Hansard, 2007-02-12

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 (2007) To (2007) Assoc. Prof. Dr Yaacob Ibrahim 24 Jan 24 Jan Mr Chan Soo Sen 26 Jan 28 Jan Mr Tharman Shanmugaratnam 27 Jan 28 Jan Mr George Yong-Boon Yeo 29 Jan 31 Jan Mr Low Thia Khiang 29 Jan 06 Feb Mr Yeo Guat Kwang 31 Jan 04 Feb Assoc. Prof. Kalyani K Mehta 02 Feb 04 Feb 16 Feb 22 Feb Dr Balaji Sadasivan 03 Feb 04 Feb 13 Feb 16 Feb Mdm Ho Geok Choo 03 Feb 06 Feb Mr Lee Yi Shyan 04 Feb 07 Feb Mr Christopher de Souza 05 Feb 09 Feb Mr S Iswaran 05 Feb 06 Feb Dr Loo Choon Yong 09 Feb 18 Feb Mr Edwin Khew Teck Fook 12 Feb 15 Feb Mr Lee Kuan Yew 12 Feb 12 Feb Dr Ong Chit Chung 12 Feb 12 Feb Mr Gan Kim Yong 13 Feb 16 Feb Mr Michael Palmer 13 Feb 16 Feb Mr Teo Ser Luck 13 Feb 16 Feb Assoc. Prof. Koo Tsai Kee 16 Feb 19 Feb Mr Khaw Boon Wan 17 Feb 20 Feb Dr Mohamad Maliki Bin Osman 18 Feb 20 Feb Ms Lee Bee Wah 19 Feb 22 Feb 14 Mar 18 Mar Dr Ahmad Mohd Magad 03 Mar 11 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 February,2007 (1) Banking Amendment Bill (2) Statutes (Miscellaneous Amendments) Bill (3) Trade Marks (Amendment) Bill (4) Secondhand Goods Dealers Bill (5) Arms and Explosives (Amendment) Bill (6) Education Endowment Scheme (Amendment) Bill (7) Income Tax (Amendment) Bill (8) Property Tax (Surcharge)(Abolition) Bill (9) Children Development Co-Savings (Amendment) Bill (10) Charities (Amendment) Bill (11) Land Transport Authority of Singapore (Amendment) Bill (12) Air Navigation (Amendment) Bill ABDULLAH TARMUGI Speaker Parliament of Singapore

[Mr Speaker in the Chair]

1. Mr Charles Chong asked the Minister for National Development (a) what is the impact of Indonesia’s export ban on sand and soil products on Singapore’s construction industry and land reclamation works; (b) what alternative sources will be tapped to ensure that Singapore’s development will not be slowed by the export ban on sand by both Malaysia and Indonesia; and (c) what measures are being taken to diversify our supply of construction materials and encourage the use of alternative materials.

2. Mdm Cynthia Phua asked the Minister for National Development (a) what is the long-term plan to help the construction industry overcome the issue of the import of sand; (b) how will the shortage of sand supply affect Singapore’s building programmes; and (c) was there any pre-warning before Indonesia decided to ban the export of sand to Singapore.

3. Mdm Ho Geok Choo asked the Minister for National Development (a) if his Ministry was forewarned of the move by the Indonesian government to stop exports of sand to Singapore; (b) if his Ministry made any representations to the Indonesian government to reconsider the ban; (c) what other sources of supply has his Ministry identified for imports of sand; and (d) how much more will these new supplies cost.

Mr Speaker, Sir, may I have your permission to take Question Nos. 1 to 3 together?

Yes.

Thank you. Sir, let me begin by clearing up a possible confusion concerning sand. Broadly, there are two types of sand - land sand and sea sand. Land sand, otherwise known as concreting sand, is used to produce concrete for construction purposes. It is mined from inland quarries and riverbeds. Sea sand, on the other hand, is dredged from the sea and is used in reclamation works.

Singapore has not imported sea sand from Indonesia since it banned the export of sea sand in February 2003. Since then, our reclamation works are carried out using sea sand from other sources as well as other suitable fill materials.

The recent export ban imposed by Indonesia is on land sand. As such, the ban affects construction, not reclamation works.

We are disappointed with Indonesia’s decision to ban the export of land sand. We were aware that various quarters in Indonesia had been calling on their government to ban land sand exports because of their claims of environmental damage and the potential impact on Indonesia’s boundaries. These claims are not justified. Our ministers had, on several occasions, offered to discuss this issue with their Indonesian counterparts, and expressed Singapore's willingness and preparedness to work with Indonesia to address its concerns. We regret that Indonesia did not take up our offer.

We do not expect the Indonesian ban on land sand export to have any major impact on the construction industry, as there are various alternatives available. The industry will have to make some adjustments, and we have put in place measures to facilitate the transition and to minimise short-term disruption to construction activities.

Since 1st February, the Government has released sand from our national stockpile to meet any interim shortfalls in land sand supply. Our objective is to provide stability and certainty in the supply of sand to allow the industry to make the necessary adjustments over the next few months. These adjustments include the procurement of sand from alternative sources and working out arrangements to co-share the increased cost burden for existing contracts by developers, contractors and concrete suppliers.

As a major developer of public sector works, the Government has taken the lead in sharing part of the cost increase in sand for existing public sector projects. We have had several dialogues with the industry associations, and they have agreed to adopt the principle of cost sharing for existing projects, and are working together to work out arrangements for their ongoing projects.

Going forward, the industry will procure land sand from alternative sources. HDB, as part of its on-going effort to diversify its supply of basic construction materials, has already procured sand from various sources in the region. Several shipments of sand from alternative sources have arrived in Singapore early this month. We will continue to work with the industry to diversify our supply sources. Although the price of sand from alternative sources is expected to be higher due to the higher transportation cost, it would only increase the overall project development cost by about 1%. This is manageable.

For the longer term, we are working with the industry to adopt sustainable construction to reduce our reliance on land sand. This includes the use of steel, dry walls, glass and metal claddings. We have been promoting such construction practices for some time. The Indonesian ban on land sand export provides a timely opportunity for the industry to accelerate the switch to sustainable construction methods. Based on the experience of countries like the UK, US and Japan, the use of concreting sand could be reduced by as much as 60% to 70%, through the adoption of non-concrete based construction.

Sustainable construction practices are not entirely new to our local industry. Glass and metal claddings are commonly used for the facades of buildings. Dry wall systems are gaining popularity in residential projects. In recent years, we have seen an increasing number of buildings being constructed with steel structures, such as the National Library, Supreme Court, Changi Terminal 3, One Raffles Quay and Fusionopolis.

Nevertheless, given that concrete-based construction has been the predominant form of construction, BCA will work with the industry to ensure that the construction workforce has the necessary skill sets in sustainable construction, in particular, structural steel works. The architects and structural engineers are already trained in steel design and construction as part of their professional training. BCA will conduct training courses to equip the existing pool of technical and supervisory staff as well as workers with the relevant skill sets in steel construction. In addition, BCA will certify and facilitate the entry of new foreign workers skilled in steel construction.

I am confident that with the cooperation of the industry, we will successfully implement these measures, so that the Indonesian ban on land sand export will not have any significant impact on our construction activities and our economy.

Ho Geok Choo (West Coast): Sir, I would like to ask the Minister given the current state of activity in construction which includes both private and public housing, public works and other public infrastructure projects, how long does MND expect our current stockpile of sand to last. Will the existing stockpile help to cushion any short-term increase in cost of sand? How much did the Government pay for the existing stockpile and how much will the Government be charging for any new release?

Sir, the Government has been building up its stockpile of sand over the last many years precisely to prepare for situations like this when there are short-term disruptions in sand supply. I want to assure the industry that the stockpile is sufficient. There are also new sources of supply being found with new supplies coming in, as I have explained in my answer.

As far as the industry is concerned, whether it is for public sector projects, like the HDB, or for private sector construction projects, there will be sufficient supply of sand for the short term arising from release of sand from the stockpile. For the immediate and long term, I expect that, with the other measures that I have elaborated on just now, ie, diversification of sources of supply as well as reduction in the reliance on sand in the long term, we will have sufficient supply of sand for all our projects.

Sir, could I just re-emphasise on the question earlier and ask whether the stockpile can ameliorate the inflationary effect on the shortage of sand presently for construction cost? My other question is: could the Minister consider rebates for construction companies that substitute sand for more sustainable and cost-effective materials for construction? Lastly, will this ban on export of sand to Singapore put a dampener on Singapore's economy?

Sir, as far as the cost is concerned, even if we factor in the higher cost of sand as a result of higher transportation cost, we have estimated that the overall increase in the cost of construction will be somewhere between 1% and 3%, taking into account the new cost of sand. That, in turn, will translate into an overall increase in the project development cost of about 1% or less. In terms of the overall impact on the industry, as far as cost is concerned, I think it will be manageable.

As for rebates for alternative construction methods and materials, obviously, the cost-benefits of using alternative materials will have to be assessed. So long as there is a cost-benefit, both in sourcing of the materials as well as in the overall cost in terms of time and labour usage, if that makes economic sense, then the industry will switch. I foresee that, with this current development, the cost-benefit analysis for alternative materials will be more favourable. BCA will, of course, facilitate this. They will take whatever measures that are necessary to provide assistance to the industry. Whether there will be rebates or not, it is left to the specific industry concerned.

Finally, will it be a dampener on our economy? No, I do not think so. Critical projects are going on and we will make sure there is sufficient sand for these projects. Public infrastructure projects are being rolled out. HDB flats will continue to be built and all the major projects, like the IRs and other housing projects, will also continue. Because of the measures that we have put in place, I expect that there will not be significant short-term disruptions. But I am more optimistic that, over the long term, we will also be able to reduce our dependence on sand and have a more sustainable construction industry, such that any future disruptions will not have any impact.

Sir, I would like to ask the Minister whether the concreting work at all the construction sites is back to normal. Are sand-related businesses profiteering by deliberately disrupting supply, not honouring contracts, negotiating new prices, and what is the Ministry doing about it?

Sir, the construction activities at various sites in the first few days were disrupted as a result of the shortage. With the release of sand, I am told that most of the construction activities have come back to normal. There are a few exceptions and this is because the various parties concerned are still negotiating on the price. But as far as the delivery and availability of sand is concerned, yes, that is already ongoing. What they are doing now is to agree on the price.

As far as the individual contracts are concerned, there are contractual obligations among the various parties - the developers, contractors and the suppliers. The Government recognises that for the public sector projects, such contractual obligations cannot be fully complied with, given the exceptional circumstances and given the fact that this is not a matter of supply and demand imbalance, but there has been a sudden and precipitate decision to stop the supply. As a result, the Government has agreed that, for all its existing public sector projects, it will co-share the cost of the increase due to the increase in price of sand with the various parties - the contractors as well as the suppliers. We have announced this and explained to the industry associations, and the Ministry of Finance is issuing a circular to this effect.

I have also urged the developers who are part of this value-added chain to similarly take a sympathetic and fair view as far as their own contracts are concerned. Between the suppliers and the contractors, there are also contractual obligations and the Government is obviously in no position to examine each and every contract. However, we have moved and freed up the supply of sand, and we have got the sand to flow. It is now a question of them agreeing on the price that they are prepared to pay and this we will leave to the individual parties concerned. But if there is a need to, BCA will step in to try and facilitate a solution or an amicable resolution.

I want to emphasise that it is not possible for the Government or BCA or MND to step in to referee each and every single situation. If there is evidence of somebody taking advantage of the situation, we would like to know about it and I would be grateful if the Member could enlighten the Ministry about those situations.

Sir, is it true that the Indonesians are very concerned over the significant impact on the environment arising from our purchase of sand from them? And, if it is so, can we not impress upon Indonesia to be equally concerned about the haze problem which is also an issue of the environment?

Sir, I am sure the Minister for Foreign Affairs would be able to better answer this question. But I can tell the Member that as far as the environmental impact is concerned due to sand, based on what we know, the Indonesian sand suppliers, who are licensed by the Indonesian government, are obliged to plough some of the proceeds that they get from the sale of sand into environmental reconstruction, and that is already built into the price of the sand. We obviously share with Indonesia their concern about any environmental degradation, and we have already expressed our willingness to cooperate and work with them to see how we can further address these concerns. However, this offer was not taken up. Obviously, we are still prepared to do so.

Last question. Dr Teo Ho Pin.

Sir, I understand that the Ministry has fixed the price of sand to about $25 so as to stabilise the situation. But I understand from industry sources that the ready-mix concrete price has gone up by over 50% to about $100. So, it is the ready-mix concrete which will affect the construction cost. May I just ask the Minister whether the Ministry has plans to fix the ready-mix concrete price?

Sir, yes, the Ministry has decided to fix the price of sand at a rate which is slightly below the current market rate. The reason why we have decided to do so is because we want to ensure not just stability of supply but also price stability for one month, so that all the various parties can come together and renegotiate and redo their sums in order to get the work going. The work on the ground can proceed, but the price for ready-mix concrete is still being negotiated in some instances.

Can the Government fix the price of ready-mix concrete? The answer is that it would be difficult for us to do so. We can only fix the price of one of the components in ready-mix concrete. The other components, eg, granite, etc, are matters which are outside the purview of this particular situation. So, it is not possible for the Government to fix the price of concrete and at the same time force the concrete suppliers to adhere to that price. We are not a party to the contract. We are not able to fix the price of all the other raw materials that go into concrete. We have brought the supplier industry's associations, the contractors' associations and the developers' associations together to make them all understand that, as far as this particular disruption is concerned, there are measures to mitigate and resolve this problem but, in the short term, they would have to get together and renegotiate some of the pricing and their contracts.

The Government is giving them some time to do so by ensuring some stability and, if it is necessary, the Government will also help to facilitate these negotiations. But we are not in a position to fix the prices of all the materials that go into the construction process.

4. Mr Charles Chong asked the Minister for Foreign Affairs (a) what impact does the mining of sand on the outer islands of Indonesia and Singapore’s land reclamation works have on the maritime boundaries between Singapore and Indonesia; and (b) how will the maritime boundary between Singapore and Malaysia be affected by Singapore’s land reclamation works.

Mr Speaker, Sir, as with Mr Mah Bow Tan, let me also begin by distinguishing sea sand from land sand.

Although various comments have been made by Indonesian politicians and journalists, it is not at all clear how the mining of sea sand in the seas off the outer islands of Indonesia could have an impact on the maritime boundary between our two countries. In any case, such mining is entirely within the power of Indonesian authorities to control. As far as Singapore is concerned, we have not imported sea sand for our reclamation works from Indonesia since its export ban in February 2003. As Minister Mah said earlier, we have been using sea sand from other sources to carry out our reclamation projects.

As for land sand, which we had continued to import from Indonesia till its recent ban, it is used for construction, not land reclamation. According to our contractors who imported the land sand from Indonesia, the sources of their Indonesian suppliers were from inland locations away from the border islands of Indonesia. It is therefore not possible for Indonesia’s export of land sand to affect its maritime boundaries.

Our existing maritime boundaries with Indonesia had been settled under the 1973 Agreement Stipulating the Territorial Sea Boundary Lines between Indonesia and the Republic of Singapore in the Strait of Singapore. With Malaysia, our existing boundaries were settled by the 1995 Agreement between the Government of Malaysia and the Government of the Republic of Singapore to Delimit Precisely the Territorial Waters Boundary in Accordance with the Straits Settlements and Johore Territorial Waters Agreement 1927. Our reclamation works, which are conducted within Singapore’s territorial waters, cannot affect those two Agreements and the demarcated boundaries.

There are some areas at the two ends, near the tri-junctions which have not been demarcated, either bilaterally with Indonesia or Malaysia, or trilaterally with both countries. These will have to be demarcated through negotiations.

Sir, I would like to ask the Minister what is his view on the politics of envy in this instance. Does he see the ban on sand arising more from a situation of: "I see you little red dot, tak puas", rather than the border and environmental concerns? If that were so, would Singapore be revealing itself to be more measured in its pace so as to pacify our neighbours? I say this because our success and fast growth may be creating a lot of tensions with our neighbours who feel the threats of challenges and stress. Therefore, would a different tactic and approach work, rather than one of offering to understand and help? Our neighbours could be feeling low, and the loss of face ---

Mdm Ho, no speeches, please.

--- when so often we talk about offering help. My question therefore is that perhaps we should slow down, and I would like the Minister's comment on these questions, as well as a recent remark by our Prime Minister, and I quote him:

"Singapore is a small country, vulnerable to external forces sometimes beyond our control. We have to get along with our neighbours. We have to work together."

Is that your question?

Sir, I would like the Minister's views on the questions that I have posed, ie, whether it is a question of politics of envy and whether we should change our approach in the way we deal with our neighbours, especially in the context of what the Prime Minister has said recently.

Mr Speaker, Sir, it is not for us to comment on the domestic politics of countries in the region. But our policy - and this is a steadfast one - is to have good relations with them and to build those relations on the basis of mutual benefit.

Sir, it is clear that the Singapore's import of sand has no effect on the environmental damage of Indonesia or the maritime boundaries. Given that case, can I ask the Minister what is his interpretation of this sudden ban on land sand to Singapore? There are some quarters in Indonesia that have linked it to the negotiations on the extradition treaty that they are trying to get us to sign. Can I ask the Minister whether he thinks this is a pressure point that Indonesia is trying to use on Singapore? I find it difficult to agree with the hon. Member, Mdm Ho Geok Choo, that we should slow down our development to be at pace with our neighbours, because we answer to Singaporeans. Can I ask the Minister whether he thinks that Singapore has been doing its part as a very responsible member of ASEAN to help our neighbours to level up?

Mr Speaker, Sir, there was a recent article in the Jakarta Post on 3rd February quoting Chief Executive of the Indonesian Maritime Security Coordinating Board, Vice Admiral Djoko Sumaryano, as linking the land sand ban to the ongoing border talks and the extradition treaty negotiations. Such a linkage, if true, would be unfortunate and counter-productive. Our border limitation talks are complicated enough and, if there is an additional linkage, it will only make the talks more difficult.

As for the extradition treaty, Prime Minister Lee and President Yudhoyono had already agreed at their meeting in Bali on 3rd October 2005 that the extradition treaty and the defence cooperation agreement should be linked together and negotiated in parallel, as one package. The talks have made good progress, although there are still a few difficult issues to overcome. Singapore hopes that both agreements, as a package, could be concluded early.

As to whether we should slow down the pace of our development in order to make our relations with our neighbours more comfortable, I think I fully agree with Ms Irene Ng that we should never do that. We should do what is in the interests of Singapore. Of course, where we can, we should help our neighbours in their economic development, and, indeed, we are. We have, for instance, a very special package to help the CMLV countries - Cambodia, Myanmar, Laos and Vietnam - and we have, over the years, programmes to assist Indonesia in its development. We have trained many of their officials. When they had the tsunami, we did not stint at all on our efforts to help them, and in so many other instances where we could, within our means, extended a helping hand. That has always been our approach - to help our neighbours because we believe that their prosperity is also good for us.

Sir, the Minister, in his reply to my Question, mentioned that there are some areas in our border with Indonesia and Malaysia that are still being negotiated. Could the Minister tell us if our land reclamation works are at all an issue in these negotiations?

Mr Speaker, Sir, we have always stated that our reclamation works would not be a factor in these negotiations.

Mr Speaker, may I ask the Minister whether there is any basis on the claim that our reclamation works at Pulau Tekong and Pulau Ubin might have contributed to the severe floodings in Johor? Is this the same claim that the Malaysians referred to the International Tribunal and which was settled with a signed agreement on both sides in 2005? Have we kept to our part of the agreement, and how do we reassure our neighbour on this?

Mr Speaker, Sir, the day after those remarks were made by the Johor Menteri Besar, Deputy Prime Minister Dato' Sri Najib immediately contradicted him and, indeed, when we were having our discussions over the effects of our reclamation on the Malaysian side, the issue of flooding in Malaysia had been extensively studied and found not to be an issue.

Last question. Ms Sylvia Lim.

Sir, if I may turn back to the issue of our relations with Indonesia, I believe we are aware that there are some wire reports over the years that one of the reasons why the Indonesian government is not too happy with us is that they suspect there could be certain persons in Singapore, of Indonesian origin, whom they may be interested to pursue in their anti-corruption campaign. Either these persons or perhaps their monies are here. I wonder if the Minister could comment on whether this is true to some extent and whether this is one of the things that is a sticking point in our relations with Indonesia.

Sir, when they are able to establish a case and provided we could be helpful to them, we have always been. But a lot of these comments are connected with their own domestic politics, and really we do not want to be too involved in their domestic politics. One reason why the extradition treaty is not easy to negotiate is because if they make a case for someone to be extradited from Singapore, then a course of defence would be whether proper procedures were observed in Indonesia, which means that, inevitably, a judge in Singapore would have to examine the conduct of their police and their judges. So, in the detailed negotiations of our extradition treaty with Indonesia, all these things would have to be taken into account, because the last thing we want is for an extradition treaty to complicate further our bilateral relations with them.

asked the Minister for Foreign Affairs in light of a report that Thailand's national security was compromised by an alleged eavesdropping that involved Singapore (a) what is the Government’s official response to this very serious allegation of eavesdropping; and (b) whether any investigations have been conducted and, if so, what is the outcome.

asked the Minister for Foreign Affairs (a) what are the government-to-government exchange programmes between Singapore and Thailand planned for 2007; (b) whether any of these government-to-government exchange programmes have been suspended by the Government of Thailand; (c) since when were these exchange programmes initiated; and (d) how many individuals have benefited from these programmes.

Mr Speaker, Sir, I would like to take Ms Lee's two Questions together as they are related. First, let me put the issues in context.

The Thai Government suspended the bilateral Civil Service Exchange Programme in reaction to the private visit of former Thai Prime Minister Dr Thaksin to Singapore, during which DPM Jayakumar hosted him to a private dinner. Dr Thaksin, an old friend of DPM Jayakumar, had asked to catch up with him.

Out of goodwill for the Thai Government, we informed them of this prior to the visit, emphasising that this would be a private social engagement and that there would be no publicity. When the Thai Government lobbied us to cancel the dinner, we sought its understanding of Singapore's position. There was no reason for us to deny Dr Thaksin's entry into Singapore. He had a valid travel document; he was not a fugitive from Thai law. It is also not unusual for former political leaders to visit Singapore. Many have done so, including some former Thai leaders. And, of course, everyone knows that in Singapore, we welcome foreign visitors. So long as a visitor is not a fugitive, respects our laws and does not engage in political activities when he is here, we have no reason to turn him away when he flies into Singapore. DPM Jayakumar could not refuse to see his old friend for a meal. He has known Dr Thaksin for a long time and they have met many times before, even when Dr Thaksin was not in office.

We are therefore saddened by the actions of the Thai Government and some quarters in Thailand in reaction to Dr Thaksin's visit. To begin with, it was the Thai side which made public DPM’s meeting with Dr Thaksin despite our assurance that it would be kept private and discreet. Singapore values our friendship with Thailand and the mutually beneficial cooperation we have had over many years with many Thai administrations.

The Civil Service Exchange Programme is one G-to-G cooperation initiative from which both Thailand and Singapore have benefited. Unfortunately, following Dr Thaksin’s visit, the Thai Government announced that it would suspend this programme. And in relation to that, they cancelled the Coordinating Meeting which was scheduled for late January in Bangkok, and they also dis-invited me from attending, which was a little sad. No other bilateral cooperation activities have been affected. As the Coordinating Meeting was meant to chart the exchange programme for this year and beyond, its cancellation means that no new programmes or projects have been drawn up. However, the activities which were agreed to earlier have carried on, notwithstanding the Thai Government’s suspension of the programme. In January, we hosted a study visit by 48 Thai doctors and nurses. We have also received requests from Thai schools and agencies, through the Thai Embassy here, for us to facilitate their study visits to Singapore next month. And we are happy that these are continuing.

As for the other details of the exchange programme which Ms Lee requested - since the inception of the Civil Service Exchange Programme in 1998, at least 1,800 Thais have come to Singapore for various courses and exchange activities, while 750 Singaporeans have participated in exchange activities. In the area of education, where Thailand has traditionally indicated the strongest interest to collaborate with Singapore, we have frequent exchanges between students and teachers from both sides through scholarships, courses, camps, school twinning programmes, and participation in each other's festivals. Other areas of cooperation over the years include exchanges in sectors such as health; social welfare, youth and sports; science and technology; manpower development; technical cooperation; the civil services and foreign ministries; media, arts and culture; land transport; legal and judicial; and information technology. So, on the whole, across a very wide range.

Ms Lee has asked about the allegations by some quarters in Thailand that Thai national security was compromised because Singapore was using Temasek’s ownership of Thai telecommunication companies to eavesdrop on the communications of the Thai military by running their calls through Singapore. Well, in many countries around the world, there are telcos which have foreign ownership. In Thailand, there is another telco owned by a Norwegian company. We have explained – and those who are familiar with how modern telecommunications operate know – that it makes no technical or economic sense to route domestic calls within Thailand through Singapore. The Communications Authority of Thailand and the Telephone Organisation of Thailand, both state-owned enterprises of the Thai Government that provide international telecom services, as well as the Thai nationals who operate the Temasek-owned telcos, would obviously not allow such a thing to happen in any case. It would also have been absurd for Temasek to sully its reputation in this way.

Mr Speaker, Sir, relations between countries, even close neighbours and partners, sometimes have their ups and downs. The current state of our relations with Thailand has its basis in the complex dynamics of Thai domestic politics since the coup. We have to take the current unpleasantness in our stride. Our ties of friendship and cooperation with Thailand are profound and will withstand this present problem.

Sir, I would like to ask the Minister how much does it cost us for this exchange programme with Thailand since its inception.

Mr Speaker, Sir, I do not have the figure with me right now. It is not so much the actual dollars and cents but the effort involved on both sides because many departments are covered in this programme. But over the years, this programme has generated considerable goodwill between Ministers, between counterpart agencies, and between civil servants. And while there might be some costs involved, I believe that they are a completely worthwhile investment in building up goodwill.

In view of the recent suspension or cancellation by the Thai Government on the Civil Service Exchange Programme, which I would interpret that they do not require this programme anymore, should not the Ministry cancel all such programmes and channel the money to better use such as, for example, expediting the Lift Upgrading Programme in Nee Soon South? I believe our residents would better appreciate the efforts of the Government.

Mr Speaker, Sir, I am all in favour of providing sufficient funds for lift upgrading programmes. But I think it is important for us to be very rational in our responses towards reactions in Thailand. They are going through a difficult patch. In the run-up to the coup, there was a lot of unhappiness in Thailand. The coup itself has created a new drama. It is a tough period for them. We hope that they can return to Constitutional rule as quickly as possible with a government which ensures fairness and justice for the Thai people. Our hearts are with them and we wish them well. So it is certainly not in our interests to aggravate the situation by reacting in an emotional way.

7. Mr Alvin Yeo asked the Minister for National Development, in the light of the steep run up in prices for super luxury residential projects, whether there is a speculative "bubble" forming in that sector and whether any measures will be taken to prevent excessive speculation.

Mr Speaker, Sir, let me first provide the Member with some statistics on the level of activity in the property market. Could the Clerk please distribute the tables to the House? [Copies of Tables distributed to hon. Members. ] Sir, if Members would refer to these tables which are being distributed now, they can see that prices of private residential properties overall rose by 10.2% in 2006, compared to 3.9% in 2005. This is in Table 1. While the prices of non-landed private residential properties rose by 11.1% in 2006 as a whole, prices of these properties in the Core Central Region (CCR) increased faster, by about 17% in 2006, compared to 3% in Rest of Central Region (RCR) and 4.2% Outside Central Region (OCR). This is given in Table 2 as well as in chart form in Chart 1. For the fourth quarter of 2006, there were 426 sub-sales of private properties island-wide. Sub-sale, by definition, is the sale of a unit by someone who has already signed an agreement to purchase a unit from the developer or somebody who subsequently purchases a unit and resells it before the completion of the property, ie, before the issuance of the CIS (Certificate of Statutory Completion). So these sub-sales in fourth quarter 2006 represented about 5.4% of the total number of private housing transactions in the quarter. If I break it down further, in the Core Central Region (CCR), this is where the higher-priced residential projects are located, sub-sales accounted for 9.7% of all private housing transactions, again for 4Q2006, compared to 3.5% in Rest of Central Region (RCR) and 2.3% in Outside Central Region (OCR). If you look at Chart 2 and Table 3, these figures are below the proportion of sub-sales in 1996, which reached a high of 28% of all private housing transactions. So the current situation, even for the Core Central Region, it is less than 10%.

Sir, based on these statistics, it is evident that prices and take-up of private housing are rising sharply but only in the Core Central Region. In other parts of Singapore, the increase is steady and is supported by economic fundamentals. The Government will continue to monitor the private property market closely and ensure that there is sufficient supply of private housing to meet demand through the Government Land Sales Programme.

To provide the public and the industry with more information, I have asked URA to break down the property market data into regions, for new as well as sub-sales and for completed as well as uncompleted projects, because the price movements in each of these sub-categories are quite markedly different. With the release of more data, I hope members of the public will be able to assess the market on their own, and make informed and prudent decisions. I would like to remind the public that buying a property is a major commitment, which they should make only after careful consideration of their financial situation and affordability of the property, and after a careful assessment of the market.

I would like to ask the Minister whether he has any comment on recent newspaper reports that say that prices in the super luxury market have moved up by more than 25% in less than a year and that there has been multiple flipping of options in some of these high-end projects. A second supplementary question: Given that the super luxury segment is extremely visible to international investors, would he agree that a forming of a "bubble" in that segment and the bursting of that "bubble" could damage international investors' sentiments, and have a knock-on effect on the Singapore property market?

As far as the first question is concerned, as shown by the statistics that have been distributed to the House, I think the reports in the press are somewhat exaggerated. Even in the Core Central Region, which is the area where the so-called super luxury developments are located, the increase for last year was 17% (quarter on quarter). So it is not as high as the newspaper reports seemed to suggest. Having said that, of course, there is a big difference between the increase in the Core Central Region and the rest of Singapore, and this is again amply demonstrated by the statistics that have been distributed. There is also a lot of what the Member calls "flipping". The number of sub-sales is close to 10% whereas it is about 2% or 3% in the other areas. So, yes, there is a difference in the level of activity in the property market in this section as opposed to the rest of Singapore.

Why is that so? I think it is quite clear that, first of all, the supply and demand pattern is quite different in this area as opposed to the rest. For a start, the interest in properties in this segment of the market is very much higher among the international or overseas buyers, although I must say that the purchases by overseas buyers is not very different from what it was in the last few years. That is one of the reasons why the prices in this area have moved up much faster than the rest. Yes, it is a very visible sector of the market. It is an area which attracts international attention. But precisely because it attracts international attention, the prices here are moving.

Is a property "bubble" forming? If you look at the number of sub-sales, I would say there is really no cause for concern at the moment. But the Government is monitoring the situation and making sure that the property market stays healthy.

I have indicated in my answer that the purchase of a property by anybody, whether it is for owner occupation, whether it is for speculation or whether it is for what people call "specu-investment", I think all those decisions must be taken very seriously and very carefully. And that is the reason why I have asked for more information to be released so that people can really make proper prudent decisions for themselves and not just rely on newspaper reports or on what people with vested interest in this market tell them.

What is the knock-on effect from this property rise in the private sector on the public housing sector? Secondly, we have seen an increase in the numbers of potential home owners going for walk-in selections, what measures have we got in place to prevent another bubble in the public housing sector as well?

The statistics for the public housing sector suggest that the rise in HDB flat prices has been steady but not as sharp as in the private housing market. For example, last year, the increase was about 2%. So, there is no cause for concern as far as the public housing sector is concerned. Indeed, there is sufficient supply of housing in the public sector. There are still flats that are available for sale and anybody who wishes to buy a flat and is not choosy about where that flat needs to be or the flat type can actually walk in to HDB tomorrow and get a flat. And that is the reason why HDB conducted this walk-in selection exercise (or WIS).

Yes, there was a little bit of a frenzy last month when rumours went around that there were flats for sale in the mature market. As Members would know, flats in the mature market are always in demand. What HDB did not communicate adequately was the fact that these flats in the mature market are actually not so popular flats because they had been offered for sale before and they were not taken up. That is why HDB felt that a walk-in selection exercise would be proper for this particular sale. I think they underestimated the power of the rumour mill and as a result of that, many people queued up in anticipation that these flats were what they wanted. They will learn lessons from this particular episode. They are now reviewing the sale exercise. Instead of doing it by walk-in selection, perhaps, if it is seen to be popular, they should be doing it by other means, like a balloting exercise.

But let me assure the House that there are sufficient flats available in the market today and there will continue to be flats available for new home owners. These flats may not be new flats per se or they may not be new flats in the areas that they want, but there will be flats available, both new as well as resale flats. And the Government will continue to make sure that this is so.

What is the knock-on effect with regard to commercial property? Recently, there were reports that rental prices year-on-year have increased double digit in the high end. I cannot remember the target now. If that is the case, how is it affecting our competitiveness, especially in the central area, for companies like financial institutions, whom we are trying to attract to Singapore? How is this affecting our cost competitiveness and what is being done to help the situation?

Yes, I think the Member is correct in noting that the price increase in the commercial property market is actually much higher than in the residential market. This is as a result of a very short-term imbalance between the demand for such spaces and the supply. Unfortunately, during the times when the economy was not doing well, developers did not take up the land that was offered for sale for commercial properties. They actually left it to a time when the market started to pick up. But as the Member would be aware, there is a gestation period, a certain lead time, before such spaces can be prepared. For example, the BFC was triggered for sale a couple of years ago. It started construction, but it will not be ready till 2009/2010. In the meantime, between now and then, there will be a short-term imbalance, a short-term shortage, and this is the reason why prices are moving up.

What the Government is doing is, first of all, to make sure that over the longer term, there will be sufficient supply of space for offices and for people who want to come to Singapore to set up business. That is the reason why in the recent Government land sales programme, a site has already been earmarked for use as office space and it will be sold on the confirmed list. In other words, it will be sold whether the developers put a reserve price on it or not. But this would only come onstream 2010 and beyond.

What do we do between now and then? First of all, the Government has moved to make available spaces for temporary occupation. Some of the Government buildings that have been vacated, for example, Pearl's Hill, some of the schools, etc, have been made available by the Singapore Land Authority for use as commercial and office space. They may not be suitable for all establishments or all companies, like banks, for example. Some banks may not want to, but there are others who will find such spaces suitable and, hopefully, they will take up these spaces.

So, in terms of overall quantum, yes, there is an imbalance and there is a shortage at the moment. But I see and expect this shortage will be resolved within three years at the outset and after that, a more balanced situation will prevail. Between now and then, we will try to put up more spaces for the commercial and office sectors in existing Government premises.

8. Dr Fatimah Lateef asked the Minister for Health what is the rationale behind the Singapore Medical Council’s pursuit of the Shorvon biomedical ethics case to the British courts and whether this case will have any long-term effects on Singapore’s standing and reputation as a regional/international centre for biomedical research.

The Singapore Medical Council ("SMC") has a practice of notifying its foreign counterparts when foreign doctors practising in Singapore are convicted for professional misconduct. In return, SMC also receives notifications from regulators in the UK, Canada, Australia, New Zealand and the US, just to name a few.

The case involving Professor Simon Shorvon was referred by the SMC to the General Medical Council (“GMC") of UK under this reciprocal arrangement. As Members may recall, Professor Shorvon, then Head of the National Neuroscience Institute ("NNI") was in charge of a major research project involving a number of patients with Parkinson disease. The research project was found to involve serious ethical breaches. Three separate inquiries conducted by the Ministry, the NNI and the SMC established these facts: Professor Shorvon breached medical confidentiality by accessing patient records without their permission. He got Parkinson’s patients to omit or change their medication, without getting their consent or telling them about the risks. Their reaction was then filmed. The doctors treating these patients were unaware that all this was being done. In fact, some patients were misled into thinking that their doctors had given approval. It turned out that Professor Shorvon did not seek ethics approval to do any of this testing. All of this put the safety and well-being of patients at risk. What is worse, many were elderly and mentally frail.

Many of you may remember this when then Health Minister, Minister Lim Hng Kiang, first described to this House what had taken place during the NNI research project. That was in April 2003 in response to a Question in this House by Mdm Halimah. After a thorough inquiry, the SMC Disciplinary Committee found Professor Shorvon guilty of professional misconduct in February 2004.

In March 2004, the SMC brought this matter before the GMC, as Professor Shorvon was registered in the UK. It provided the GMC with its findings and all the evidence that it had obtained. In September 2004, the GMC decided that a public inquiry should be held in the UK. It took the view that what Professor Shorvon had done in Singapore would amount to serious professional misconduct if proved.

Then unexpectedly, in September 2005 - this is one year later - the GMC reversed its earlier decision, cancelled the public inquiry and closed the case against Professor Shorvon. Two reasons were given. First, the GMC felt that logistical difficulties would make it hard for them to prove the case. Second, it had obtained an expert report that said that what Professor Shorvon had done in Singapore was not wrong according to British standards.

The SMC was totally surprised by this sudden change of position. Both reasons given by the GMC were unconvincing. First, teleconferencing could easily solve any "logistical difficulty". Second, the SMC found the expert report substantially flawed. Besides containing serious factual mistakes, it did not explain why Professor Shorvon’s conduct, which clearly violated the GMC’s own guidelines, was not a breach of ethics.

The GMC's decision had undermined the integrity of SMC’s findings and cast doubt on the fairness of the SMC’s procedures. It also risked harming Singapore’s reputation as a centre where internationally-established standards of ethical practice are upheld. After consulting legal counsel, the SMC decided to challenge the GMC’s decision before the British courts.

Needless to say, the SMC was disappointed to learn that the British courts had ruled in favour of the GMC. I too am disappointed that the substance of the SMC’s grievance was not fully addressed by the British courts. There are established international rules governing the conduct of research on human subjects, based on the Helsinki Declaration. Under these rules, the welfare of the human subjects is paramount. The research procedure must also be approved by independent Ethics Committees of Hospitals where the research is to be conducted. In the NNI project, Professor Shorvon and his assistant deliberately subverted these rules. I am baffled why the British professional community should choose to condone such a practice.

Will the outcome of this case affect Singapore’s reputation as a biomedical research hub? Over the past two years, internationally-renowned researchers and scientists have come to Singapore to lead and conduct key research in their respective areas of expertise. Many of them are settling down here for at least a good stint.

Our ongoing success in attracting research talent speaks volumes. If anything, this case has clearly reaffirmed our unwavering commitment to upholding international standards of bio-ethical practice, even as we promote biomedical research. Singapore will sacrifice neither patients nor ethical principles in the name of research.

Sir, I have three supplementary questions. Firstly, I would like to ask the Minister with regard to the intellectual debate that is on-going now on the future directions of research. What would be the future on biomedical research as this would really have a bearing for the research fraternity as well as the influx of foreign talent and research into Singapore? Secondly, can he please elaborate on the fund allocation for research, say, in the next five to 10 years? Thirdly, I would like to know whether there would be plans for a ratio or a quota of foreign versus local researchers or research grants and projects.

Mr Speaker, Sir, all public hospitals claim to do three things - service to patients, teaching/training students, nurses, trainees, and clinical research. In practice, of course, all public hospitals definitely do the first two. In fact, we are extremely busy doing all these two. As for clinical research, it varies between hospitals. Some are a lot more active than the others. But on an overall basis, I will be the first one to admit that we do not do substantial clinical research as we would hope to do, and there are good reasons for that. There are two. First, we are really very busy just on treating patients and teaching, and there is very little time left to do clinical research. The second reason is related to the first. The amount of money set aside by the Ministry of Health and the public hospitals in clinical research is quite limited, very modest.

If I recall correctly, say, a few years ago, we only set aside something like $10 million per year for the whole Ministry of Health. So this is a very modest sum. And because of that, the ability to have enough doctors whose patient-load can be reduced so that they have time to spend on doing serious research, is very hard to achieve. At the beginning of last year, we decided to take a good hard look at this, particularly because of the recent years of emphasis on biomedical research. We sat down with the National Research Foundation as well as A*STAR, and there were many man-months spent discussing this. We were pleasantly surprised to find a coincidence of objectives because A*STAR and MTI have been pushing life sciences for several years. Quite correctly, their initial plan was to do basic sciences at the Biopolis, at the bench level. But having now attracted so many world-class researchers and doing very good bench work, they wanted to go to the natural next stage which, in our trade, we call it "translational and clinical research". So Biopolis and A*STAR look at the Ministry of Health and say, "Let's work together." Of course, the Ministry of Health is ever-ready for more research money so that we can do a lot more clinical research than we have traditionally done. So very quickly, there was a consensus of opinion that for the next stage of life sciences development, we should put serious money into translational and clinical research. Because without serious money, the rest is just words and that only frustrates the doctors because if you do not give them money and resources and you ask them to do research, it is just humanly impossible. The end result of it all was a series of very serious papers, after extensive discussions among the scientists, researchers and experts, both local and foreign, who are familiar with this subject. The series of papers culminated in several recommendations that went up to the Life Sciences Steering Committee, chaired by Dr Tony Tan, and of which I am a member.

Some time in the middle of last year, we then took a strategic decision that for the next stage of development of biomedical sciences, we should emphasise translational and clinical research. We went to Cabinet for endorsement and approval of this strategic direction and I also went to Cabinet to ask for an inclusion of a mandate in the Ministry of Health's charter that clinical research is also one of the mandates. Together with that, there is a commitment of sums of money, not huge sums like in the US because we cannot afford it, but based on what we can afford, something like $1.55 billion new money to be spent on clinical research over the next five years. And Dr Tony Tan quite wisely noted that for this to succeed, you need all the stakeholders to be committed to it because it is a long-term mission and therefore he insisted that this project should be co-funded by the key players. For Ministry of Health, we are the poorer cousin, so we contributed $350 million over the next five years, which is still a lot to me because we were spending only $10 million a year, now we will be spending $70 million a year, a seven-fold increase. The National Research Foundation would chip in $550 million and A*STAR, the biggest chunk, $650 million. $1.55 billion to be spent over the next five years. But of course, it is not something that you can create overnight because you need to build up capacities and capabilities and we need expertise from outside.

In the last few months, we had been engaged in this whole exercise on what to do and to set up the infrastructure. The first thing we did was to rehash the National Medical Research Council which was responsible for allocation of funds and we brought in Prof. Ed Holmes, a very distinguished clinician and scientist internationally, to chair this Committee. The last few months, they have been discussing. Obviously we need to focus because $1.55 billion is not unlimited. So they have also decided, after consultation with the medical and scientific community, on the five key areas, ie, heart, cancer, infectious diseases, ophthalmology and neurosciences. These are the five key areas as they affect most patients in Singapore and also where we have some expertise. But they were also quite clear that, having identified these five areas, when bids are submitted from researchers for grants, it has to be based on competitive bidding, peer review, internationally reviewed. In that way, we do not waste taxpayers' money. That is how I see clinical research going forward under the Ministry of Health, together with our partners, over the next five years and, if necessary, I can elaborate further during next month's COS.

9. Mr Low Thia Khiang asked the Minister for Health (a) what is the number of doctors from non-traditional sources, according to nationalities, serving in polyclinics; (b) what is the current ratio between traditional and non-traditional sources of doctors in each of the polyclinics; and (c) whether communication problems due to language barriers between doctors and patients at polyclinics pose potential risks to patients.

Mr Low wanted to know the number of polyclinic doctors who originated from non-traditional sources, presumably those countries other than Singapore and Malaysia. There are currently 31 such doctors serving in our polyclinics: 12 from India, 11 from the Philippines, four from Myanmar, and one each from Hong Kong, UK, Taiwan and Thailand.

They make up 12% of the total number of doctors working in the polyclinics. So this gives a ratio of 1 to 7.

Communication between doctor and patient is an important part of doctor-patient relationship. Our polyclinics have therefore exercised care in the recruitment process. The Singapore Medical Council also requires foreign doctors from medical schools, where the medium of instruction is not English, to pass an international English proficiency test before they can be registered.

In addition, our polyclinics have regular language lessons for all our doctors, both from traditional and non-traditional sources, to pick up local dialects, Mandarin and Bahasa. Nurses are also on hand to help serve as interpreters between doctors and patients, when necessary. In this way, we minimise the risk of any miscommunication between doctor and patient.

10. Prof. Thio Li-ann asked the Deputy Prime Minister and Minister for Law whether Article 5(2A) of the Constitution which entrenches the elected presidency will be brought into operation soon and, if not, whether the Government will consider bringing into effect Article 5(2A) insofar as it entrenches basic constitutional provisions relating to general elections and fundamental liberties.

Mr Speaker, Sir, as for the first part of the Member's question, we are not ready to bring Article 5(2A) into operation soon. This is because we are still refining the Presidential safeguards, especially in regard to the country’s reserves. This is a gradual process that requires time.

Sir, when we enacted the provisions in our Constitution for an elected Presidency, we were conscious that those changes were unique and unparalleled elsewhere. Our clear and stated intention was to refine the scheme and to iron out all the issues that may arise in the light of experience over time, before bringing the entrenchment provisions into operation. As Members know, we have previously made amendments to refine the framework to deal with issues that had not really been anticipated.

As the Prime Minister had informed this House last year on 13th November, the Government intends to amend the definition of how much Net Investment Income (NII) from our past reserves can be spent by the current Government. We are currently studying this complex problem carefully. Any changes, as a result of that review, will require an amendment to the Constitution. This will be an important amendment which affects the core duty of the elected President to protect the past reserves of the Government. After that amendment, we will need some years of experience operating under the revised rule before we can entrench this and other provisions concerning the elected President.

As for the second part of the Member's question, whether we can bring into operation the provisions relating to elections and fundamental liberties or rather the entrenchment, we cannot do so for two reasons. First, they were not intended to be implemented separately from the others, but as an integrated package entrenching all the critical Constitutional provisions over which the President should have a special role. And that continues to be the intention.

The second reason, Sir, is that the Constitution Amendment Act (No. 41 of 1996) which amended this was drafted on the basis of this intention. I have been advised by the Attorney-General that, having regard to the provisions of that Act, Article 5(2A) has to be brought into operation as a whole and cannot be brought into operation in part.

Let me add in closing, Sir, that whether the Article is entrenched or not, the Government has made it a practice to always seek the President's views whenever it intends to move Constitutional amendments that affect the relevant provisions. The President's views have been reflected in the respective Second Reading speeches in this House. We have not made any amendments which the President had not agreed with, except once in 1995 when we referred a legal question to a Tribunal of Supreme Court judges set up under Article 100, which ruled in favour of the Government's interpretation of the Constitution.

11. Ms Denise Phua Lay Peng asked the Prime Minister and Minister for Finance (a) whether the responsibility of integrating disabled people into mainstream Singapore should primarily be under the domain of the Ministry of Community Development, Youth and Sports and the charity sector; and (b) whether each Ministry can take ownership, develop basic policies and work plans to address these within the individual functions of health, housing, employment, defence, law, education and community integration.

Mr Speaker, Sir, the Ministry of Community Development, Youth and Sports (MCYS) is responsible for defining the needs and issues of the disability sector. However, MCYS does not work in isolation. Instead it works with the other Ministries to formulate policies that assist the disabled and ensure their integration into society.

Sir, we have made progress in the last few years to promote integration. For example, we are making our transport and physical infrastructure friendly to both the frail elderly and persons with disabilities. Since 2000, the MRT stations have been retrofitted and made barrier-free. In 2006, the first wheelchair-accessible buses were introduced. By 2010, 40 per cent of our bus fleet will be wheelchair-accessible. The HDB and the Town Councils have begun work on making our housing estates barrier-free accessible. It will take time, precinct by precinct, but we will get there by 2011.

To help persons with disabilities get employment, MCYS set up the ENABLE Fund in July 2006. Funding was provided by the Workforce Development Agency (WDA) and MCYS works with the Singapore National Employers’ Federation (SNEF) to administer it. Last year, Infocomm Development Authority (IDA) and MCYS announced that they would work with the Society of Physically Disabled to set up an Infocomm Accessibility Centre to provide, among other things, IT training for persons with disabilities. This will enhance their learning, employment and connectivity with the world.

From 2004 to 2008, Ministry of Education will put in about $55 million a year to help children with special needs. Special Needs Officers (SNOs) have been deployed to mainstream schools to support and provide specialist intervention for children with learning disabilities. In addition, for Special Education, Ministry of Education has supported training of teachers, improvements in curriculum and the building of purpose-built schools. All these measures that I have mentioned above involve the relevant Ministries taking ownership and responsibility, and working closely with MCYS on the challenges at hand.

Many Helping Hands

On top of Government agencies working together, we firmly believe that there must be a "Many Helping Hands" approach if we are to address disability issues holistically. The National Council of Social Service (NCSS), voluntary welfare organisations, the community, employers, families and persons with disabilities themselves - all have a role to play toward the integration of persons with disabilities.

Enabling Masterplan

MCYS and NCSS have appointed an Enabling Masterplan Steering Committee with representatives from the people, private and public sectors. The Steering Committee was formed in September last year to chart the development of programmes and services in the disability sector for the next five years.

The Steering Committee has released its report this morning. I am pleased to say that in response to the Steering Committee’s call for an integrated, inter-Ministry approach to disability issues, the Government will set up an inter-Ministry standing committee at the senior management level led by the Permanent Secretary to address disability issues holistically. This committee will report to the Minister for Community Development, Youth and Sports. It will be supported by two governing panels to look at the core areas of early intervention and education, and at employment.

The Government will study the other recommendations of the Enabling Masterplan Steering Committee. The inter-Ministry committee will closely monitor the implementation of these recommendations from the Enabling Masterplan report that are accepted by the Government.

Sir, if indeed each Ministry is very supportive of the PM's vision of an inclusive Singapore, then what is the role and the personal attention that will be given by each Cabinet Minister to ensure that disability issues are tabled at each Ministry's level, and that strategies and even Key Performance Indicators (KPIs) to ensure there is impact of the resources spent are all evident at each ministry?

Sir, knowing my colleagues, I know they take their jobs very seriously. They take a personal interest in all matters under their responsibility. Even in this area of disability, I am certain that my colleagues pay close attention to it.

12. Ms Denise Phua Lay Peng asked the Minister for Education (a) what is the effectiveness of the Community Involvement Project initiatives in developing the character of students towards an inclusive Singapore; and (b) if he will consider implementing a special school within a mainstream school, to enable greater daily interaction between students with special needs and their mainstream peers.

Mr Speaker, teaching our students to respect those who are different from them and to learn to work with them is an important part of our education. There is no single way in which we seek to do this. We need multiple approaches.

The Community Involvement Programme (CIP) is in fact one of these ways. Schools consciously create opportunities for their students to interact with people of different cultures, socio-economic backgrounds and abilities. CIP encourages students to develop the habit of being socially responsible, and to understand that every Singaporean has an active role to play in the well-being of the country.

The effectiveness of CIP is difficult to measure in any direct way. However, surveys conducted with schools suggest that CIP has indeed made a difference to the students’ awareness of volunteerism and their sense of service to the community.

At the primary and secondary levels, students have been encouraged to initiate and organise their own CIP. For example, at Greenview Secondary, a Secondary 3 class collaborated with MINDS Towner Gardens School to organise team-building activities for their students. Schools like Raffles Girls Secondary and Bedok South Secondary also have long-term collaborations with Special Olympics Singapore and Very Special Arts’ Singapore respectively, to create opportunities for their students to interact.

At Raffles Junior College, students prepared a sports handbook for the disabled, conducted a tennis clinic for the hearing-impaired, and interacted with children from the APSN Tanglin School through sandwich-making sessions. The involvement gave the students a deeper and direct, personal understanding about people with special needs, their hopes, aspirations and concerns.

There are many other examples. Besides the CIP and the co-location of mainstream and SPED schools, MOE is also involving staff and students of the SPED schools in various events such as NE Shows, the MOE Excel Fest which showcase innovations in education, Singapore Youth Festival performances, and events at the Singapore Discovery Centre and the Singapore Science Centre. We will continue to involve SPED schools whenever meaningful and practicable to promote greater engagement amongst these students and their mainstream peers.

Ms Phua raised the specific idea of having a special school within a mainstream school for the purpose of increasing interaction. We do want to provide more opportunities for interaction, as I have just mentioned. On co-location, we are already doing it and will do more of it where it is feasible and educationally sound for the children with special needs. By locating SPED schools adjacent to mainstream schools, we eliminate physical barriers like roads and housing blocks between the schools, and encourage free flow of interaction and activities between these schools.

Currently, five SPED schools are already co-located with mainstream schools. Another five new purpose-built SPED schools will also be co-located with mainstream schools. These are either in the construction or planning stages.

MOE will continue to explore different models of educating children with special needs and ways of providing opportunities for them to interact with the rest of their peers.

Sir, I have two questions for the Minister of State. I would like to ask how effective a six-hour CIP programme will help to develop the character of our students and also to help promote a more inclusive society. To me, it is much akin to being a tourist going to visit a country and just going for holiday and really not understanding the country that he is visiting.

My second question is this: Currently, integration efforts between special schools which are primarily run by charity organisations and mainstream schools run by Government, they are ad hoc. These integration efforts are ad hoc and piecemeal and very much dependent on the kindness of the principals or the leaders of the schools.

Ms Phua, give time for the Minister to reply.

My question is: Will the Ministry officially adopt and consider and support some of the more tested programmes, models like those started by Canossian Convent, for example, which is not just adjacent to each other but within each other, so that these models last beyond individuals and can be duplicated throughout the special education sector?

Mr Speaker, with regard to the first question, I certainly would like to explain that many of these students actually did more than six hours of CIP. Ms Phua herself has experienced these voluntary services provided by students which go much beyond six hours. We hope that the 6-hour experience will open their eyes to the opportunities and the challenges of volunteerism. And through these six hours of experience, it could challenge them and enthuse them to continue in community service.

With regard to the second question, the MOE certainly would like to explore different models of integration between special schools and mainstream schools. I think some suggestions by the Member are possible models for us to consider. And we certainly hope that these models that are practicable and effective should last beyond their individual personalities.

Sir, may I ask the Minister of State how does he get the grassroots leaders to be involved in all these special schemes so that more students could be involved in our community?

Mr Speaker, Sir, I think many of our school leaders within our mainstream schools, and within the special education schools, have very close working relations with advisers on the ground, and I would encourage advisers themselves to also take a pro-active role in encouraging their grassroots leaders to be actively involved in helping out in the special education sector. If we can work together collectively through the many-helping-hands approach, we will be more effective in reaching out to these children with special needs.

13. Dr Lily Neo asked the Minister for Community Development, Youth and Sports when was the last review of the Public Assistance Scheme and whether there has been an increase in the number of families on the Public Assistance Scheme.

Mr Speaker, Sir, the Public Assistance Scheme is targeted at helping needy Singaporeans who are unable to work and have no family support. The number of families on the scheme has been stable for the past five years at about 3,000 families at any one time. MCYS reviews the Public Assistance Scheme regularly and takes into consideration changes in the cost of living for families on public assistance. The scheme was last reviewed in 2002 and the revised rates were implemented on 1st January 2003. And I would like to inform hon. Members that there is good news - a review is currently ongoing and likely to be completed within the next few months.

Yes, Dr Neo, one minute left.

May I request that this review be commensurate with inflation because, in the past, the review had not been. And from my study on 32 elderly PA cases, it shows that they need $400 a month, whereas now, from the $260 per month, they only have to live from $5 per day, which is too little even for subsistence living. The other issue is whether we could also look into the eligibility criteria because we have been very stringent as there are less than 2,800 cases of PA allowance cases whereas, according to a study, there are 100,000 households that need assistance from charitable organisations.

3.00 pm

Order. End of Question time.

[Pursuant to Standing Order No. 22(3), Written Answers to Question Nos. 18, 21-22, 32-33, 43-46, 51, 59 and 61-62 on the Order Paper are reproduced in the Appendix*. Question Nos. 14-17, 19-20, 23-31, 34-42, 47-50, 52-58, 60 and 63 have been postponed to the sitting of Parliament on 15 February 2007.]

* Cols. 1299-1318.

"to amend the Land Acquisition Act (Chapter 152 of the 1985 Revised Edition)",

presented by the Deputy Prime Minister and Minister for Law (Prof. S Jayakumar); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to provide for the control of spam, which is unsolicited commercial communications sent in bulk by electronic mail or by text or multi-media messaging to mobile telephone numbers, and to provide for matters connected therewith",

presented by the Minister for Information, Communications and the Arts (Dr Lee Boon Yang); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

Order for Second Reading read.

3.03 pm

Mr Speaker, Sir, on behalf of the Senior Minister, I beg to move, "That the Bill be now read a Second time."

There have been significant changes in the global financial and regulatory landscape since the MAS Act was enacted 36 years ago. To keep pace with these changes, MAS embarked on a review of the MAS Act and proposed a series of amendments. The amendments will enable MAS to carry out its functions more effectively to meet the challenges of a dynamic global financial and regulatory landscape.

The amendments are aimed at three broad areas. First, improving accountability and governance; second, streamlining of operations; and, third, providing MAS with the flexibility to address emerging issues. I will now touch on the key amendments proposed in this Bill.

The first set of amendments is on improving accountability and governance.

Specifying MAS’ objects and functions

MAS’ mission is to promote sustained non-inflationary economic growth and a sound and progressive financial centre. To this end, MAS performs the multiple functions of a central bank, an integrated financial supervisor and a developer of the financial sector. We propose to explicitly set out these functions in the Bill.

The Bill will also set out the objects of these functions. They are:

Maintaining price stability conducive to sustainable economic growth;

Fostering a sound and reputable financial centre;

Ensuring the prudent and efficient management of Singapore’s official foreign reserves; and

Growing Singapore as an internationally competitive financial centre.

Clarifying the Board’s accountability to the Minister-in-charge of MAS

Next, the MAS Board will be required to keep the Government informed of matters of policy through the Minister-in-charge of MAS. In addition, the Board will also be required to furnish the Minister with information regarding MAS upon request.

Report on MAS’ performance in annual report

MAS’ annual reports presently give an overview of MAS’ performance and initiatives by highlighting key achievements and work-in-progress. To enhance MAS’ accountability, the proposed amendments in the Bill provides for the annual report to include a write-up on MAS’ performance in its functions and duties.

MAS’ position on lending to the Government and public authorities

Monetary discipline has underpinned Singapore’s solid economic fundamentals. While there is tacit understanding that MAS as the central bank will not lend to the Government for the purpose of deficit financing, making this principle explicit in the MAS Act will help to provide a clear separation of responsibilities between monetary and fiscal policies. This is essential for good governance. It will put in place safeguards that prevent MAS from financing Government deficits, thereby sending a strong signal of Singapore's commitment to monetary discipline and price stability. The amendment will also set out the limited exceptions under which the prohibitions may be lifted.

Mr Speaker, Sir, let me now touch on the next set of amendments, which is to streamline the operations in MAS.

Discharge of Managing Director's duties

Currently, only MAS Board directors may be appointed as acting Managing Director of MAS by the Minister to cover the duties of the incumbent Managing Director. Over the years, MAS has groomed an effective senior management team which works closely with the Board and the Managing Director. We therefore propose to allow MAS' senior management, comprising the assistant and deputy managing directors, in addition to the MAS Board of Directors, to be appointed as acting Managing Director by the Minister. Such appointments will require the President’s concurrence. This amendment will enhance MAS’ operational efficiency and flexibility as MAS' senior management already assists the Managing Director in day-to-day running of the MAS.

Approval for investment in new securities and investments

The other amendment is to streamline the decision-making process for the investment of MAS' funds. Presently, the MAS Board makes the broad investment policy and other key investment decisions for the MAS. However, MAS is still currently required to seek the President's approval for new securities and investments that it may purchase or sell using MAS' funds. The range of new securities and assets is getting wider and more complex; it is very cumbersome for the President to have to approve every recommendation of new security and investment. Over the years, MAS has put in place a governance framework with a set of independent checks with regard to the investment of MAS' funds. The MAS Board is also well positioned to approve these new securities and investments. We therefore propose that the MAS Board be empowered to do so. MAS will continue to provide regular reports to keep the President's Office updated on its overall financial performance. These amendments have been endorsed by the President.

Mr Speaker, Sir, the third set of amendments is to revise the scope of MAS' powers to address emerging issues.

Powers to enable MAS to issue regulations on anti-money laundering and countering financing of terrorism (AML/CFT) matters

Singapore is fully committed in our efforts to keep our financial system clean and well-regulated. Indeed, our success as a financial centre has been built on a consistent track record of integrity and the rigorous implementation and enforcement of international standards. To better meet our international obligations and keep pace with evolving international standards on anti-money laundering and countering financing of terrorism, we propose to include a new section 27B in the MAS Act. The new section will consolidate requirements currently imposed under various Acts and enable MAS to issue regulations or directions to counter money-laundering and terrorism financing, thereby achieving a more responsive regulatory framework.

Powers to approve a dispute resolution scheme

A key aspect of consumer empowerment is to provide consumers with recourse to an affordable, accessible and independent dispute resolution mechanism. It is therefore important for MAS to have the authority to approve schemes for the resolution of disputes arising from the provision of financial services in Singapore. The proposed new powers will also enable MAS to require a financial institution to be a member of an approved dispute resolution scheme and to comply with the prescribed terms of that membership.

General power of composition

Lastly, in view of the increased provisions in the MAS Act that may attract criminal penalties upon contravention, we propose to introduce a general composition provision to enable MAS to prescribe and compound penalties on offences that it considers appropriate.

Mr Speaker, Sir, the environment that MAS operates in today is increasing in complexity, requiring greater flexibility from the MAS. The proposed amendments to the MAS Act will enable MAS to carry out its functions more effectively and to meet the operational and policy challenges ahead.

Sir, I beg to move.

Question put, and agreed to.

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

The House immediately resolved itself into a Committee on the Bill. - [Mr Lim Hng Kiang].

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

Order for Second Reading read.

3.10 pm

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

This Bill will amend the Economic Expansion Incentives (Relief from Income Tax) Act (EEI Act). It will give legislative effect to allow the Investment Allowance incentive (IA incentive) to also be extended to the aircraft rotables used by the aerospace maintenance, repair and overhaul industry. Investment Allowance Incentive

Sir, the IA incentive is a tax incentive to encourage investment in high technology equipment for greater productivity and to upgrade the manufacturing industries in Singapore. The incentive allows a company to deduct an approved percentage of its qualifying fixed capital expenditure from its taxable income. This is on top of the capital allowance enjoyed by the company, if it is already allowed under the Income Tax Act.

Currently, the IA incentive can only be applied to the fixed capital expenditure on buildings, the acquisition of know-how or patent rights and productive equipment to be used in Singapore. The rationale is to ensure that Singapore directly benefits from the projects which enjoy the IA. Hitherto, the only exception where the incentive may be given in respect of fixed capital expenditure items that are used outside Singapore, is in the operation of space satellites, where a special concession has been made to encourage companies to launch and operate satellites here.

We propose this legislative amendment to allow the IA incentive to be extended to the aircraft rotables used by the aerospace maintenance, repair and overhaul industry here. There has been a trend in recent years towards companies in this industry managing and providing spares like aircraft engines, avionics and landing gears for airlines when in the past the airlines themselves would have owned these spares. These spares are known as "aircraft rotables" and would be fitted onto the aircrafts which fly around the world while the actual systems and components are being repaired in Singapore. Airlines are now demanding that aerospace maintenance, repair and overhaul companies provide aircraft rotables while their systems are being repaired, so that they can operate their aircrafts with minimal downtime.

As the aerospace maintenance, repair and overhaul industry is a key industry that we want to grow, it is important that our incentives are attractive to encourage such activities here. This Bill amends sections 66 and 67 of the EEI Act to extend the IA incentive to the aircraft rotables used by the aerospace maintenance, repair and overhaul industry in Singapore.

Consequential amendments

Arising from the insertion of the new sections 43T, 43U, 43V, 43W and 43X and the repeal of section 43L in the Income Tax Act by Income Tax (Amendment) Acts 2005 and 2007, clause 2 of the Bill makes consequential amendments to the definition of "concessionary income" in section 66(1) of the EEI Act.

Mr Speaker, Sir, the proposed change to the EEI Act seeks to enhance Singapore’s value proposition for the aerospace maintenance, repair and overhaul industry, and to strengthen our role as an aerospace hub. The proposed amendment reflects the Government’s commitment to constantly monitor the effectiveness of our tax incentives regime, and to keep it relevant and competitive as business models change.

Sir, I beg to move.

Question proposed.

Sir, it is most timely that the provisions of this Act and the Investment Allowances are extended to the maintenance, repair and overhaul (MRO) industry. This will spur the development of our own MRO industry, and contribute to the development of Singapore as a regional aviation hub.

To this end, Sir, I do have a few observations and suggestions to make.

One, the MRO business faces competition from around the region. For example, other countries are also setting up MRO companies to service their own aircraft, especially from their national carriers. Our own local MRO companies can expand their

wings into these overseas markets by setting up joint ventures in these countries. In situations such as these, and where the services are complementary to those here, I ask that the investment allowance also covers the capital expenditure and investment relating to the formation of these foreign MRO joint ventures. This should apply to those MRO companies headquartered in Singapore.

Although the EEIA covers the MRO services and aircraft rotable management, also known as Inventory Technical Management (ITM), I would like to ask if it can also be extended to cover aircraft Fleet Technical Management (FTM) services. The FTM services tend to complement ITM services, and both these ITM and FTM services are normally sought after by start-up airlines which need the technical expertise to start up an airline.

An airline-linked MRO which would have all the technical expertise and experience to run the airline could provide such services, which are high in intellectual content and with high value-add. Sir, such "knowledge-based" services will contribute to making Singapore a one-stop aerospace hub, providing the entire suite of services, from MRO to managing the supply chain of aircraft parts and running the entire technical operations of even new airlines.

To compete profitably and effectively in a global marketplace, a Singapore MRO company would have to establish facilities overseas to store aircraft inventories and spares. We can have the "brains" in Singapore but, for an efficient flow of aircraft spares and inventories, it would be better to set up forward Distribution Centres (DCs) in countries like China, India, Middle East and North America at strategic locations (or air hubs) around the world in support of ITM and FTM services.

Sir, I ask that the IA should be extended to Singapore MRO companies engaged in these global businesses.

Sir, the MRO is a knowledge-based industry, with a high level of value-add and intellectual capital. To quickly build up a base of local MRO domain knowledge, I would like to ask if the Government could provide incentives for our MRO companies to bring in foreign talents who have specialised skills in the MRO, ITM or FTM businesses, like the specialists for passengers-to-freight (PTF) conversion aircraft, aircraft design, aircraft structures (such as aircraft stress engineers), etc, to grow the depth and breadth of our local MRO industry. They can provide the knowledge and skill transfer to help us build up our own pool of local talents.

Finally, Sir, I have also received feedback that the current claim process is very long and tedious with many forms to fill, together with a lot of justifications required. If the MRO industry is seen as strategic to our economic development, we should then look into streamlining the claim process as well.

To this end, Sir, I ask that the relevant Government agencies, such as EDB, CAAS and IE Singapore, work closely with the aerospace industry association or MROs to simplify and streamline the entire claim process.

On this note, I rise in support of the Bill.

Mr Speaker, Sir, with reference to the EEIA and the extension of the investment allowance, I ask if there will be consideration given to the repairs and returns industry, in terms of inclusion into this investment allowance scheme.

Mr Speaker, Sir, I rise in support of the Bill to extend the investment allowance under the EEIA as well. In fact, I support the suggestion to extend this incentive beyond the MROs and to other areas, such as those mentioned by Ms Jessica Tan.

The proposed amendment will be a welcome relief for companies who are prepared to spend large capital expenditure. Tax incentives have always played an important part in Singapore's economic development. While we should continue to use tax incentives to develop new and high-growth sectors, such a scheme should always be regularly reviewed for its relevance and, if need be, we should include a sunset clause. We should also review its attractiveness vis-a-vis countries in the region with similar aspiration. We should also closely monitor whether we achieve the desired outcome. There must be measures there to assess such outcomes.

Singapore's tax rates are already among the most attractive in the world and, come 15th February, it may even go lower. Hence, I would like MTI to also look beyond corporate tax relief as an incentive or to encourage big-ticket item investments and to consider other incentives such as lower cost financing and other measures.

Sir, I support the Bill.

Mr Speaker, Sir, let me thank the Members - Mdm Ho, Ms Jessica Tan and Mr Liang Eng Hwa - for their comments and support for the Bill.

In responding to their comments, allow me to, first, reiterate the primary purpose of this Investment Allowance Incentive. It is to encourage high-technology equipment investments in order to promote greater productivity and to update the manufacturing industry in Singapore in particular. So, it is applied quite selectively and only when the economic agencies, and in particular EDB, assess that there is a significant economic benefit or contribution to Singapore. So, if you take the maintenance, repair and overhaul business for the aerospace industry, for example, it is a big contributor to our economy. The aerospace sector has been one of the fastest growing sectors in Singapore. In 2005, it grew by about 15% to 16% and its value-add to the Singapore economy was about S$2.2 billion, and 90% of that comes from the MRO industry. In terms of job creation as well, it is quite significant - more than 15,000 jobs and these are professional jobs, high-wage jobs typically.

In the case of the MRO, when we seek this amendment to apply the IA to the MRO industry, it is because we want to promote the investment in the stock of replacement rotables, such as the engines which cost several tens of millions of dollars, to drive the MRO operations in Singapore, in other words, the maintenance, repair and overhaul activities in Singapore. So, whilst the engine is brought in and replaced from the aircraft that is flying around the world, the MRO activity occurs in Singapore, giving direct spin-offs for us. The test really in applying this incentive, or for that matter other incentives, is really, first, does the industry bring significant economic benefit to Singapore? Secondly, is this incentive necessary to attract and sustain this kind of industry in Singapore? And if the answer to these two is yes, then to proceed to calibrate a package of incentive measures for particular companies in these sectors. In that regard, the investment allowance is not the only incentive available either, and I want to inform Members, because there is a slew of other measures available at EDB's and other economic agencies' disposal. These include HQ incentives, pioneer status, development and expansion incentives, and so on. But I think the key point here really, at the end of the day, is that EDB and MTI agencies are keenly aware - and this is the point that several of the Members have made - business models are evolving and changing, and our incentive structures must adapt flexibly to these needs. That is really what we are trying to do even through this amendment.

Just to take up the specific questions. Mdm Ho raised the point about incentives for overseas expansion, ie, using this investment allowance for that purpose. As it is framed now, this investment allowance does not allow it to be applied for investments in capital equipment and other investments overseas. However, if it is, in fact, linked back to Singapore through other activities - I think Mdm Ho mentioned the possibility of a HQ and so on - then we do have HQ incentives and other incentives which can be made available to these companies in order to facilitate this regional expansion that they are contemplating.

On the point of fleet technical management, it is a fair point. What I would urge the Member is that any companies in this business who are interested in this area should get into a dialogue with our Economic Development Board, and I think they will find that there is a very responsive set of officers there who are prepared to come back with measures that they think will help them and, if necessary, extending the IA for that purpose.

On this point about incentives to attract foreign talent, for the MRO industry in particular, as it stands now, there is no specific incentive for this talent flow for the particular industry. But what we do know is that, generally, the companies do not necessarily look for incentives to bring in individuals or a group of talent per se, but they are looking for concessions for their entity as a whole. For example, if we can provide them with HQ incentive or some other tax concessions at the top level, then all this cost that they incur as part of their attracting talent and setting up their operations here will be deducted and thereafter whatever taxable income there is would be entitled to further concessions.

So, I think that is a more holistic way of providing these incentives. But, again, I want to assure Mdm Ho that if there is specific change in the system where she feels that with some intervention, we can facilitate greater flow, we would be very happy to engage her in a more detailed dialogue in the matter.

She raised the point about long and tedious claim process. I want to assure Members that EDB is now in the process of streamlining its processes once again, and this is an on-going process. But I also want to place one caveat on record. When we dispense such incentives, we have to bear in mind that what we are giving away are public resources, in other words "tax revenue". When we do this, we need to make sure that it is being allocated through a valid legitimate claim, and for that we need appropriate diligence done by the Government agencies. So, we cannot do away with this. In our desire to streamline and be business-friendly, we need to strike a balance between that and our desire to be also accountable to public resources.

Ms Jessica Tan raised a point about the repairs and maintenance industry. I think the point I made earlier would apply here as well, that is, if the activity is anchored primarily in Singapore, and the investment in parts is in order to facilitate that activity in Singapore, then I think it would technically be qualified because there is a provision in the Act that allows for specialised engineering and technical services. However, it still has to meet the test of significant economic contribution and so on, which I have outlined earlier. Just to reiterate the point, it is something we can look at if, in fact, there is sufficient economic justification.

Mr Liang made several points. The point about regular review and the sunset clause, I think both of these we agree fully. In fact, this is part of the regular review process and the sunset clause has been built in even for this particular amendment, the logic being that we need to revisit these incentives from time to time, either to enhance or maybe even to remove, if it is no longer necessary. The agencies are regularly involved in monitoring and comparing the regime we have in Singapore, fiscal and other incentives vis-a-vis our competitors.

I would like to assure Members that MTI agencies are quite seized with the whole notion of evolving business models and ensuring that Singapore continues to maintain its position as an attractive place to do business and to be a business hub for the region. This amendment is part of our ongoing efforts to maintain that pre-eminent position.

Question put, and agreed to.

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

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

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

Order for Second Reading read.

3.30 pm

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

Our current legislative framework regulates western medicines and, to some extent, traditional Chinese medicines, but it does not cover the other health products, such as medical devices, leaving them largely unregulated. Meanwhile, as medical science continues to advance, new varieties of health products are being added to the market, both in diversity and complexity. These new products are no longer limited to external applications but include devices to be implanted in the human body, often for long term or even for life. Examples include cardiac pacemakers and coronary stents. Rapid developments in biotechnology have also produced a new category of health products called biologicals, such as cultured chondrocytes for repairing joint cartilage injuries.

There is a need to regulate some of these new products to protect public safety. First, we need to prohibit such products from containing harmful substances, at the very least. Second, we need to evaluate the more complicated health products for their quality and effectiveness. Third, we need an effective post-marketing surveillance programme to detect any problems early. But we need to regulate them in a practical manner given the wide diversity and different risk profile.

Review of legislation

One way is to extend the existing legislation on medicines to cover the other health products as and when we decide that they should be regulated. But we do not find this option satisfactory as the existing medicines laws were crafted with orthodox pharmaceutical-type medicines in mind, and their provisions are not entirely suitable for the regulation of other types of health products. For example, we think that we should regulate medical devices or biotechnology products differently from the way we regulate medicines.

Another way is to introduce separate legislation for the different health products, say, one for medicines, one for medical devices, another one for biologicals, etc. However, this is also unsatisfactory as some health products are combination products, eg, a drug-coated stent is both a medicine and a medical device. At the same time, my Ministry and the Health Sciences Authority (HSA) would like to consolidate and streamline the existing medicines control laws. This is because having separate, and sometimes overlapping, pieces of legislation makes it cumbersome for the industry to understand and comply with the controls. There are currently four different pieces of legislation on medicines.

Given these considerations, we think the most practical approach is to draw up a single law to cover the regulation of different types of health products but structure it in a way which can allow different categories of products to be regulated to different degree based on their risk profile. The idea to have a single encompassing law for a range of health products is not new. This approach has already been adopted in other countries, including Australia and the US.

Based on this approach, we have drafted the Health Products Bill which is now before this House.

3.35 pm

Regulatory approach

In drafting the Bill, we adopted two principles. First, we will preserve the control elements in our existing medicines laws, which have served us well. They are fundamentally sound and will still be applicable in the future. We have therefore included the provisions for such controls in the Bill.

Second, we will build flexibility into the Bill. This will allow us to apply different levels of control for different types of products, taking into account their different risk profiles. Given the wide spectrum of health products, we cannot use a "one-size-fits-all" regulatory solution. We have instead structured the Bill such that the controls could be tailored according to the special regulatory requirements of each particular group of health product. Main features of Bill

Let me now go through the main features of this Bill. First, in Part I, clause 2(1) defines "health product" and "health-related purpose". We have defined it widely so as to describe the potential scope of this Bill. However, we are not committing to regulate all these health products. Clause 4 makes it clear that, after the Bill is passed, the Health Products Act will only apply to those categories of health products that are specified in the First Schedule.

In other words, not all health products will come under the immediate control of the Health Products Act when it is enacted. In fact, we will start with only medical devices in the First Schedule. Over time, we will, as required, add other categories of health products that need to be regulated under this law into the First Schedule. In the meantime, existing laws will apply to the other categories of health products. Part II of the Bill describes the various parties involved in administering and enforcing the controls under this piece of legislation. The main party is the Health Sciences Authority which is the regulator of health products in Singapore and they will be responsible for its administration and enforcement.

Parts III and IV of the Bill contain clauses that impose controls on the three key activities of manufacture, import and supply. The controls are similar to the existing controls in the medicines laws. But we have updated the penalties where appropriate. Here, I would like to highlight the prohibitions against dealing in adulterated or counterfeit products, in clauses 12(5), 13(5) and 16(1). Anyone doing so would be committing an offence and, if convicted, would be liable to a fine of up to $100,000 or imprisonment for up to three years or both, for each offence. Items like counterfeit medicines, which might not contain the essential life-saving drugs they are supposed to contain, or traditional medicines that have been adulterated with potent drugs, are especially dangerous. They threaten public health, and we have singled them out to make clear that we take such offences seriously.

Part V of the Bill covers controls on the advertising and promotion of health products. Again, these controls are similar to those in the medicines laws. This aspect of regulation is important because accurate and truthful information about a product is essential in helping consumers, as well as healthcare professionals, make sensible and well-informed decisions in choosing which health products to use. We have also included, in clause 23, the power for Health Sciences Authority to direct an advertiser to publish a "corrective advertisement" if he is found to have published a misleading or offending advertisement.

Parts VI and VII of the Bill contain provisions that describe the general steps in the licensing and registration processes. They are also similar to the provisions in the medicines laws. Under clause 34, there will be a "Register of Health Products" for all categories of products that have to be registered. This Register, which will be made available to the public, can then be used by consumers to check whether a particular product has been registered, as well as find out certain basic information about the product, for example, the declared ingredients or the product manufacturer.

Part VIII of the Bill specifies the key duties and obligations of parties who deal in health products: manufacturers, importers, suppliers and registrants. Here, I would like to highlight the important role expected of the industry. Companies and dealers should not only introduce safe, effective and good quality products into the market, but they also have the continuing responsibility to ensure that the products they have introduced into the market remain safe, effective and of good quality. For these reasons, there are provisions, such as clause 40, which require dealers to maintain records of the products they deal with, and clause 42, which makes it mandatory for dealers to inform HSA of any information they receive about adverse effects or defects concerning their products.

Part IX of the Bill allows HSA to impose controls, by way of subsidiary legislation, on specified raw materials, or "active ingredients", used in the manufacture of health products. Parts X, XI, XII and XIII of the Bill contain clauses relating to various administrative aspects, such as enforcement and legal procedures. For example, clause 49 describes the rights of enforcement officers when performing their duties. These are fairly standard and in line with those accorded to officers of other regulatory agencies that also enforce public health and safety laws. Another example is clause 66, relating to the protection of "confidential information", which bars anyone who has obtained commercially-sensitive information in the course of administering or enforcing this legislation from disclosing that information except for an official purpose, or else with the consent of the 'owner' of the information. Clause 72 of the Bill allows HSA, with the approval of the Minister for Health, to make subsidiary legislation for the purposes of the Health Products Act. These are needed to flesh out the technical matters and details relating to various aspects of the regulatory framework. The Second Schedule gives an indication of some of those aspects. The intent is for the different categories of products to each have their respective sets of subsidiary legislation catering to their specific regulatory requirements, appropriate to the risks and benefits of each category.

We have also included, under Part XIV of the Bill, clauses that will allow the Ministry of National Development and the Agri-Food and Veterinary Authority (AVA) to use the controls in this Bill and to make subsidiary legislation to regulate the health products used for veterinary purposes. These have been put in because some products, like human medicines, are sometimes also used by veterinarians on animals, and AVA may need to regulate them. Phased implementation

Let me now touch on implementation. As I said just now, after the Bill is passed, the first category of health products that we plan to bring under the control of the Act will be medical devices. We have therefore included the definition of "medical devices" in the First Schedule. Regulating medical devices

Currently, there are no laws to specially regulate medical devices. We have mostly left it to the industry to self-regulate on a voluntary basis, and also depended on healthcare professionals to act as 'gatekeepers' in deciding which medical devices are suitable to use. The current approach is inadequate. First, we now have more new and advanced medical devices coming into the market. Second, many medical devices are increasingly being designed for use by lay persons, instead of just healthcare professionals, and it is important for the presentation and advertisement of these medical devices to be properly controlled.

Other countries, such as the US, Australia, Japan and the European Union (EU), have had laws for medical devices for some time now. For example, in Australia, medical devices are regulated under their Therapeutic Goods Act, which requires that medical devices be registered with the authorities and must meet certain technical standards. Medical devices cover a wide range of products, from syringes to artificial hearts. Not all medical devices need to be regulated to the same degree of stringency. Internationally, there is a task force called Global Harmonisation Task Force (GHTF) for the regulation of medical devices. We work closely on a bilateral basis with the Task Force members

and also through an Asian Harmonisation Working Party. The GHTF has endorsed a set of principles based on the concept of risk management and recommends that the level of regulation should be proportional to the degree of risk involved. Our proposed regulatory framework for medical devices is based on these GHTF principles, which we find sensible, with just some modifications to suit our local needs. There is no need for us to reinvent the wheel. In particular, we have applied the concept of risk management in designing the proposed regulatory framework for medical devices. For example, for product registration, higher-risk devices, such as those to be implanted in the body or with an active power source attached, will be required to show more evidence and scrutinised more closely, while lower-risk devices like syringes can be registered through a simple notification process. The Health Sciences Authority (HSA) is currently conducting a public consultation on the proposed regulation of medical devices, using a draft Health Products (Medical Devices) Regulations. I hope all stakeholders – industry, healthcare professionals and consumers – will contribute their inputs and let us have their views. This will help us refine the regulatory framework before we formalise it for implementation. Other categories of health products

Meanwhile, pharmaceutical medicines will continue to be regulated under the current medicines laws and not yet brought under the Bill. This is to enable HSA to conduct a thorough review of the existing medicines laws to see if we need to refine or update any provisions. This may take a couple of years. When pharmaceutical medicines are eventually brought under the Bill, we will repeal the Medicines Act, Poisons Act and Sale of Drugs Act.

Chinese Proprietary Medicines (CPM) are currently regulated under the Medicines Act, though using a slightly modified regulatory regime from Western medicines. Similarly, we will see if CPM should be regulated under the new Bill as a separate category of health products or together with other types of traditional and complementary medicines.

Beyond these health products, we will study other categories of health products, such as biologicals and health supplements. We do not intend to rush this but will actively monitor and learn from the experience in other countries.

Cost of compliance and consultation

We are mindful there is a cost to regulation and we should not impose unnecessary cost on businesses. Furthermore, even the most stringent controls will not be able to eliminate all accidents or stop irresponsible behaviour. So, it is important that we find a suitable balance of how much regulation and controls there should be.

To achieve this, we consider it important to consult with the stakeholders, both industry and consumers, to understand their concerns and desires, and we will continue to do so before adding new categories of products into the First Schedule under the future Health Products Act. Furthermore, whenever we need to consider adding a major new category of health product into the First Schedule, we will bring the proposed amendment before this House, to explain why and how we intend to regulate that category of product. Our current legislation has not caught up with advances in new health products and, in particular, medical devices. The Health Products Bill will provide greater clarity for the health products industry with a single law as the reference point. More importantly, the Bill will permit customisation of legal requirements and controls for the different categories of health products through the more flexible rule-making process written into the Bill.

I ask all Members of this House to support this Bill.

Sir, I beg to move.

Question proposed.

3.49 pm

Mdm Deputy Speaker, I rise in support of this Bill.

This Bill is timely and necessary, considering the vast advancements that have been made in medical technology today and the proliferation of so many health products in the market. Consumers, not being trained medically nor very well informed, are often very much reliant on the advice of those who sell health products or use such products during medical procedures. They can become confused and are vulnerable to all kinds of representations and commercial practices that sometimes put profits above public health and safety.

The dangers that an unregulated market presents are indeed real. In 2005, six heart patients in Singapore were affected by the American Food and Drug Administration’s worldwide recall of 50,000 Guidant-made defibrillators because of an electrical fault that caused it to short-circuit. At least one patient here had the pacemaker replaced. And in December last year, a major health products manufacturer, Boston Scientific, had to recall its guide catheters distributed in the United States. The company had discovered a batch that had excess resin, which could dislodge and obstruct a blood vessel, leading to serious complications, such as stroke, heart attack or kidney problems. In the US, the use of medical devices are regulated by the US Federal Food, Drug and Cosmetic Act, which allows the US authorities to order a recall of such defective medical devices if the manufacturers themselves fail to do so. If the two cases were to occur in Singapore and we do not have equivalent legislation, then the Health Sciences Authority may not have the powers to order a recall or to take other action against the manufacturers or distributors of defective or harmful health products. Hence, this Bill is important to vest such powers in the Government to order that the manufacturing, retailing, importing or exporting of such products cease or to order a recall of such defective products.

There are also other compelling reasons why this Bill is important. The Health Products Bill will bring our legislation in line with the legislation already found in many developed countries, such as Canada, Australia and the US. As we aim to position ourselves as the regional if not the global medical hub through Singapore Medicine, and as we try to expand and gain recognition for our life sciences activities, this legislation is important as it will send a strong signal that Singapore will take effective measures to ensure that health products manufactured, sold or used here are of the highest standards. This will give a tremendous boost to our efforts in promoting Singapore Medicine and the Life Sciences hub, and will go a long way in instilling confidence in the integrity of our health care system.

Mdm Deputy Speaker, the approach taken under this Bill is to provide for a comprehensive framework that will cover many products but at the same time ensure sufficient flexibility for the authorities to decide when to extend coverage to specific products and to what extent, depending on the risk profile. I agree with this approach, as it is better to focus on the most important product that has the potential to cause the greatest harm if unregulated, rather than to try and cover all health products at the same time, thus putting a tremendous strain on finite resources but not achieving much. The first product to be regulated will be medical devices. Today there are hundreds of thousands of Singaporeans with some sort of medical devices implanted in them. With rapid improvements in medical science, the number will rise even further. Even a minor flaw in these devices can have disastrous consequences, and it is therefore absolutely essential that this is the first health product that should be regulated.

Mdm Deputy Speaker, small businesses have aired their concerns on the need to guard against over regulation which will add to their costs as they do not have the same resources as bigger players. I think that this is a valid concern, which should be addressed. One way of doing so is to ensure that the licensing and registration requirements are kept simple and the fees are not excessive. In this way, the compliance costs will not be prohibitive for the small businesses. Much as we want to regulate the market to ensure public safety, we also do not want to kill initiative and keep out the small players from entering the market, as this will lead to the market being dominated by a few big players who could dictate the price and other terms which are also not in the long-term interest of the public. There is another reason why the Government should keep the licensing and registration regime simple and inexpensive. This is to ensure that we do not inadvertently push some of these businesses underground, which is worse for the public as dangerous health products can still flood the market. I would like to suggest that the HSA work closely with the medical technology industry to help them understand the requirements of the Act before it comes into effect. The HSA could also consider extending some financial assistance to the small businesses to help them set up the system to comply with the registration and licensing requirements. This is a win-win strategy, as the real objective of the Bill must be to ensure that businesses uphold high standards and with penalties kicking in only if there are violations. Hence, it is better to try and assist businesses to comply in the first place, rather than to rely on penalties alone to keep them in line.

Mdm Deputy Speaker, since 2002, we have had a voluntary registration system in place for medical devices. I would like to ask the Minister to enlighten this House on the number of companies that had registered with the HSA voluntarily. I would also like to ask the Minister if he could provide this House with information on how many companies had been prosecuted for violations of the various legislation, such as the Medicines Act, the Poisons Act and the Sale of Drugs Act, and whether violations are increasing.

Mdm Deputy Speaker, unlike the US Federal Food, Drug and Cosmetic Act, our Act does not cover food products. Increasingly, this can become an area of concern. One example is milk or food products for infants, which can make all kinds of claims that it is good for health. Or for that matter, dietary supplements used for convalescing patients or generally as a replacement in some cases for normal meals. I know the difficulty of trying to cover so many areas but, other than this reason, I would like to ask the Minister what is the rationale for excluding food products that are promoted as health-related products from the ambit of this Bill.

Mdm Deputy Speaker, the Bill provides the Government with great flexibility to cover the other health products when the Ministry deems it appropriate by listing those products in the First Schedule. However, I think that one area, which the Ministry could consider with greater urgency, would be medicines as these contain potent substances that can cause great harm, if not effectively regulated. I know that there exist laws covering medicines, such as the Medicines Act, but the Health Products Bill provides a more comprehensive framework. So, I would like to know when the Ministry of Health intends to bring medicines under the ambit of this Act.

Finally, Mdm Deputy Speaker, clause 61 of the Bill penalises agents and employees of health products companies that commit any violations. Clause 61 is very broad as it covers “an … employee of another person, or being otherwise subject to the supervision or instruction of another person for the purposes of any employment in the course of which the offence was committed, that person shall … be liable.” I am concerned about this clause because the ambit seems to be very wide. It seems to cover even a production operator working in a health products manufacturing company or a clerk doing documentation work, who knows nothing about what he is doing as he is merely a cog in the machine. If indeed this interpretation were correct, then it would impose very onerous obligations on employees, which is way beyond their capacity. I would appreciate it if the Minister could clarify on the scope of this clause.

In conclusion, Mdm Deputy Speaker, this Bill is a forward-looking and progressive piece of legislation that is needed to raise the safety standards of health products manufactured, imported, exported or supplied in Singapore. However, having the law alone to regulate the market is not sufficient. What is equally important is the commitment on the part of those who manufacture, import or sell health products to act responsibly by maintaining the highest safety standards and by placing the public interest above profit making. I hope that businesses dealing with health products will uphold high ethical standards that go beyond the requirements of this Act as the potential for inflicting harm arising from dangerous, defective or tampered health products are really great.

On that note, Mdm Deputy Speaker, I support this Bill.

4.00 pm

Mdm Deputy Speaker, I rise to speak in support of the Health Products Bill that was first read on 22nd January this year. I applaud the system of regulatory control implemented by the Ministry and the Health Sciences Authority (HSA) to ensure that health products, particularly, the medical devices, available in Singapore are of high quality, safety and efficacy.

Many health products are currently unregulated and are left to the consumers' discretion in deciding what is safe and what is best for his or her own health and well-being. Many seemingly "harmless" health products and food supplements can have serious adverse effects on the individual's health if taken inappropriately. It is well-known that certain vitamin supplements when taken in excessive amounts can be toxic to the human body. Garlic, another naturally occurring food product, for example, has blood thinning properties that can result in bleeding problems during surgery.

The Health Products Bill serves to protect public safety and is essential to weed out "snake oil merchants" making outrageous health claims about their products. The proposed new Health Products Bill, in its first initial stage, applies to medical devices only, as depicted in the First Schedule. There are currently no regulations to ensure that such medical devices are reliable, safe and perform to their claims. Regulation is therefore necessary because an increasing number of medical devices are being implanted into the human body and left there for a long time. It is also imperative to note that minor flaws in these intricate devices can have disastrous consequences, resulting in severe morbidity or even mortality. The new Bill also covers products which do not fit the sole description of either medicine or device, such as the drug-eluting stent.

With the present climate of increasing globalisation, where goods and services are expected to move freely with minimal barriers between markets, it is important that we maintain the appropriate levels of regulation, control measures, and vigilance in order to prevent the entrance of unsafe medical devices and other health products into our Singapore market.

In addition, the Health Products Bill also proposes to bring the four existing legislation on medicines, namely, the Medicines Act, the Poisons Act, the Sale of Drugs Act and the Medicines (Advertisement & Sale) Act under one framework, as the general feedback of having the current regulatory controls fragmented and spread out in the different Acts makes them rather confusing and difficult to understand.

The new Health Products Bill provides a detailed list of pre-market administration control measures that entails a series of control measures of manufacturing, importing, supplying and advertising health products in Singapore. It also illustrates the registration, licensing, enforcements and offences related to the dealings of health products. While the Bill already covers a relatively broad area of control measures, I believe it can be fine-tuned further to greater enhance the regulatory system of the health products in Singapore.

Apart from the pre-market administration of the health products and the devices in Singapore, we need also to recognise the importance of the post-market surveillance. Post-market surveillance is a critical form of control measure to ensure that manufacturers, importers, suppliers and other health professionals continue to adhere to the regulations of the Act even after registering or attaining the licence to the health products.

An example of an agency that places relatively high regard to post-market surveillance on medical devices is Australia's Therapeutic Goods and Administration (TGA). To place some flavours on the post-market activities implemented by TGA, its three major components include:

the manufacturer's post-market surveillance system;

post-market monitoring of market compliance by TGA; and

vigilance programmes.

In future reviews of the Act, the Authority may consider advocating greater emphasis on such post-market surveillance of the health products.

With the implementation of the new Health Products Bill, it could be a good time to also relook into some of the current auxiliary plans that help to maintain the high quality, safety and efficacy of the medical products and devices in Singapore.

A good example of such a plan is the Memorandum of Intention of Cooperation (MOI) signed between our HSA and its Australian counterpart, TGA, in May 2002. The MOI was signed to jointly collaborate and cooperate in the regulatory framework for pharmaceuticals, medical devices and complementary health products of the two bodies. The scope of the MOI covers the exchange of information relating to the authenticity, quality, safety and efficacy of complementary medicines, medical devices, human and tissue products, the development of professional competencies and other scientific collaborations.

As we can see, these areas are critical and significant components of the Health Products Bill and such MOIs with our regional or distant neighbours would certainly help to reinforce the effectiveness of the new Health Products Bill.

To increase the efficiency and competencies in medical science technologies of our nation, I suggest that we could look into the possibility of establishing similar MOIs with countries like Japan and the United States where medical science technologies are advancing rapidly. Besides collaboration with agencies from the technologically advancing nations, we may also like to consider working with countries that are facing increasing cases of counterfeit or adulterated health products. Cooperation and exchange of information with regulatory agencies from countries, where most of such products originate, could help to increase the quality, safety and efficacy of their health products, which would in turn reduce the possible entrance of counterfeit products into Singapore.

Mdm Deputy Speaker, I would like to caution that the new Health Products Bill be introduced gradually and judiciously. A 'one-size-fits-all' regulatory regime will not be in the best interest of consumers and it should allow for modular application of the different controls to different types of health products. This will help to minimise over-regulation as well as under-regulation of certain types of health products.

For example, there are currently many different types of medical devices in the market, ranging from the simplest to the most complex; the non-invasive to the invasive. It is not feasible economically nor justifiable in practice to subject all medical devices to the most rigorous conformity assessment procedures available. A graduated system of control is more appropriate. In such a system, the level of control is commensurate with the level of potential hazard inherent in the type of medical device concerned. A medical device classification system is therefore needed in order to channel medical devices into the appropriate degree of regulation and control.

It is also important to note that should the regulation on health products, such as health supplements, be made too stringent in the future, it may require a very high level of scientific substantiation, including human clinical trials to license their use. The imposition of such an inappropriate pharmaceutical model for low-risk natural health products would inevitably raise the cost of natural health products and reduce consumer choice.

Interestingly, while many countries are pushing for some form of regulation of natural health products, the Canadians are moving in the opposite direction. They have debated on the Bill C-420 - one which attempts to move natural health products from under a repressive 'drug style' directorate to a 'food style' directorate for natural health products with a long history of safe use in Canada.

Even FDA allows certain health claims for food high in nutrients proven to support health, eg, FDA allows food high in potassium to claim that 'diets containing foods that are good sources of potassium and low in sodium may reduce the risk of high blood pressure and stroke'. Such permission is given based on sufficient medical evidence and strong authoritative recommendation.

I would, therefore, like to propose to the Ministry that the principle based on the concept of risk management endorsed by the Global Harmonisation Task Force for the regulation of medical devices be applied to other health products as well.

A medical device classification system is needed in order to channel medical devices into the appropriate degree of regulation and control. Health products can also be classified into the following in decreasing order of regulation and control:

pharmaceutical drugs, requiring the most stringent regulation for obvious reasons;

biologicals, such as stem cells and vaccines;

nutriceuticals or functional foods and other active ingredients known to result in possible but uncommon adverse effects when consumed inappropriately; and

dietary supplements, with good track records and have no reported adverse effects reported in the literature.

In conclusion, I wish to reiterate that the Health Products Bill is a proper framework that embodies the critical regulations, control measures and proceedings required to ensure safe and effective entrance and availability of health products in Singapore.

With fine-tuning over time and as the Act expands to include other health products in future gazettes, I am confident that we will be able to strike a good balance between the expeditions of wide availability and access of health products, including new medical device technologies and the assurance of high quality, safety and efficacy of such health products in Singapore.

On that note, I support the Bill.

Thank you, Mdm Deputy Speaker, for allowing me to join in the debate today. I would like to speak in Mandarin first and followed by English.

(In Mandarin): [For vernacular speech, please refer to Appendix A*.] I support the Health Products Bill submitted by the Minister for Health. When we open the newspapers, magazines or other publications, one can hardly miss advertisements or reports on healthcare products and medical devices. In this regard, one can find more of such medicines, tonics and healthcare products in pharmacy stores of shopping centres. Such products include drugs, ointments, medicines for external application, as well as drugs to be taken orally. There is a great variety in the selection, from head to toe, from being applied on the body to implants into the internal organs. As such, consumers are confused. There are certainly plenty of choices and the consumers may not know how to select the right type which would meet the safety standards and whether, after taking or using it, it would cause any harm to the body.

As these products are not subject to control, we do not have a comprehensive system to ensure that these medical and health products can meet the safety standards to safeguard the interest of the consumers. Due to plenty of choices, consumers rely on word of mouth and recommendations from their relatives and friends and even advertisements in order to make decisions about purchasing such products. Among these products, they include health equipment or devices that must be implanted into the internal organs through operational procedures. These devices, for example, the heart stent, valves and pacemaker, have a high degree of risk. Even if they are effective, they will be very risky for the consumers.

In view of the increasing affluence of Singaporeans, increasing purchasing power and ageing population, more and more people are in need of these medical devices. Therefore, the control over these medical devices and medicines has become more and more critical. However, the current Bill only covers the regulation of medical devices.

As pointed out by the Minister earlier, other medicines and supplements are not subject to control. So it is not really that ideal because there are different varieties of health supplements. And there are numerous consumers consuming this kind of health supplements. If we do not control these supplements, we cannot protect the interest of the consumers.

To evaluate and to study all kinds of health supplements available in the market is rather difficult. And to classify them appropriately is also a very difficult process. In this regard, I hope that the Ministry of Health will set a timeline and target and gradually, for those health supplements which are widely consumed, to be subject to control.

I hope that the Ministry of Health will also formulate some advertising guidelines for health supplements so that the promoters, advertising companies and mass media, in promoting these supplements and medicines, can be more careful. Indirectly, it can also reduce the chances of false and misleading advertising. The Ministry of Health can also step up public education to ensure that the consumers select and take these medicines and supplements wisely.

Last but not least, with this three-pronged approach and policy, I do believe that it will bring us closer to our goal of becoming a leading medical hub in the world.

(In English): As part of my research for this speech, I wandered into several health stores in a few shopping centres. There, I found supplements to wake you up, put you to sleep; to slim you down or fatten you up; to make you younger, to help you age slower. There was even one medicine called Mega-man, whose function, I guess, is self-explanatory.

Mdm Deputy Speaker, as Singapore moves towards making itself a medical hub, there will be more health products and medicines brought in for the consumers, for both the foreign and local patients. I therefore support the Government's move in stepping up regulatory framework and powers to ensure that only credible products are made available for public consumption.

However, I understand that the preoccupation of the current Bill is with the regulation of medical devices. It does not cover health supplements. The Minister has said that he will study other categories of health products, such as biologicals and health supplements in future. He also said that "we do not intend to rush this", and do more work before including additional products under the Health Products Act.

Mdm Deputy Speaker, the current laws do not cover products that hold themselves out to be mere supplements which do not make medical claims. Importers can bring in many health products, both Western medicines and Chinese proprietary medicines. As the public has high confidence in the Government, they will tend to believe that all the health products available in medical outlets or through the multi-tiered sales networks are safe to consume, as the Government surely must have tested and approved them. This is a misplaced confidence.

We remember well the severe cost in the Slim 10 case, where at least one woman lost her life and another had to have an organ transplant. There could be other cases too. I appreciate the need to be circumspect and resist over-legislation. Hence, I urge the Government to consider other measures, such as stricter advertising guidelines for health supplements, in ensuring that no superlative, unfounded claims are made. The Government can also step up public education on the dos and don'ts of taking health supplements, through the already very active Health Promotion Board.

I must stress that I urge this not because I want fewer supplements in the market - indeed, going by my trips to the health stores, I would welcome more choices for all. I am also not suggesting to over-regulate the control of health supplements, as this will result in lengthy testing of health products as well as pushing up their costs which will eventually be passed on to the consumers. Madam, what I am looking for is for the Ministry of Health to keep one eyeball on the regulation of health devices now and the other eyeball on health supplements in the near future.

Mdm Deputy Speaker, with that, I support the Bill.

* Cols. 1335-1338.

4.17 pm

Mdm Deputy Speaker, I rise in support of the Health Products Bill. I will speak in English first, followed by Malay.

This Bill will create an omnibus to regulate all health products eventually. The common legislative provision is indeed a welcome move to make it easier for understanding and practice. Starting off with only the medical devices listed in the First Schedule, this legislative Act will eventually become the vehicle regulating all types of health products for human use and consumption. The review of the Medicines Act is going to be carried out for future incorporation into this Bill. I would like to put forth the following two recommendations: firstly, the provision of bio-equivalent data to be provided by generic manufacturers. This is also already a requirement by the US Food and Drug Administration (FDA) and it is time for Singapore to follow suit. Secondly, with respect to identification of medicines, it would be safe as well as useful to have the drug name, composition, batch number or expiry date printed on every segment of the blister package of medication. Currently, this information is shared by several segments at a time, and when patients, especially the elderly, cut these segments into individual pieces, which they very often do, the crucial information is missing and lost.

Pertaining to the regulation of health supplements, I agree with the Health Minister that we should not be rushing into this. A detailed assessment by the Health Services Authority will be required. Currently, health supplements are not regulated, even in the United States. And if we do decide to regulate, it would indeed be a very bold and complex step indeed. However, one area which I would like to see regulation would be over the claims and advertisements of health supplements.

One other consideration would be whether the Ministry of Health, HSA and the Ministry of National Development, in particular the Agri-Food Veterinary Authority, have any plans to regulate food with therapeutic claims, for example, ginseng drinks with claims of lowering blood pressure, under this Health Products Bill.

Medical technology has indeed expanded by leaps and bounds in the last decade and major open surgery is now being overtaken by less invasive laparoscopic procedures with highly sophisticated equipment. With all these developments, we have to remain vigilant. Let me illustrate with an example. Several years ago, a well-known medical device company was redesigning its 60-degree heart valve to open to 70 degrees. This was with the aim of reducing the chance of clog formation and therefore the risk of strokes. The FDA reviewers did not approve the application because it lacked the engineering metal stress analysis and also clinical data. The valve was however approved for marketing and use in Europe. After use in several thousand patients, it was found to break six times as often as the old valve. Another example - a company designed a new stent that was smaller and more flexible than existing ones so that it could be used in convoluted as well as narrow heart arteries. The device was approved for marketing in Europe. When the FDA reviewed the device, engineers discovered a design feature which caused metal fatigue and breakage, and the company had to redesign the stent before the clinical trials could start.

The point I am trying to make here is that post-market surveillance of already marketed devices is a very vital complement to the pre-market review. This is because no system of pre-market review, no matter how thorough, can prevent all potential safety problems once a device is in widespread use. A post-marketing reporting system is essential to monitor adverse events, interactions, falsifications, malfunction, operational and technical defects. In some countries, consultants or safety officers for medical devices are appointed and, thus, I fully support the stipulations in clauses 23 to 28 and the essential principles of safety and performance of medical devices under the Second Schedule.

The penalty provisions in this Bill have also been updated and this is certainly necessary. For example, the maximum court fine for the offence of providing false information in the process of applying for a licence under the Medicines Act is only $5,000. The maximum fine for a corresponding offence in the proposed Health Products Act has been adjusted to $20,000. This will serve to act as a deterrent and will certainly stress the seriousness with which such penalties are being viewed. The prohibitions against dealing with adulterated or counterfeit products in clauses 12(5), 13(5) and 16(1) will help to act as a checking mechanism and to reduce chances of another Slim 10 incident.

Finally, the modular application of different controls to the different types of health products, which is a new feature, will assist with the customisation of the regulatory regime with the appropriate levels of control.

Let me now just say a few words in Malay.

(In Malay): [For vernacular speech, please refer to Appendix A*.] Many developments have been taking place in the medical world which is becoming more advanced. Every year, various medicines and new devices are being introduced. Therefore, it is very important to have this Health Products Bill which incorporates various types of medicine and medical devices so that the safety of consumers is ensured. For example, among the Malay community, the usage of jamu or herbal medicine and traditional medicine is still going on actively. Every year, this industry develops by 25% to 30%. This makes the regulation process very complex. Therefore, from what aspect can control be put in place? Certainly, from the advertising point of view. As consumers, we have to be conscious especially with information which is not so correct or wrongly featured in advertisements as well as promotions. Not everything that they say or promise is true. That is why I strongly support the Bill, especially clause 23, where HSA, which handles issues on health products, may order the person who has advertised unsuitably to withdraw all the information which is not true, wrong and inaccurate. This is known as corrective advertisement. It is also hoped that it will make the industry more responsible.

I am also very relieved to note that under this Bill, there will be a register of health products. This can be referred to by anyone to ensure that the medicine or device can be used and also be informed of the ingredients. Cooperation between Singapore and members of the Asian Harmonisation Working Party can be further enhanced through participation in courses in this industry and also the regulation sector. Singapore’s specialists who attend these courses can gain benefits and study the available systems in countries like America and Europe. Singapore will also study and share the experiences of these countries.

With that, I support this Bill.

* Cols. 1339-1340.

Mdm Deputy Speaker, I thank the Members who have spoken in support of the Bill, and in particular the approach of regulating the different categories of health products in phases.

As Members have noted, this will provide flexibility in customising the regulations to suit the different risk profiles of the products. The key objective is to be able to balance the need to protect the safety of consumers and the need of the industry to remain innovative and financially viable.

Let me touch on the specific issues raised. First, let me discuss medical devices. This will be the first health product category which we intend to regulate under the proposed Act. I thank Members for their support of our proposals to regulate medical devices. Mdm Halimah cautioned against over-regulation, and indeed several other Members mentioned that too - to keep registration requirements simple and fees at an appropriate level. I fully agree. We should not over-regulate, not only medical devices but also for other health product categories that may eventually be added. There is a cost to regulation, whether in terms of licence fees or other costs in compliance with regulatory requirements. We must strike an appropriate balance between consumer protection and business viability. That is why we are taking a risk management approach to regulating health products - doing the minimum for low-risk products and applying stringent regulations only on the high-risk products.

Mdm Halimah wondered if clause 61 of the Bill may be too broad and onerous on employees, like factory operators, as they may be held liable despite not knowing what the production process is all about. Let me assure the House that this is not the intention. Clause 61 holds a principal or an employer responsible under certain circumstances for offences committed by his agent or employee. For example, if an employer has encouraged or allowed his employee to commit the offence, then he will also be held accountable. Whether employees, like factory operators, will be held liable for offences will depend on how culpable they are. The Attorney-General will have to assess each case individually but the Act will be enforced sensibly and judiciously.

Mdm Halimah suggested that HSA work closely with the medical technology industry to help them understand the requirements of the Act before it comes into effect. I agree. HSA has been engaging the medical devices industry in dialogue over the past many months and will continue to do so. Once the current public consultation phase is concluded, HSA will have further dialogue to communicate impending controls to the industry before those controls are implemented. As far as possible, HSA will try to guide those who are not familiar with the controls to understand the regulatory framework and requirements when this is finalised. However, we are not in a position to provide financial assistance to companies to help them comply with regulations as compliance cost is part and parcel of the cost of doing business.

Mdm Halimah asked about HSA's voluntary product registration scheme. This was introduced in 2002. So far, more than 4,000 products have been registered by over 250 companies.

Dr Lam spoke in support of a classification system for medical devices. I agree. The proposed regulatory framework envisages a

risk-based classification system. This is in line with the Global Harmonisation Task Force's regulatory principles and is practised in many other countries. Having a risk-based classification system for medical devices, we allow HSA to better calibrate the extent of controls that need to be imposed, ie, the higher the degree of risks, the tighter the control.

Let me now discuss regulating other categories of health products. Dr Lam suggested using the Global Harmonisation Task Force's regulatory principles for medical devices in regulating other categories of health products. As it stands, the basic principle of risk management is already applied in regulating those health products that come under existing laws and will continue to be applied in future and certainly the experiences learned from regulating medical devices will be reviewed and applied, where appropriate, in shaping the regulatory framework for other categories of products as and when they may be added in future. There are likely to be specific issues in each group of products that will require some degree of customisation, and this is what the future Health Products Act will allow. For example, the regulatory controls currently in place for pharmaceutical-type medicines are not necessarily suitable for regulating other categories of health products which may have different risk profile.

I have noted Dr Lam's suggestion to rank the degree of regulation for the different types of health products. But I prefer not to commit myself or to predetermine their risk classification now and their ranking at this point in time.

Let me now touch on pharmaceuticals. Mdm Halimah asked when we would include medicines under the new Act. We would do so as soon as possible after we have completed the regulation of medical devices. There is less urgency as medicines are already regulated under the current legislation but we certainly want to subsume the existing medicine legislation under the new Act. We will do so not in a mechanical way but take the opportunity to review the existing provisions to see if we should not update the provisions. This would require some time for public consultations. But I hope to be able to do so within two years from now.

In the process, we have taken note of Dr Fatimah's two suggestions on how to refine the registration requirements for medicines. Let me now touch on the subject of health supplements, whether we should regulate health supplements and, if so, how to regulate them, a complex issue. This afternoon, we heard two different views from Mr Sam Tan and Dr Fatimah on whether we should indeed rush to do the regulation of health supplements. We should carefully discuss the pros and cons and, in particular, study the experience in other countries. It is not a straightforward subject. We do note the comments by Dr Fatimah and Mr Sam Tan about the need to look into such products, especially with respect to claims and advertisements, and we will bear that in mind.

As I said earlier, we have not made a decision on this yet and we certainly should not rush to do so. In the meantime, aside from legal controls and prohibitions, Mr Sam Tan's idea of having more consumer education is certainly something we can look into. Increasingly, we should try to educate people to be more savvy and discerning in making choices about the products they use and consume. As a rule, consumers should always be wary of wild claims.

Mdm Halimah noted that this Bill does not cover food products. This is because there are already a set of well established laws for regulating food in Singapore, for example, the Sale of Food Act which is administered by AVA under the Ministry of National Development. The controls on food do include certain restrictions and requirements on the claims made about the food products. HSA does work with AVA, especially where it involves products that fall into the grey area between medicines and food.

Let me now address some broader aspects of a regulatory system starting with post-marketing surveillance. I agree fully with the points made by Dr Fatimah and Dr Lam on the vital need for post-marketing surveillance. There is a continuance in regulation that extends from what is done in the pre-marketing stage to what continues to be done after a product enters the market. No matter how stringent the assessment is before a product is granted approval to be marketed, effective regulation is never complete without a robust post-marketing surveillance system. HSA's health product regulatory programme currently comprises the two key elements of risk assessment before the products enter the market and ongoing management of any evolving risks for as long as the products continue to be marketed and distributed. This approach will continue to be applied for other categories under the Health Products Act.

Mdm Halimah asked about violations under existing medicine controls laws, such as the Poisons Act and Medicines Act. If I recall correctly, there are about 100 such violations every year, a very stable number. Last year, there was a significant increase mainly because of Subutex abuses which we assume will be one-off.

Finally, Dr Lam highlighted HSA's collaboration with the Australian counterpart and how we can learn from the experience there as well as other countries which he mentioned, Japan, US, in particular, how they manage counterfeit medicines and counterfeit products. In addition, HSA has also signed a memorandum of understanding with US Food and Drug Administration and Health Canada. Over the years, it has also played an active part in various international regulatory forums, such as those organised by La Leche and ASEAN. HSA will continue to explore deepening and formalising its professional links with other key regulatory partners overseas. Today, we live in a globalised world and regulatory issues and solutions are no longer self-contained in local jurisdictions, as highlighted by Dr Lam. Strong international involvement is important to ensure that HSA is engaged in strategic networks that enhance our regulatory framework and continues to be an active partner with major regulators around the world. In this respect, the Health Products Bill will help ensure that Singapore's regulatory system for health products not only fulfils the essential aim of safeguarding public health but also continues to meet our future regulatory requirements in line with international best practices.

Mdm Deputy Speaker, I thank once again the Members for their support for this Bill and I invite them to continue to give us their suggestions and feedback on the regulation of medical devices.

Question put, and agreed to.

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

The House immediately resolved itself into a Committee on the Bill. - [Mr Khaw Boon Wan]

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

Order for Second Reading read.

4.40 pm

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

Introduction

This Bill amends the Civil Aviation Authority of Singapore Act (CAAS Act) to allow the Civil Aviation Authority of Singapore (CAAS) to:

raise loans from the Government;

raise loans within or outside Singapore from such sources as the Minister for Transport may direct, by: (i) mortgage, overdraft or other means with or without security; (ii) charge on any property vested or on any other revenue receivable; and (iii) debentures, bonds or any other instrument; and

raise loans through credit facilities for purchase of goods, materials, things or services;

I will now explain the proposed amendment.

Background

Sir, CAAS was set up in 1984 when the then Department of Civil Aviation was restructured from an MOT department into a statutory body. CAAS' powers for discharging its functions as the Civil Aviation Authority of Singapore, as set forth in the CAAS Act, include taking decisions on appropriate modes of capital financing.

Expansion of borrowing powers

Currently, the CAAS Act restricts CAAS to borrow only from the Government, banks and other financial institutions. This does not clearly include the power to borrow by issuing bonds.

The proposed amendment will give CAAS more options to raise funds from the capital market. This will allow CAAS greater flexibility as it will be able to choose the option with the lowest borrowing cost to fund its projects.

The same powers had been granted to the Inland Revenue Authority of Singapore, National University of Singapore, Nanyang Technological University and Public Utilities Board when their Acts were amended in recent years.

Sir, I beg to move.

Question put, and agreed to.

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

The House immediately resolved itself into a Committee on the Bill. - [Mr Raymond Lim Siang Keat].

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

Resolved,

That Parliament do now adjourn to Thursday, 15th February, 2007. - [Mr Mah Bow Tan].

Adjourned accordingly at

Fifteen Minutes to Five o'clock pm

to Thursday, 15th February 2007.

WRITTEN ANSWERS TO QUESTIONS FOR ORAL ANSWER NOT ANSWERED BY 3.00 PM

asked the Deputy Prime Minister and Minister for Home Affairs whether foreign workers are allowed to consume alcoholic beverages in their dormitory compound and, if not, will the Ministry reconsider this policy so as to reduce the number of foreign workers loitering, drinking and creating disturbances in HDB housing estates.

Whilst Police regulates the sale of alcoholic beverages in licensed outlets, generally, it does not regulate the consumption of such beverages. Police had previously discouraged the consumption of alcoholic beverages in foreign worker dormitories to minimise possible law and order problems due to drunkenness, which can be difficult to tackle within the confines of a dormitory. It is for this same reason that some dormitory operators impose their own "house rules" to prohibit or restrict the consumption of alcoholic beverages within their premises.

However, if the law and order concerns can be managed, we are prepared to modify the present policy and allow foreign workers to drink alcoholic beverages in designated areas within their dormitories.

In a pilot test, Police has allowed beer to be sold in four dormitories*, and where the beer is then consumed at designated social areas inside the dormitories. The operators of these dormitories have to comply with conditions in the beer licence and take necessary measures to ensure that law and order within the dormitory is not compromised. They also have to ensure that they can effectively deal with any problem arising from the workers’ drunken behaviour. Thus far, Police has not encountered any serious law and order problems resulting from beer being sold and consumed in these dormitories#.

Police is now conducting a review to assess if the sale and consumption of beer can be extended to other dormitories.

* These dormitories are Acacia Lodge, Starlite Dormitory, Jurong Penjuru Dormitory and Toh Guan Dormitory.

# Incidents involving intoxicated foreign workers at these dormitories generally arise from disputes. There was only one case of voluntarily causing hurt at Starlite Dormitory in October 2006.

asked the Minister for Defence whether, in cases where the accused in court martial proceedings has not engaged a lawyer to represent him in such proceedings, his Ministry will be willing to change the current practice of allowing the accused to be defended by a non-legally trained SAF officer and instead require that the Defending Officer should be a legally trained NSF or NSman.

Legal right to be represented

The SAF Act provides that when an SAF serviceman is charged in a court-martial, he has the right to be defended by:-

His own lawyer; or

An SAF officer ("defending-officer").

If the serviceman decides to appoint an SAF officer, the SAF officer is appointed by the serviceman himself. The serviceman is not restricted, by law or practice, if he wishes to appoint a legally-qualified SAF defending-officer.

Technical and practical restrictions

The only restrictions to his choice, for obvious technical and practical reasons, is that the appointed SAF defending-officer is not a witness in the case, and should be able and willing to represent the serviceman. The SAF officer must also be a regular, NSF or an NSman who is serving his In-Camp Training (ICT). The serviceman can therefore appoint any legally-qualified SAF officer, who is a regular, NSF or NSman on ICT, as his defending-officer in a court-martial.

Representation by choice

In summary, the present system of representation in our SAF court-martial is based on the serviceman's choice. It does not follow that by making it mandatory for a serviceman to be defended by only a legally-trained SAF officer, that it will be a better system. Many of our court-martial cases (about 75%) are straightforward where the facts are clear and undisputed, and the serviceman has elected to plead guilty. This is not different from the civil courts in straightforward cases such as speeding or littering. In such cases, the accused person is often not represented by a legally-trained person especially when he has decided to plead guilty. The accused servicemen do however, often want someone to mitigate for them so that their sentence may be lighter. In practice, these servicemen prefer to appoint their platoon commanders or unit officers to represent them, despite them not being legally-qualified.

Training for non-legally qualified SAF officers

MINDEF and the SAF have been conducting regular workshops to train SAF officers as defending-officers. A list of these trained SAF defending-officers are placed on the SAF intranet. The servicemen's unit manpower officers also assist them in their choice of their SAF defending-officer. Guides, advice, FAQs and sample mitigation-plea forms are also available on the SAF intranet.

asked the Minister for Transport in light of the introduction of season passes on its routes by SBS Transit, will his Ministry seek to make available to commuters island-wide season passes with SMRT’s and TransitLink’s participation.

Our current regulatory approach is not to mandate the operators to come up with such integrated season passes. We have instead adopted an approach of giving operators some leeway to be innovative in coming up with their own customer loyalty schemes, such as SBST's SeasonPass in this case. Such schemes are a business decision of the public transport operators (PTOs), based on their assessment of market requirements. Commuters have indicated that they would like to see an "all-in-one pass" which covers the entire rail and bus system and the PTOs would need to take into account such feedback.

asked the Minister for Health (a) whether his Ministry will subsidise the cost of biologics treatment for psoriasis and psoriatic arthritis patients or, alternatively, allow such patients to pay for their treatment out of their CPF; and (b) whether the Health Promotion Board will take steps to increase public awareness of this illness.

There are about 40,000 psoriasis patients in Singapore. Out of this number, about 80 patients or 0.2%, may benefit from biologics treatment. For the vast majority of patients, external treatment of the affected area will be sufficient.

Biologics treatment is expensive. Moreover, it is not a cure. The use of biologics for treatment of psoriasis and psoriatic arthritis is still new; their efficacy and effectiveness will take time to be established. As Medisave is largely meant for inpatient use during old age, we should not rush to extend the use of Medisave for such unestablished treatments.

We certainly should help to raise public awareness of psoriasis. The Health Promotion Board carries public information on psoriasis on its website. The National Skin Centre offers much more detailed information through print and electronic media. Together with the Psoriasis Association of Singapore (PAS), the National Skin Centre conducts regular public forums on this illness. In addition, PAS runs a patient support group which serves as a useful platform for discussion and sharing of issues related to psoriasis.

asked the Minister for Health what is the average waiting time for appointments at specialised heart and renal clinics of restructured hospitals for polyclinic referrals.

The waiting time for new appointments at restructured hospitals for polyclinic referrals will depend on several factors, including the medical condition of the patient and the hospital to which the patient is referred.

For emergency cases, there is no waiting time as the polyclinics would refer the patients to the nearest Hospital Emergency Department. Non-emergency patients who are assessed to require early attention would be fast-tracked to be seen within, on average, one to two weeks at Hospital Specialist Clinics. For other non-urgent cases, waiting time varies with hospitals.

For non-urgent referrals to the cardiac units, the median waiting time in 2006 was 36 days, ranging from 17 days in Changi General Hospital to 89 days in Alexandra Hospital.

For non-urgent referrals to the renal units, the median waiting time in 2006 was 91 days, ranging from 63 days in Singapore General Hospital to 205 days in Tan Tock Seng Hospital. Although these are non-urgent cases, the waiting is too long. We have got the SGH to streamline its operation as it has the largest renal unit and sees the bulk of renal patients. For the last quarter of 2006, they have brought the median waiting time down to 23 days.

asked the Minister for Manpower what measures has the Ministry taken to ensure compliance by employers who do not pay CPF to their contract workers and to enhance these workers' social safety net.

Under the CPF Act, all employers must contribute towards the employee’s CPF if the latter is paid more than $50 a month, and this includes contract workers or those who are hired on an adhoc basis. For formal employees the default rate* by employers is very low - it has fallen from 0.72% in 2004 to 0.56% in 2006.

For contract workers, monitoring of CPF payments is more difficult, especially if the contract workers themselves collude with the employers to avoid paying their employee CPF. CPF Board regularly audits employers’ CPF payments and wage records, especially if they belong to high-default industries such as cleaning contractors and security agencies. Defaulting employers have to pay a penalty interest on late contributions. Employers convicted of non-payment of arrears will have to pay a court fine in addition to the arrears and interest.

These measures have been effective in helping CPF members recover contributions owed to them. In 2006, 97% of the dollar amounts owing were paid up within 3 months of recovery actions being initiated, and 99% within 12 months of recovery actions. The remaining 1% was filed with liquidators or the Official Assignee where the Board would press on with its claims.

MOM also regularly engages employers through briefings and dialogue sessions and through its publications educates employers about their obligation to pay CPF promptly, and workers on their rights regarding CPF contributions.

Finally, CPF Board encourages employees to check their CPF contributions regularly by making available tools such as SMS, the CPF Board website, as well as on AXS machines. If the CPF contributions have not been paid correctly, they should inform the Board.

* The default rate refers to the percentage of active employers who default on CPF payments for two consecutive months.

asked the Minister for National Development whether the Government levy for resale HDB flats will be waived if the flat is sold below the price purchased from HDB.

Eligible first-timer families can enjoy a public housing subsidy by buying a new HDB flat sold by HDB at a subsidised price, or buying a resale HDB flat or a Design Build and Sell Scheme (DBSS) flat with a CPF Housing Grant.

While those who have previously enjoyed a public housing subsidy are allowed to purchase another subsidised new flat from HDB, the resale levy is imposed to reduce the subsidy on the second flat. This is to ensure a fairer allocation of public housing subsidies, so that more help can be targeted at new families who need to buy their first flat to set up home. By doing so, HDB avoids giving the same household multiple subsidies of the same high quantum.

Therefore, the objective of the resale levy is to reduce the subsidy of the second flat bought from HDB. It is not a capital gains tax and it does not matter whether the first flat was sold at a profit or loss.

However, flat owners do not need to pay the resale levy if they are not buying a second subsidised flat from HDB. They can keep the full proceeds from the sale of their first subsidised flat, if they buy a resale HDB flat from the open market.

asked the Minister for National Development (a) why is the take-up rate for the reverse mortgage scheme offered to HDB flat owners extremely low; and (b) whether it will be necessary to review the criteria for eligibility of the scheme.

Reverse mortgage is one of the options available to elderly HDB flat owners who wish to monetise their HDB flats. It is an option which is offered by financial institutions, with the approval of HDB. To date, NTUC Income is the only financial institution offering a reverse mortgage scheme for HDB flat owners.

Dr Fatimah is right in that the take-up rate for reverse mortgage scheme has been low. One of the reasons could be unfamiliarity with the scheme, which was introduced only recently in 2006. Another reason could be a desire among elderly lessees to bequeath their flat to their children. This was revealed by a survey conducted by HDB. Therefore, I believe that time is needed before reverse mortgage is better understood and accepted among the elderly.

Dr Fatimah has asked whether the eligibility criteria of the scheme should be changed. The main criteria stipulated by HDB are one, the minimum age of 62 for the youngest lessee and two, the loan tenure should cover the youngest lessee up to age 90. These are put in place to minimise the risk of elderly lessees losing their homes as a result of outliving the loan term.

HDB will explore with relevant organizations and agencies to further improve awareness of reverse mortgage and other monetisation options among elderly Singaporeans. Such options include selling the flat to stay with their family, downgrading to a smaller flat including a Studio Apartment, or subletting either the entire flat or individual room(s). Ultimately, our objective is to put in place a wide range of housing options for the elderly to support a comfortable and meaningful retirement. Each elderly household can then decide how best to unlock the value in their flat, based on their respective needs and preferences.

asked the Minister for Transport whether the proposed North-South Expressway will be constructed and, if so, when will the construction commence.

The Concept Plan 2001 established the need for a North-South Expressway (NSE) to support the anticipated increase in traffic along the major north-south corridors in the long term, given the Urban Redevelopment Authority’s (URA) plan to increase residential developments in the north and north east of the island and employment in the city area.

Currently, no implementation timeframe has been established for NSE. The Kallang-Paya Lebar Expressway (KPE), which will be completed by the end of 2008, should relieve the current pressures on the Central Expressway (CTE) and Upper Serangoon Road. But as this is a dynamic situation, we will continue to assess the development growth and traffic conditions of the northern sector to ensure the timely implementation of the NSE.

asked the Minister for Foreign Affairs (a) whether he will give an update on the progress made in adopting an ASEAN Charter; (b) what will this Charter achieve; and (c) will the adoption of this Charter mark a change in ASEAN's principles of consensus and non-interference.

Update on the progress made in adopting an ASEAN Charter

Last year, ASEAN Leaders tasked an Eminent Persons Group or EPG to recommend bold and visionary ideas of an ASEAN Charter. The Charter seeks to reposition ASEAN in the new strategic environment. As Members may know, DPM S Jayakumar was Singapore's representative to the EPG. This group of very senior statesmen, including former President Ramos, DPM Tun Musa Hitam and Foreign Minister Ali Alatas, produced an excellent report. The ideas are bold yet practical. At the recent Cebu Summit, the Leaders gave their strong endorsement to the EPG report and have instructed a High Level Task Force to draft the Charter in time for ASEAN's 40th Anniversary Summit to be held in Singapore in November. The Charter can be expected to enter into force upon deposit of ratifications by all member states. Our representative on the High Level Task Force is Ambassador-at-Large Professor Tommy Koh. In fact, they have just had their first meeting in Jakarta.

What will the Charter achieve

The Charter seeks to achieve two purposes. First, it seeks to transform ASEAN into a more effective organisation. It is clear that if ASEAN is to achieve its vision of an ASEAN Community, it cannot go on doing the same. It must implement the many agreements and declarations that its Leaders sign. This means that decisions taken must be treated seriously, ways must be found to enforce them and non-compliance must be frowned upon. As ASEAN matures as a regional organisation, it is only natural that it takes the next step of developing into a more rules-based organisation.

Second, it seeks to give impetus to ASEAN's community building efforts. Over the years, ASEAN cooperation has expanded into many fields. Today, all levels of ASEAN officials meet in many settings and across different sectors. As regional integration efforts pick up, we can expect the demands on ASEAN to increase. Indeed, at the last Cebu Summit, the Leaders have brought forward the timetable for the realisation of the ASEAN Community from 2020 to 2015. The EPG have therefore recommended that ASEAN's organisational structure be enhanced to support regional integration efforts, including strengthening the role of the ASEAN Secretariat and Secretary General, getting Leaders to meet more often, better coordination across member states, and efforts to mobilise resources to help narrow the developmental gap.

Will the adoption of the Charter mark a change in ASEAN's principles of consensus and non-interference

The principles of consensus and non-interference have served ASEAN well over the past four decades. They have made it possible for ASEAN countries to develop a sense of trust and understanding and pave the way for ASEAN cooperation as we know it today.

At the same time, ASEAN recognises that times are changing; to the region is becoming more interdependent and face transboundary challenges such as the 1997 Asian financial crises, SARS, tsunami, avian influenza and haze that no one country can handle on its own. This will require ASEAN to calibrate or adjust its traditional policy of non-interference with member states collaborating more closely to tackle some of these new challenges.

ASEAN must also respond more quickly to the demands of a dynamic and changing environment. While consensus as a principle should be upheld for particularly sensitive areas like security, defence and foreign policy, there are many functional areas where consensus would slow us down. The EPG have therefore recommended that for non-sensitive areas like economic cooperation, we can apply principles such as 10-X and 2+X, in which members that are willing and ready can proceed with implementing certain projects, while others have a more flexible timeline to come on board. Such flexibility and pragmatism will allow the grouping to move forward without being held back by one member or a minority.

asked the Minister for Manpower (a) how has the extension of the legal retirement age affected older workers in the last few years; and (b) whether there has been any company or employer who has violated the Retirement Age Act.

The legislation of the minimum retirement age at 60 in 1993 and the extension in 1999 to 62 have contributed to an increase in the employment rate of older workers in Singapore. The employment rate of older workers 55-59 years rose from 46.2% in 1993 to 51.8% in 1999, and further to 60.6% in 2006, while that for the group 60-64 years improved from 33.2% in 1999 to 41.9% in 2006.

MOM has set up a Tripartite Committee on Employability of Older Workers to forge a tripartite consensus on ways to enhance the employability of older workers. The Committee has released its interim report with a range of recommendations to raise the effective retirement age of older workers, and will issue its final report later this year.

Compliance with the Retirement Age Act has been good. Since its implementation, there have been only 36 cases reported to MOM, and they have been isolated occurrences. In all these cases, the employers have rectified their employment practices upon intervention by MOM. Effective tripartite promotion and cooperation have ensured that MOM has not found it necessary to charge any employer for violation of the Retirement Age Act.

asked the Minister for National Development in light of the expanding local economy and a need for more foreign workers, how does his Ministry intend to meet the housing and recreational needs of foreign workers in Singapore.

The Member is right that demand for foreign workers, to augment the local workforce, is rising in tandem with our continuing economic growth, particularly in sectors such as construction. Housing our foreign workers in proper accommodation is a multi-faceted issue which requires the efforts of many different ministries and agencies. Hence, a Foreign Worker Housing Coordinating Committee, co-chaired by MOM and MND, and involving the various agencies, had been set up since early 2006 to look into this issue.

There are currently a variety of housing options available to foreign workers. For example, workers from factories, services sector, and marine sector may stay in residential areas or within approved dormitories set up within factory premises or on independent sites. Foreign construction workers may stay in quarters within the construction site, or in workers' dormitories.

To meet the housing needs of more foreign workers, we are in the process of releasing more sites for operators to build workers' dormitories, especially for foreign construction workers. Guidelines have also been reviewed to allow off-site workers to reside in workers’ dormitories located within an industrial or warehouse development.

In releasing new sites for workers’ dormitories, the Building and Construction Authority (BCA) will require successful tenderers to provide a range of amenities within the dormitory sites. Apart from adequate living space for the workers, the dormitories will be required to have mini-marts, barber, remittance services etc. These amenities will make the dormitories attractive and self-contained, insofar as daily living and recreational needs are concerned.

However, given that Singapore is becoming more built up, it will be a challenge to find suitable sites for workers’ dormitories. Increasingly therefore, residents may find more foreign workers living in their midst, or dormitory sites located near to their premises.

Notwithstanding the facilities provided within the dormitories, it is inevitable that foreign workers will go outside their dormitories and make use of common facilities within the area. We hope that Singaporeans will be more understanding and accommodating in this aspect. Foreign workers are here to contribute to our economic growth. Besides working here, they may be living near us or eating next to us in the hawker centres. We should accept their presence in our midst. Employers and dormitory operators must also play a part in educating the foreign workers on our culture and way of life. Better provision of facilities and greater controls, as well as greater mutual understanding, will go a long way to addressing the housing and recreational needs of foreign workers in Singapore.

asked the Minister for Manpower whether he will review and amend the Employment Act to better safeguard the maternity benefits of pregnant female employees in the event of retrenchment or unfair dismissal.

Under the Employment Act, it is already an offence to dismiss or terminate the employment of an employee during her maternity leave. Dismissal on the grounds of pregnancy is also considered unfair dismissal under the Employment Act.

Pregnant employees are aware of these rights under the Employment Act as evidenced by the complaints received by MOM. Of the 71 claims in 2006 from pregnant employees relating to the termination of employment, 36 have been concluded, 20 were withdrawn by the employee, and the rest are pending investigation.

Out of the 36 concluded cases, 33 of them were successfully settled with payment received from the employers. These included six cases involving pregnant employees who were retrenched. For another three cases, MOM was satisfied that the cause of dismissal was not on account of the employee's pregnancy, but on grounds of poor performance or misconduct. In other words, for 90% of the cases where the employee has pursued her claim, MOM investigations have substantiated the complaint and the employee has obtained redress.

asked the Deputy Prime Minister and Minister for Home Affairs how many Restraining Orders have been made against religious leaders or other persons under the Maintenance of Religious Harmony Act since its enactment.

No Restraining Order has been issued since the Maintenance of Religious Harmony Act was enacted in 1990. We came close to invoking the Act on several occasions to stop local religious leaders from mixing religion with politics and putting down other faiths. These religious leaders stopped their activities after they were warned by ISD.

asked the Minister for National Development what are the strategies and efforts of the Ministry to prepare the workforce to make the transition to alternative building construction methods in view of the constraints in the supply of sand for construction works.

Indonesia announced the ban on the export of land sand on 23rd January 2007. While there are other regional sources from which we can procure land sand, it is more sustainable for the construction industry to switch to alternative construction methods and materials that rely less on the use of concrete and sand. Sustainable construction includes the use of steel, dry walls, glass and metal claddings.

Such sustainable construction practices are not totally new to our local industry. Glass and metal claddings are commonly used for the facades of buildings here. Dry wall systems are gaining popularity in residential projects. In recent years, we have seen an increasing number of buildings being constructed with steel structures, such as the National Library, Supreme Court, Changi Terminal 3, One Raffles Quay, Fusionopolis.

Nevertheless, given that concrete-based construction has been the predominant form of construction, BCA will work with the industry to ensure that the construction workforce has the necessary skill sets in sustainable construction, in particular, structural steel works. The architects and structural engineers are already trained in steel design and construction as part of their professional training, and could attend re-orientation courses, if necessary. BCA will also conduct training courses to equip the existing pool of

technical and supervisory staff as well as workers with the relevant skill sets in steel construction. In addition, BCA will certify and facilitate the entry of new foreign workers skilled in steel construction.

asked the Minister for Trade and Industry, for each year from 2001 to 2005, what were the median and mean monthly household per capita income for (i) all resident households in Singapore; and (ii) each quintile of resident households broken down by income.

The mean and median monthly income from work per household member among resident households up to 2006 is shown in Table 1 below. Income from other sources is only available once in five years from the Household Expenditure Survey. Income data for employed households is used, instead of for all households, in order to isolate the effects caused by changes in the proportion of retiree households.

Member Among Employed Households

Mean

1,700

1,660

1,690

1,750

1,820

1,950

Median

1,190

1,160

1,170

1,200

1,250

1,310

The mean and median income from work per household member among employed households by quintile is shown in Tables 2 and 3. The lowest quintile group showed a slight drop in the mean income between 2001 and 2003 but recovered from 2004.

Employed Households by Quintile

Dollar

Quintiles

1st - 20th

21st - 40th

41st - 60th

1,200

1,170

1,180

1,210

1,260

1,320

61st - 80th

1,850

1,800

1,830

1,860

1,950

2,050

81st - 100th

4,310

4,210

4,300

4,490

4,720

5,090

Dollar

Quintiles

1st - 20th

21st - 40th

41st - 60th

1,190

1,160

1,170

1,200

1,250

1,310

61st - 80th

1,810

1,770

1,800

1,830

1,920

2,010

81st - 100th

3,440

3,360

3,380

3,500

3,660

3,940

asked the Minister for Health whether kidney dialysis centres for retired civil servants can be set up at regional hospitals (Changi General Hospital (East), National University Hospital (West), Tan Tock Seng (Central)) to meet the needs of retired civil servants living in these respective areas.

Routine kidney dialysis is best carried out at neighbourhood kidney dialysis centres. This reduces running cost and is also more convenient for the patients. It is not necessary for such treatment to be carried out within acute hospitals. (Some hospitals do provide kidney dialysis but for patients with serious or complex conditions.)

There are many such neighbourhood kidney dialysis centres in Singapore, run by public, private and charity sectors.