to reap a normal profit or, worse still, suffers loss, then he may resort to cutting corners, and this situation may result in poorly-built flats. The Ministry has decided not to place any price ceiling, as the experience in Hong Kong has shown that this may lead to developers skimping on construction. However, developers may still skimp on construction if their profit margins are squeezed or if they make losses and have to hold on to unsold flats. Hence, there ought to be at least some form of control over the quality of the flats built, say, in terms of materials used and workmanship, and/or some BCA quality certification.

The quality issue cannot be over-emphasised as, although the developer is responsible for the one-year (or longer periods if they are applicable) liability period, defects usually occur after the first year, or after the expiry of the liability period. After the defects liability period, it is the Town Councils who may end up spending more on maintenance of poorly-built common areas and flats.

In conclusion, Sir, I note it is appropriate that the Government is treading warily in the move to open up more public housing to the private sector under the DBSS, as the idea is alien to HDB flat buyers as well as private developers. The Government should thus carefully consider the rules and guidelines under which the scheme is to be implemented as well as monitor the scheme when it is underway to avoid some of the pitfalls highlighted.

Nonetheless, I applaud MND for embarking on this daring move and

welcome the opportunity that it affords for the private sector to participate in yet another area of public service to the citizens.

Sir, subject to the aforesaid, I therefore support the Amendment Bill.

Sir, I wish to raise some points regarding new section 65S of the Bill. Section 65S deals with the events on the death of a purchaser before the relevant date. When that happens, under this section, the approved developer shall, unless the Minister otherwise directs, cancel the deceased purchaser's application and terminate the sale and purchase agreement and refund moneys paid, less administrative and legal costs.

This clause raises several issues. First, it seems to run against the general operation of law that a person's contractual obligations and rights continue even after his death to be borne by his estate. There are exceptions to this general rule, such as in contracts of service or employment and other similar agreements which are personal to the individual. The Minister has stated that the effect of section 65S is similar or exists in the Executive Condominium Scheme. I wish to ask him whether there is a rethink of that position and whether a similar rationale exists in this case. This is because, besides these few exceptions, in almost all property transactions, these are carried over by the person's estate upon his demise, and there are good reasons for this. It lends certainty to the agreement, especially from the viewpoint of the developer.

Under section 65S, the developer may also be able to mitigate the uncertainty by buying suitable insurance. But this means additional cost which, I presume, will ultimately be borne by the purchaser.

This is not a totally satisfactory solution. I would like to ask the Minister whether there is any special reason why there is a departure from the general rule in this case.

The second point is that this clause may cause severe hardship to the purchaser's joint applicant, if any. And, indeed, in the current scheme of things, it is very likely that purchasers apply to purchase jointly. Under this clause, upon the demise of one purchaser, the joint purchaser will have his or her rights of application cancelled. This may not be fair to the joint purchasers who have shared the dream of buying the property, invested funds into the purchase and may even have the capacity to fulfil the obligations under the sale and purchase agreement, notwithstanding the demise of his or her partner. To the surviving partner, there might not be any reason why his or her rights should be terminated in the event of the demise of his co-purchaser.

The third issue is that this clause may even cause hardship to the dependants and other persons who are intended to be occupiers of the property. One could envisage a situation where a married couple have purchased jointly. They have school-going children and aged parents staying with them. The parents may have agreed to help the purchase to finance furnishings, for example. Then one of the purchasers passed away. This clause says that the developer shall cancel the sale and purchase agreement. Not only does the family suffer bereavement, we also see their plan to stay together dashed. Of course, they can re-apply elsewhere, but there will be much time wasted and loss of the opportunity to stay at the location of their choice.

It may be argued that the concerns I raised are addressed by the phrase "unless the Minister otherwise directs" found in section 65S. But the question is:

why do we need to have the Minister to direct the developer not to cancel the sale and purchase agreement, when the developer should not cancel the agreement in the first place even without the direction of the Minister? I am of the view that, in the event of the demise of a purchaser, we will let the normal operation of law take its course, ie, the estate carries on with the purchaser's obligations and rights. If there is reason to force the parties to reconsider their positions upon such a demise, then it is better to let the deceased purchaser's estate and the co-purchaser, if any, have the option whether to continue with the purchase. Under the proposed section 65S, this option seems to lie with the Minister, and not with the estate of the purchaser or with the co-purchaser.

I hope the Minister would address these issues and, subject to these, Sir, I support the Bill.

Mr Deputy Speaker, Sir, let me thank Dr Amy Khor and Mr Ahmad Khalis for their comments which are very relevant, and I hope to allay some of their concerns regarding the points that they have raised.

First of all, Dr Amy Khor raised four concerns.

Let me address each of them in turn.

On the issue of land allocation and reserve price, as Dr Khor mentioned in her speech, it is true that the Government will be tendering out land for the DBSS. We will award the tender to the highest bidder, in the same way that we award land for other Government land sales programmes but, of course, subject to their meeting the reserve price. Regarding the question of what the reserve price will be, Dr Khor is an eminent valuer, and she has suggested that one way of arriving at a suitable reserve price is the residual value method. I am not a valuer, but I am sure that the Chief Valuer, whose duty it

is to set the reserve price, will know what to do. But the point really is that the land allocation and the land price that is determined in this manner will be determined by the developers themselves. It will be determined by them doing their sums, looking at the prices of flats in the surrounding area, calculating their profit margin and their own particular situation, and then making a bid for it.

It is a pilot project. As Dr Khor rightly mentioned, the developers are not very sure how this will work but, in the course of the discussions with them, HDB has tried to explain as much as possible what is the objective behind the scheme. Of course, it is the wish of the Government that as many developers as possible take part in this preliminary pilot project.

So, the issue of the land price and the reserve price, these are things that will be determined by the Chief Valuer. It is not determined by HDB. How the land will be allocated will be determined, as per normal, through the highest land bid, and how many developers will take part in the exercise and what their bid is and so on will be left to the market. I hope that, through this initial project, we will be able to learn many lessons.

But the main point of Dr Khor's concern here is not so much how much the developer is going to bid, but really how to make sure that HDB flats remain affordable. I think that is really the nub of the issue. Here I must say that it is not the intention of the DBSS to raise the price of HDB flats. Certainly, it is not in the Government's interest to do so. We want HDB flats to be affordable and, in the case of the DBSS, this objective remains paramount. But at the same time, we also want to inject that flexibility into the market to try and see whether the private sector can actually add value to the whole process of the provision of public housing. HDB has been at it for 40 years, and it has done a marvellous job.

But I think there is scope for us, in a limited way, to allow the private sector to be involved in the provision of public housing.

I do not see the DBSS scheme will be the overwhelming way for the HDB or the Government to sell HDB flats. There are three ways that we will continue to do so, even after DBSS.

The first, of course, is for HDB itself to develop public housing, and this HDB will continue to do. Second, is the design-and-build method where HDB will remain the developer but will sub-contract or outsource the design and building of the flats to the private sector. The third way, of course, is DBSS. I foresee that the bulk of the public housing programme will still remain with HDB for the foreseeable future. Indeed, the DBSS scheme, even if we proceed after the pilot project, will remain a very small but a very meaningful part of the public housing programme. In this way, Singaporeans can be assured that HDB flat prices will remain affordable, because the Government will still remain a major provider of public housing.

The second way is through the eligibility rules for buyers of DBSS. We will continue to set the eligibility rules so tight, eg, the housing income ceiling, the family nucleus and other rules like the 5-year minimum occupation period, because these are, at the end of the day, public flats. It is part of the public housing programme. So, the target market for the developers in the DBSS programme will be limited to these groups of people. Again, I dare say that this will be another way for us to make sure that the prices of DBSS flats will remain affordable.

The third way that we will make public housing affordable under the DBSS scheme will be through the provision of

the CPF housing grant. So, whatever the price set by the developer, any first-timer who comes and buys a flat under this scheme will immediately be able to get a $30,000 or $40,000 grant.

So, these are the three ways which I would like to assure the Member that we will continue to make public housing affordability an objective of the DBSS scheme. We will make sure that there is sufficient competition through HDB to ensure that there is a price comparable, that there are benchmarks and that the private developer is not able to set whatever price he wants. Secondly, we want to make sure that the group that is buying the DBSS flats will be a restricted group. Thirdly, there would be the CPF housing grant.

The DBSS scheme is another way for us to provide HDB flats by allowing private developers to step into the shoes of the HDB and to provide a different kind of HDB flat but, at the end of the day, still a form of public housing. It is not private housing like in the Executive Condominium Scheme, but it is a form of public housing.

On whether developers will be free to set prices, yes, I think I have mentioned earlier, we will allow developers to set prices but the developer really has to take into account many factors when he does so, eg, the surrounding flats, the comparables, as they call it, not just new HDB flats built by HDB but also resale HDB flats in the surrounding areas. So, the prices of flats will be set by the developer. We have decided not to fix the price of the flats, which I think some Members in this House suggested when I first mooted the scheme in the debate in the Committee of Supply, the so-called reverse tender scheme whereby we fix a price and then we ask the developer to tender for it. I explained in the House at that time that I thought it was not a very good idea because housing authorities,

such as those in Hong Kong, for example, who did try this, and found that, by setting a cap on the price, the only way the developers could make money or maximise profit was really to try and scrimp on the quality, which obviously is not in our interest. So we think that by freeing up the ceiling on prices, by letting the developers set prices but yet at the same time providing sufficient competition to them, they will be able to set prices at a level that the market can bear and which, with all the other considerations, will make it affordable to housing buyers.

We will also let the developer decide on the allocation of the flats, whether it is through ballotting or first-come-first-served. Again, we do not want to restrict the developer in how he chooses. Of course, they will have to comply with the policies of HDB, such as the ethnic integration policy. They will have to provide a higher weightage or preference for first-timers and provide some priority for those under the Married Child Priority Scheme and so on. So, all the priority schemes that HDB is currently operating for its own flats will also be required of them.

Within that parameter, how they go about allocating, whether it is through a walk-in selection or whatever, we will leave it to them. I think that one of the primary difficulties of this scheme is that while we want to make sure that the rules and regulations do not depart too much from those for the current HDB flats, at the same time, we do not want them to be exactly the same because, if they are exactly the same, then a lot of the purpose of the DBSS would be lost. So, we want to allow the private developers to do as much as they can and to free up as much as possible, without violating the fundamental principles of the public housing scheme, such as minimum occupation period and the ethnic integration policy.

The third concern that Dr Khor had was on the housing subsidy and the resale levy. On the issue of the housing subsidy and whether the housing grant needs to be reviewed from time to time, if you look at the history of the CPF housing grant, it has actually been reviewed from time to time. It is a useful mechanism. It is something that allows first-timers to purchase a HDB flat in the place and at a time of his choosing and yet, at the same time, benefit or enjoy the CPF housing grant from the Government. And we have reviewed it from time to time. We have reviewed it as and when the market situation or the economy has changed. We will continue to do so. And so it is with the resale levy. I believe many Members have commented on the resale levy in this House, and I have indicated that we are going to do a review of the resale levy. So I would just like to repeat that again. I think there are certain anomalies in the system which have arisen as a result of changing circumstances and changing market conditions, and I agree that it is timely for us to do a review of the resale levy. But let me just say this again that the principle of the resale levy, which is that we want to make sure that subsidies are not over-consumed by any single person, still remains. But how we implement the resale levy, eg, how we apply it, what are the percentages and so on, I think that we can review.

Finally, the question about quality - better design and yet trying to keep it affordable. It is a bit strange listening to Dr Khor, but I guess it is a tribute also to HDB that she is a bit worried about the quality of flats that will be built by the private sector. Usually, it is the other way around. Usually, people say that HDB flats are not as good as those in the private sector. But I think it is a tribute. For the same price, the HDB can build a good quality flat, and I would like to thank her for acknowledging this fact, although in an indirect way. I thought I would put

it a bit more directly to her.

But it is a concern that we have. We want to make sure that the quality is there, and that is one of the reasons why I did not want to use the reverse tender mechanism, because all my friends in Hong Kong tell me, "If you do this, developers are going to take advantage of it."

We will maintain the quality because the private-sector developers will continue to be governed by all the housing construction standards that are set by BCA, the technical standards that are set by HDB and not just standards on housing quality. We will be setting standards on durability and maintainability, because one of the features of the scheme is that these flats will be handed over and vested to HDB and will be maintained by the Town Council. So, we do not want to have a situation where a flat is built

- it may look very good for the first, second or third year - and thereafter, Town Councils will be landed with the "baby", as it were. Standards on durability and maintainability are standards which apply to HDB flats and which we willl apply to the DBSS flats as well.

In summary, as far as Dr Khor's concerns are concerned, I think they are very valid concerns and we will certainly take note of them. We will proceed with the first project with our eyes wide open and we will talk to all concerned - buyers, developers and, of course, HDB - and we will see how we can improve upon it. The objective behind this scheme is a good one and that is why I am pushing for it, but, at the same time, we know that there are certain pitfalls which we have to be careful about.

Let me now turn to the concern of Mr Ahmad Khalis. He talked about the

proposed new section 65S. First of all, let me say that this clause is also in the Executive Condominium (EC) Housing Scheme Act. The reason why we have it and why it is not in the Residential Property Act for private property transactions is because of one simple fact. In a private property transaction, you do not have issues of eligibility conditions, whereas for buying an HDB flat and an executive condominium, you must fulfil certain eligibility conditions before you can buy. That is the reason why we need this clause in the EC Housing Scheme Act and now, in the Housing and Development Act for DBSS purposes.

What are these eligibility conditions? Income ceiling, family nucleus, citizenship - these are the three basic ones. These are provided in the Bill under the proposed new section 65R. We do not want to inadvertently have a situation whereby, as a result of an unfortunate demise of one of the applicants, the remaining applicant is not eligible to buy the flat because of one or other conditions earlier. So we craft it in such a way that it is mandatory to cancel the sale and purchase (S&P) agreement. However, I would like to mention here that, in practice, what happens is that the developer will not need to cancel the S&P agreement straightaway. What he does is that he will consult HDB to check whether that person, who is inheriting the contract, is eligible to purchase. If he is, he will then refer the matter to the Minister and the Minister will exercise the discretion that is in the Act to allow him to proceed. But if he is not, then, unfortunately, he has to proceed to cancel the S&P agreement. Of course, having said that, we do get appeals from time to time from people who are not eligible, but, as a result of a demise, they cannot get another person to jointly purchase and as a result of which, he may actually lose the flat. Under extenuating circumstances, we do look at it on a case-by-case basis.

But I want to assure the Member that there are enough provisions such that for the cases that he has pointed out, whether it is the remaining applicant or whether it is the dependant, if there are extenuating circumstances, we will look at it. But on a normal basis, we must have this provision in the Act. Otherwise, it will be very difficult for us to implement the scheme. So, that is as far as the proposed new section 65S is concerned.

Let me thank both Members again for supporting the scheme. I assure them that we will proceed with this scheme and learn lessons from it. If we can make this scheme work and iron out some of the issues, I think it would be of great benefit to public housing flat buyers.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Mr Mah Bow Tan].

Bill considered in Committee; reported without amendment; read a Third time and passed.

Order for Second Reading read.

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

Sir, the Weights and Measures Act was first enacted in 1976 to safeguard fair trade by preventing unfair trading due to short-weights or measures. The Act is currently administered by SPRING Singapore, which enforces controls on weighing and measuring instruments used for trade, as well as on net contents of pre-packaged goods. SPRING issues licences to

manufacturers and repairers of weighing and measuring instruments as well as registers instruments approved for trade use. It verifies all new or repaired instruments, and stamps and seals such instruments to indicate approval and to prevent tampering. It also inspects instruments for inaccuracies and tampering, and investigates complaints about short weights and measures.

The Weights and Measures Act was last revised in 1985. Over the years, manufacturers and repairers have developed the competency to perform verification work. The Imperial Units system is also no longer widely used. A review conducted by SPRING in 2001 has identified various areas in the current Act that would have to be updated so that it would remain relevant to our industry needs and be aligned to practices in other developed economies. We have prepared the Weights and Measures (Amendment) Bill to incorporate the various proposed updates.

Main provisions in the Bill

Mr Deputy Speaker, Sir, allow me to take the House through the main provisions of the Bill.

First, we will introduce the new Authorised Verifier, or AV Scheme. Under this scheme, SPRING will appoint qualified parties as AVs to take on the role of verifying weighing or measuring instruments for their fitness for trade use. The benefit of the scheme is that verification will no longer be constrained by SPRING's capacity. With a larger pool of AVs, the turnaround time for the verification of instruments will potentially be reduced from three days to less than a day.

SPRING aims to fully transfer the role of verification to AVs within three years. The AV scheme will replace the current mandatory Licensing Scheme for manufacturers and repairers of weighing and

measuring instruments. Clause 13 repeals section 13 of the Act which mandates the licensing. Clauses 2, 7 and 25 spell out the main duties and responsibilities of an AV. Clause 11 prohibits any unauthorised persons from performing the functions of an AV.

Second, we will revoke the Metrication Order. References to imperial and traditional units will be deleted from the Act, with the exception of some local customary weights and measures used in trade transaction at Chinese medical halls. Clauses 3 and 4 remove references to imperial units, whereas clause 17 outlines the offences in respect of the failure to use the metric system in certain circumstances. In addition, clause 31 introduces the new versions of the First, Second and Third Schedules, all of which no longer contain references to imperial units.

Third, we will introduce the Accuracy Label as a mandatory mark to be affixed on all instruments used for trade through clauses 2, 6, and 7. The label will allow consumers and businesses to identify an instrument that has been verified for accuracy, as well as enable them to know when the instrument was last verified and by whom.

Finally, we will replace the current Minimum Quantity System, or MQS, which prescribes the allowable limits of error in the net quantities of pre-packaged goods with the internationally accepted Average Quantity System, or AQS. The AQS will be fairer to both manufacturers and consumers than the MQS as it does away with the need for the manufacturers to overfill the net contents in pre-packed goods, and spares consumers from bearing the cost of overfilling. The AQS is recommended by the International Organisation of Legal Metrology and is also widely accepted internationally in such countries as the United States, the

European Union, Australia and New Zealand. Changing from MQS to AQS will therefore align us with international standards.

Clause 2 introduces the "non-standard package" as a package enclosing goods which fall short of the stated quantity by a deficiency greater than the allowable margin of error. Clause 18 introduces the offences related to the implementation of the AQS, while clause 29 allows for regulations to be made on specific matters relating to the AQS.

Conclusion

Mr Deputy Speaker, Sir, the Bill updates the provisions in the Weights and Measures Act in light of the changes in the business environment over the years. In preparation of the Bill, SPRING has consulted manufacturers, repairers and businesses and has received positive support for the proposed amendments.

Sir, I beg to move.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Mr Heng Chee How].

Bill considered in Committee; reported without amendment; read a Third time and passed.

Resolved,

That Parliament do now adjourn to a date to be fixed. - [Mr Mah Bow Tan].

Adjourned accordingly at

Twenty-nine minutes past

Five o'clock pm

to a date to be fixed.

asked the Minister for National Development if his Ministry intends to introduce greater tax incentives for builders to construct buildings which are more energy efficient.

Both the Building and Construction Authority (BCA) and National Environment Agency (NEA) have in place various schemes to require or promote energy efficiency in new and existing buildings.

Since 1979, energy conservation standards have been part of the building design requirements in the Building Control Regulations. These are minimum standards of energy efficiency that all new buildings must comply with. The standards are regularly reviewed to keep pace with technological developments.

Apart from regulatory requirements, there are a number of incentives to encourage energy efficient buildings. Energy efficiency is a key assessment area under BCA's newly launched Green Mark scheme to promote environment-friendly buildings. The scheme is open to both new and existing buildings, and accords recognition to developers and building owners for building and maintaining environment-friendly buildings.

Achieving the Green Mark status will not only help them save on the costs of operating their buildings, but help to raise the profile and hence, value of their properties.

The NEA also has measures to promote energy efficiency in existing buildings. Its Energy Efficiency Improvement Assistance Scheme encourages and provides funding for private sector building owners and manufacturers to carry out energy appraisals. NEA is also working with Government agencies in a pilot project to engage energy services companies to implement energy saving measures.