Hansard, 2006-03-06

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 (2006) To (2006) Mr Charles Chong 09 Mar 12 Mar 16 Mar 21 Mar Mr S Iswaran 10 Mar 18 Mar

ABDULLAH TARMUGI Speaker Parliament of Singapore

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

1st March,2006 (1) The Mutual Assistance in Criminal Matters (Amendment) Bill (2) The Residential Property (Amendment) Bill (3) The Casino Control Bill (4) The Accountants (Amendment) Bill ABDULLAH TARMUGI Speaker Parliament of Singapore

[Mr Speaker in the Chair]

The following Question stood in the name of Dr Tan Sze Wee -

1. To ask the Minister for Health since the implementation of the Advance Medical Directive ("AMD") Act (a) how many persons have signed up for AMD each year from 2001 to 2005; (b) what are the efforts and programmes undertaken by his Ministry to promote AMD adoption in the population; and (c) if the AMD Act needs to be reviewed and changed to improve adoption rates.

Question No. 1, Sir.

Sir, Dr Tan Sze Wee wanted to ask about the adoption rate of Advance Medical Directives (AMD). Since its implementation in 1997, nearly 4,000 Singaporeans had signed on. I am one of those 4,000.

From 2001 to 2005, the numbers were 442 in 2001, followed by 265, 268, 350 and 1,328 in 2005.

We promote AMD largely through doctors at clinics, nursing homes and hospitals. We have a public information booklet on "Advance Medical Directive - What You Should Know", which is available at healthcare facilities.

This booklet also contains the form for making an AMD. Anyone who wishes to make an AMD should discuss it with his or her doctor, including getting the doctor to help complete the form. Singaporeans can also download the form from the MOH website.

MOH will make periodic efforts to raise public awareness and support for the AMD. We will leverage on events such as the tragic case of Mrs Terri Schiavo to educate the public on such issues. That was how AMD adoption rate increased sharply last year. But, realistically, we should not expect overwhelming subscription to AMD.

Making an AMD is a serious and voluntary decision. Our efforts will continue to focus on increasing access to the AMD forms and providing the necessary education.

MOH, together with the National Medical Ethics Committee, is currently reviewing the AMD Act. We will see if any amendments are needed in the light of experience.

Order read for consideration in Committee of Supply [4th Allotted Day].

Resumption of Debate on Question [3rd March, 2006],

"That the total sum to be allocated for Head T of the Estimates be reduced by $100." - [Dr Amy Khor Lean Suan].

Question again proposed.

Singapore as a Global City

Sir, the Prime Minister's National Day Rally Speech last year was entitled "A Vibrant Global City Called Home". The aim is to

Many global cities evolved organically from the industrial and transport hubs of the past, largely through the entrepreneurial drive and energy of their populations. Singapore has done well through excellent urban planning and execution. But - and this is the intriguing question - can Singapore continue to use a largely top-down approach to move to the next plane on its quest to successfully transform itself into a global city?

Sir, there is widespread perception that Singapore is too well-planned, even over-planned, and that this accounts for the relatively sterile environment relative to other major cities. I fully appreciate that our planners have become more accommodating, more private enterprise driven and more flexible. But I submit that more needs to be done.

I hope that the "Duck Tours" example, cited by PM Lee, is consigned to history. But a number of businessmen and developers have told me that if their idea is not one that can fit into any of URA's current planning drive, it would be difficult to get planning approval.

Sir, I would like to ask the Minister what other plans, going forward, has the Ministry to help turn Singapore into a truly Tier One global city. What does it consider are the necessary ingredients of a global city? What challenges does it foresee? How can the Ministry allow for more organic, bottom-up ideas to germinate and take root?

create an outstanding living, working and recreational environment for all Singaporeans. Yet, Sir, there appears to be many detractors of whether Singapore can ever achieve its aim - which I recently learned to have originated from the wonderful late Mr S Rajaratnam - of becoming a "Global City", comparable to the likes of New York and Tokyo.

Sir, Dr Amy Khor has

We do not intend to do the same with our City Hall - to jack it up and put a shopping mall underneath. But, I think, that is an illustration of what cities around the world are thinking of doing. Whether they proceed with it or not, I do not know. But the very fact that somebody is thinking along these lines illustrates that people are all vying to attract the same pool of talents and visitors to their shores. That is the kind of competition we are up against - to be an international city and a global city. So, to be in the game, we need to have bold strategies, innovative plans, and we also need to think, to use the cliché, out of the box. How do we intend to do so? Let me outline three areas we intend to focus on in the years ahead, in order to achieve this vision.

The first is to touch on what Dr Amy Khor mentioned, and that is land use planning. How do we provide for greater flexibility in our land use planning to meet

As a result of all these schemes, I think businesses and entrepreneurs now find that they are able to make better use of the facilities and infrastructure that they have. But, having said that, I think we also have a responsibility to maintain a certain orderliness and a certain quality of the living environment that people have come to expect. We need to provide a little bit of certainty to businesses and home-owners, so that when somebody buys a home in the neighbourhood, he does not find suddenly that next to him there is a factory or a childcare centre, a place of worship or a shopping mall. There is a need to balance between flexibility on the one hand and that sense of certainty, that when you buy a piece of property in Singapore, you know what it is that you are buying; you know, to a certain extent, at least within a certain reasonable timeframe, what is it that is going on around you.

So, that is the kind of balance that we need to strike. Of course, on top of that, we also need to worry about our long-term land use needs. I think this is one of the strengths of Singapore. While Dr Amy Khor may cite complaints of our top-down planning being a burden, it is, I submit, a strength that has allowed us to make better use of the limited space that

So we have to bear these considerations in mind. It is not just a top-down approach that we need but it is, I think, a consultative approach that we would need, with industry players and the population, and this is the kind of approach that we have taken in reviewing the Concept Plan and the Master Plan. But one of the things that I would like to emphasise is that whatever it is, whichever approach we take, and we will take whatever approach is necessary, in land use planning, we must bear in mind that this is our home - that this is a home that is dear to us, this is a home that is beautiful, that has character, life and memories which we want to keep. The Prime Minister, at last year's National Day Rally speech, painted this vision of Singapore as a very distinctive global city, with beautiful residential towns, thriving communities in the heartlands, and exciting events that will enliven the city. That is the first area that we will focus on - a more flexible land use planning approach.

The second area that we will focus on is to make Singaporeans proud of our city. Last year, we had a seminar and some prominent Singaporeans were invited to speak at the seminar. One of them said

asked what are the plans we have to develop Singapore into a global city and how we can meet the new challenges and competition. I agree with her that developing a global city is not something that we can do overnight or easily. In fact, there are many cities in the world that are vying for the same position, in the same way, to attract investors, talents and visitors. So, many cities around the world are embarking on major development projects, building new attractions, and actively marketing themselves as global cities. No idea is too far-fetched, too bold, or too crazy for them. Recently, I read that in Shanghai, there is a developer that intends to jack-up or lift the 20-odd conservation buildings along the Bund. If you know about the conservations along the Bund, it is equivalent to us saying that we are going to jack-up City Hall. He was going to put a row of high-end shops underneath those buildings after he had jacked them up by something like seven metres.very diverse and rapidly changing needs? Sir, we know that the Urban Redevelopment Authority (URA) has got a comprehensive Concept Plan which is updated every 10 years, and then, in the interim, there is a Master Plan which is updated every five years. These regular reviews of the plans ensure that the plans will always remain relevant to our needs and the changing aspirations of our people. In recent years, we have introduced the White Zones, the Business-White Zones, other schemes such as the Warehouse Retail Scheme, the Home Office Scheme, and so on.we have. So, when you talk about Changi Airport - although Changi Airport was completed in the 80s - the land for Changi Airport was actually set aside many years before that. When we finally decided that the time was ripe for us to move the airport from Paya Lebar to Changi, the land was already available. You compare that with other situations in other major cities. Every time they try to shift an airport to a new place, they have got to fight with the farmers, like they did in Tokyo. They have got to fight with the residents, like they are doing in Sydney or many other big cities. And they simply cannot move, and airports which are urgently needed infrastructure take years and years to develop.that we must make Singaporeans love our city, and for that the city must love us back. I think "love" may not be the right word to use in this context. But I think we must make Singaporeans proud of our city. How? Deepen their rootedness; foster a spirit of creativity; foster a sense of celebration among our people through better use of urban spaces, preserving some of the memories that we hold dear. And this is where URA can play a part. They can actively promote architecture and urban design excellence to encourage distinctive buildings and public places. URA is making a concerted effort in this direction and it has started to hold exhibitions to showcase good local as well as overseas architecture, working with DesignSingapore Council on the President's Award for Architecture and Urban Design Excellence, and promoting Singapore's urban design and architecture by participating in overseas exhibitions such as

the Biennale and through the mass media. I do not know whether Members here managed to catch CNA broadcast last night. It was called "City Lights", and it featured a selection of significant buildings in Singapore's central area. This is part of a series which will showcase some of the most significant developments and buildings in Singapore, showcase the people behind them, the history, the meaning of all these urban spaces and designs.

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The third area of focus would be to focus development on strategic areas in Singapore, that will create new competitive advantage for us. I am talking about Orchard Road, which is one of the world's premier shopping streets and which brings in tourists as well as locals alike. I am talking about the Bugis and Bras Basah area, our arts and civic area, which is also going to become our educational hub. And finally, the greater Marina Bay area, which will be home to

Let me talk a little bit about the vision for Marina Bay. Marina Bay is fast taking shape. The future of Marina Bay is an exciting one. Last New Year's Eve, 200,000 Singaporeans gathered around the Bay to witness and to celebrate New Year's Eve Countdown. They saw the spectacular fireworks and they saw the lighting displays, and I think they were very excited, not just by the event itself, but by what that event can become, and I hope that one day, that celebration will be seen, not just by thousands of Singaporeans, but also by many millions all around the world "live" on New Year's Eve.

There are many new developments that are coming up around the Bay. As they say, a picture is worth a thousand words, so I have prepared a pamphlet that will give Members a better idea of some of these developments. If I may ask the Clerk to please assist to distribute the folders. [Copies of pamphlet distributed to hon. Members.] One development that is going to make a major impact on Singapore's financial landscape and the city's skyline is the Business and Financial Centre (BFC). If I may refer Members to picture 1, the BFC is one of the buildings that would be surrounding the Bay, together with the Integrated Resort and the new bridge, which I will talk about later. The BFC is positioned as the new financial hub of Singapore because it will contain state-of-the-art office, residential and retail space. It will meet new needs and it will also enliven the Bay. The tender for the BFC site was awarded last year. I understand that planning for the buildings is now at the design stage, and completion is expected before 2010.

On the Integrated Resort, the tender is also expected to be awarded by the middle of this year. I look forward to receiving strong proposals that will

To support the new developments at the Marina Bay, the URA, as the Development Agent for the area, is now coordinating the infrastructure, implementation of the infrastructure for the area, like the Common Services Tunnel, the road, rail network and also the electrical substations.

In addition to this, a new vehicular and pedestrian bridge will be built this year to link the Bayfront area in Marina South to Marina Centre, in other words, to link that part of the land where the IR is going to be situated with the Marina Centre area where the hotels are - Marina Mandarin, Ritz-Carlton, and so on. The pedestrian component of the bridge will complete the walking loop around Marina Bay and link up the necklace of public spaces and attractions around the Bay.

URA staged an International Design Consultancy Competition to secure the best possible design for this bridge, and it attracted many proposals, both local and international. We have selected the design, it is very spectacular, very unique and very distinctive. If you refer to picture 2, I think you will be able to see what I mean. The pedestrian component of the bridge, there will be a vehicle component as well to the left of that, but the pedestrian component alone will be of a unique design. In fact, it is a world-first because it will resemble the structure of a DNA, the bridge featuring a double helix steel structure, symbolising "life and continuity", "renewal" and "growth". At night, the bridge can be lit to bring out the beauty of the double helix structure and it can also be programmed with different colours to create different moods for different occasions.

The new pedestrian connection at Bayfront will be more than a bridge.

The completion of this iconic bridge in 2009 will add to the exciting developments in Marina Bay. It will be functional and yet aesthetic. It will complete the loop around the Bay area, and it promises to be another unique attraction in Singapore.

The new bridge will not be the only structure that will be lit up at night. URA has developed a lighting master plan to guide new developments and existing buildings within the CBD and the Marina Bay. If I may refer Members to picture 3, this lighting plan serves to enhance Singapore's city skyline by highlighting various unique architectural features of prominent buildings, as well as the greenery and the waterscape.

And the lights from the pedestrian bridge, as well as developments around the Bay, can bring out the beauty of the city at night, and create a whole new image for Singapore. In fact, we can create different images for different times of the year in the same way that other cities are able to celebrate different moods through different seasons. We too can celebrate different times of the year by celebrating different festivals, and through the lighting effect create such a difference in mood. So URA will have to look into measures to persuade owners to provide such lighting. More details will be announced later.

Another major attraction that will be developed at Marina Bay is the Gardens-by-the-Bay. Please refer to picture 4 where there are certain artists' impressions of the various gardens around the Bay. NParks has already launched an international design competition to try and

To further our greening efforts at Marina Bay, a Lanscape Masterplan has been drawn up to guide the planting of trees and shrubs along the key streets and boulevards and within the public open spaces in the Bay area.

URA will also encourage all new developments in the area to provide sky terraces, viewing decks and roof gardens. Landscaped open spaces will be the hallmark and the distinguishing feature of developments at the Marina Bay area.

Finally, let me talk about the Bay itself. The Bay itself is the centrepiece for our celebrations at the Bay. Some architects I talked to have likened it to, what they call, a piazza, in many traditional European cities. But in our context, I believe it is more like a Padang, except that instead of grass, it will have water. Just as we enjoy sports like football, rugby, cricket, and so on, on the Padang, we can have water sports on the water Padang. URA has worked with partner agencies like the PUB, STB, SSC, to develop activities for the Greater Marina Bay area by way of an activities masterplan. We have already organised some notable activities in Marina Bay area. Last year, we held the F1 Powerboat Championships and the Marina Bay New Year Eve Countdown, and some of these activities are shown in picture 5 of the handout. With the city skyline as the backdrop, the Bay and its waterfront can be a one-of-a-kind venue for major events in Singapore, truly a Bay of Celebration.

Sir, distinctive architecture, well-integrated landscaping in buildings and public spaces; internationally renowned Gardens; varied public attractions; tasteful lighting; exciting water-based activities and events - all these can contribute to making Marina Bay and Singapore unique and special. If we couple this with sound land-use planning, we can take Singapore even closer towards our vision of a vibrant global city.

financial centres, the Integrated Resorts, and so on.differentiate the Singapore Marina Bay IR from any other IRs in the world.There will be art works that will be integrated into the design to provide a unique crossing experience, and we are inviting some of our young artists, together with our other prominent local artists, to create the artwork.bring in the best designers from all over the world to give us the concepts and designs for the three waterfront gardens. Each of the gardens will feature a design and a character of its own. And when these three gardens are completed and surround the Bay, they will help us to achieve our vision of a City-in-a-Garden.

Dr Geh Min, you have two cuts. Please take them together.

Marine Areas

Sir, I heard from the Minister that Singapore is land scarce, so we have optimised what little we have through a comprehensive Master Plan, and the result has been very impressive. I agree.

But Singapore is far more than a garden city or even "a city in a garden". We are actually 64 tropical islands set in Singapore waters. And our seas are as much an integral part of Singapore as our land; but while we have done very well on land, I believe that our marine and coastal areas have suffered from the lack of more integrated planning and protection.

I therefore propose that we develop a Master Plan for all coastal and marine areas, not just Marina Bay. In this Master Plan, we incorporate a detailed and comprehensive Blue Plan for marine conservation that is based on regular surveys of our seas. This should be under an agency with overall authority and responsibility which will work with other agencies and stakeholders to coordinate and integrate the planning, implementation and regular review of the Master Plan, like the URA does, but of course not dominated by urban planners. This agency should also coordinate project and

Yes, we must have our port, petrochemical industry, land reclamation, but I believe a Master Plan will improve on our present rather patchy approach, which has resulted in the negative impact or neglect of certain aspects of our marine resources and environment. In addition, we are going to face new challenges to our marine and coastal areas and their management and protection as a result of climate change.

One of the areas that I feel, despite what the Minister said about Marina Bay, that has suffered neglect is leisure and recreational facilities. I think it is fair to say that a generation ago, a larger proportion of Singaporeans used to live and play in our seas and offshore islands than they do now today. This is not due to a lack of interest on the part of Singaporeans. For example, East Coast Parkway is always packed, especially on weekends; trips to Chek Jawa are snapped up and even oversubscribed the moment they are announced; we have 100,000 certified divers, 3,000 amateur boaters and sailors and about 250,000 fishermen, and Singaporeans are estimated to spend about $32 million per annum on overseas dive trips. But increasingly, Singaporeans have had to look overseas or within our restricted inland waters to pursue water sports and hobbies, because our marine areas are out of bounds, difficult to access or degraded. For example, divers in Pulau Hantu and the southern islands tell me it is perpetual haze down there. And this compromises their safety as well as their enjoyment. Yet, Pulau Hantu was and still can be ideal for beginners who want to learn to dive; if we work for a creative co-existence.

Yes, we have ambitious tourist and leisure developments. We have just heard some of them. But these need to be supported by a rich menu of choices, both for tourists and locals. I believe that most successful tourist destinations and activities exist in symbiosis with local patronage.

Another area of neglect is the scientific and educational area. When I wrote to the Forum page, asking for Chek Jawa to be saved, URA replied initially that they did not think the area merited it as there were no coral reefs. We have 73 patch reefs and 35 fringing reefs in the southern islands but still no marine conservation area.

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Their potential for research and advancement of our life science industry is enormous, as well as the ecological, education and recreation services

research future challenges and threats, such as climate change.

they provide. This is a new growth area and Singapore does need new growth areas. I believe the fact that our corals and marine life have managed to survive, despite our port, land reclamation, petrochemical and other activities, is testimony to their hardiness, and we should seek to protect them as best as we can with a comprehensive Blue Plan and Development Guide Plans, as we do for land.

We are likely to have to face the impact of global warming and possible sea rises, and this will have serious implications not just on the environment but social and economic impacts as well. Surely, this requires a proactive multi-agency approach in an integrated manner. Many countries already have done comprehensive studies on this issue. Has Singapore done research on this and, if so, can we know the results or the findings? How will our land reclamation be affected? How will projects like Marina Bay be affected? Will erosion be a problem? I believe it is better to know

I, therefore, call for a Master Plan and a Blue Plan for Singapore's waters and off-shore islands.

Biodiversity Protection

Sir, Singapore has some of the richest biodiversity in the world, both terrestrial and marine, and new species are constantly being discovered. Yet, we still describe ourselves as a country with no natural resources. I believe the statement is only accurate in a very narrow sense and timeframe which is now outdated, ie, a natural resource is something that is immediately translatable into hard cash in a manufacturing-based economy. In this era of a knowledge-based economy with large investments in the life sciences, I believe it is high time we made the long overdue connection with nature, and value our biodiversity as a precious natural resource.

For example, 62% of all cancer drugs are said to be created from bioprospecting discoveries, and the patenting of bioprospecting discoveries has exploded from less than a dozen in 2000 to over 100 in 2005. But experts tell me that it is actually in the realm of biomimetics, where the gains are enormous and the potential is endless. Bioprospecting, not just for molecules but for ideas and solutions from nature which can be replicated or redesigned in the laboratory by reverse engineering, is where the real value is. But this requires close collaboration between the biologist, engineer and, of course, nature, and we have all three.

The richer our endowment of biodiversity, the larger our capital for investments and spin-offs. Many countries which are rich in biodiversity,

This lack of adequate laws is particularly surprising when we consider that Singapore is exceptional and, I believe, even unique. We have a rich biodiversity. We have the capability to develop it, both the infrastructure and expertise in life science research, unlike most biodiverse countries. And we have them concentrated in a very small area. It takes less than an hour to go from the field to the laboratory. Which other country has this? We have a "3-in-1" in a highly concentrated form. Moreover, our geographical location in Southeast Asia near the epicentre of global biodiversity provides us with regional opportunities to develop our shared biodiversity.

I, therefore, urge the Government to:

recognise our biodiversity as a valuable economic and scientific resource;

give it the legal protection it deserves and desperately needs; and

leverage on our unique position, both locally and regionally, to develop the use of it in a sustainable manner.

If we fail to recognise and respond to this window of opportunity, we will end up as a nation with no natural resources. It will then be a small consolation to

what we have and what we can expect and plan accordingly, rather than not know or ignore it just to make planning easier.eg, India, the Philippines, Malaysia, now have strict laws protecting them from commercial exploitation by other countries, and they also have multilateral agreements. But Singapore still lacks laws that are designed to protect our biodiversity. Yes, we have laws that protect our nature reserves, but these cover only a very small fraction of the island, ie, less than 3%, and our primary forest, less than 1%. Biodiversity in other parts of our island is not protected. In particular, marine biodiversity is at risk. We have no marine reserves, we have high biodiversity, and they are exposed to high risks.realise that this description is not a result of a lack of natural endowments or a lack of ability and opportunity to use them, but a lack of foresight.

Greening of Singapore

Sir, Singaporeans who have grown up with greening programmes started by Minister Mentor Lee Kuan Yew in 1963 are happy to learn that the Government has announced a plan for the Garden City by the Bay at Marina South, East and Centre. Looking at the pictures circulated by the Minister earlier, we are quite excited to know what is coming. Indeed, this is a major undertaking that will complement the existing Botanic Gardens.

Being an avid gardener myself, I am fascinated by the unstinting efforts of the National Parks Board (NPB) people who scoured the tropical and sub-tropical forests in Southeast Asia, Africa and Latin America to identify and bring back unique species previously unknown here. They had enriched our flora collection and made Singapore an attractive place. So, every time I drive along a canopy-covered road and slopes lined up with shrubs with unique species of trees adorning our roadside and road dividers, I am reminded of their hard work and creativity in enriching our natural heritage.

It is a refreshing experience being able to enjoy the shade, greenery and beauty of the rain trees and pueh poui that we brought from tropical America and the yellow pinda from Australia. One day, as I was driving near Grange Road, I was pleasantly surprised to find even some "Tongkat Ali" trees among the shrubs by the roadside. I hope the plants will be allowed to grow and achieve their

Sir, what strikes me in reading about the new botanical garden and the upgrading work of our parks is that the concept tends to be restricted to work done on land only. In areas where there are both land and water bodies, such as East Coast Park, Sembawang Park, Seletar, MacRitchie and Bedok Reservoir Parks, the gardens or park developments often end at points where the land meets the water. This does not seem natural, as the geographical landscape forms a continuum between land and water, regardless of whether it is the coastal or inland features.

While we are successful in creating and beautifying the landscapes, we tend to disregard the waterscape, as Dr Geh Min just mentioned earlier. In some places, such as at Bedok Reservoir, it is painful to our eyes to see the cold, solid grey granite lining up the watermarks.

Sir, I have seen the works of park planners and designers in the UK, Switzerland, Canada, Australia, New Zealand and Holland where there were major reclamation works done. The planners take both land and water as an undivided continuum and the results are fascinating.

May I ask the Minister whether his Ministry will consider extending the greening programme to cover the water areas as well, especially our southern islands?

optimum potential. Sir, I had planted a number of similar species in our gardens in Tampines without labelling them - to hide them from the eyes of the public - but they were found missing less than a year later!

Mr Chairman, Sir, I would like to thank Dr Geh Min and Mr Yatiman Yusof for their views on the greening of Singapore and

First, let me speak on Singapore as a Garden City. Indeed, we are well-known as a Garden City, and this is the result of 40 years of deliberate national planning and effort, not by chance. The result has provided a pleasant and high quality living environment for our people. But we cannot become complacent about these achievements. We must continue to innovate and remake our city. Our vision is to evolve Singapore into "A City in a Garden" that is characterised by a matrix of parks, gardens and green spaces interconnected to form a green mantle throughout the island. To achieve this goal, we would do so through a four-pronged strategy.

First, we will build on and expand our greenery capital through developing our parks, building a park connector network, extending it, intensifying streetscape greenery and, as Mr Yatiman Yusof suggested, better integrating greenery with our water bodies.

Second, we will strengthen the public, people and private sector partnerships in greening efforts, so that it would not just be a Government effort but it would be a national, community and total effort.

Third, we will showcase our horticultural excellence through developing signature parks, including waterfront gardens and staging a world-class garden festival.

Fourth, we will work with industry to upgrade the skills and competencies to sustain our City in a Garden.

Sir, allow me to elaborate on some of the key areas. On signature gardens, we are developing a distinctive collection of "Gardens by the Bay" in the heart of Marina Bay. Minister Mr Mah Bow Tan has elaborated on the three inter

The Garden at Marina South, which will be adjacent to the Integrated Resort, we believe, would be a wonderful location to showcase tropical blooms and foliage colours at their best. We are also studying the feasibility of a conservatory that can house flowering plants from cooler climates. The Garden at Marina East will comprise water-theme gardens and have a staging area for water sports in the Bay, while the one at Marina Centre will be a waterfront promenade linking the cultural core at the Esplanade Theatres to Kallang Basin. These waterfront Gardens will complement the developments around Marina Bay and offer a new, exciting experience for Singaporeans and visitors.

In designing our regional and neighbourhood parks, NParks also gives due consideration to the development of the interface between land and water. In deciding the appropriate treatment, NParks will consider the site conditions, intended uses, and surrounding features. For example, the Ecolake at the Botanic Gardens incorporates a natural grass embankment, while mangrove areas line Sungei Tampines. The Boardwalk at Pulau Ubin allows us to get close to nature without spoiling the ambience or damaging the surrounding ecosystems.

Other efforts to beautify our waterbodies are underway. PUB has initiated an Active, Beautiful and Clean Waters Programme to develop our waterbodies into clean and vibrant attractions. NParks will work with PUB and other relevant agencies to realise the full potential of our waterbodies as quality recreational destinations, and to strengthen our greenery infrastructure. I think this would be encouragement to both Mr Yatiman Yusof as well as to Dr Geh Min.

Sir, for example, NParks and PUB are working on a preliminary masterplan to revitalise the Kallang riverscape. There are exciting ideas to transform the entire length of the Kallang River and its canals into beautiful recreational and lifestyle venues that will enhance the quality of life for Singaporeans. The vision is to create a river system with clean and fresh waters, integrated with landscaped banks, where there can be swimming, fishing, boating and other sporting activities in the waters, and recreational activities along the banks and connected gardens.

Sir, I will now move on to speak on the conservation of biodiversity. We are, as the Government, indeed mindful of the need to conserve our natural heritage and biodiversity. As the Minister has pointed out earlier, we are not just talking about building a city, but about an entire experience of what it means to create a national outcome that takes into account the richness not only of the buildings and infrastructures but of the natural gifts as well. We recognise the importance of doing so, including the potential value that a rich biodiversity can contribute to bioscience research, education, tourism and leisure. Mr Yatiman Yusof's illustration just now of the "Tongkat Ali" tree is one example where the right kinds of vegetation with medicinal and other properties could be exploited. The need to conserve our natural heritage is, therefore, taken into consideration as we plan for the use of our land, coast and sea in an integrated manner.

As part of this process, key coastal and inter-tidal ecosystems at Labrador and Sungei Buloh have been gazetted as Nature Reserves. Sisters' Islands were identified as a marine nature area. These are actual steps taken and they reflect this Government's commitment to conserving biodiversity. And we will continue to keep as many areas in their

NParks, URA, the Ministry of the Environment and Water Resources and PUB will undertake other efforts to conserve our natural heritage and biodiversity:

NParks collaborates with NGOs and academic institutions to monitor the biodiversity and health of our ecosystems;

NParks maintains a repository of information on Singapore's natural habitats, both marine and terrestrial, and, as Dr Geh Min will know, has also recently commissioned a survey in order to update the knowledge and information in that repository;

URA works with NParks to assess the environmental impact of development projects near our islands and, where necessary, will mandate that protective measures be put in place to minimise adverse impact.

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Sir, currently, we already have

the conservation and protection of biodiversity.connected waterfront gardens totalling 94 hectares around Marina Bay, and has actually provided us with the artist's impression of those three gardens.natural state for as long as possible. But as a small country with limited land and waters, we also have to take a pragmatic approach. So nature conservation will have to be balanced with other competing needs - not to be sacrificed, but to be balanced.

various regulations protecting our biodiversity. The Parks and Trees Act empowers NParks to take action against biodiversity-related offences in parks and nature reserves. Offences against biodiversity of State lands, including poaching from the seabed within Singapore waters, are also regulated and, in this case, under the State Lands Encroachments Act. The Endangered Species Act enforces against poaching of endangered species from our nature areas for export. We have laws and regulations that we can apply in order to safeguard our biodiversity and our natural heritage.

Sir, our challenge, going forward, is to transform Singapore into a City in a Garden, not only known for its parks and greenery, but also for its beautiful streets, inter-connected parks, waterfront gardens, beautiful rivers and canals, and integrated land-water developments. This will make Singapore a truly exciting place to live, work and play in.

I would like to thank the Minister of State for his lengthy and comprehensive reply. But I also raised the question of new challenges, such as global warming. I saw in the Straits Times today an article on land erosion off East Coast and Pasir Ris Park. If I may have Mr Speaker's permission to briefly read, "When the beaches were first reclaimed, the elevated breakwaters were intended to protect the shore immediately behind them. However, it now appears that in some parts of beaches, including East Coast Park, erosion may have occurred even behind breakwaters. This could be because the height and force of the waves have been greater than anticipated."

There is a strong possibility that we will have even stronger waves even though we are immune from the tsunami, or if we think we are. With all these plans, including Marina Bay, what studies have we done as to the impact, maybe not now, maybe not 10 years, but 20, 30 or 40 years? I think any developments we have, surely we want them to last and not going to be re-remade every five years, even though we review them every five years. What plans have we got to protect Singapore - the coast, the marine areas and the land - from climate change. I would be grateful if the Minister of State would clarify that.

Mr Chairman, Sir, with regard to studies on global warming and the effects of global warming on tide levels, sea levels and so on, the correct

Ministry to address such a topic to would be the Ministry of the Environment and Water Resources. However, given that Dr Geh Min has spoken on the East Coast Park, citing the newspaper report, she would like to note that the stretch that was highlighted, indeed, relates to a stretch of reclaimed land and it is something that resources have gone into creating, and NParks and other related agencies are monitoring. It is also cited in the newspaper report the actions that they are taking, by way of monitoring and also to discuss and evaluate how best to reinforce and further protect those investments.

Dr Geh Min, make it very brief, please.

Yes. Thank you for that reply. But I think this illustrates what I was trying to say that we need a more integrated approach. If the Ministry of the Environment and Water Resources is responsible for the erosion but the Ministry of National Development is responsible for the planning, then I think there is a lack of integration there which illustrates what I was trying to say that on the water and coastal areas, we could do with much better integration under one agency that would coordinate all the different stakeholders, both Government and non-Government.

Mr Chairman, Sir, I can assure the Member that there is coordination amongst Government ministries and amongst statutory bodies and all the agencies that work under the Government umbrella. Depending on the subject matter, different agencies will be involved and they will work together as a team to review and to take coordinated action. It is not possible to set up one agency that can conceivably attend to every possible combination of circumstances, but a coordinated approach is needed, a coordinated approach there is.

Bird Flu

Sir, Singapore's highly open economy leaves it especially vulnerable to external shocks, including effects of pandemic diseases. The SARS episode in 2003 and the effects on our economy are still fresh in our minds. Our response and swift action to confront them and isolate SARS was acknowledged by the WHO, World Bank and many international organisations. It is known throughout that Singapore has been one of the most successful countries in its response to SARS.

But, Sir, the recent news of the spread of Avian flu in many parts of the world - in Europe, Africa, Asia and now in Selangor, Malaysia - is very alarming and it is discomforting for many. New outbreaks of bird flu in Europe and Asia have heightened fears of the public, resulting in cautious and slightly depressed business sentiments.

For the continued safety of our people, what is Singapore's action plan, strategy and defence system to combat this deadly disease? I know that some steps have been taken to prepare the country for this outbreak should it occur, but what more can be done? Are we in need of funds or resources for this effort?

I am sure that AVA also regularly reviews the adequacy of these measures as the situation develops. In light of the outbreaks in nearby Indonesia and Malaysia, is AVA considering implementing additional safeguards to prevent the disease from reaching our shores?

I would also like to know, Sir, what other agencies are also working with AVA and MND in this effort to prevent the bird flu from arriving Singapore.

(In Mandarin): Mr Chairman, as my colleague

has said, the whole world is very concerned over the possible bird flu pandemic and recently, H5N1 was discovered in chickens in Selangor. Although the Primary Production Department has said that all chickens consumed in Singapore are safe and reliable, can the Government tell the ordinary citizens what steps should be taken to ensure that the chickens that eat will not affect us adversely? The ordinary people would like to know what the Government is doing, otherwise, they would not dare to eat chickens.

Mr Chairman, Sir, I thank Members, Mr Zainudin Nordin and Mr Ong Ah Heng for their comments and questions on the bird flu. I would like to assure all Singaporeans that chicken and eggs in Singapore are safe to be eaten by cooking them well.

The Highly Pathogenic Avian Influenza (HPAI) or bird flu is currently the most threatening disease to our food supply. Its worldwide spread and recent detection in Selangor have also raised concerns in Singapore. In accordance with the protocols established between the veterinary authorities of Singapore and Malaysia, ie, our AVA and their DVS, we suspended poultry and egg imports from Selangor.

Over the last two years, AVA has been working with its Malaysian counterpart, the DVS, to establish what we call Disease Free Zones. Poultry can be imported from these zones even if isolated cases of bird flu are detected in other areas. Because of this, we did not need to suspend all poultry imports from Malaysia when there is a case in Selangor, unlike the situation when there was an outbreak in Kelantan back in 2004, before we had that protocol established when we had to ban imports from all of Malaysia. Because we are now able to narrow down and have these Disease Free Zones, the impact on our

We must continue to remain vigilant against bird flu and to prevent incursion, we have adopted a comprehensive strategy. Allow me to elaborate.

AVA actively engages our ASEAN partners in efforts to combat the disease. The ASEAN HPAI Taskforce was set up to facilitate a coordinated regional approach for bird flu control. To garner international support and maintain urgency, we will continue to keep HPAI, or bird flu, on the agenda of international fora. AVA is also helping to train officers from Indonesia in laboratory diagnosis and surveillance skills.

At our borders, we maintain a high state of alert. AVA conducts 100% inspections on poultry imports, and works with ICA and Police to guard against the smuggling of birds. All ornamental bird imports are tested before release from the checkpoints.

AVA requires our local poultry farms to maintain high levels of bio-security and regularly inspects our poultry farms and slaughterhouses. We have banned poultry rearing on Pulau Ubin to remove the risk posed by backyard farming. Households on the mainland are also not allowed to keep more than 10 caged chickens. AVA also conducts surveillance on wild birds at Sungei Buloh and Pulau Ubin, as well as on urban pest birds like swallows and crows. As further protection, we have also vaccinated the birds at our Bird Park and the Zoo.

Sir, to further protect against bird flu outbreaks in Singapore, AVA will be implementing two additional safeguards. First, AVA will implement bio-segregation to minimise inter-farm contact to prevent any potential spread of the virus should there be an outbreak. Bio-segregation

Our local poultry farms can be grouped into five clusters and with effective bio-segregation, should there be an isolated outbreak within the cluster, poultry in other clusters need not be culled, thus enhancing the resilience of our local egg supply.

AVA will also implement emergency vaccination of poultry in local farms when there is an imminent risk of HPAI incursion into Singapore. Emergency vaccination will only be activated under severe circumstances if there are rampant outbreaks in nearby areas.

egg and our poultry supply, both in terms of quantity and in price, has been negligible. measures include requiring the farms not to share equipment, and separating their egg collection from the production areas.

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Complementing existing measures, these additional measures will further reduce the risk of bird flu incursion and contain the spread of the virus should there be an outbreak.

Sir, experts have warned of the possibility of the virus mutating into a form that could cause a human flu pandemic. This could cause intermittent disruptions to our fresh food supply. AVA will continue to diversify our food supply sources and keep our food trade going for as long as possible. But this is an effort that requires more than Government action. We will also need the cooperation of the private and people sectors. Businesses in the food industry must have their continuity plans in place. AVA will regularly review the situation with industry, including exploring with importers the feasibility of stepping up inventories of frozen food. Members of the public also have a vital part to play. Households must adjust their food preferences and buying patterns and this will give AVA and the industry the time needed to bring in imports from alternative sources.

Sir, let me reiterate that AVA will spare no efforts to safeguard Singapore against bird flu. It has put in the necessary resources and will continue to be vigilant.

Building Maintenance

Sir, I will address two questions. First, building maintenance. We must all be quite familiar with the Golden Mile Complex, that landmark along Beach Road. But, Sir, view it from the other side and you see what I call a "vertical slum". It is a terrible eyesore and a national disgrace. The appearance of Golden Mile Complex appals me whenever I drive along Nicoll Highway. It must create a terrible impression on foreign visitors arriving from the airport. How can we be a world-class city in a garden? The Golden Mile Complex is just the most extreme of how a strata-title property can deteriorate. It illustrates what economists call a "negative externality". Each individual owner acts selfishly, adding extensions, zinc sheets, patched floors, glass, all without any regard for other owners and without any regard for the national welfare. The result is market failure. Unless we take resolute measures, other strata buildings will go that way. I ask the Minister to quickly act to arrest the deterioration of such property.

Two, Marina Bay, my second point. The Hon. Minister has set out a visionary plan for the development of the Marina Bay. I applaud the Ministry for that. But I want to echo hon. Member Geh Min, that we can do more to support leisure and even tourists' use of Marina Bay. Specifically, the Marina Bay would be a superb location for a maritime museum. I mean not only to showcase our heritage but also a functional museum, that is, we should have operational Chinese junks,

Arab dhows, sailing crafts from India, Indonesia and the Philippines. Let our kids play, enjoy and learn and let tourists come in. I am glad to see the Minister for Trade and Industry is here. There is an economic angle here. This would be a superb complement to all the other attractions that we have around the Marina Bay - a functional maritime museum. Not one of those full of dead things, but one which is alive, with real people, real boat building. We can bring in the craftsmen from the region. Let us help to sustain some of these skills and let our children, tourists and businesses understand where we came from and where we will be going.

Mr Chairman, Sir, I thank Prof. Png for raising two issues, although the second one is not directly related to building maintenance as stipulated in the Order Paper Supplement.

Let me just address the first part first. Prof. Png raised the issue of building maintenance, specifically in reference to the Golden Mile Complex. Generally, let me just say that the Building Maintenance and Strata Management Act (BMSMA) provides for effective maintenance and management of strata development. It empowers the management corporations (MCs) and subsidiary proprietors (SPs) to make decisions concerning their own estates. This places greater responsibility on the owners to take pride in their own estates as well as their own buildings.

One of the responsibilities of MCs and SPs, under the BMSMA, is that the MC is charged with the responsibility to ensure that common property is well maintained, clean and tidy. MCs can also introduce by-laws to regulate works to be done by SPs on private units that could affect the facade of the building. If the common property of a development falls into serious neglect, then the Commissioner of

Let me touch on the Golden Mile Complex. I think Members who drive along Nicoll Highway would be able to appreciate the point raised by Prof. Png, that Golden Mile Complex is an eyesore. It is true that external walls of the Golden Mile Complex were not adequately maintained. However, in February 2005, last year, the Commissioner of Buildings (COB) has issued an advisory letter requiring the MC of Golden Mile Complex to paint up and spruce up the building facade and to encourage the SPs to do likewise for their private balconies. The MC has been cooperative in addressing the situation. Works are currently in progress and I hope that when the works are completed, the complex will be more pleasing to the eyes. As I understand it, it is due for completion by the end of this month.

With regard to Prof. Png's second question on Marina Bay, I think those are very good suggestions. When we look at the development of Marina Bay and the whole concept of a Garden in a City, all suggestions are welcomed. As we are still in the planning process, whatever suggestions that come along, the ultimate goal is to make sure that Singapore achieves the objective of a Garden in a City, that the projects and programmes do attract tourists and more people to come to Singapore and enjoy the so-called concept of Garden in the City.

Buildings (COB) has the authority to issue a notice to require the MC to take action to spruce up the property. Enforcement action could be taken if the MC does not comply.

I take it that that was Prof. Ivan Png's clarification on my speech earlier and so maybe I should respond. I will add on to what my Parliamentary Secretary has said.

First of all, we have to remember that Marina Bay is actually a reservoir. So

The second point is that when you talk about boat-building, etc, again coming back to the point that Marina Bay is a reservoir, the impact on the quality of the water will have to be considered. In fact, if the Member will recall, there actually were boat-building activities in the Kallang area. In the Tanjong Rhu area there were boat-yards and shipyards all along that area before URA changed it into a residential area. So I think the idea of having boat-building in the Marina Bay area is probably something that is no longer relevant. But, having said that, as my Parliamentary Secretary said earlier, all sorts of suggestions have come in, including I must say the idea of a maritime museum and, obviously, the commercial as well as the technical feasibilities will have to be undertaken.

when you talk about boat-building, maritime museum and so on, we have to bear in mind that as a reservoir, access to the open sea would be restricted. Although there will be provisions made with a boat-lift to allow small yachts to come in, the big boats will have difficulty traversing from Marina Bay into the open sea. That is the first point that needs to be considered.

Prof. Png, clarification only. No speeches.

Yes, clarification. Sir, I pointed out that one of the problems with Golden Mile Complex is not just a matter of painting. Will the Parliamentary Secretary please acknowledge that it is also a matter of all those unsightly extensions, glass, wood and so on?

Responding to the Hon. Minister, I was not thinking of commercial boat-building, but just demonstrative boat-building. All those boats are non-engine boats. They are all sail boats and so there is very little pollution.

Sir, the issue of Golden Mile Complex is, as Prof. Png mentioned, an extreme example. It is an issue of a building that was built in the 70s and, at that time, the conditions were slightly different. The history of Golden Mile Complex is one. We have confirmed with URA that, at that time, planning approval was not required for enclosing of balconies because the balconies were included as part of the GSA at that time. Because of that, the BCA allows these structures to be regularised now under the Building Control Act as long as they do not impact on the structural safety of the building. The MC had actually approved such enclosures and facilitated their regularisation. It is within those constraints that right now what the Commissioner of Buildings has done is to try to make the best of what we have at this point in time. And sprucing up is really indeed one of the things that we could do. Hopefully, with sprucing up, with better facade, things would be better. It may not be the ideal that we want with regard to what we can see from Nicoll Highway, but certainly it is better than what it is today. Why do we not wait till they complete their work, take a look at it and see how else we can further enhance the view from Nicoll Highway as we drive up there?

Any more clarifications? If none, Dr Amy Khor, would you like to withdraw your amendment?

Sir, I want to thank the Minister for his detailed and considered response to our queries and concerns and for the amendments that have been made to some of our suggestions. I hope that he will consider further the concerns and suggestions that we have also made where no amendments have been made to it.

With this, I would like to withdraw the amendment.

Amendment, by leave, withdrawn.

The sum of $672,459,270 for Head T ordered to stand part of the Main Estimates.

The sum of $3,115,198,400 for Head T ordered to stand part of the Development Estimates.

Head V - Ministry of Trade and Industry. Dr Ahmad Magad, you have two cuts. You can take both at the same time.

Multi-national Corporation and Small and Medium Enterprises

Sir, I beg to move,

That the total sum to be allocated for Head V of the Estimates be reduced by $100.

Both MNCs and SMEs have played a significant role through the various phases of Singapore's economic transition. Both occupy an important position in Singapore's enterprise ecosystem in terms of generating economic growth and providing employment to Singaporeans.

Among others, SMEs have played a pivotal role in providing support in many aspects to the MNCs and are continuing to do so to this date. However, with increasing competition from both developed and developing countries, many MNCs, especially manufacturing industries, are pressured by rising costs and are forced to locate to countries with lower cost. As a result, the dynamics in MNC-SME relationship is changing rapidly, more so with the forces of globalisation integrating the economies of the world to unprecedented level. However, Sir, with Singapore upgrading and transforming itself into a knowledge and innovation-driven economy, to enhance its

Sir, we need to ensure that the special and trusted relationship between MNCs operating here over the last several decades and our SMEs is not only preserved but also strengthened. As such, I believe creating a platform for the two groups to meet and interact regularly will be beneficial to strengthen this relationship.

I would like to propose that a private sector-led initiative like the Action Committee for Entrepreneurship (ACE) be initiated for the MNC-SME segment. As noted by Mr Inderjit Singh during the Budget Statement debate, the progress made by ACE has been encouraging across the private sector there. Although a Minister chairs the Committee, his role is primarily to facilitate rather than to dictate what should be done. Hence, I propose that we should embrace a similar model like ACE for the facilitation of MNCs and SMEs to connect and to come together. Along the same lines, Spring Singapore or IE Singapore could function as a secretariat to coordinate such activities.

Sir, I am not speaking on the second topic on SMEs as the issue I wish to raise has been clarified under the Ministry of Law cut last week.

competitive and comparative advantages, combined with Singapore's excellent infrastructure, stable political environment, a steady supply of well-educated workforce and a strong intellectual property protection regime, many MNCs are finding Singapore attractive to conduct their high-end activities here. I believe our SMEs could leverage on these evolving changes provided that they are wary of the changing needs of the MNCs. Similarly, SMEs could also continue to be relevant to the MNCs even as the latter relocate their business activities to other countries.

Small and Medium Enterprises

Sir, as our efforts to promote entrepreneurship bear fruits, we will be able to create many more companies that will inevitably be SMEs as they start to grow. If we do not support our SMEs well, many will die prematurely and defeat the purpose and objective of trying to create many more local enterprises. Sir, SMEs need support and they need a focused effort

as what my colleague, Dr Ahmad Magad, just mentioned. As I said many times before, we need a Government agency to play this role, one with equivalent resources given to do a good job.

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I had in last year's debate talked about a LEDB, or local EDB. I am very confident that the results will far outweigh the cost to the Government. Just as the efforts of EDB have yielded the results in the area of FDI attraction and the efforts of ACE have helped in entrepreneurship, an organisation that dedicates its support to the growth of SMEs will yield similar results.

In fact, I am worried about the type of FDIs we have been attracting lately. My impression is that the value add of these investments might not pay for the cost that the Government incurs, because the number of jobs created by these FDIs and also the amount of tax revenues the Government collects might be zero for the lifetime of such investments. Perhaps the Minister can share with the House the value add of the $8 billion or so FDIs that we had attracted last year, and also in previous years. I am sure that for every dollar that we spend on local companies' development and support, it will yield a bigger value add and return for the Government. I am not asking the Government to kill the efforts of the EDB but to redistribute the resources to do both jobs optimally.

I also do not want to belittle the efforts put in by Spring and IE Singapore in supporting SMEs. In fact, I sit on the board of Spring and we know that a lot of good work is done there. I can see the passion of the people in both of these organisations at the board and management levels, and also the staff of these two organisations. But I know that unless the drive starts from the top, these two organisations will not get the right level of resources to allow them to do their jobs well. I see the opportunity to merge these two organisations as a combined entity, and perhaps this may be the equivalent of the local EDB that we are asking for. I am sure, with the rationalisation of the efforts and the combined resources and realignment of focus, we will see greater success in our efforts to create an environment conducive for the support and growth of SMEs into large multi-nationals of the future. If properly funded, this enlarged entity will be able to fulfil the needs and answer the call of the equivalent agency that we have been talking about, and this call has been going on for many years. And if it continues for many years, it just says that we need to do a lot more, and not enough is done in this area.

I also like to say that in the last few years, we have done a very good job in addressing the cost issues for SMEs and companies in general. Now that we have restructured our economy - and companies which are surviving today are perhaps the stronger ones, and the weaker ones have probably collapsed by now - our next focus should therefore be on the other part of the equation, ie, the numerator side or the demand side to capture greater business opportunities from around the world. So, the Ministry's next focus should be on how to enable companies to capture a bigger pie of global opportunities that exist. The various FTAs could help show us how we

Sir, I am also happy to note that we are increasing our efforts in promoting R&D in Singapore. We also have had many five-year R&D plans and the main beneficiaries for this have been either Government research institutes, big multi-national companies or Government-linked companies. We have had a very poor reach to SMEs. And I have talked many times in this House about how the equivalent jobs done in SMEs may not get the type of funding that MNCs may get for the jobs that they also do. I, therefore, ask the Minister to share with us how he hopes to ensure that the SMEs will capture a greater pie of this R&D budget that the Government is setting aside. I hope that, this time, we will distribute the funds in a more equal manner so that our local companies have a greater chance of accessing.

Perhaps we can create a focus group, quite along the lines of what Dr Ahmad Magad mentioned just now, that can help cultivate the development of R&D in SMEs along with many other things that we want to do.

can do this. Perhaps the Minister, therefore, can clarify and share with us what successes we have had with the many FTAs that we have already signed. The impression that we have is that these are, so far, paper agreements with no net benefits to companies in Singapore.

Sir, there about 100,000 SMEs in Singapore and they contribute a quarter of the total value added generated in our economy. Clearly, they are an important sector of our Singapore economy. However, when it comes to Government's policies and support, they feel like the neglected child. When the multi-national companies were providing all the job opportunities up to a decade ago, SMEs were, by and large, left to their own devices. However, during the last recession, when MNCs shuttered their factories, closed their offices and

The Economic Development Feedback Group of the Feedback Unit, under the leadership of Mr George Abraham and Mr Kwek Theng Swee, has highlighted the need of the SMEs researching around the world for examples of how other governments take care of their SMEs. Again, at the Feedback Unit annual conference, they proposed the following recommendations geared towards enhancing Singapore's pro-business environment and enabling entrepreneurship.

First, setting up industrial specific SMEs in industrial parks to group businesses together in a given location. This move will allow businesses to save cost. For instance, food and beverage companies could be grouped together for greater clout. For the food and beverage industry, this is important as the companies in this sector tend to be small and lack the critical mass.

Second, making it compulsory for small companies to join the trade association of their specific industry. With a bigger pool of members, such association would then muster sufficient resources to help members cooperate among themselves and look for new markets. This follows the principle behind the setting up of the Singapore Business Federation. The Federation has bigger clout but its focus is not on the SMEs.

Sir, many SMEs are small only in relative terms. Some SMEs, in fact, hire up to 200 people and have well-thought-out business plans. In executing their plans, they are often hampered by the

packed their bags, we started to realise the value of the SMEs in keeping jobs in Singapore. We discovered that being Singapore companies, boom or bust, they stay in Singapore. Unlike multinational companies, which have the EDB to look after them, there is no single Government agency championing the causes of SMEs. obstacles to obtain good financing. This matter was brought up repeatedly in the House and the Government has reacted in some way, which Mr Inderjit Singh had mentioned, and these are well appreciated by the SMEs. However, the Economic Development Feedback Group still feels that more could be done. For instance, the Feedback Group looked at Japan and discovered that there is a government-sponsored financial institution specifically set up to provide financial loans to SMEs and start-ups. I hope the Singapore Government could also adopt the same model of helping SMEs, especially the start-up companies.

Dr Loo Choon Yong is not here. Mr Lawrence Leow.

Enterprise Development Centres

Mr Lawrence Leow Chin Hin (Nominated Member): Sir, the Enterprise Development Centre (EDC) is a very good initiative by the Government that offers a one-stop comprehensive range of services and assistance to local enterprises. Supported by Spring, the Association of Small and Medium Enterprises opened the first EDC in Singapore last March. Since it started operation, the Centre has, to date, serviced more than 1,000 SMEs and handled in excess of 4,000 enquiries. EDC is, in essence, one of the two key channels set up by the Government under the EnterpriseOne initiative to assist our SMEs. The other channel being an online web portal that allows SMEs to identify funding options and Government assistance schemes that best suit their needs.

Sir, following the promising debut of EDC on the local SME scene, I have a few concerns which I would like the Government to address. As I understand, EDC is a scheme that is co-funded by the Government on a three-year plan. Hence, I would like to ask the Minister whether EDC is here to stay and, if so, what is the

Next, as there are already three EDCs in operation today, I would like to ask the Minister how many more EDCs will be set up. Given our small market, I am concerned with the problem of "crowding out" if there are too many EDCs in operation. A more prudent approach would be to let the EDCs that are already operating manage the requirements of the SMEs and decide from there whether there is a further need to set up more EDCs.

Sir, my third and final question is whether the Government would provide sustained funding to EDC, if EDC is here to stay.

long-term vision for EDC, as it is rather difficult to have an effective long-term programme for EDC without a long-term vision in place.

Expanding Overseas

Sir, many SMEs are keen to venture abroad given the small local market. While they find the idea attractive and interesting, they also find it daunting and challenging. To help these companies, IE Singapore has several incentive schemes in place. However, for these schemes to be helpful, they should not be just post-active but proactive as well as easy to apply. Besides financial support, these companies could also make do with some hand-holding.

Going overseas is no stroll in the park. Besides the cost, cultural and market differences can be wide. Taking a taxi ride can be harrowing. Clearing the immigration and customs can be a chilling experience. The business culture could be a minefield. Some places are controlled by cartels while others may need a local sponsor. To navigate the complexities and obstacles is no easy task.

At the end of the day, our SMEs must take the bold step to move forward. They should cooperate with one another for the common good rather than to focus on self-interest, especially when they intend to move in as a group. The benefits may not be evenly distributed but everyone will benefit in some way. The markets are large enough for all our companies. Government agencies must proactively support these companies in the foray into new markets and territories.

Government agencies, such as IE Singapore, could move in first and provide market intelligence, advice and ground support for venturing companies. A consortium where companies pool their resources and strengths is a good approach. Larger companies can help bring along smaller ones. The inclusion of SMEs in trade missions is also helpful. IE Singapore has been helpful in all these aspects. Our Embassies and High Commissions can also be of great help, but we need to do more.

Sir, the Government, through IE Singapore, has made available various schemes to assist local enterprises venture abroad and many, amongst the local business community, have actually benefited from these schemes. IE Singapore should be commended for doing a good job in this respect. Be that as it may, there are still companies which are unable to access the schemes made available by IE Singapore, either due to ignorance or because they could not meet the requirements of the schemes.

Sir, one other scheme to help more companies venture abroad successfully which I would like to propose is to have the relevant agencies, like IE Singapore, work on an initiative to identify and promote strategic locations to our companies. China and India are two huge markets in Asia that are ideal starting points for such an initiative. PM Lee had

Sir, the whole idea is to encourage and attract but not to force or coerce, as there will always be those companies who will find these identified locations unsuitable or unattractive. This is inevitable. However, that notwithstanding, if we embark on such an initiative to identify, promote, attract and encourage companies to co-locate in these strategic locations, we will be able to realise the creation of a business cluster in these markets. The benefits of a business cluster are obvious. Apart from the synergistic links amongst the businesses located together within the cluster, by banding them together also serves to strengthen the position of each individual member within the cluster.

Once I had a conversation with a Chinese official on the topic of Singapore business ventures in China. This official made a very crude remark. He said that given our small size, with a population of only four million, even if our entire population goes over to China to invest,

once mentioned that there are lots of opportunities that fall within an eight-hour flight radius from us. Within this radius, China and India stand out as two huge markets that we cannot afford to miss. The relevant agency should, first, work with their counterparts in these countries to identify suitable locations and thereafter negotiate and procure a deal that will render companies investing and locating there maximum benefits and relief. If it is politically sensitive for a Government agency to identify and promote only selectively certain locations, the relevant agency can actually rope in SBF, trade associations and business chambers to assist in this area. The key is to identify suitable locations and thereupon actively work with the foreign counterparts to sweeten the ground, so as to incentivise Singapore companies whose operations fit in with these identified locations or are location-neutral to co-locate there.and if we are dispersed all over, we would be very insignificant and almost negligible. The only way for us to make an impact

is for our businesses venturing there to band together, co-locate and create sizeable clusters. While it may sound crude, it is indeed very true. If we can start to create business clusters in this market today, in a decade or so, they may perhaps see a Singapore Business Community being established in these countries. When this happens, we have cause to rejoice as it means that we have successfully built an external economy outside our geographical territory.

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Sir, with the intensified competition, compounding the effects of a small domestic market, many companies have realised the importance of venturing abroad to extend their reach. The Government has also been actively encouraging companies to globalise. I would like to ask the Government to consider this scheme I have put forth which, I believe, will serve to help many more companies venture abroad and globalise successfully.

Singapore Business Federation

Sir, the Singapore Business Federation (SBF) was formed in the year 2002 through an Act of Parliament. It was meant to be the new apex organisation, representing Singapore business interest, both locally and abroad. Concurrent with this, we have a wide array of business chambers and associations, representing different sectors of the business community.

Sir, I must declare my interest here as I am the Chairman of one of these Chambers, ie, the Singapore International Chamber of Commerce. When the SBF was first formed, there was great unhappiness by many companies to be

Sir, the position of CEO has been vacant for some time. Why are there no takers for that position? May I suggest to the Ministry that perhaps it is timely to conduct a stock-take on the SBF, review its achievements and challenges, and as part of this review, consider lowering subscription rates for its members?

compelled by law to become members of the SBF and to pay subscription fees, hence increasing their business cost. I must feed back that till today, many companies are still begrudging the need to pay compulsory subscriptions to the SBF. They still feel that they do not need the services of the SBF. Indeed, many prefer to use the free professional services rendered by IE Singapore. I wish to ask the Minister if he will give an update to this House on what the SBF has been doing and whether it has achieved its objectives as the apex body of businesses here. What has been the financial position of the SBF, ie, its revenue, expenditure and surpluses, including accumulated surpluses?

Free Trade Agreements

Sir, I support the issues brought up by Mr Chew Heng Ching on the effectiveness of SBF. And I have a suggestion on how we can make SBF look like a value-added organisation and not compete with the various Chambers, and that is related to my question on the FTAs. I mentioned that companies have yet to see the benefits of FTAs. I think the organisation that could play a significant role is SBF. Just as in ACE through the internationalisation of Action Crucible, through very tedious mentoring approach, our members have been able to help Singapore companies internationalise. It is an accounts management approach done by volunteers. If SBF could take the responsibility to be the organisation that

understands and helps to operationalise these FTAs, I am sure many companies will then want to go to SBF and will not question the value-added that SBF has. We will then also see the added benefit of our companies benefiting from the many FTAs that have already been signed and the many more that are coming on board very soon.

Sir, Singapore has signed FTAs with a number of countries, including the developed nations, such as the US and Japan. These FTAs give us better access to these developed markets compared to other countries for goods that need the rules of origin. Therefore, there are products that other countries could make or value add in Singapore to gain access to these developed markets. Their coming to Singapore will provide jobs to Singaporeans and contribute to our GDP. My question for the Minister is whether MTI has considered what products we can attract companies from these other countries, such as China, to manufacture here and whether MTI has an action plan to attract such investments to Singapore. If yes, what are the types of investments and from what countries? Has MTI attracted any in the last few years?

Prof. Ivan Png, you have two cuts, take them together. Total of 7 minutes.

Economic Incentive Schemes

Sir, the Government offers a range of incentives to businesses, including tax incentives, loans, grants and co-investments. MTI's Economic Development Assistance Scheme is budgeted for $2.125 billion in Phase IV. In years 2004 and 2005, the EDB provided for grants of $106 million and $82 million respectively. In the same two years, EDB had loans outstanding of $523 and $107 million respectively.

Sir, I ask if the Ministry could please share with the House three points: (1)

What have been the results in Phases III and IV of the Economic Development Assistance Scheme? Sir, I have referred to the EDB's Annual Report. It does publish data on such things as fixed asset investment, total value added, total business spending. However, the problem is that it does not say how much of these are due to EDB grants, loans, etc, and how much would have come to Singapore anyway. To evaluate the policy, we really need to know the incremental value-add of the policies. How much extra as an investment, how much extra value added, how much extra business spending resulted from EDB grants and incentives?

As discussed during the Budget debate, we should be concerned about the economic impact, both in economic performance and revenue loss of tax incentives. May I suggest to MTI that it agrees with the Ministry of Finance a tax revenue budget for economic incentives. This tax revenue budget would measure the value of tax incentives given out, specifically the amount of revenue loss resulting from these tax incentives. In this way, we could put tax incentives on a similar footing as grants and loans that we budget for tax, budget for grants and loans, and we could more accurately measure and compare the cost vis-a-vis benefits of these various schemes.

Research and Development (R&D)

Sir, just last month, Minister Lim Hng Kiang announced the Science and Technology Plan 2010. Allow me to applaud Minister Lim for publishing the plan and also the review of the previous plan. This is a big step towards greater transparency and good governance.

Sir, the plan has three targets at the national level by the year 2010. (1)

As a researcher, I applaud investments in R&D. However, as an economist, I worry about two aspects of the R&D plan. First, the key targets are inputs. I and, I think, most economists and other policy makers would rather aim at output targets. Let me propose the following alternative, increase our growth rate of multi-factor productivity to the top quartile in the OECD. Sir, please refer to the chart which is being distributed by Parliament staff. You will see Singapore's multi-factor productivity growth right at the end on the right hand side. It leaves much to be improved. Over the period, 1990 to 2002, we were placed just above the OECD median, at about slightly under 1%. Sir, we are much more flexible and dynamic than many of these OECD countries. Yet, our productivity growth pales by comparison. So instead of aiming at national R&D spending be 3% of GDP, let us aim that our growth rate of multi-factor productivity be in the top quartile of the OECD.

Sir, my second worry. The Science and Technology Plan 2010 increases A*STAR's budget by over 20% from $4 billion to $5.15 billion. It creates a National Research Foundation on a budget of $5 billion. I worry about the ability of our research organisation to make good use of a sharp increase in funds. Let me give an analogy. Suppose that we are running at 7 km an hour, and we want to accelerate to 10 km an hour. Yes, if we want to run faster, we must eat more. But the additional food must be calibrated according to how fast we are running, not just stuffing in food and hoping we can run faster. Indeed, I have heard talk of a "feeding frenzy" as foreign researchers swarm to Singapore for the rich research funding.

Sir, A*STAR's performance indicators include the number of patent applications and industry funding. Again, the number of patents has the flavour of an output target. It is just a matter of how much money you put into filing applications. Let me propose an alternative indicator which, I think, would be more reflective - the royalty income from patents and commercialisation. After all, we are not interested in collecting pieces of paper but rather their economic impact. So let us measure the royalty income. I do applaud A*STAR's focus on industry funding as a performance measure. That is great! But let me suggest another one. Besides industry funding, let us also measure A*STAR by the amount of co-funding of A*STAR's research by foreign national agencies and international agencies, for instance, the US National Science Foundation, the US Defence Advance Research Projects Agency, the European Union and the various UN organisations.

What performance measure does it use to evaluate the results of these grants and loans?Increase national R&D spending to 3% of GDP; (2) Increase the private sector share of R&D to two-thirds; (3) Increase research manpower to catch up with Sweden and Japan.

Sir, I declare that I am an academic at NUS.

$13.55 billion will be pumped into R&D over the next five years, of which more than half will go to MTI and its research agency and research institutes. This is certainly good news, but I perceive that overseas researchers and institutes could be more excited than Singaporeans over this news! It is necessary to look into how these research resources will be used to transform Singapore into an R&D driven economy with the outputs that we wish to achieve.

First, in attracting and recruiting world-renowned scientists to Singapore, it has been reported recently in the local media that what attracted these scientists were Singapore's offer of "direct funding, less restrictive rules for research and the freedom to commercialise their science".

There is nothing wrong in attracting renowned foreign scientists to Singapore, and I agree with the Prime Minister that we should attract foreign R&D talents. But I think we have to ask ourselves a few questions.

If a world-renowned scientist is not able or faces certain difficulties to find grants to support a certain research work back home in his own country, there must be some reasons and important factors to it, and we should analyse carefully before we throw in huge amounts of money for this scientist to come to Singapore and conduct the research work here. A different angle to view this is: is the Singapore Government offering them huge sums of research grants without requiring them to clearly state their research objectives and deliverables in the form of writing research grants?

In attracting these world-renowned scientists with huge research grants and salaries, what are the key performance indicators that we have set for them to meet, and within what kind of a timeframe do these scientists have to deliver what they promise?

Have excessive money and research grants been paid to "catch these whales"? Will these "whales" turn into "ikan bilis" after a while?

Is "buying scientists" the right approach for Singapore to put us on the world map of R&D? How many such scientists can Singapore "buy" as each may cost at least a few millions, considering the salaries and research grants that have been paid to them?

Have we given a different treatment to the foreign scientists as compared to home-grown researchers in research grant application and approval? Many foreign scientists have echoed in the various media reports that Singapore's quick access to funding, speedy grant approvals and lack of burdensome paperwork are the attractions for them to relocate here. This seems to contradict what local researchers have experienced. Often, we hear from local researchers that they need to write grant applications to the research agency, fulfil burdensome paperwork and the grant approval, if successful, will usually only come maybe nine months or a year later.

Sir, I have no quibble over these measures or quick access to funding, speedy grant approvals and less paperwork. My plea is only for equal treatment, not to favour the foreign scientists and therefore discriminate against the local R&D talents. We are not asking for special favours, we are only asking for the chance to compete equally.

Scientific research today is increasingly about access to grants and rewards, such as fame, prizes and commercial spin-offs,

A web-based magazine, however, reported that Singapore offers "unrestricted research, top-notch equipment and limitless funds" to these scientists, as long as they agree to relocate to Singapore. How contrasting this is! It has also been reported that Singapore promises these foreign renowned scientists world-class laboratories and more than enough money to pursue work that is not fundable, or is too controversial back in the home countries of these scientists. So far, this has worked and many "whales" have been caught by our local research agency. They are renowned researchers from the US, Japan and UK who have made their names in cancer and life science research, including Sirs and a Nobel Laureate.

ie, incentives that can sometimes lead to unethical practices, such as the South Korean stem cell research scandal. In Singapore, we have the BAC to guide biomedical research, and we have an external oversight system. However, we need a sound research

We are reminded of proper corporate governance in the recent meltdown of NKF. In line with proper accountability and transparency, we need proper research governance to enhance accountability and transparency in the money spent on catching these "whales".

If I may be frank here, Singapore has been taken to be a "Santa Claus" by many overseas researchers and research institutes (RIs). As the Prime Minister has said, "We will not spend it blindly. We will make sure it is well spent."

Secondly, as the Prime Minister has said, we need to get the appropriate performance measures, because how we measure influences what people will do. We need to have a coherent set of KPIs to measure the achievement of the comprehensive R&D strategy that will be implemented. We should not be relying on winning awards and competitions alone, or the total number of research publications and citations count. We should also not be too skewed towards commercialisation of technologies and ideas as this would influence the research towards a more downstream development work. What we need is a range of indicators, such as the number of publications, citation counts, patents filed, patent commercialised, research dollar attracted from industry, investment dollar attracted for IP commercialisation, etc. This whole range of indicators should not be applied equally to all institutions conducting research work. Rather, it should depend on the institution, whether it is a university, polytechnic or RI. A different combination of these indicators should be applied to measure the research output.

Lastly, much funds set aside for R&D have been spent on development of expensive iconic buildings, such as the $500 million Biopolis and the $700 million Fusionpolis. In the Science and Technology Plan 2010, 3% of the total R&D budget will be spent on such infrastructures. Sir, what will put us on the world map of R&D is not the iconic building that costs millions to build and millions to maintain, but the research output in terms of breakthroughs, patents, commercialised products, IPs and technology transfers from RIs to the industry.

governance framework that is aimed at continuous improvement of standards and the reduction of unacceptable variations in research practices to safeguard scientific integrity, ensure financial probity and prevent fraud and misconduct in research.

National Research Foundation

Sir, there is no doubt that Singapore needs to create its own intellectual property rights in the fields of science and technology where it has the competitive advantages. The Singapore Government has earmarked some $12 billion to finance public sector R&D activities for the five-year period starting from 2006 to 2010. This is more than double the amount of the previous five-year period. Of this amount, $5 billion has been allocated to the National Research Foundation. This seems like a lot of money. After all, the Progress Package that we just announced for every Singaporean only amounted to $2.6 billion. Yet, compared to what other nations spend on R&D, it is still small change.

Therefore, in my view, Sir, picking up the winners in the early phase of the game becomes very important. Yet, doing so is extremely difficult, especially when civil servants picked to do the job need to ensure that public money is properly accounted for. Thus, in the past, we tended to allocate funds to the public sector R&D institutes affiliated to the various universities. So, perhaps our culture and mindset need to be changed.

I have just noted that Dr John Chen spoke with the aid of a computer. Sir, I am not sure whether that is in line with the Standing Orders. If it is not in line with the Standing Orders, perhaps we should also take the opportunity to change the Standing Orders so that we can move with the technology.

My question to the Minister is what measures we are going to adopt to measure the success of the R&D programmes. I also agree with Prof. Ivan Png that perhaps an output-based performance measure is better than an input-based one.

Mr Chairman, first, let me thank Members for their very many insightful comments and suggestions. Many Members have spoken about how we can help our local enterprises, as well as the importance of research and development (R&D). These are indeed two areas that will strengthen our competitiveness in the coming years, and where we will be giving more emphasis over the next five years. I would also like to divide the issues raised into two levels.

At the macro level, Members have suggested ways to improve our competitiveness and adjustments to our economic policies. I think all of us agree that the Singapore economy has recovered and the prospects are positive. We are ranked very high in terms of competitiveness, effective tax rates, ease in doing business, quality of infrastructure, and our connectivity. We also have a strong pipeline of investments, our trade growth is robust and our tourism receipts are growing. Furthermore, with our focus on R&D and investment in our talent, I am confident that our competitiveness would be reinforced.

But, at the second level, I sense that Members would like to see how our economic policies and programmes can be

First of all, Dr Ahmad Magad has suggested a platform for the MNCs and SMEs to regularly meet and interact. I agree with him that we should strengthen the economic linkages between the MNCs and the SMEs. One such platform is the EDB's Local Industry Upgrading Programme (LIUP), where MNCs form strategic partnerships with their SME suppliers and other companies. It is a win-win partnership. MNCs can build up a strong supplier base supporting their requirements, while the SMEs can avail themselves of the MNCs' technical and managerial expertise to upgrade and be more competitive.

Over the last five years, the LIUP has assisted some 670 local companies. One good example is Baxter Healthcare SA and its group of local suppliers. Baxter manufactures medical products, such as intravenous sets and renal pumps. Under the LIUP programme, Baxter has worked to develop the suppliers' capabilities through knowledge transfers and promotion of quality standards. Last year, for example, it conducted two training sessions for 24 of its local suppliers to equip them with the ability to supply quality predictive tools to streamline their manufacturing processes.

As Members will remember, this is how we built up the electronics industry over 30 years. The MNCs provided the base that led to the development of the local precision engineering industry, which comprises many SMEs serving the tooling

This same story is repeated in our chemicals, transport engineering and biomedical sciences (BMS) clusters. Increasingly, we are seeing the spill-over of such linkages across clusters. For instance, the local precision engineering industry, which started off supporting the electronics industry, is now also serving new growth areas like the medical technology, aerospace and automotive industries.

The second suggestion put up by several Members, such as Dr Tan Boon Wan, Mr Inderjit Singh and Mr Lawrence Leow, is how to help our companies go overseas. They have suggested two approaches: (i) by banding together, such as through consortiums; and (ii) Mr Lawrence Leow suggested going together, also as a cluster, in the same location.

This is something that IE Singapore fully supports. By banding together, our companies increase their chances of success. Through the iPartners programme, IE encourages the formation of strategic alliances among our local companies, both the large and the small enterprises. Last year, for example, IE supported 12 new alliances, comprising

One such alliance is the Singapore Building and Infrastructure Consortium (SBIC). Led by SembCorp Engineers and Constructors Pte Ltd and DP Architects Pte Ltd, the consortium is targeting the Middle East market. Collectively, the 14 consortium members represent the complete value chain for the building and construction sector, from master-planning, engineering, consultancy, construction to procurement. This enables the SBIC to present an integrated team capable of delivering complete solutions, thereby boosting their chances of success, especially in securing larger contracts.

The LIUP programme and the iPartners programme illustrate that our approach to developing our SMEs is a painstaking one, involving sector by sector, consortium by consortium. We cannot just wave a magic wand and every SME will be helped.

Mr Inderjit Singh proposed establishing a Local EDB, while Dr Wang Kai Yuen suggested also centralising help to the SMEs. I remember reading in the newspapers that Dr Ong Chit Chung, during the Budget debate, had said that SMEs were like Cinderellas and called on the Government to send in a Prince Charming to transform Cinderella into a princess. But we have 120,000 SME Cinderellas in all shapes and sizes, and they all wear different sizes of glass slippers. They range from our neighbourhood stores, to bigger names like Osim, Inter-Roller and HTL. It is hard to imagine that a single agency can be a Prince Charming, with the full breadth and depth of sectoral knowledge and domain expertise to fully cater to all our SMEs' needs. For example, we need BCA's involvement to help our SMEs in the

What we have done is to appoint Spring as the overall champion for SMEs. Spring will leverage on the strengths and expertise of the other agencies to provide holistic and integrated services to our SMEs, in line with the vision of "Many Agencies, One Government".

A concrete result of this integrated, multi-agency approach is the recent launch of EnterpriseOne, which stands for "One Network for Enterprises". The portal at www.business.gov.sg is a Government-wide initiative managed by Spring in partnership with business chambers and industry associations. It enhances the SMEs' access to business information, Government e-services from more than 30 agencies, and advisory and consultative services. I urge Members to give it a try and I welcome your feedback on the effectiveness and usefulness of this portal.

The second pillar of the EnterpriseOne initiative is the network of Enterprise Development Centres (EDCs) that are being set up. These EDCs are run by the various business chambers and associations, and they offer business advisory and consultancy services. Today, SMEs can visit any one of the three EDCs at the Association of Small and Medium Enterprises, the Singapore Manufacturers' Federation and the Singapore Chinese Chamber of Commerce and Industry.

Mr Lawrence Leow has asked about the Government's long-term plans for these EDCs. The idea of EDCs was actually prompted by industry's calls for a consultancy or advisory panel which

effectively implemented to help our companies grow and create jobs. I agree completely with Members. We must ensure that our strong GDP is translated into growth opportunities for our companies, that more FTAs mean more export opportunities, and that higher R&D spending results in technology upgrading in our companies. Let me elaborate as I respond to the comments raised by Members.and component needs of the MNCs. Some of our SMEs later grew and internationalised, such as Unisteel and Seksun. Others became contract manufacturers, such as MMI. The vibrant local precision engineering industry in turn attracted more electronics MNCs, and further strengthened our electronics cluster. The supply chain management for electronic products gave the logistics sector a boost, with several SMEs growing to become sizeable regional logistics players, such as Accord Express Holdings. Not only that, it has also given rise to a huge electronics international wholesaling and trading cluster in Singapore, creating more business opportunities for additional local companies.60 companies, which are expected to generate over S$415 million in overseas sales.construction and renovation sector; IDA's help for IT and media development; and WDA's help for workforce upgrading and retraining. Hence, the more sensible approach of developing our SMEs is to adopt a "whole-of-government" approach rather than a single agency.SMEs can turn to for business advice, be it to upgrade, expand or venture overseas. Recognising that most SMEs will not be able to afford

the services of the likes of McKinsey, the Government sought the cooperation of the major business chambers and industry associations to provide guidance and advice to our enterprises and our would-be entrepreneurs.

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As each chamber and association has a specific business focus, the EDC so formed will similarly have its own focus and area of specialisation. For example, the EDC at the Singapore Manufacturers' Federation focuses on mainly manufacturing-related diagnostic and consultancy services, while the one at the Singapore Chinese Chamber provides comprehensive advice on doing business in China.

So far, as Mr Lawrence Leow has pointed out, the Government has provided co-funding support to defray the set-up costs for the EDCs. In the longer-term, we hope that the EDCs will evolve into thriving centres for business information and knowledge exchange, sufficiently valued by the SMEs that they become an integral part of the chambers and the industry associations. The Government will thus work closely with the EDCs to help them succeed and be commercially viable and sustainable over time.

Mr Chairman, the next level of our support is working with the industry associations to develop vibrant industry clusters. The industry associations know the business environment, the challenges and issues faced by the SME members much better than the Government does. Thus, by working with them and through them, we can better reach out and target our assistance to our SMEs.

It was with this in mind that the Government launched the $50 million

I have given examples of these previously in the House of the work done by the food manufacturers and the textile and garment and furniture industry associations. I think Members would also have read newspaper reports, the most recent one by the Furniture Association of their plans to develop Sungei Kadut to improve design and to increase their export opportunities.

Let me today give you another example, the Print and Media Association of Singapore. Some may perceive printing as a sunset industry in Singapore because of our high labour costs. But our printing companies have been very resilient, surviving downturns and strong competition by finding niches for themselves and moving towards high value print jobs. For example CS Graphics prints fine quality art books for key clients such as the Metropolitan Museum of Arts. Another group of local printing companies has come together, such as Fabulous Printers, COS Printers and Markono Print Media, in order to support Blackwell Publishing, one of the world's leading scientific, technical and medical journal publishers. Blackwell is drawn to our local printers because of their quality and their competitive prices, as well as Singapore's strong supply chain capabilities, which enable them to quickly

Mr Chairman, let me now turn to specific areas where SMEs need help. The first area is financing. We have been systematically improving the financing infrastructure for enterprises by plugging the funding gaps through a mixture of loans and equity schemes. For this, I would like to thank Mr Inderjit Singh and the Financing Crucible of the Action Community for Entrepreneurship (ACE) for their contributions and effort.

Last year alone saw the launch of several new financing schemes. Among them is the SME ACCESS Loan to help SMEs, especially under-served enterprises without collateral or with a limited track record. To date, over S$100 million in loans have been extended to more than 400 SMEs. To spur greater angel investments, EDB has also recently launched the $30 million Business Angel Scheme. This was launched in September last year. In October last year, IE Singapore started the Trade Credit Insurance Programme, which offers premium trade credit insurance rates through the pooling of demand. The scheme has already benefited more than 270 companies with a total volume of sales insured amounting to over $45 million in just three months. We will continue to work on improving the access of our enterprises to financing. I think in PM's response in the Budget debate, he gave Members a printout of several sheets of all the schemes and we welcome feedback from Members on how to improve these financing schemes.

Dr Wang Kai Yuen suggested that the Government could consider a single Government-funded institution to provide

What the Government in fact can do is to designate more financial resources to help our local enterprises grow. This is indeed what we are prepared to do. I am happy to announce that the Government will set aside $3.9 billion over the next five years (FY2006-2010) for this purpose. Grants will take up $900 million, an increase of 35% over the previous five years. The remaining $3 billion will be in loans, and through partnerships with our various financial institutions, this is expected to catalyse more than $6 billion worth of loan financing, almost 60% more than the previous five years. So we are prepared to put more resources to support our local companies.

The second area in helping our companies is to encourage them and facilitate them to expand overseas. I mentioned just now about the consortiums. Let me also briefly outline what IE Singapore is doing to help our companies go overseas.

IE does so through a 3C framework - Competency, Capital and Connections. For example, last year, IE Singapore helped some 32,000 companies through its services and its activities. Let me highlight some of the key initiatives under each of these 3Cs.

Competency involves helping our companies to build up capabilities so that they can compete more effectively in overseas markets. Last year, some 1,900 companies leveraged on IE's capability-building programmes, particularly in branding, design and international manpower development.

It is important that companies formulate a viable market strategy before entering any new market. The Internationalisation Roadmapping Programme was launched early this year to help companies develop long-term business planning strategies as part of their internationalisation plans.

The second "C" is Capital. Coupled with other inroads that we have made on supporting financing, we have also promoted the Regionalisation Finance Scheme, which is a fixed interest loan scheme. Since 2001, it has committed over $54 million in loans, benefiting some 43 companies as at end 2005.

The third "C" is Connections. SMEs, in particular, need help to enter into overseas markets. To build connections, SMEs can participate in outgoing missions and fairs organised by IE Singapore as well as IE Singapore's networking platforms, namely, Network China, Network Indonesia and Network India. Companies can also tap on the International Marketing Activities Programme which supports the activities organised by trade associations and chambers, or the Pathfinder Scheme for Distribution, which helps exporters by

Mr Lawrence Leow suggested that our SMEs can go together and find suitable locations when they go overseas. I think this is indeed what many have done, not directly through the Government but indirectly. As you know, Singapore companies have helped built industrial estates in Batam, Bintan, Vietnam, China and India. Many of our SMEs find comfort in operating in many of these industrial estates developed by our local companies. Going forward, there are other plans to develop SEZs, both in Indonesia, in India and further afield also in Russia. If companies find that this is sensible strategy to locate in business districts and industrial estates developed by Singapore companies, then this is one strategy they can pursue. But I would be loath to concentrate all our resources just in one or two industrial estates and encourage or direct all our companies to go there. We should allow our companies to diversify and go to different industrial estates and different countries to pursue their opportunities.

Let me now turn to another area which is the FTAs. So far, we have signed 11 FTAs. Mr Inderjit Singh asked exactly how our companies have benefited from the FTAs. I would say in several ways. First, the FTAs gave our companies a competitive advantage through the elimination or reduction of the tariff as well as non-tariff barriers. Second, the FTAs can help our companies gain access to emerging markets such as India and the Middle East. Finally, our FTAs contain safeguards to provide our companies with better protection when they venture overseas. This protection can include guarantees on repatriation of capital and profits, as well as investor-state dispute settlement mechanisms. But I believe we can do more.

In order to help our companies take advantage of all these benefits, MTI and its partner agencies have been reaching out to the business community through various activities and programmes, eg, seminars, workshops and guide books. A dedicated FTA website has also been set up. This year, IE Singapore has established a special unit to help companies leverage on FTAs. This special unit will not only organise seminars and provide general information, but also provide the individual company with consultations, to show them exactly how they can make full use of the FTAs for the products that they are producing and exporting. I therefore encourage our businessmen to take advantage of these resources and make full use of these FTAs.

Dr John Chen has also asked whether the FTAs have been successful or helpful for us in bringing investments into Singapore and he mentioned particularly the case of China. I would say that Singapore's extensive FTA networks have added to our overall value proposition in attracting investments to Singapore.

Local Enterprise and Association Development (LEAD) programme to support able and willing industry associations in spearheading industry development efforts. The LEAD programme has had very good success to date. So far, the Government has approved grants of more than $20 million to six associations in industries such as the restaurant industry, the food manufacturing industry, furniture, textile and garment, process industry and the precision engineering sector. These projects are expected to add more than S$800 million to the economy and create more than 4,000 new jobs.distribute their journals worldwide. Some of our printers not only do the printing, but also maintain a website and fulfil the orders for Blackwell.financing to the SMEs. Currently, there are already many private sector financial institutions which are providing loans to SMEs. In fact, more banks are recognising the potential of the SME market and have set up specialised teams to focus on SME customers. For the Government to set up its own SME banking or financial institution to compete against the private sector will be against the "Yellow Pages Rule". The Government has instead partnered some 16 financial institutions to administer the loans to our SMEs, so that we can leverage on their market expertise as well as to foster the start of hopefully a lasting banking relationship between the SMEs and the financial institutions. This win-win arrangement has worked well so far. Over the past five years, Spring and IE Singapore have worked with financial institutions to facilitate more than $3.1 billion worth of loans to more than 12,500 companies. matching them with overseas intermediaries who have extensive local business networks.

In fact, when EDB officers approach the various clients, they actively market our strong network of FTAs when highlighting our strengths to potential investors. When they make client calls on the companies they will, in fact, work out what the FTAs can offer these companies and talk directly with the company executives on how if they invest in Singapore they can take advantage of these FTAs.

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We also work with companies to identify the areas where our FTAs are able to offer a preferential edge over other competing investment locations, be they in terms of tariff savings or investment protection. And we have had some successes. Let me give you an illustration.

So, overall, I would say the FTAs have added value to Singapore's attractiveness as an investment location.

Let me now turn to some of the other issues raised by Members. Mr Chew Heng Ching has asked for an update of the SBF.

Members will remember that the SBF was set up in 2002 to create an apex organisation to represent Singapore's business interests more effectively, locally and abroad. SBF membership was made mandatory as the earlier practice of voluntary membership by business chambers and associations had not been effective. Compulsory membership will ensure that SBF has a strong membership base, and has the mandate of the entire business community. Compulsory membership of business chambers or business associations at the apex level is not uncommon. France, Germany and Brazil also have this practice.

However, only local companies with paid-up capital and foreign companies with authorised capital of $0.5 million and above are required to be members of the SBF. Small companies, partnerships, sole proprietors and companies without any employees are exempted. As a result, SBF has exempted some 142,000 companies and another 140,000 partnerships and sole proprietors. In fact, SBF has only a membership of 15,046 which constitutes just 9.6% of all companies in Singapore.

Furthermore, if you look at these 15,000 companies, about 11,500 of them have paid up/authorised share capital of less than $5 million. And, therefore, their annual fees range from $300 to $400 per year, or about $1 a day. So I do not think this is a very heavy financial burden. As you know, the SBF has had only four years of operation. It is young by any standard of a business association. So I urge Members and other businesses to give SBF a chance to develop. In due course, we will do a stock-take and encourage the SBF to find ways where it can provide value to its members.

Let me now turn to the question raised by Prof. Ivan Pang about the performance measures that we use to evaluate the Economic Development Assistance Scheme (EDAS) and also Mr Inderjit Singh's comment about the value of the FDIs that we have attracted to Singapore.

As you know, attracting FDIs is a very important component of our investment and development strategies. Even though Singapore is a capital-surplus country we believe that the foreign direct investment into Singapore is very important because it not only brings in capital but, more importantly, it brings in technology and gives us access to export markets. The Prime Minister also explained during the Budget response that we are in a very different environment nowadays. We are competing for foreign direct investments not just with the other emerging economies but also with the developed countries as well. So the Economic Development Assistance Scheme (EDAS) is a very important tool by which the EDB uses to bring in foreign investments to Singapore. And EDB goes about it in evaluating whether the EDAS is to be used through four key indicators. EDB

So over the last five years, EDB attracted $42.5 billion in manufacturing Fixed Asset Investments and $10.6 billion in services Total Business Spending. These investment commitments will create a total value add of $50.4 billion per year and 110,000 new jobs when fully realised. Of the 110,000 jobs created, 71% will be skilled and professional. So it is very important for us that this pipeline of investments continues to give strength to our economy, add to the value-add and help generate jobs.

Prof. Ivan Png has suggested that we consider a tax revenue budget to manage revenue loss through tax incentives. As I have explained earlier, we are in a very competitive environment. We have to compete with both the developed countries, as well as with the emerging countries for such investments. Our tax incentives are also granted by tying the companies to new investments. If we had not provided these incentives, the companies could have taken their investment to competing locations. We would, therefore, not have collected the taxes to begin with. But, nevertheless, we will look at his idea of a tax revenue budget to see whether it can be used to complement our methods of evaluating the investment proposals that we want to attract to Singapore.

The final question I would like to address is research and development. As the Prime Minister highlighted in his Budget debate round-up speech, R&D is a major effort and we are undertaking to transform our economy by building a strong foundation for our sustainable growth and competitiveness. Going forward, in a global knowledge-based economy, competition will not be simply about lowering costs but, increasingly, it is about talent and creating value. So, I think all Members are agreed that building up our R&D capability is, therefore, a crucial piece of securing our economic future. There will be risks, but it is something we have to do. I think what Members are more concerned about is how do we go about investing our R&D funds in a way that will deliver the output that we desire. If you look at R&D, and this is a very complicated subject, based on the interventions by Members, you can see that there is great difficulty in measuring the output of R&D because this is a very long term process. But we have to be bold and we have to take this step to invest heavily in our R&D effort.

Basically, if you look at comparisons among various countries, it is always easier to compare the inputs, the percentage of GDP devoted to R&D or the amount of funds or resources, both the public and private sectors, put into R&D. When you start looking at output, I think the indicators are more difficult to arrive at. The easy output indicators will be, for example, the number of research scientists and engineers that are active in the country. I think, on this measure, Singapore has done well through our successive Science and Technology Plan (S&T). The number of research scientists and engineers in Singapore has progressively been increased. I think that puts us in a very strong position, going forward, because R&D is all about talent

Prof. Ivan Png also suggested other measures. Let me just go through some of them. He suggested using the Multi-Factor Productivity as an indicator. Prof. Ivan Png is an economist, I am not, but my little knowledge of MFP indicates that it is not really a measure of productivity alone. So the table he showed is not a measure of the low productivity of Singapore economy. If you look at the productivity parameter, in fact, Singapore has done fairly well. But when you look at Multi-Factor Productivity, this factor is really any GDP growth that cannot be attributed to changes in labour or capital inputs and so it is a very illusive concept and an illusive parameter to measure. Perhaps what we need is a research grant to see how MFP can be used as a way of measuring the competitiveness or the productivity of the economy. But I know that MFP does not specifically measure R&D output. That much I know. But how we can use MFP to measure the effectiveness of R&D, that is something that we have to study further.

Prof. Ivan Png also suggested that we look at the grants that we are able to secure from overseas R&D agencies as one way of measuring performance. I think this is a valid point and, in fact, A*STAR agencies and research institutes have been fairly successful in securing fundings from other national and international agencies, such as the US National Institute of Health, the US Defence Advance Research Project Agency (DARPA), and also from the European Commission. I think this reflects well on us on several counts. One, it shows that our standards of research are high. Two, it shows that some of the areas that we are collaborating in are also in areas which these agencies are interested in. But I will be concerned if we use this as a primary factor of the

I think the main issue that we need to address, going forward, in R&D is, one, we must put in more resources, if we want to be in the game. We have to take the risk. If we are very cautious, we run the risk of losing out. Two, we want to make sure these resources are invested in the right areas and this requires both a bottom-up as well as a top-down process. The bottom-up process involves us tapping a big panel of research experts to draw upon the expertise and to understand which are the areas that we should invest in. The top-down input involves the Prime Minister chairing the Research Council so that he has an overview and that he is assured that the resources are directed at the right areas and that it is not just money chasing after a few big names or encouraging a feed frenzy.

Next, the other key principle is that we want to encourage the leverage of the industries and that is the reason why we target

A leading US manufacturer of oilfield drilling equipment doubled its manufacturing plant capacity in Singapore. It did so because the tariff savings from the US-Singapore FTA, combined with Singapore's logistics infrastructure and our competitive costs, made it more economical for it to manufacture here and export to the US. So, even though the tariff saving is only a few percentage points, this has increased its margin and swayed the decision for it to expand in Singapore rather than in the US.So, even though we make it compulsory, through this exemption process, the membership profile of SBS only constitutes 10% of all companies. will look at, for manufacturing, the Fixed Asset Investments that the foreign investor is bringing in and, for services, the Total Business Spending arising from investor's commitments in Singapore. In the evaluation, EDB will also estimate the value-added and also the number of new jobs generated as a result of these investments. As the Prime Minister indicated, as long as all these items are in the positive, generate jobs, create value-add, then we are prepared to provide EDAS and other incentives to bring in the investments.and we need to build up our local talent to undertake R&D.effectiveness of research because if we send the wrong signals to our research agencies, if they pursue this factor, then I think what they will be doing is that they will be aligning our research objectives in line with all these agencies in order to get their funding. And I am not sure this is entirely the right thing for us to do because, as a small country with competencies in different areas, we do want our research directed at different sectors. So, this ability to secure fundings from international and other national agencies is a useful way to collaborate, that we are reaching certain standards and that we are doing things right, but I would not want to make this the primary output factor.

to achieve two-thirds of the research to be done by the companies, because the companies will know where the commercial potential is, and I think it is one way we can be assured that the research money will be appropriately

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The fourth principle is that I do not think we can be very far wrong if we invest in talent. So a large part of the S&T plan is to build up our local talent, encourage our students to do PhDs and take up research as a career.

Sir, with all these measures in place, I think we are well poised to go into this programme. The Government has decided to put in resources into this programme and it is our responsibility to make sure that these resources are properly spent, and that we get the best benefit out of these resources.

spent, if we have the partnership with the private companies.

Sir, a clarifying question to the Hon. Minister. He has presented us with magnificent numbers for the fixed assets and total business spending attracted by EDB. Could I ask the Hon. Minister what is the incremental quantity? Some of these investments would have come even if we had not given grants and tax incentives. We really need to understand what is the incremental quantity. Because we have a good Government, we have good infrastructures, and some of these investments would have come any way. What is the incremental amount that came because of the incentives? That is what we need to know.

Secondly, the Hon. Minister has agreed that there is no good measure of R&D. I agree. The best possible one - as far as I know, and OECD uses this - is the growth of multi-factor productivity. The fact that it is hard to measure does not mean that we should duck and not measure at all. If it is hard to measure, we should try to get the best possible measure. We should not just run away from it.

Sir, our approach to attracting investments, as I have mentioned just now, is to evaluate each investment proposal very carefully. And if we can get by without giving the potential investor the incentives, the Member can be assured that EDB and JTC would not do so. So, if we look at our track record, MTI and EDB would generally ask for a significantly large EDAS budget, because we need a fairly significant war chest to be able to go out and promote Singapore and to attract investments. But if we look at the actual expenditure, in terms of equity, grants and loans, we will find that, in fact, it is a very small percentage of the budget that is granted to MTI and EDB. I think this should reassure Members that we adopt a very disciplined and focused approach in our attempts to bring in investments.

We try not to give specific numbers because, as I said, we are in a very competitive environment. Other investment promotion agencies also look at what we are giving and try to top it. As the Prime Minister mentioned, investors sometimes come with a list of proposals on what they are getting from other countries and ask us to better the offer. We are very wary of such tactics and we do not want to fall prey to such tactics.

Sir, on the issue of value add, one thing that has always been on my mind is whether we have ever recovered all the investments that we brought in Jurong Island. Have we been effective in generating value add for the country?

On the issue of Jurong Island, I can say unequivocally that it has been a good investment and it has been very good for Singapore.

Entrepreneurship

Sir, I would like to thank Minister Lim particularly for

Sir, in an age of hyper competition and radical innovation, to achieve long-term sustainable results to position entrepreneurship as one of the key pillars for the future economy, we could and should do more to preach entrepreneurship as a serious viable alternative to employment. Beyond easier access to funds and beyond stepped-up education about entrepreneurship, radical entrepreneurship initiatives require strong persistence and encouragement. For example, in the creative industry, cost of talent and developing commercialisable products are high, and developing such may cut across the ups and downs of business cycle. We certainly would not want to see our entrepreneurs giving up all their efforts when they are just ripe on the edge of success but do not go on. This is where I would like to ask the Government to do more by providing them the necessary support, which includes mentoring for business continuity, helping connect them with appropriate sources of funds and providing them with grants for protection of their intellectual properties. Provisions of such support will ensure that the entrepreneurs could be focused on their product development and, subsequently, successfully bring their products to the market in the shortest possible time.

his extensive elaboration of the many improvements to several existing schemes meant to assist our SMEs. I am sure the SME committee will be pleased with the new announcements.

Sir, the Government has had a significant impact on the economic landscape of the country, and in the promotion of entrepreneurship, when the Government decided that creating local companies was as important as attracting foreign MNCs. Our effort has resulted in the creation of ACE, and we have seen very good successes in a number of areas.

I have a few questions in this regard. One is very specific and it is on the issue

The issue of financing has also been widely discussed. Many Members have always brought this up in any discussion that we have during feedback sessions. This comes out as a big issue. As the Minister has mentioned, I also believe, from my latest feedback, that we have a tremendous progress in this area, the latest being the approval of the OTC and also the Business Angel Fund that the Minister mentioned a while ago. But I believe that one area that the Government could do better is the way that risk capital is looked at and utilised.

We spent about US$1 billion some years ago to attract foreign VCs into Singapore. I am not too sure if we have achieved the desired outcome. The reason I say this is because the anecdotal evidence seems to indicate that many of the VCs that we attracted into Singapore seem to be more actively investing in companies outside Singapore, and they have made very few investments in Singapore. Could we, therefore, have designed things a bit differently to achieve better results in creating and supporting more local enterprises? But, as in most cases, caution seems to be the order of the day when it comes to support for local SMEs and local entrepreneurs.

Sir, risk capital is risk capital, and the Government should be contented if it does not make too much returns, not as much as what typical VCs make. And this has been the example that was brought up by some Members, the model that Korea and perhaps in the US where the government spends more money to do a developmental type of role. When it

Finally, in the area of economic planning, I feel that it has been too much of a one-way process where we have the Government thinking and deciding the type of industries to develop. Of course, EDB and the planning agencies in the Government have done a good job over the years. But I think we could have a greater involvement of the private sector in planning the future of our economy. And perhaps a two-way process, instead of deciding what the Government wants to focus on and communicating it to the private sector, we have greater involvement earlier on in the whole process. I think if we can do this, we will have a greater chance of creating an even stronger economy for the country.

of the 60-plus Government incentive schemes. I had taken on the task, together with my committee, to review them, and we have made proposals to MTI. Perhaps the Minister can give us an update on whether some of the recommendations made are useful and will be adopted.comes to putting money into GLCs and VCs, the Government has been more gung-ho than putting it into local companies. And we seem to have also made some spectacular losses in investment in VCs as well as some GLCs. Whereas in the area of LEFS, which is the loan scheme that the Minister mentioned, I think the Government has made good returns when they should have been contented with just breakeven type of returns since, again, it is a developmental type of role that the Government plays.

Sir, the Ministry of Trade and Industry has the noble task of growing the economy, expanding the trade levels and developing a pro-enterprise environment that will position Singapore as a key trade and business hub.

The Entrepreneurial Talent Development Fund (ETDF) was introduced by MTI in 2004, targeted at students from institutes of higher learning, to develop talent by encouraging 'learning by doing' and encouraging these students to participate in various business ventures over the next five years to develop the spirit of entrepreneurship in our young.

My question, therefore, is to ask the Minister, when the ETDF was introduced, $25 million was earmarked in total for the fund. For FY2004, $2.41 million was the amount drawn down by SPRING (as in actual figures) and in FY2005, the revised amount needed by SPRING was $700,000 versus an original estimated amount of $2.5 million in FY2005. For FY2006, the amount was only $500,000.

I am sorry, Dr Tan, your time is up. Miss Penny Low.

Social Enterprise Fund

Sir, in the first world-wide estimates of just how big the non-profit sector is, Johns Hopkins University studied 37 nations and found a total operating expenditure in 2002 to be at US$1.6 trillion. In other words, if the non-profit sector were a country, they would be the fifth largest economy in the world. In the US alone, the non-profit sector employs nearly 11 million Americans, or about 7% of the workforce, and contributes more than 9% of GDP with a total asset of US$1.7 trillion in 2003.

Currently, most of the fees and dues were the greatest generators of income followed by government payments, private contributions and other sources. But this income composition is about to change with the rise of for-profit social enterprises. For-profit social enterprises are legally incorporated entities explicitly designed to pursue a social mission. Often, for-profit ventures identify social gaps and look for innovative market means to create system change and sustainable organisations. While their primary objective is social impact, their for-profit structure requires paying attention to a double bottom line, ie, dual social and financial objectives that guide

managerial decision making and determine success. Some examples are Grameen Bank, Shore Bank Corporation, Easybeinggreen and a listed company called Free Play, which help to create jobs in difficult sectors and cultivate self-reliant societies. I believe the Minister would agree with me that encouraging for-profit social enterprises to bloom can help redefine our people sector economy from one that is charity or Government driven to one that is sustainable and profitable in the long term. This, of course, can be translated to less tax dollars needed to fund social programmes. I see the for-profit social enterprise as a main business table agenda item, and not a CSR after-thought. It is a potential new engine of growth. Growing this sector possibly with favourable fiscal measures and Government incentives, like funding from SPRING, subsidised land rent, or even a special business zone, as mentioned by Dr Wang Kai Yuen, and even staff secondment from public agencies will help social needs as well as contribute to GDP. I urge that MTI take an enlightened view on the for-profit organisations and help kick start the for-profit people sector and help move Singapore towards a vibrant and connected people sector economy.

Tourism

(In Mandarin): Sir, first of all, I would like to commend the Singapore Tourism Board for their recent efforts in promoting Singapore's tourism industry. In order to attract more tourists to Singapore, the Singapore Tourism Board mobilised a lot of resources to prepare some guide books with rich local flavours, and they have introduced a lot of lesser-known local attractions to the tourists, for example, the elaborately produced "Walking Guide to Katong/Joo Chiat". Unfortunately, in the Chinese version of this guidebook, owing to some mistranslation, there was a piece of material that is really laughable.

In introducing Joo Chiat and Katong, it states, "Many people do not know the difference between Joo Chiat and Katong. In fact, Joo Chiat is situated within Katong, and Katong is Chew Joo Chiat's grandfather. It represents a very large area."

On reading this, I have a doubt on the statement of Katong being the grandfather of Chew Joo Chiat. Who is this Katong? I believe the editor was deliberately trying to create a suspense. In another page, I found the answer. It says, "Do you know that Katong is named after a species of sea turtle found in Singapore?" This is to say that Chew Joo Chiat's grandfather, Katong, was a sea turtle. If this is brought to the knowledge of Chew Joo Chiat's descendants, I am sure they will go after the Singapore Tourism Board for turning them into descendants of a sea turtle.

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The Singapore Tourism Board is our international tourism ambassador charged with the heavy responsibility of introducing Singapore to the international tourists. I think many tourists' first impression of Singapore comes from the guidebooks. Now with the emergence of Chinese market of one billion people, I think we have to be more careful with the translation, otherwise we would become a laughing stock and undermine our international image.

Sir, last year, Singapore had a bumper record of 8.9 million tourists and generated $10.8 billion in tourist receipts. But 10 years ago, in 1996, we made even more in tourism receipts, $11 billion, with fewer tourists, 7.3 million. This calculates to 1.6 million less tourists but $200 million more in tourist receipts, in my opinion, a better performance, in terms of cost-effectiveness. And yet, we are now targeting to double our tourist numbers in

The advent of two IRs and the surge of tourists from China and India should enable us to ride this new wave of tourism growth and achieve these targets, but I would like to ask the Minister: is this the best and most sustainable way to grow our tourism industry? Or is it just the easiest way? Does it value add?

The exponential growth of tourists and tourist infrastructure can exceed the limits of healthy growth and tilt us towards a malignant growth if we just continue crunching numbers. Are we creating new markets or are we just chasing old ones? Does Singapore have the land and resources to cope with this pressure? How many hotels will we need? And where is the land for them to come from? What types of jobs will be created? What percentage of these will be skilled jobs?

Mass tourism is notoriously fickle and susceptible to fashion, economic downturns, currency changes, epidemics, terrorism or the fear of any of these. And not only does it put a heavy strain on a country's resources but it also negatively impacts on the residents by increasing petty crimes - we read about that recently - drug trafficking, prostitution, the risk of diseases and their quality of life in general. It also deters the more discerning and discriminating visitor. In my opinion, it would be easier to revive Singapore from a reputation as backwater than to rescue a tarnished down market tourist reputation.

Therefore, I think Singapore should resist the lure of numbers and focus on value-added tourists like students, long-term or repeat visitors, people who come for a specific purpose - cultural and arts tourists, medical tourists, even eco-tourists. We should also focus on the silver tourist industry. These people will have brand loyalty and integrate with

I therefore recommend a more comprehensive and sustainable long-term tourist policy that builds on our core strengths and that deepens our rootedness.

10 years' time, in order to triple our tourist receipts.rather than compete with locals, and they will add value. They will create high-end rather than low-end jobs. In my opinion, a truly cosmopolitan global city is one where locals and foreigners can interact in a meaningful and mutually beneficial way, not pass like ships in the night.

Your time is up, Dr Geh Min. Mr Alex Chan.

Sir, Singapore is chosen to position itself as a global city that is prepared to compete for the world's investment and consumption dollars and for the best human capital. Global competition among cities is intense for technology investments, and the EDB has a long history of success in doing this for Singapore. In the past, we could just offer land, engineers, tax incentives and reliable logistics to win. Today, as PM Lee said in his Budget debate's closing speech, we need to meet or beat an ever growing list of the best of breed items. But chasing and winning the race for foreign investments is only one part of the success equation. The receptacles or factors of operations for the conduct of successful business must be available, ready and also competitively best of breed. This includes our hard and soft infrastructures, our human capital and our overall social environment. We have proven that we can build, run and maintain our hard infrastructures. We are now being tested whether we can educate, train and retrain our human capital to meet the challenges of the future. We are now also showing that we

The point I am trying to make is in today's incredibly noisy world, getting noticed is a "must have" first step. Dubai, through its mega-tourism project, is a good example. Getting visitors to the doorstep and trying the product is the next step, then having a memorable experience and a good outcome must surely be the objective for repeat and sustainable business. Achieving the memorable experience and the "wow" outcome is a collective effort of all Singaporeans in product knowledge and customer service culture. It also requires the concerted effort of private and public partnerships and inter-agency coordination to make the entire business value chain a viable and sustainable one in a challenging and small domestic market. I think we need to nurture domestic tourism and local consumption spending in our own tourism products. The Esplanade would never be successful if Singaporeans are unwilling to pay for entertainment. The S-League would not succeed if we do not support and pay admission charges to watch the matches.

Since the budgets are prepared and segmented by Ministries, my questions are: Is there a budget for promotion of domestic tourism and for ideas creation, product generation and origination of services and products, just as we have for technology R&D? Which are the agencies involved and which agency is leading or driving the coordination? Are we adequately investing in new ideas and projects? Is the Government prepared to be aggressive to seed fund new ideas?

are able to invest or wanting to invest heavily in R&D to generate the future technology that will hopefully have a strong economic impact on Singapore and indeed the world. There are no guarantees for economic returns, but without the bold attempt to engage the future possibilities, we will surely be out of the race and lose our significance.

Integrated Resort

Sir, since the start of the IR debate, the final selection criteria and operating framework of IR has gone through quite some changes. With these revisions, what is the expected benefits to our economy, in terms of (a) employment; (b) GDP boost; and (c) long-term economic strategy. It surprises me that while the social consequences of IR are long-term challenges, the selection criteria of IR weigh in favour of upfront considerations, like design and tourism appeal. Given the price that society has to pay, perhaps the winning IR should be one that gives the most strategic value add to Singapore's long-term economic interest, and not one that gives the most one-off tourist appeal, one-off project funds or be the most aesthetically appealing proposal. If tourism is indeed our long-term strategic interest, then the criteria should go further to ask what brings repeat visitors. We want regular spenders to fuel our economy, and not just one-off curious onlookers. In addition, given a global shortage of gaming professionals, what is our strategy in attracting them to Singapore?

Order. I propose to take the break now.

Thereupon Mr Speaker left the Chair of the Committee and took the Chair of the House.

Order. I suspend the Sitting and will take the Chair again at 3.15 pm.

Sitting accordingly suspended

at 2.52 pm until 3.15 pm.

Sitting resumed at 3.15 pm

Debate in Committee of Supply resumed.

Head V (cont.) -

Mr Chairman, Sir, Dr Ahmad Magad quite rightly pointed out that deep pockets are needed for product development, especially in the creative industries.

The Government has put aside more than $200 million with MICA and its agencies in order to provide a wide array of incentives, which are mainly grants and co-investments, to develop and encourage the creative industries. Besides content creation, the incentives also cover capability development, opportunities to showcase works at international platforms, cross-disciplinary innovations, and the engagement of consultancy services. In addition, in order to give the digital media a further boost, the Economic Development Board has committed $500 million over the next five years, with long-term plans for another $500 million over the subsequent five years.

MDA's efforts with industry players have translated into production value of at least $7 million in 2005 alone, and the value of work done in Singapore, we estimate, will grow over the next two to three years to as much as $30-$40 million.

Dr Magad has also suggested that the Government explore offering grants for patenting product creations. I would like to highlight that the EDB manages the "Patent Application Fund (PAF) Plus" scheme, which offers grant assistance to help cover part of the cost of professional and official fees for filing a patent. Since its inception in 2002, we have had 348 successful applications and given out some $2.6 million in grants.

Dr Tan Sze Wee was concerned with the low take-up rate of the Entrepreneurial

The programme only began in 2004, and the IHLs needed time to set up their internal mechanisms to administer it. Consequently, the money disbursed in 2005 was not high. Some funds disbursed to the IHLs have also not yet been fully utilised. SPRING has taken this into account when estimating a lower draw for FY 2006. This is in no way an indication that the programme is slowing down.

In fact, I am sure Members of this House would agree with me that we should be more concerned with quality rather than quantity. Thus far, we are heartened by its results. Just the other day, I was shown an example of a student venture under this scheme. It is called MXR Cubes. It offers "mixed reality" or "augmented reality" books and toys, in which two-dimensional texts and pictures are converted into three-dimensional interactive products. This product has been described as "the next generation of children's book", and their work has been featured internationally by CNN, CNBC and BBC. These are the types of products and enterprises from our universities and polytechnics that we want to support.

SPRING is currently working with the IHLs to further promote this programme to more students. We have received feedback. So we will fine-tune some of the criteria so that there will be more flexibility in administering this programme, but without lowering quality.

I would like to thank Mr Inderjit Singh and his taskforce in the Finance Crucible of Action Community for Entrepreneurship (ACE) for their sterling work in reviewing a whole host of our programmes and grants in order to help provide more financing options for our start-up companies and enterprises in Singapore. He submitted, I think, a total of about 34 recommendations for change, and I am glad to note that two-thirds of the recommendations have been accepted or are still in the process of being reviewed. For those for which our agencies have had to say no, we will write back to Mr Singh to give him explicit reasons why we could not say yes at this point in time.

One recommendation which SPRING will be following up on is the recommendation to streamline some of our capability development schemes into a single umbrella so that it becomes easier to access. IE Singapore will also take into account the recommendations of the taskforce in its review of the Regionalisation Finance Scheme. This is all work currently in progress.

Mr Singh also mentioned the over-the-counter trading platform which would provide another avenue for start-up enterprises to access equity funding. Largely because of his work and prodding, the legislation was changed in September or October last year to provide an exemption in the Securities and Futures Act, and I am glad to inform Members that I think within the next two to three months, we should see Phillip Securities roll out an over-the-counter platform, and this will be a welcome addition to the financing options available to our enterprises.

Mr Singh also brought up a more generic point about the Government's use of risk capital. He was concerned that perhaps we were more willing to take risk and put investments in MNCs and GLCs,

In addition, of the total investments made by the Technopreneurship Investment Fund (TIF), 50% or $600 million have been invested in Singapore-based companies. This means, for every dollar of the $1 billion which the Government invested in TIF, 50 cents has been channelled back to Singapore.

We have two other schemes which have helped our companies.

The Research Incentive Scheme for Companies (RISC), in which 25% to 30% of the awards in this scheme are for local companies; and

The Innovation Development Scheme, in which 70% of the beneficiaries are Singapore-based companies.

So I would like to correct the misperception out there that the Government does not put risk capital into local companies. We do.

Mr Singh has also asked about the role of the private sector in the formulation of the Government's long-term economic plans. Mr Singh is the Vice Chairman of ACE. I happen to chair it because I am supposed to be the Minister-in-charge of Entrepreneurship. But I am happily outnumbered by 29 other members, every single one of whom is a private sector individual. Those who have served on the Committee, which include Mr Inderjit Singh and Dr Loo Choon Yong, will agree that we have had extremely useful exchanges of perspectives and information. Rules, regulatory and cultural changes, educational programmes and a whole host of things have been done so much more effectively because of the access to private sector input. This is not the only forum at which the Government takes private sector input.

Members may have heard of the Pro-Enterprise Panel (PEP). This is the panel which, over the last five years, has reviewed 1,500 suggestions on rule changes, and has accepted more than half for implementation. This panel is chaired by the Head of Civil Service but, again, has very strong representation by the private sector. This has made our ability to change rules so much more responsive to private sector needs.

SPRING itself, as my Minister has said earlier, which we are using as the champion for interfacing with the SMEs, has significant private-sector representation on its Board of Directors, starting from the Chairwoman onwards. Moreover, Members will recall that when the Prime Minister announced the establishment of the Research, Innovation and Enterprise Council (RIEC), if you look at the list of the people who have been invited to serve on that Council, you will see here, again, evidence of clear private sector involvement, and we hope therefore to be able to tap their perspectives and wisdom as we formulate our long-term economic plans.

Let me move on to social enterprises. Miss Penny Low gave a good speech explaining the benefits and potential growth of social enterprises. Social enterprises are basically businesses with a social mission. As she pointed out in her speech, they can be not-for-profit and they can also be for-profit. Our interest in them - and I would say it is still early days yet - is that, if they could succeed in creating new jobs or in providing additional revenue streams for charity, so that they would not have to be absolutely dependent on the charity dollar, then this would be a welcome addition to our economic landscape.

My Ministry, MCYS, has the ComCare Enterprise Fund (CEF), which provides seed funding for up to 80% of the total project cost, up to a limit of $300,000, for new social enterprises. But they must have viable business plans. Since the launch of the CEF in March 2003, a total of 48 projects have been approved and around $4.7 million committed. The nature of the CEF-funded social enterprises varies very greatly, depending on the interests of its founders. Some provide direct employment to the needy, whilst others aim to generate profits to support programmes for the elderly and the needy. The sectors range from food and beverage to consultancy, retail and home-based services. Yesterday, at the lunch with the Singapore Action Group for Elders (SAGE), they said they wanted to start putting a group of retired electricians and plumbers into another social enterprise. So, there will be lots more ideas which will be generated, and we will look for opportunities to support them.

In addition, social enterprises are also welcome to tap on the existing Government assistance schemes which are extended to small and medium enterprises (SMEs), such as the Local Enterprise Technical Assistance Scheme

Let me move on to tourism. The World Tourism Organisation has projected that global tourist arrivals will grow at 4% per annum over the next decade, with the growth in Asia alone exceeding 6%. It is a choice for us whether to exploit this growing market. Yes, there may be some downsides, but there is a significant upside, and this is not something which we should sniff at and give up without a fight or without making a significant attempt to tap into. The Singapore Tourism Board (STB), therefore, plans to triple tourism receipts to $30 billion annually and to double visitor arrivals to 17 million. We estimate that this will create an additional 100,000 jobs for the tourism sector by 2015, and this is what our vision for tourism in 2015 is. The tourism sector will, therefore, be one of the major growth engines for our economy.

I agree with Dr Geh Min that we should not aim blindly just to increase the absolute number of tourists, although having said that, that is still useful. But what we are really interested in, a better indicator, is tourism receipts, because an increase in tourism receipts directly translates to a higher value-add or a better Gross Domestic Product (GDP) for our economy and, if I may add, jobs. It is thus not enough to just increase arrivals,

Let me give an example of this. Traditionally, many of our PRC visitors to Singapore have come as part of a tri-destination tour which includes Malaysia and Thailand. They tended to stay not more than one day here, sometimes not even in a hotel in Singapore. So they would generate a lot of tourism numbers, visitor arrivals, but the yield, in terms of tourism receipts, was low and there was a very short length of stay. STB is now promoting more single-destination Singapore tours that generally span three or more days. In fact,

Talent Development Fund (ETDF). The ETDF aims to nurture entrepreneurial talent by providing matching funding for business ventures started by students in the Institutes of Higher Learning (IHLs), ie, the three universities and five polytechnics. and not enough in local companies. I have checked on this. The Government does have risk capital in local enterprises. Examples are schemes such as the Start-up Enterprise Development Scheme (SEEDS); the Business Angel Scheme, which really was initiated because of a discussion over tea that Mr Singh started; and, of course, the recently launched Enterprise Fund. We have seen some success in the SEEDS programme, with 11 SEEDS-supported companies having now crossed the $1 million mark in terms of revenue, and six of them have won international awards. This is why we have injected further funds into SEEDS and the Business Angel Scheme. So we have put in an additional $60 million. The Enterprise Fund, which currently stands at S$35.5 million, will grow to a $100-million fund, and this will provide additional financing for start-ups and SMEs to tap into. (LETAS) and the Micro Loan programme from SPRING. But I want to emphasise that they must clear the hurdle as viable businesses, which is why I would also disagree with Miss Penny Low's suggestion that we provide subsidised land for them. If we were to provide subsidised factors of production for social enterprises, then we are creating an uneven playing field and unfair competition for all our other SMEs out there which, I believe, would be a step in the wrong direction. But having said that, we will look for legitimate, competitive and fair ways for social enterprises to develop in our economic landscape.but we need to put in place strategies, as Dr Geh Min suggested, to extend the length of stay and to encourage high yielding repeat visitors.

I have just checked the statistics. The length of stay for visitors from PRC has been going up significantly and so has their tourism expenditure. Despite the fact that there has been a 2.5% fall in Chinese visitors last year, the revenues have gone up significantly.

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Let me therefore elaborate on some of our key strategies to increase tourism receipts. Firstly, we need to have a range of tourism attractions and products in order to increase and enhance our competitive advantage as a destination for business and leisure visitors. I agree totally with Mr Alex Chan that we must be noticed, we must get mindshare on international media so that when people are looking for their next place to visit, they think of us, they think of Singapore. And, therefore, we need attractions which are compelling and unique, and it is not just a matter of building hardware, as many of you have said. In fact, in order to appeal to more sophisticated travellers, we need software, we need new marquee events, programmes, novel ideas, marketing packages, arts and culture, entertainment, education and sports.

But this should be executed by the private sector rather than provided by the Government. Let me give you a few examples. The Singapore Flyer observation wheel and the two Integrated Resorts are examples of private sector-led projects that will bring world-class attractions and creative concepts to Singapore. The Government's role is to paint a compelling vision, provide the regulatory environment and enable these things to happen, but the actual creative push and business imperative must come from the private sector. We have a $2 billion Tourism Development Fund which has been set up in order to catalyse this private sector investment into our tourism infrastructure.

There was also a question on which agency is responsible for tourism. Members of this House will know that we do not have a tourism Ministry per se. I oversee tourism in my capacity within MTI, but I will tell you the key advantage which we have in not having a separate Ministry is precisely the fact that it depends on so many other agencies and Government. We need to work with MND, within MTI, we need to work with MICA and, sometimes, we need assistance from MFA. It is really one of those Government multi-agency projects. I can say, with hand over heart, having done this now for some time, that this approach works. So you do not need to worry that the lack of a single Ministry, or point of focus agency, in any way detracts from our efforts in tourism.

I thank Mr Low Thia Khiang for pointing out some inaccuracies in the brochures. I am sure the people in Joo Chiat are not descendants of sea turtles. But my good friend, Mr Chan Soo Sen, has said that in China, "hai gui" refers to entrepreneurs who have made good overseas and come back home. I think if we have more of such people in Singapore like that, that is not necessarily a bad thing. But having said that, we will make sure those things are corrected and it is

Speaking of translations, I think Mr Low would also agree with me that we have made a lot of progress in ensuring multi-lingual signs at airports, MRT stations and other places, so that Singapore is now much more friendly for tourists who are coming here from various destinations.

Let me briefly touch on Integrated Resorts which Miss Penny Low asked about. The two IRs will widen the range of leisure and entertainment options available in Singapore and will generate significant economic benefits. During the submissions of the Request for Concepts last year, we estimated that the two IRs are expected to add about $1.5 billion for annual Gross Domestic Product and create some 35,000 jobs, direct and indirect, throughout the economy. We believe these figures are still valid. Of course, the actual numbers will depend on the actual proposals selected and how things work. It is obviously a fluid and competitive field that these two Integrated Resorts will be entering.

Miss Penny Low highlighted the fact that the winning IR proposal should be selected on the basis of our long-term strategic interest. Obviously so. We have calibrated the four main criteria. The main criteria are tourism appeal, 40%; architectural concept and design, 30%; development investment, 20%; and strength of the consortium partners, 10%. The criterion with the highest weight is tourism appeal and contribution. We are not just talking about the number of tourists that will visit in the first year of

Many people have asked why we have put such high weight on the architecture for the Integrated Resort at Marina Bay. First, it occupies a very central location within our new downtown and will, to some extent, be a defining feature of the area of that district. Secondly, unique and compelling architecture is a tourism attraction in its own right, and you only need to think of museums around the world which have had such an impact on tourism arrivals.

Let me conclude by saying that for the tourism sector, things are looking up. Our visitor arrivals last year reached a record high of 8.94 million, an increase of 7% over 2004. Tourism receipts grew by 10% to $10.8 billion. And we are well on our track to achieving our Tourism 2015 vision. But we will continue to be responsive to the needs of the industry, rethink old assumptions and take calculated risks. In the past year, we have taken many steps which will change our tourism landscape for many years to come. While we push new boundaries to make ourselves an appealing destination for visitors, we will ensure that we take appropriate social and security safeguards to make sure that we do not kill the goose that lays the golden eggs.

not an excuse for inaccurate translations to occur. But it is better that translations are made, or that we at least attempt to make translations, than for us to say that we are so concerned with accuracy that we do not even take the risk for making translations.its arrival. This is a long-term project, and I want to remind Members of the House that when the private sector puts in such a significant amount of resources, they are going to want to make sure that this succeeds in the long term. So in the long term, I think we will get significant numbers of visitors, significant expenditures by those visitors, and we will get new and innovative entertainment concepts in those places, even the architecture.

Sir, I would like to seek clarifications from the Minister. I would like to know what concrete steps have been or would be taken by STB on the accuracy of tourism materials,

I do not know whether the Minister is aware that when his good friend, Minister of State, Mr Chan Soo Sen, told him about "hai gui pai" , ie, the return of the entrepreneur from overseas, the same as the "hai gui" (sea turtles) is wrong. The "gui" in "hai gui pai" means "return", which has the same sound of "gui" as in "wu gui" (sea turtles). But it means a different thing.

especially pertaining to the Chinese Language materials. We had a year or two ago of this wrong translation on the Hungry Ghost Festival where it becomes "Xiong Ya Li Gui Jie". Now we have a Chinese translation making sea turtles grandfather of Chew Joo Chiat. I think it will do well to make sure that it will not happen again.

I am certainly not an expert in the Chinese Language, and I can assure the Member that STB does not rely on me to vet their translations. Having said that, one mistake is one too many and we will have to do our best to ensure that this does not happen again. The point I want to make is that I can never guarantee that there will be no mistakes in the future. But I would rather have a situation where we are making our best efforts to ensure that we translate material accurately and that it conveys interesting messages to tourists and also to our locals who read that material. I would like to thank Members of the House who, from time to time, if they see any error in our signboards, brochures, publicity materials or things on television, let us know, and we will fix it.

Mr Chairman, I would like to thank the Minister for his very comprehensive reply and emphasis that it is not numbers alone that we are pursuing, but it is tourism receipts.

I would like to just clarify. I understand from what he said that we

I would just like to follow that up and say that if we double our tourist numbers, at a conservative estimate, especially if we hope that they will stay a little bit longer and that they do not stay outside of Singapore, we will need 30,000-50,000 more hotel rooms, unless maybe we create "B and B" in HDB. This, to me, seems to be something that you cannot just create overnight. You have to put the land aside. Even if you involve the private sector, the private sector cannot act if URA does not give the land. I understand that, for example, Shangri-La only has about 800 rooms. So if we are creating 30,000-50,000 more rooms, this will be a big commitment in terms of land and resources. Of course, it will create jobs, yes, when we are developing, but do we want that many more hotel rooms? Is this not something that we have to plan in advance?

cannot increase the receipts without a certain increase in volume and that is why we are aiming to double our tourist numbers in 10 years' time, because there is no way we can increase the receipts to the desired level if we do not do that. Is that correct?

The Member is absolutely right. This is not something which will happen overnight. That is why I said this has to be a multi-agency effort. In order to double the tourist arrivals, in order to lengthen the length of stay, we will need many more hotel rooms. But frankly, this is a good problem to have. It is much better to have a problem where I have a shortage of hotel rooms, and we have to ask URA to see whether there are more sites available or, indeed, to increase the intensity on development in those sites so that we can have those hotel rooms.

There are also other innovative solutions. As she has said, there are some people who are using homestay as an option. There will also be further spin-

offs to hotels and places of residence around Singapore, outside Singapore as well , the use of ships, berths, in the national waters around Singapore. There have to be many more innovative ideas on how to house them. But the more important point is whether you are going to say that because we do not want so many tourists in Singapore, we turn our backs from an economic opportunity which is expanding right in front of our eyes. My attitude is this is too good a thing to turn away from. Let us find a way, sensitively, rationally and innovatively to tap into this opportunity without, at the same time, losing the greenery and security - the very reasons that bring people to Singapore in the first place. We will do this sensitively.

Government-linked Companies

Mr Chairman, Sir, the Government's move to divest businesses that are non-strategic and non-core is to be lauded.

On first look, the impending divestment of JTC's business to the private sector appears to be another move in this direction. However, on closer examination, it is a divestment that has raised several concerns.

Sir, in my opinion, the impending divestment of JTC's business is a divestment of a strategic business. JTC was established with the objective of making available industrial land and space at competitive rates to promote our economy. I feel that such a role of JTC cannot be replaced by the private sector and the divestment of JTC's business will bring with it wide-ranging implications.

First, what will happen to the price of industrial land and space after JTC diminishes its role as an agency that supplies industrialists with land and space

Sir, the next concern relates to control and usage of industrial land and properties. At present, JTC can take back industrial buildings and facilities that are tenanted to companies

at competitive pricing? Will it then lead to a rise in business cost?

in old industrial estates and redeploy them. JTC could upgrade the old estates, redesignate or recluster them to meet the future needs of our economy. However, depending on the extent of the divestment, such control and flexibility over old industrial estates could be lost after divestment.

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Sir, I would like to put forth the following questions: first, why did the Government decide to divest JTC business, which carries with it implications across the entire industry and which is a strategic area that the Government should retain control? Second, what are the measures the Government has in place to ensure that industrial land and space would remain competitive after the divestment and that business cost would not be driven up consequently.

Town Councils

Sir, as the Coordinating Chairman of all PAP Town Councils in Singapore, I speak on behalf of my fellow Town Council Chairmen.

Since the liberalisation of the electricity market by the Government, Town Councils have been able to achieve some savings in electricity costs through directly purchasing electricity from retailers in the market. Sir, but this is limited to the larger utility accounts, ie, accounts with consumption of more than 10,000 kilowatt-hour per month. However, savings achieved to date by Town Councils are minimal as most of the utility

Sir, with oil prices on the up trend and increases in electricity tariff, Town Councils have been facing increasing electricity cost in the upkeep of their estates. It will certainly help Town Councils cope with the increase in utility costs if the Government would expedite the liberalisation of the electricity market to include accounts with consumption below 10,000 kilowatt-hour per month. I, therefore, wish to ask the Minister if he would expedite the liberalisation of electricity market to include the smaller accounts and, hence, allow Town Councils to enjoy lower rates of electricity consumption through economies of scale.

accounts under the Town Councils do not exceed 10,000 kilowatt-hour per month consumption.

Consumer Protection

Sir, the Consumer Protection (Fair Trading) Act (CPFTA) came into effect on 1st March 2004. Under the Act, financial services are expressly excluded. I hope MTI could amend the Act to include financial services this time.

Sir, there is also a need to look at the setting up of a framework on proper disclosure of information relating to the sale of time-share club and resort membership. In this regard, there is no need for a private Member's Bill to push for new legislation if we could just extend CPFTA to include regulatory framework to enhance transparency in this area.

On enforcement and effectiveness of CPFTA, Sir, CASE would like to highlight that businesses are now taking things lightly as they know that it is expensive for a specific body, like CASE or STB, to take up legal actions against them. Many ignore our invitation for them to sign the Voluntary Compliance Agreement (VCA). As the Act is silent on such delay, errant

Sir, the Act should also be amended to protect specific bodies, like CASE and STB, from legal action when they publicise such unfair acts in the media.

Another CASE proposal is to include the introduction of the opt-in practice under CPFTA. I hope MTI could respond positively to all the proposed amendments to strengthen our CPFTA to better protect consumers' interest overall.

Last but not least, CASE would like to urge MTI to consider looking into the possibility of introducing what is commonly called the "Lemon Law". We propose that the "Lemon Law" applies to all consumer goods. Such a law would give the right to consumers to require the business to replace goods that are defective and are beyond repair. We could incorporate the "Lemon Law" into the Sale of Goods Act.

businesses are taking advantage of such a loophole. We should review the Act.

Mr Chairman, Sir, Mr Lawrence Leow asked the Government to ensure that when we divest companies, we do not create dominant market players that would undermine competition in the marketplace. As a general rule, the Government would observe the yellow pages rule and divest out of business where there is active private sector participation and there is no strategic value to the Government owning such businesses. The state of competition in the industry post-divestment would be a key consideration in any decision to divest Government holdings, so we proceed with a lot of caution.

In the case of JTC, we have announced on 21st November 2005 that JTC would divest its ready-built industry facilities in certain market segments, including 71 high-rise factory blocks,

The divestment of these JTC properties will enhance market competition in the provision of industrial space over the long term. Companies will have more choices in the supply of industrial space to meet their various needs, especially in the high-rise factory segment where JTC would divest its 25% market share. Private sector industrial developers will be able to operate flexibly to accommodate industry needs and to provide good customer service. We will monitor the supply of industrial space and provide for an orderly release of industrial land sites through the Government Land Sales programme. This will help ensure that prices do not escalate unduly due to tightness of supply. In other words, we understand all your concerns. We will proceed carefully so that there will not be undue increase in business costs.

Mr Chew Heng Ching asked for a speedier liberalisation of the electricity market so that Town Councils can benefit from choosing their retailers. I believe this call would have resonance in many other sectors too. Since the electricity retail market started progressive liberalisation in year 2001, about 10,000 electricity consumers have become contestable. This includes about 172 electricity accounts that belong to the Town Councils. Town Councils may approach EMA on how to apply for contestability as there are criteria that they have to meet, such as a

Mr Yeo Guat Kwang spoke on the Consumer Protection (Fair Trading) Act (CPFTA). I would like to assure Mr Yeo that anything to do with protecting consumer's interest will be positively taken into consideration by my Ministry. In fact, following Mr Yeo's suggestion in the Committee of Supply last year to review CPFTA, MTI has set up a taskforce to do so. The taskforce is co-chaired by MTI and CASE and it includes representatives from consumer and business bodies as well as public agencies. The taskforce has made several useful recommendations, one of which is to extend the scope of CPFTA to cover financial services. So MTI supports this recommendation and is currently working with MAS on the implementation details.

Mr Yeo also highlighted the difficulties faced by specific bodies, such as CASE, in dealing with errant retailers. The CPFTA has clearly laid out the circumstances under which specific bodies can file an injunction order. If an errant retailer refuses to cooperate or sign a Voluntary Compliance Agreement (VCA), I would encourage the specified body to follow through with the enforcement procedures and obtain an injunction order against the retailer. I think this may be a little bit troublesome, but it will send a clear and strong signal that the specified body will not hesitate to act against such retailers. So he may look for a good case on which to implement this procedure.

Mr Yeo also raised a matter on the so-called "Lemon Law". This was something that the taskforce had also considered. But, given the extensive effect of this law and the recent developments in other countries, the taskforce has recommended that further studies be done. MTI will take into account the taskforce's various recommendations and conduct public consultation for the proposed changes to CPFTA regulations.

As far as the regulations on time-share are concerned, complaints against time-share companies have remained high, with 158 complaints lodged with CASE last year. MTI agrees with Prof. Ivan Png's workgroup that there should be proper disclosure of material information by time-share companies so that consumers can make informed choices. But MTI does not believe that the solution lies in incorporating a code of governance for time-share companies within CPFTA. Such a code is better set by the industry or a consumer body like CASE. The CPFTA is also not designed to have an on-going monitoring mechanism to ensure that the time-share company will continue to abide by a code of governance after a sale. This is better undertaken through an industry, or consumer-led scheme like CaseTrust, where there is an accreditation system to ensure continued compliance.

So, in short, I want to assure Mr Yeo again that, through the mechanism of consultation with CASE, we will continue to improve on measures to protect the interests of our consumers.

three business park buildings, one warehouse and 800 units of workshops. Since then, JTC has appointed a financial consultant to formulate a divestment plan, which includes exploring the possible modes of divestment and the implementation timeline. The plan will factor in the need for competitive market forces to work well post-divestment. We expect the divestment plan to be finalised by the middle of this year.consumption of at least 10,000 kilowatt-hour per month and other technical requirements. Town Councils with contestable accounts have generally been satisfied with the utility savings achieved. EMA is currently exploring how to leverage on new technology to achieve cost savings in retailing electricity to smaller consumers so that they can also benefit from contestability. EMA will announce the details once they are ready. Hopefully, it will not take too long.

We still have some time left before the guillotine. Yes, Mr Lawrence Leow.

Sir, many of the SMEs are concerned that the industrial rental may end up like REITs' play in the retail malls where rentals only go up. So, would the Government consider getting feedback from the users

of industrial space, and not rely solely on the consultant's recommendation alone?

Sir, I would be very happy to do so if Mr Lawrence Leow's Association wants to organise one. I have already told him, during the ASME installation ceremony about a month ago, that I am always ready to go and listen, bringing along the officials who are responsible for the areas that he is interested in.

Would the Minister of State be able to enlighten the House the mechanisms that he has put in place after the divestment of JTC to the private sector to prevent the industrial property price from going up so high according to market forces when there is a shortage, so much so that SMEs and other manufacturers would find it prohibitive to manufacture in Singapore and, thereby, eroding our competitiveness again?

We do not believe this will happen. As I have explained just now, the way divestments would be done, we would do our homework - put in a lot of studies, engage financial analysts - to ensure things are properly done. At the same time, we also have a feedback and consultation mechanism with associations such as ASME. We can consider intervention if things go wrong, but we will first try to ensure that we would not come to that.

I believe, Sir, that the best time to put in this kind of checks would be when you are divesting, not after you have divested and you want to change the ground rules. I think there are legal consequences when you want to do that. There is a bigger interest at stake here, which is our competitiveness in terms of land cost and cost of manufacturing. So I would urge the Minister to reconsider this and make sure that he puts in his divestment agreement

something which will be indexed, so that we will not become uncompetitive. Taking feedback is one thing. Does he have the legal rights and power to redress the problem once it has happened? It is now a glut. Industrial properties have slackened. But think of the time when property prices doubled and trebled. Whoever bought your JTC properties is not going to turn away from good windfall profit.

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Any more clarifications? If none, Dr Ahmad Magad, are you withdrawing your amendment?

Sir, on behalf of the many Members who have raised cuts and questions, I would like to thank the two Ministers and the Minister of State for their extensive clarifications and responses they have provided.

On that note, Sir, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The sum of $457,397,860 for Head V ordered to stand part of the Main Estimates.

The sum of $4,379,748,000 for Head V ordered to stand part of the Development Estimates.

Head J - Ministry of Defence. Mr Ravindran.

Defence Security

Sir, I beg to move,

That the total sum to be allocated for Head J of the Estimates be reduced by $100.

Sir, South East Asia is increasingly on the horizon of all major powers. The vital maritime routes and the huge market provided by South East Asia make it important for all big countries to take an interest in the evolving security architecture of the region. There are, however, trouble spots in the region that still remain. The Taiwan Strait, North Korea, maritime boundary dispute in the South China Sea and Japan Sea, global terrorism and maritime security in the Straits of Malacca are all of concern.

Sir, India and China are actively pursuing diplomacy and strengthening their military capability by increasing their defence spending and expanding their blue water navy capabilities. Their energy needs and a strong economy will inevitably push them to new corners. The enthusiasm shown by these two major powers in ASEAN, ARF and the new East Asia Summit clearly shows that ASEAN and Singapore are high on their economic and strategic considerations.

Sir, the US in its February 2006 quarterly Defence Review highlighted that the rise of China, as an emerging global military power, is a matter of concern. The US maintains an active military presence in the region and in North East Asia. It has shown its commitment to the region by entering into the SFA with Singapore last year. It has recently resumed IMET with the TNI in Indonesia. It has various facilities and military arrangements with other countries in the region. The recent decision by the Bush administration to enhance US partnership with ASEAN clearly shows the strategic importance of South East Asia for the US in the coming years.

Sir, Japan is also taking an active role in redefining its military role. It has started to relook at its constitution and has already started deploying its SDF for peaceful and humanitarian purposes overseas. The ongoing North Korea

Russia, with its huge land mass in Asia and energy reserves, intends to stay engaged in Asia and will seek to play a role in the security of the region. It will also provide a balance of power in the region if it seeks to play a part in this region.

Sir, within ASEAN, member countries have their own strategic calculations and national interests. Some welcome the presence of all major powers to ensure that the region is engaged with all, with no one superpower or major power dominating the region. But there are some others who are suspicious of some of these powers for historical, strategic or economic reasons.

Sir, all these make for interesting times and an unpredictable future for the region. I would like to ask the Minister what is MINDEF's regional security outlook and for the Minister's take on the evolving security architecture. I would also like him to address the developments towards the ASEAN security community and what are the realistic prospects of achieving these goals.

nuclear issue, the hot and cold relationship between Japan and South Korea and between Japan and China, and the rise of a strong China with a big economy and a strong military, will clearly push Japan to define a new role for the SDF in the long run.

Defence Policy

Sir, after 911, the strategic landscape in South East Asia has changed significantly. New challenges emerged. There could be more low-intensity operations, anti-hijack operations, search and rescue operations and targeted strikes against terrorists. There are also potential threats in chemical and biological warfare. While preparing itself for conventional warfare, is the SAF also geared up for these new

Sir, the Straits of Malacca is another strategic point of concern. Clear passage in this sea lane is of crucial importance to the trade and security of Singapore. May I ask what is the outcome of the multi-national patrols of the Straits of Malacca? And are there any additional measures to ensure safe passage in this vital sea lane?

Sir, the SAF has good relations with the armed forces of neighbouring countries, and this defence diplomacy helps in times of crisis. May I ask if the SAF will further strengthen the defence ties and use the goodwill to promote more bilateral training and exercises?

Sir, all Singaporeans, I am sure, will agree that we should recognise the contributions of our National Servicemen, including those who have completed full-time National Service while still doing in-camp training. RECORD IV has made a series of recommendations. What is MINDEF's response to these recommendations? Are the recommendations being followed up and acted upon?

threats? As these operations would involve other Government agencies and civil resources, how is MINDEF coordinating and managing these issues?

Sir, I would, first, like to thank the Prime Minister for having decided to give our NSmen a Special Bonus in conjunction with the 40th Anniversary of National Service. Both full-time National Servicemen (NSFs) and those who have completed their ORNS training cycle will enjoy the $100 and $400 bonus respectively.

NS bonus sends a signal - an important signal - that Singapore values the men who have been there to ensure our national security and safety through their services in the Singapore Armed

The Special Bonus also demonstrates the importance that is placed on our national defence and the concept of Total Defence, which has gained greater currency and relevance, as the sources of threats have changed from largely military aggression only to also the scourge of maritime terrorism and piracy, as well as the need to respond to disasters.

While our large spending on defence has been justifiable, the question that will always be asked is how ready is our Armed Forces for any eventuality, in terms of weaponry edge as well as operational readiness of our men to action. This must be viewed against the different sources of threats to us.

Sir, may I ask the Minister to give us his assessment of the security environment around Singapore, in South East Asia, as well as in the adjacent regions of East Asia and South Asia, in particular, the potential flashpoints in the Strait of Taiwan and the Korean Peninsula. How are we working with other countries to enhance peace and security of our nation and that of the region?

In the case of terrorism, can the Minister inform the House of the potential threats to Singapore and our neighbouring countries? How does the Minister assess the change of leadership in Jemaah Islamiyah in Indonesia and the region, and the problems in Southern Thailand? Is the SAF, along with the SPF as well as SCDF, operationally ready for the possible first terrorist threat and attack in Singapore?

It is also important to ask about our post-operation plans for the period when

Forces, the Singapore Police Force and the Singapore Civil Defence Force. It is therefore important that we share the benefits of our prosperity with our NSmen.psychological defence - a component of our Total Defence - would be tested.

Defence Diplomacy

Sir, the SAF has always enjoyed good relations with the military forces of many countries. In fact, even at difficult times in our relations with other countries, the SAF continues to have good working relationship with the respective defence forces in these countries.

Sir, the SAF's defence diplomacy has yielded good results in many countries. When I visited Aceh during the tsunami disaster, I was able to recall that many of the Indonesian officers were able to call many of our senior officers by name, and they enjoyed very good relationship. And I think this special relationship enabled us to be a key coordinator with other relief agencies who came to Aceh to help. In fact, at times, I am sure that the defence forces and the key players in the defence forces in other countries do influence their political masters to consider our requests and needs with greater sympathy.

Sir, in many instances, our defence forces have also played other important roles by providing local assistance, doing local projects and even working with local people to ensure that the good image of the SAF and Singapore is projected. I would like to take this opportunity to ask the Minister to provide an update on the SAF's defence diplomacy and perhaps to share with us some of the fruits of such diplomacy.

Dr Tan Cheng Bock is not here. Mr Steve Chia.

Defence Budget

Sir, I understand and recognise the importance of national defence and our armed forces' role in

Sir, I think the Government should cut it down to below 30% of our budget allocation, and free up more money for the other social sectors, like education. I would also like to hear from the Minister whether we are seeing any increased security and sovereign threat towards Singapore and in Asia, except for Taiwan.

providing peace in Singapore. But I cannot help feeling that we are over spending a bit too much on our defence budget allocation. Considering the total estimate of $10.05 billion is due for defence alone, that is a whopping 32.8% of our total budget allocation of $28.6 billion, and 4.86% of projected GDP for FY2006. Compared to other developed countries like the US (3.6%), Britain (2.59%), Japan (1%) and France (1.98%), I think we are spending a tad too high on defence.

Sir, the International Institute for Strategic Studies publishes Military Balance. This publication reports military expenditure of 19 countries in East Asia and Australasia. In 2004, we spent 4.7% of GDP on defence. Parliament staff are now distributing a chart which I have extracted from Military Balance. Members will see that our military expenditure at 4.7% of GDP places us fifth out of 19 countries in the region. Who were ahead of us? North Korea, Myanmar, Vietnam and Brunei.

Sir, let me give another perspective by comparing us with other developed countries in stable regions. These are all similarly sized. Finland spends 1.3% of GPD on defence; Sweden spends 1.5%; and Switzerland spends 1.0%. Note that these are not NATO countries.

It is easy to spend a lot on defence. Few will challenge defence expenditure, as it sounds like compromising national security. In the current Budget, defence expenditure will increase by 8.5% relative

Sir, Prime Minister Lee has likened our defence expenditure to an insurance policy - the more we are worth, the more we should spend. Let me offer a different analogy - a bank. If a bank holds twice as much money, it does not double the number of security guards. The reason is economies of scale. As the economy grows larger, surely, we can reap economies of scale from defence like every other Government function.

Further, let me echo hon. Members, Dr Ong Chit Chung and Mr Hawazi. Have we drawn the implications of changes in the threats to Singapore? Today, our most dangerous, imminent threat is global terrorism. Yet, we are adding more heavy artillery - a new squadron of F15s. How do these help us to combat Al Qaeda and Jemaah Islamiyah? Indeed, Sir, have we reviewed our force structure accordingly? For instance, last year, the US Army was busy converting artillerymen into MPs - not Members of Parliaments, but military policemen.

Given our tax revenue and investment income, if we spend more

to 2005, and consume one-third of the entire budget.

on defence, we must be spending less on something else, for instance, R&D. The Government is aiming to emulate Finland and Sweden in R&D spending. Finland spends 3.5% of GDP on R&D, Sweden spends 4%. We spend just 2.25%, aiming to increase to 3%.

Sir, let us be judicious in defence spending. Let us be very sure that every additional dollar spent on defence provides us good value as every additional dollar in education, healthcare, housing and R&D.

3G SAF

Sir, as we move towards the 3G SAF, I beg to differ with

Sir, S3G is the way that our armed forces have gone along because that is where the warfare plans are all going. I am proud that we have adopted the right strategy to implement and operationalise the 3G concepts. As I visit our SAF component units, I can see the fruits of our investment. In fact, one clear dividend of the 3G SAF is the ability of our SAF to cut the NS tenure of our NSmen from 2 1/2 to two years.

Sir, with the bigger budget this year, I expect the SAF to accelerate the conversion of the SAF to 3G. Can the Minister please provide us with an update on the transformation of SAF into a 3G force?

the comments of the Opposition Member, Mr Steve Chia. When somebody calls us "a small red dot" or "a little red dot" and somebody threatens to cut essential supplies to Singapore and one looks at the history of Kuwait, how it was overrun by a huge military in a short space of time, I think it bears lesson to us that we must always invest well and invest adequately so that when the time comes, we can all sleep in peace and rest assured that we have a strong defence force to protect us.

Sir, under this cut, I wish to raise with the Minister for Defence the following queries: (1) to enquire with the Minister on the further progress made by MINDEF on the advancement made on the effectiveness and the sophistication of our defence forces under the 3G SAF; (2) to ask the Minister to give an update on the changes, impacts and improvements made in SAF following the implementation of the new two years NSF, as compared to the previous 2 1/2 years NSF; and (3) to request the Minister whether he can assure the House that the SAF has implemented measures of internal control and checks and balances to ensure that

I understand that MINDEF's defence budget is based on 6% of the GDP, correct me if I am wrong. As our current GDP is about $160 billion, therefore, the annual budget for defence is nearly about $10 billion. I do not agree with Mr Steve Chia that this amount of money spent is not worthwhile and should be cut. In fact, I think in principle I am in favour of spending sufficient funds to ensure that we are extremely combat effective in the defence force which serves as a strong deterrent against any potential intruders. It also helps to comfort our people and foreign investors to sleep well at night.

As MINDEF is asking our young men to spend two years of their lives to do National Service, I would like to ask the Minister whether the time spent by the NSmen while in service is employed fully and meaningfully. For us to have an effective and modern 3G SAF, MINDEF is spending billions of dollars annually on the defence budget. I wish to know whether there are checks and balances to ensure that our generals do not go out and buy weapons and defence systems as toys and playthings, and which may not be best suited for our use, or great value for money. I would like to know what has been done by MINDEF to ensure that the above control measures are in place.

I understand that MINDEF is not under the normal annual budget allocations and controls of the Ministry of Finance. If this is so, what internal checks and balances are in place to ensure that proper spending procedures are adopted? I wish to let the Minister know that we do not just want to be dazzled by promises and visual impact of the new weaponry. We want to be sure that these new weapons costing billions of dollars would be effective. The Minister may wish to clarify.

funds used by SAF for upgrading and purchase of new equipment and weapons are based on cost-effectiveness and value for money.

Sir, the changing landscape in security and dynamic technological advancement has made it necessary for many armed forces to rethink their doctrines and fighting strategies. New security threats, such as terrorism, or new fighting environment, such as heavily built-up cities, have posed new challenges to fighting forces.

In Singapore, the Ministry of Defence is presently transforming our SAF into a third-generation (or 3G) fighting force. The purpose of this transformation is actually to enhance the fighting capability of our soldiers through harnessing advanced technology. In today's environment, we can exploit information, command and control technologies to integrate and enhance the fighting capabilities of the SAF. In terms of hardware, modern weapon systems can be procured and modified to suit the defence needs of our country. At the same time, our SAF soldiers are better educated and trained to handle more sophisticated fighting system. Thus, the combination of both modern weapon systems and better trained soldiers will provide a good platform for our SAF to build a strong and capable integrated fighting force.

Sir, I wish to ask the Minister the following questions: (1) What is the status of transformation of the 3G SAF? (2) What are the key deliverables of the 3G SAF? (3) How are we going to train the NS operationally ready men to fit into the 3G SAF? (4) How effective is the 3G SAF against terrorism and chemical warfare?

Sir, the transformation of the SAF in recent years into a 3G army has been dramatic and represents a quantum leap in the capability of our armed forces. Following the transformation, the SAF would be a leaner and more potent force employing new operating concepts and systems

while maximising our limited manpower resources. In particular, the 3G SAF will be chiefly characterised by its ability to use the state-of-the-art technology to gain an asymmetric edge over its potential adversaries in areas of precision strike, advanced network and unmanned systems. This transformation of the SAF into a 3G army, as I understand it, mirrors the transformation of the US Armed Forces as well. However, despite the deployment of advanced technology, we have seen in Afghanistan and, in particular, Iraq, how a technologically superior armed forces can be bogged down by low intensity and unconventional warfare. I refer in particular to the challenges faced by the US Army on the ground in dealing with the security threats posed by guerrilla fighters and terrorists. Indeed, we have seen in Iraq that technological superiority has limited protection against suicide bombers and snipers. I would therefore like to ask the Minister whether the transformation of the SAF into a 3G army would take into account these developments and whether we are observing the situation in the Middle East closely to see how lessons can be learned which may be applicable in our context.

Mr Chay Wai Chuen is not here. Mr Ravindran, another 2 minutes.

Training and Training Safety

Sir, the SAF has excelled as one of the best organisations in Singapore. Whether it is National Day, SAF Day, or even the State funeral of the late Mr Rajaratnam, or the tsunami relief effort, we can always count on the SAF to deliver with the highest level of efficiency, organisation and propriety. It makes us proud and I am confident that the SAF can deliver when called upon. This, they have been doing well due to their planning, good deployment of resources and trained manpower. But

My biggest worry, whenever serious accidents take place in the SAF, is whether the SAF will go soft due to public backlash or negative comments. Sir, training must be realistic to make sure that our soldiers are well prepared. It is easy for the SAF to go soft and take no risks, but we will all pay dearly when the crucial time comes. Even during football training, I recall, instead of 10 rounds, sometimes, the trainer made us go 20 rounds or 25 rounds and sometimes to train in mid-day, and I wonder why. All because there will come a time when the team has to play that extra 30 minutes or even beyond to win the game. All this training only comes when the critical time for us to play the game and stay there on the field after the critical 30 minutes. I think it is critical that the SAF provides safe training but, at the same time, realistic training. I would like to ask the Minister how the SAF intends to provide for more safety.

training soldiers is no easy task. Every minute details must be practised, every scenario taken into account. Having our soldiers prepared for all contingencies is no easy task. Every soldier is different. Some are timid and must be pushed to maximise their potential. Some are risk-takers and always want to push their limits. Some set very high standards for themselves to have a sense of achievement. Some, at times, do pure heroics just to have fun during training. To manage and provide training to all such men and yet avoid any injury is asking for the impossible in any serious-minded defence establishment.

Sir, year after year, families have to send their sons for National Service, believing that a strong SAF is necessary for this country's continued survival. They do this knowing that there are inherent risks in military training and operations. Given

Sir, we realise that no military in the world, not even the best armed forces, has a zero training death rate. Indeed, it has been documented that since the SAS British elite force was formed in 1957, it had lost more men in peace time practice manoeuvres than in combat. The tougher the training, the higher the risk, and the same goes for our SAF. In Singapore, we have NSmen who have never fought in a war, but we have men who have lost their lives in training accidents while in service. They were training for the sole purpose of defending this country. Their deaths are not a loss to their families but also to the country. We should not allow their sacrifice to be just another accident statistic. I would propose to the Minister for Defence that as the SAF celebrates its 40th anniversary next year, we consider building a memorial to recognise the sacrifice and to commemorate them, to honour all those who had died while in service, including those who had died while training.

Sir, RECORD IV has proposed a slew of measures to recognise the sacrifices of NSmen who are still alive. But I think we would be remiss if we do not also think of those who have sacrificed their lives - it can be through training, it can be through other operational exercises. During MINDEF's visit to France last year, led by the Defence Minister, I noticed that its

Sir, we have several war memorials in Singapore - Kranji War Memorial and the Cenotaph - and they are there to commemorate our war-time sacrifices, mainly World War II, World War I. And most of those who had died are not Singaporeans who had fought for the country, but the British troops, Australian troops and New Zealand troops, foreigners. But we have yet to have a memorial for NSmen who have died. Sir, I would hope that the Minister would consider this. It is not too late and it is not too early, and I think the 40th anniversary is a good time for us to start this ritual to do so.

4.30 pm

the spate of training deaths in recent years, we need to reassure parents that adequate safety measures are being put in place even as their sons go through tough and realistic training. Sir, I am for tough and realistic training but we need to make sure that there are safety audits being put in place, being done, and that there are actions being taken when there are lapses. Can I also ask the Minister what has the progress been since two years ago, when the Minister told us that the SAF would benchmark their safety standards against those of other armed forces? elite anti-terrorism troop commemorated their comrades who had died in training on a memorial plaque, and it did not matter how they died, under what circumstances they died, but the fact was that they died while they were in training, in service to the country. While the commander stopped to show us that plaque, I could not help noticing that he had this moment of reverence and respect, and it shows that he remembered those who had died, his comrades who had fallen while training. And it also signifies a higher value, the sacrifice for the nation.

Much obliged, Sir. Sir, two training-related incidents resulting in the deaths of our armed forces personnel in 2005 compel me to, once again, raise this issue of training safety in the House again. Sir, in June, last year, a serviceman died at sea while training under the supervision of four officers. In July, two commandos were killed after falling from a helicopter while undergoing rappelling training.

Following the dunking incident in 2003 when a serviceman died, the SAF did an extensive audit of training procedures, tightened regulations and

The helicopter incident, for example, was a repeat of a similar incident that actually happened in 1990 when three persons were killed. In the training incident at sea, there were four supervisors looking after six men, and yet not one of them noticed that the poor man had slipped under the waves. When he was sent to a medical centre at Changi Naval Base, what was even more surprising to find out was that there was no medical officer at the Changi Naval Base. So, what is the point then, if we have a medical centre and the most important personnel, a doctor, is not available?

Sir, I think our safety consciousness is still not sufficiently instilled amongst the SAF personnel. It is good to tighten rules to have all the proper training procedures in place, but I think we need to do more, and that is, we have to ensure that this safety culture is properly instilled in our men. I do not doubt that at the very top of the command chain there is an urgency to maintain this safety consciousness. But, I think, somewhere down the line, there is what we call a lack of the safety culture and it is probably that which says, "Oh, don't worry, it won't happen to me." But then it has happened once too often.

conducted surprise audit checks. Sir, we have been regularly assured that the procedures are in place and that the safety of SAF personnel is of prime importance. But it puzzles me as to why such incidents do happen.

Mr Chairman, Sir, this House has debated on numerous occasions on training and safety in the SAF. When a tragic accident occurs, we grieve for the loss of a precious life and ask if the incident could be prevented. MINDEF has continuously reviewed the procedures and tightened the safety measures. The General Staff Inspectorate has been strengthened for more safety audits. Yet, the incidents occur. Why?

A recent case was the drowning of Second Serjeant Ong Kia Hwee off the Changi Naval Base. The AG's Chambers has found that there were no legal grounds for proceeding against the four instructors and the case is referred back to MINDEF for review under military law. May I ask MINDEF on the outcome of the review? More importantly, could such an incident be prevented and lives saved?

Sir, over all, MINDEF faces the dilemma of walking the tight rope, trying to balance the concern of safety and the operational requirement of training our National Servicemen for war. It is a tough act. I would like to ask MINDEF how does it overcome this dilemma. Are there better measures to enhance safety in training and to improve the culture of safety in our units? How does the SAF fare in terms of casualty in training when compared to other armed forces?

Mr Chiam See Tong is not here. Mr Teo.

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Mr Chairman, Sir, I would first like to thank the hon. Members for their comments and questions, and for their support and robust commitment to defence.

Mr Ravindran, Mr Hawazi Daipi and Mr Steve Chia have asked for an assessment of our regional security environment. Sir, the geopolitical landscape of the Asia-Pacific region is in a state of flux. The shifts which are now taking place will lead to significant changes in the geostrategic balance. The US remains pre-eminent, with its superior military power, economic strength and political influence. But

China and India have both abandoned autarky and are seeking economic linkages with the world. They are now both major trading and energy importing nations, and their search for foreign sources of raw materials and markets, as well as their dependence on them, can only grow. As a consequence, both China and India now have an interest in the security of sea routes, and of their energy sources.

Southeast Asia is situated at the confluence of major sea routes, and at the crossroads between India and China. The Straits of Malacca and Singapore are now vital lifelines for these two emerging powers, as they are for the US, Japan and the countries in our region. Our region is also a major source of oil and gas. So we can expect that the issues of maritime security and energy security will loom larger in our region and become more critical for the major powers. Singapore, therefore, must have the wherewithal - military and diplomatic - to play a role to contribute to regional security and stability, and also to protect our national interests and ensure our security as the geopolitical landscape evolves.

Singapore and the SAF have, therefore, been playing active roles in multilateral efforts to enhance maritime security. Over the past year, we contributed to developing a consensus among the three littoral states of the Straits of Malacca that while we, the littoral states, have the primary responsibility for the security of the

Another major threat to our security is - as Mr Hawazi has noted - that of trans-national terrorism. The list of countries hit by terrorist attacks continues to grow. The danger is by no means over. In fact, with the terrorists exploiting modern technology to their advantage and organising themselves better to evade detection, the fight will be a long and arduous one. This is a fight that may take many generations, for it is an ideological war that they are waging. The fact that Azahari Husin was killed in Indonesia does not change that. The personalities might change, organisations might morph, but the ideology and objectives remain the same, and there are others, eg, bomb-makers like Nordin Top and their disciples, those who have learnt from them these dark arts, who are still at large. So we still have to remain on our guard.

Sir, Dr Ong Chit Chung has asked if new security threats have brought any changes to our defence policy, and Mr Ravindran asked about the state of our defence relations and defence diplomacy. The fundamentals of Singapore's defence policy are determined by our geography and environment. We are a small island with no strategic depth. We have no hinterland to absorb an attack, and there is no natural buffer between the external

Given these realities and the uncertainties of the regional environment, we continue to pursue deterrence and diplomacy as the twin pillars of our defence policy. We have invested considerable resources into building up a defence force that can deter aggression. And, should deterrence fail, the Singapore Armed Forces must be able to defeat the aggressor swiftly and decisively.

At the same time, we have also been enhancing our security by pursuing active defence diplomacy. The objectives of our defence diplomacy are to develop positive and mutually beneficial relationships with friendly countries and armed forces, to contribute to a stable and cooperative regional environment and international order.

On the bilateral level, good defence relations also enable us to overcome our land and air space constraints. Today, the SAF trains in about a dozen countries around the world. We are very grateful to our friends for extending this assistance to us. These overseas training facilities, along with the exercises that the SAF conducts with foreign armed forces, bring significant benefits in terms of enhancing the SAF's operational and professional skills, improving inter-operability with friendly forces, and offering opportunities to benchmark ourselves. Our defence diplomacy also affords us valuable technology cooperation.