Hansard, 2007-04-09

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) Mr Gautam Banerjee 12 Mar 18 Mar 24 Apr 06 May Mr S Iswaran 12 Mar 13 Mar 15 Mar 17 Mar Mr Lim Biow Chuan 13 Mar 16 Mar Mr Ang Mong Seng 14 Mar 21 Mar 03 Apr 10 Apr Mr Hawazi Daipi 14 Mar 17 Mar 06 Apr 08 Apr 16 Apr 23 Apr Mr Alvin Yeo 16 Mar 18 Mar Mr Low Thia Khiang 16 Mar 19 Mar Mr Seng Han Thong 16 Mar 20 Mar 30 Mar 02 Apr Mdm Cynthia Phua 18 Mar 21 Mar 24 Mar 28 Mar Mr Cedric Foo Chee Keng 21 Mar 21 Mar 11 Apr 11 Apr 12 Apr 12 Apr Mr Chan Soo Sen 22 Mar 24 Mar 05 Apr 16 Apr Mr Liang Eng Hwa 22 Mar 27 Mar Mr Teo Chee Hean 23 Mar 24 Mar 15 Apr 18 Apr Ms Grace Fu Hai Yien 26 Mar 28 Mar 06 Apr 08 Apr Column: 7Mrs Josephine Teo 26 Mar 30 Mar Dr Lily Neo 26 Mar 29 Mar RAdm (NS) Lui Tuck Yew 26 Mar 28 Mar Mr Masagos Zulkifli B M M 26 Mar 29 Mar 03 Apr 13 Apr 16 Apr 19 Apr Dr Ong Chit Chung 26 Mar 26 Mar 11 Apr 12 Apr Dr Ahmad Mohd Magad 27 Mar 01 Apr 10 Apr 19 Apr Ms Jessica Tan Soon Neo 27 Mar 29 Mar 01 Apr 07 Apr Mr Raymond Lim Siang Keat 27 Mar 01 Apr 10 Apr 11 Apr Mr Zainudin Nordin 28 Mar 30 Mar Dr Vivian Balakrishnan 30 Mar 01 Apr Mr Lim Hng Kiang 01 Apr 02 Apr 20 Apr 21 Apr Mr George Yong-Boon Yeo 02 Apr 04 Apr 08 Apr 08 Apr Dr Ong Seh Hong 02 Apr 08 Apr Mr Sin Boon Ann 02 Apr 05 Apr Mr Tharman Shanmugaratnam 04 Apr 05 Apr 08 Apr 13 Apr Mr Yeo Cheow Tong 04 Apr 20 Apr Assoc. Prof. Koo Tsai Kee 05 Apr 05 Apr 15 Apr 18 Apr Dr Amy Khor Lean Suan 06 Apr 08 Apr Mr Lim Swee Say 06 Apr 08 Apr 16 Apr 17 Apr 20 Apr 22 Apr Mr Goh Chok Tong 09 Apr 16 Apr 22 Apr 26 Apr Mr Wee Siew Kim 10 Apr 19 Apr Mr Lee Yi Shyan 11 Apr 13 Apr Mr Lim Boon Heng 11 Apr 15 Apr Dr Lim Wee Kiak 11 Apr 15 Apr 21 Apr 27 Apr 28 Apr 04 May Dr Teo Ho Pin 11 Apr 17 Apr 28 Apr 05 May Mr Teo Ser Luck 11 Apr 13 Apr Column: 8Mr Heng Chee How 12 Apr 14 Apr 16 Apr 17 Apr Mr Zainul Abidin Rasheed 12 Apr 03 May Miss Penny Low 13 Apr 16 Apr 18 Apr 23 Apr Mdm Halimah Yacob 16 Apr 17 Apr 13 May 18 May 29 May 14 Jun Mr Mah Bow Tan 17 Apr 02 May Dr Lee Boon Yang 18 Apr 21 Apr Dr Ng Eng Hen 18 Apr 03 May Mr Abdullah Tarmugi 21 Apr 27 Apr Ms Lee Bee Wah 21 Apr 27 Apr Mrs Yu-Foo Yee Shoon 26 Apr 04 May

Mrs Josephine Teo

Mr Heng Chee How

ABDULLAH TARMUGI Speaker Parliament of Singapore

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

20th March,2007 (1) Supplementary Supply (FY 2006) Bill 22nd March,2007 (1) Supply Bill ABDULLAH TARMUGI Speaker Parliament of Singapore

[Mr Speaker in the Chair]

1. Er Lee Bee Wah asked the Minister for Foreign Affairs whether his Ministry has received any update on the status of the 13 granite-carrying vessels bound for Singapore which were detained by the Indonesian Navy for allegedly carrying sand and whether Singapore is still freely importing granite from Indonesia.

Mr Speaker, Sir, Indonesia has not banned the export of granite. However, there have been supply disruptions in recent weeks due to the detention of several barges and tugboats carrying granite bound for Singapore since February.

When I met Indonesian Foreign Minister Hassan Wirajuda in Nuremburg last month on 15th March, he told me that an inter-departmental team from Jakarta had visited the Riaus to investigate the detention of the tugboats and barges. Minister Hassan assured me that the Indonesian team's verification process would be transparent. I agreed with him that transparency is important. Transparency in such matters is good for trade and investment and in the national interest of Indonesia.

On 5th March 2007, MFA sought clarification on the detained barges through a Diplomatic Note and subsequently followed up with two reminders on 12th March and 26th March. DEPLU (the Indonesian Foreign Ministry) replied on Thursday, 5th April 2007, last week via a Diplomatic Note giving us the inspection results. According to the Note, 22 tugboats and barges were

detained in February and in March. However, only seven were alleged to have violated the land sand ban by carrying land sand or a mixture of land sand and granite chips. The rest were detained on charges of violating various other Indonesian laws, shipping regulations and customs regulations. DEPLU informed us that these cases will now be taken up through the legal process in Indonesia. We are studying DEPLU's response and will seek further clarification from the Indonesian Government, if necessary.

Sir, may I seek the Minister's comment on the article by Asiamoney magazine entitled "The Singapore Sandstorm" which said that, despite Singapore's extraordinary advances, it is still vulnerable and Singapore being the triple 'A' rated First World State can still be bullied by its big developing neighbours and that Singapore is a little more than a 10-stone weakling, defenceless against having sand kicked in its face. Could the Minister reassure this House on the steps taken by the capable team of civil servants and Ministers to ensure that Singapore, the little red dot, with no natural resources, is not a weakling nor defenceless against having sand kicked in its face?

Mr Speaker, Sir, I think we are used to being called names and described sometimes in comical idiomatic ways. The responses to some of the disruptions we have faced had been discussed in this House and I believe Minister Mah Bow Tan will be talking in greater detail about them in answer to the following question. It is true, Mr Speaker Sir, that we are not a "200-pound Hulk". Maybe we are small, but we are not without capabilities and our gongfu is not bad. If sand is kicked in our face, the person may end up with a mouthful of sand in his own mouth.

Sir, I would like to ask the Minister how long

more have we to wait and is there any other action or alternative that we can take?

In particular, which is the hon. Member referring to - the granite?

About those detained barges.

The process is now in the open. It will be taken through legal channels in Indonesia. Three of the barge owners are Singaporean. If they want our help, we will help them in whatever way we can. It is good that the matter is now transparent. I am sure that they will get their own lawyers. If charges will be pressed, they will defend themselves and the matter should be properly resolved in this way, according to the laws of Indonesia.

Sir, I would like to ask the Minister for Foreign Affairs how he has taken this whole episode of the Indonesian reaction to the sand and granite ban on exports, and obviously it is coming against us. Is it a diplomatic failure on the part of Singapore or on the part of ASEAN in which we are supposed to be good neighbours and we help them along?

Mr Speaker, Sir, this is primarily a bilateral matter. If any country, in effecting a ban on exports, does so in a way which contravenes the WTO or ASEAN's economic agreements, then we can invoke dispute mechanisms within those agreements. But I believe that it is within Indonesia's rights, for environmental reasons, to ban the export of sand, and it has done so for environmental reasons. I know there have been Indonesian legislators and officials who have talked

about various motives for banning the export of sand, but the official reason given to us was for environmental reasons and we have got to take it at face value. As to what we can do in response, well, the key is that we must be diversified and we must have our own strengths. The ban of sand and the disruption of granite supply have caused some disruption to the construction industry, caused some inconvenience to Singaporeans, but I think we are able to cope, and Minister Mah Bow Tan has explained in some detail in this House how we have been able to cope.

But if you look at our bilateral relations with Indonesia on the whole, it is a big account and we are mutually dependent in so many ways. There are specific problems here and there and it is best we manage them as discrete problems rather than linking everything together. So for example, I have informed this House before that on the Extradition Treaty and Defence Cooperation, we are negotiating these in parallel. The negotiations are ongoing and I hope they can be resolved in a reasonably short time. We are helping Indonesia in developing the Special Economic Zone in Batam, Bintan and Karimun; we are helping them on Avian Flu in Tangerang near Jakarta; we are helping with the haze problem in the province of Jambi; and in so many areas we are cooperating. So it is important to set these problems in context.

Ho Geok Choo (West Coast): Sir, I would like to ask the Minister to comment on the recent blast of the granite quarry in Karimum. How will it affect the supply to our construction industry and the measures taken by our Government with regard to other sources of supply? Also, beyond the possibility of sabotage, what long-term plans or strategies would our Government be looking into where sand and granite from Indonesia are concerned?

I do not know much about the explosion at the granite quarry in Karimun apart from what I have read in the newspapers and from some reports which I have received from Jakarta. The Indonesian police is investigating into the matter and it is best that we leave it to them. If the Singapore owner requests our assistance in the Foreign Ministry, then, of course, we will help them. Mr Low Thia Khiang asked earlier, Mr Speaker, Sir, whether, in fact, the problem we are now having with Indonesia reflects a certain diplomatic failure. Well, I think that is for others to judge.

2. Dr Lily Neo asked the Minister for National Development whether his Ministry is importing granite from alternative sources and, if so, when will these arrive.

3. Ms Denise Phua Lay Peng asked the Minister for National Development what are the specific steps the Government is taking to prevent unjustified escalations of overall construction costs by parties who give the high price of sand as the reason for increasing prices.

Minister for National Development: Mr Speaker, with your permission, I would like to answer Question Nos. 2 and 3 together.

Please do so.

Mr Speaker, Sir, Dr Lily Neo asked whether we are importing granite from alternative sources and whether shipments have arrived. The answer is “Yes”. When the supply of granite from Indonesia was disrupted in

late February, we immediately released granite from our stockpile to make up for the supply shortfall.

We have activated various alternative granite supply sources from countries in the region. These measures have helped to minimise the disruption to construction activities. Shipments of granite from the alternative sources have started to arrive in Singapore and the supply is proceeding smoothly. We will continue to work with our granite importers to maintain the flow from these sources. We will also look for more sources to ensure that the supply line is further diversified.

Diversifying supply sources is part of our total approach to enhance resilience for our construction industry. The general approach adopted under this plan is this - keep all our options open, and plan for all contingencies. This is our best defence against the risk of a future supply disruption, whatever the reasons and whenever it happens. So we buy from as many different countries as possible, continue to keep a sizeable stockpile and work with the industry to switch to more sustainable methods of construction. One additional option is to tap on our local granite sources, should the need arise. Thus, it is necessary to carry out some limited quarrying to understand the issues involved in reactivating quarries, such as the preparatory works and time involved, and the mitigating measures to put in place. HDB will look into restarting one of its former quarries in Pulau Ubin.

Ms Denise Phua is concerned about the impact of higher sand and granite cost on overall construction cost and has asked about steps taken to prevent unjustified increases. Let me just explain that construction cost may change because of many factors, not just the prices of construction materials. For example, the increased demand for skilled manpower as a result of higher construction volumes will have an impact

on overall construction cost. Similarly, we do expect the major adjustments that the industry is making, following the disruption in supplies of concreting sand and granite from Indonesia, to cause construction cost to rise. The Government is monitoring the situation closely and will look into specific complaints on cases of unjustifiable increase in prices.

In addition, in response to requests by some contractors who want to produce their own ready-mixed concrete, we are releasing suitable sites for the setting up of new batching plants. Others who are interested to produce concrete are also welcome to bid for these sites.

Meanwhile, as a developer and an owner of projects, the Government will help the contractors by co-sharing up to 75% of the price increases in sand and granite. Public agencies have started to make progress payments. I urge the private sector developers to follow suit. All stakeholders in the construction industry - developers, contractors and concrete suppliers - must work together to cope with this short-term disruption to the industry and to move towards a more sustainable position in the longer term.

Sir, may I ask the Minister of State whether the increasing prices of sand and granite will put a dampener on our presently booming construction industry and what are the steps taken to prevent this effect?

The impact of the price increases in sand and granite, we estimated, would be about 2% of the overall project cost. I think that is not a very significant proportion and definitely in this current state of the market, we believe that it is still in a very good position to benefit from the upswing.

Mr Speaker, Sir, the Minister of State mentioned that we may restart limited granite quarrying in our offshore island of Pulau Ubin. Could the Minister of State confirm that should we restart this granite quarrying, all environmental protection measures will be taken not only

to protect our environment but also to demonstrate to some of our neighbours that granite quarrying can be achieved without damage to the environment, without the outer islands disappearing, and without compromising our maritime boundaries?

Thank you very much, hon. Member, for raising this issue. We are definitely doing with all the mitigating factors considered in totality. Starting from dewatering of the quarry, we will make sure that the marine life in the surrounding area is well taken care of. We will measure the content that is being discharged and we will also manage the discharge rate at which the water is being released into the surrounding area. We are very mindful of the marine life in the neighbourhood. We are also mindful of the safety issue. So, we want to make sure that, for example, in the immediate surrounding area, safety precautions are taken, that we do sound a siren before blasting takes place and that we will cordon off the area with barricades when the blasting takes place. And, of course, dust generated as a result of blasting will also be monitored and managed.

We have chosen the Kekek Quarry in Pulau Ubin because it is far away from the residential area. So, we make sure that the impact on the residents of the island is also minimised. And, most importantly, the transportation leg is closest to the sea, to a barge, and therefore it minimises disruption to the island life as well. Definitely, we want to keep the island as it is as much as possible. It is a place for leisure which we will continue to maintain it to be. Blasting and mining activities will

not take place over the weekends and not at night. On an overall basis, we will also rehabilitate to make sure the quarried area is well taken care of at the end of the process. So, these are all the various mitigating factors that we will consider. And we have also made sure that the plants and the nature life are well protected on the island.

Mr Speaker, Sir, I would like to ask MOS whether the Ministry will adjust the price of sand and granite from HDB's stockpile downwards as there are more and more alternative sources available. Can the Ministry please also update the House on the state of the cost-sharing in private projects due to this sand and granite issue?

Mr Speaker, Sir, we are monitoring the prices. The price of the HDB's stockpile is released at the replacement price. And that is the only sustainable way for us to both replenish stockpile and, at the same time, release it for the use of the construction industry. It is actually benchmarked using our replacement price from purchasing from various sources. As much as the Member has said, if the prices would come down, we would be monitoring it. Also, we would like to say that at this point in time, while we are releasing the stock from our stockpile, the private sector actually has the ability, and they have in fact done so, to import sand and granite on their own. So, if there are alternative sources at better prices, we actually encourage the private sector to do so and import by themselves.

On the Member's second question, it is not something that we would get involved in the private sector, as far as cost-sharing is concerned. Because we understand that they have their commercial arrangements which we are not in a position to dictate or regulate. But the Government has taken steps. For example, the Ministry of Home Affairs (Singapore Prisons Service) has started to

make monthly progress payments for the cost-sharing arrangement that I have mentioned earlier on. So, that has already taken place. We are not waiting to the end of the project. We are already making progress payments to help the contractors to meet the higher cost of sand and granite at this point in time. We hope that the private sector will follow suit, and we encourage all parties to look at the issue in totality and work together as an industry to overcome the problem.

Ms Irene Ng, last question.

Can I ask the Minister of State, rather than hike up the price three times from its original price of $20 per tonne of sand to $60 per tonne, whether we can just bring down the price so that we do not have to think of cost-sharing? In other words, rather than you hike up the price and then you give back in terms of subsidies, why not just bring down the price to the level that we can afford so that construction can go on, and there will be stability in prices in the market and there will be a steady supply of sand that contractors can be assured of?

Mr Speaker, in reply, the prices are not hiked up. It is the actual replacement price that we have to pay. The primary reason is because of transportation cost. The cost compared to importing from Indonesia and a country that is further afield would involve greater transportation needs and therefore the landed cost has actually gone up. So the price at which we are releasing the stockpile is really the cost to the Government. Of course, there is this issue about cost-sharing for existing projects. But for new project, it will be a different matter. The contractor, the developer, and the owner will then be able to discuss cost issues in a different manner because they are not bound by existing contracts. Contractors will price their construction cost at the new cost of

sand and granite. So, it is really not tenable for the Government to subsidise across the board, because there are projects, for example, which will enter into a new phase of awarding contractors and we definitely want these contracts to reflect the replacement cost, which is the current market price of sand and granite.

4. Dr Fatimah Lateef asked the Deputy Prime Minister and Minister for Home Affairs if he will provide an update on the activities of the Religious Rehabilitation Group and what is the progress in the management of the remaining Jemaah Islamiyah detainees.

Sir, the Religious Rehabilitation Group or RRG is a voluntary group formed by some Muslim religious scholars and teachers on their own initiative. They provide religious counselling to terrorist detainees and those under Restriction Orders, as well as their families. The RRG and MUIS also help to counsel other individuals who have fallen for radical and violent ideology.

Religious counselling is part of the overall rehabilitation of detainees. When detained, the detainees are interviewed by ISD for their knowledge of the terrorist network and operations. At the same time, effort is made by the asatizah volunteers in the RRG to try to rehabilitate them, in particular, to show them that the terrorist ideology which they had imbibed is misguided and against what Islam teaches, and to guide them to the correct teachings and interpretations of the religion. As part of rehabilitation, the

detainees also interact regularly with ISD psychologists, case officers and their families, and are given opportunities to improve themselves, for example, through access to a library and pursuit of academic courses.

Rehabilitation takes time, as the detainees have been deeply exposed to JI teachings. It is unrealistic to think that, overnight, they can be convinced that their JI beliefs are wrong, and hence released. That said, several detainees who were less deeply indoctrinated have been released. We will continue to try to rehabilitate the others. But it is worth highlighting that a number are adamantly holding on to their radical and violent beliefs.

Also on their own initiative, RRG members have reached out to the public to explain the misuse and abuse of Islamic concepts by terrorists, so that other Singaporeans will not unwittingly fall for the terrorist propaganda. MUIS and several other Muslim organisations have done likewise. They have conducted many public forums and talks, and also reached out through the media. For the continued security and harmony of Singapore, we should strongly support all these efforts. Terrorist ideologues have been unrelenting in spreading their ideas to win recruits, supporters, and sympathisers. The Government and the Malay/Muslim leaders must actively counter their rhetoric.

5. Mdm Ho Geok Choo asked the Minister for Manpower (a) what are the challenges faced in (i) retraining and helping the aged fraternity to rejoin the workforce; and (ii) encouraging employers to recreate jobs; and (b) what are the measures planned or in place to encourage more employers to embrace job re-creation for older employees.

Mr Speaker, Sir, the challenges to enhancing the employability of older workers are multifaceted. We need to shape employers’ mindsets towards older workers and encourage them to recruit and retain older workers. At the same time, we also need to help our older workers stay competitive by keeping their skills up to date and relevant.

The Tripartite Committee on the Employability of Older Workers, in its interim report released last year, recommended several key initiatives to improve the employability of older workers. These include promoting age-friendly employment practices, such as the re-creation of jobs for older workers through job re-design, automation and the modification of job roles. Last year, NTUC, SNEF and WDA successfully assisted more than 12,000 workers under the Job Re-Creation Programme (JRP). About half of them were mature workers.

The Tripartite Action Group (TAG) was set up last year to facilitate sharing of best practices among companies to re-create jobs and raise productivity. Companies requiring resources to undertake these initiatives can also tap on the ADVANTAGE! scheme. So far, approximately $8 million has been committed to companies under the scheme.

These initiatives, coupled with the strong economic growth in the past year, have helped boost the employment rate of older residents in Singapore. Between 2004 and 2006, the resident employment rate of those aged 55 to 59 improved from 55.9% to 60.6% while that for those aged between 60 and 64 rose significantly from 33.6% in 2004 to 41.9% in 2006. Both are at record high levels.

The Tripartite Committee will be releasing its final report shortly. The Committee will recommend additional initiatives to facilitate the employment of older workers. We will continue our efforts to work with the tripartite partners to enhance older workers’ employability.

I would like to ask the Minister of State how many companies to date have embarked on the Job Re-Creation Programme. What is the target that the Ministerial Committee on Ageing has in mind to encourage more employers to participate in job re-creation? Also, how will the Ministerial Committee on Ageing work with other agencies to promote employability of the older workforce? And in the midst of these 12,000 workers who have gone through the job re-creation training, how many of them are actually from the PMET category?

Mr Speaker, Sir, as of 31st December 2006, some 300 companies have committed, under the ADVANTAGE! scheme, to employ and re-employ mature workers beyond the age of 62. Many of these companies have already put in place employment practices that are age-friendly with the help of the ADVANTAGE! scheme. We will continue to work with the tripartite partners to reach out to more companies and to encourage them to make a commitment to recruit as well as to retain these older workers.

Mdm Ho also asked how do we work with other partners. In fact, tripartite collaboration is a key cornerstone of our success so far in reaching out to the older workers. WDA will, together with NTUC as well as the employers' associations, work together and reach out to the older workers, encourage the employers to change their mindset to be pro-older workers and, at the same time, we also want to reach out to the workers to prepare them to be more flexible and to

equip them with skills that are up to date and relevant so that they can remain competitive and employable. We will continue to do so together with our tripartite partners.

I would like to pick on Mdm Ho's point. How many of these programmes are targeted at the PMET category for the older workers, especially those above 62?

Yong: Mr Speaker, our programmes cater to all the workers and a significant number of them are PMETs. They come from different career paths. We do job re-creation and, at the same time, we also conduct retraining for them so that their skills can be applicable in other areas that are more relevant in today's economy.

Sir, regarding PMETs as well as re-employability of older workers, is there also tracking of salary and are they worse off if they are doing similar types of jobs?

We have to recognise that the priority for us is to ensure that they are employable, and as they are employed, their remuneration or salary must reflect their competency as well as the performance and the value of the job. With the growth of the economy, I think the job market is very healthy. We have created a significant number of jobs, a large proportion of them are PMET jobs, and therefore we believe that they will receive commensurate remuneration according to the jobs that were taken. At the same time, we have also recently introduced the professional conversion programme (PCP) to allow PMETs to convert to new jobs that are in demand. But, of course, for some of the jobs that are becoming less and less relevant in this knowledge economy, these jobs will become less competitive. So we want to

help them to acquire an occupation that is more relevant to today's economy and PCP is one programme that we have introduced recently to help them achieve this.

6 . Mdm Halimah Yacob asked the Minister for Manpower what is the significance and impact of the Cooperation Agreement, to address labour and employment issues and promote social progress, that was signed on 20th March 2007 between ASEAN and the International Labour Organisation.

Mr Speaker, Sir, over the years, the International Labour Organisation, or ILO, and ASEAN have been cooperating in many areas of mutual interest, such as occupational safety and health, industrial relations and vocational training. ILO's technical expertise is well regarded and valued by ASEAN.

The Cooperation Agreement, which was signed between ASEAN and ILO recently, reflects the strong commitment of both organisations to collaborate closely in addressing labour and employment issues as well as promoting social progress. Singapore is supportive of this Cooperation Agreement and believes that it will pave the way for increased cooperation and partnership between ASEAN and ILO through mutual exchange of information and joint technical cooperation projects. Such collaboration is likely to benefit workers across ASEAN.

A follow-up question, Sir. I would like to ask the Minister of State what labour and employment issues will be covered by the Cooperation Agreement. How will workers in Singapore benefit and will the social

partners be involved in this process of collaboration?

Mr Speaker, the Cooperation Agreement covers a wide range of issues in labour, worker-related and employment-related issues. In particular, from Singapore's point of view, we are very interested in workplace safety and health (WSH) matters. In fact, as the Chair of ASEAN Labour Ministers, Singapore has adopted workplace safety and health as one of the core focus of ASEAN Labour Ministers, and this issue has also been brought up with ILO. We are working on the programmes, together with ILO, to address issues of workplace safety and health. I think we have three objectives in mind. Firstly, we want to, through this platform, learn from other countries' experience in workplace safety and health. We will also benefit from the expertise in ILO with regard to workplace safety and health. The second objective is to share our experience and efforts that we have put in over the many years in achieving our workplace safety and health. And, thirdly, we also want to showcase our achievements so far in WSH.

7 . Dr Fatimah Lateef asked the Minister for Health if the process of class downgrading for wards in public and restructured hospitals can be streamlined and hastened as there are too many steps and appointments which make the workflow process very time consuming.

Mr Speaker, Sir, public hospitals offer different classes of ward at different levels of subsidy so that patients can choose according to their budget. While clinical care is the same, comfort and other non-clinical service levels do differ.

Before admission, hospitals will advise the patients on the estimated bill sizes so that they can make an informed choice. There is no means-testing at this stage and patients are free to choose.

Subsequently, a higher-ward class patient may seek a downgrading to a subsidised ward. At that stage, we will require means-testing. It takes about two days to process the application. But sometimes it takes longer, not because the procedures are cumbersome, but because the patients are unable to produce relevant documents to support their applications.

We will continue to streamline the process. Unfortunately, the necessary step of getting income information and family particulars cannot be avoided in any means-testing process.

Sir, this is also for outpatient or SOC patient where the downgrading actually may take up to eight to 10 weeks. I have had several cases who had actually come to me to appeal because they need to make several appointments with the medical social worker and also to get approval of the doctor for the downgrading. So if this could be streamlined further, it would be so much helpful for the patient because, in the interim, they have to pay the non-subsidised rate while waiting to be downgraded for the eight to 10 weeks.

As I said earlier, we will try to streamline. But, sometimes, the difficulties are that patients are unable or unwilling to disclose the necessary information. Dr Fatimah works in SGH. So I specifically asked SGH's medical social workers about the processes for outpatient downgrading, and they said by and large they are able to do it smoothly. They make sure that the decision is made before the follow-up appointment. So if the follow-up appointment is in a few

weeks' time and so long as it is done in time for the next appointment, I think that should be adequate. But if a patient is unable or unwilling to provide the information, I hope the doctor can help counsel the patient to do so. He has to cooperate with the medical social worker, and we will try to facilitate it as much as we can.

Mdm Halimah, last question.

I think the difficulty for patients who are seeking downgrading is also because the process of means-testing sometimes requires them to produce the salaries of all their children. Sometimes, you have elderly patients who do not even know where their children are staying because their children do not visit them, and they may be too scared. I have a case of a resident who is too scared even to ask his children for their payslips. So these are the difficulties. If the hospital could exercise some flexibility and humanity in such cases, I hope the Minister would consider that also.

Yes, we work in a humane industry and we would try to be as compassionate as we can. I think hospitals do exercise flexibility. I did ask for some data from SGH, in particular, on applications and what is the success rate. By and large, they said that for outpatients, about two-thirds have a successful downgrading. For inpatients, about 1% of Class A and B1 patients have successfully been downgraded. By and large, the hospitals do try to assist as much as they can, but they really need the help of the family members to cooperate. Where children are not forthcoming in providing information, or worse, in helping to pay the bills for their parents, I think society as a whole must encourage the children to do so because

the failure of them to do so means that you and I have to look after their parents, which I do not think is the right way society ought to be organised.

8. Dr Lim Wee Kiak asked the Minister for the Environment and Water Resources what is the long-term target for proportion of clean cars on our roads and whether his Ministry will push for a separate "green car" category of Certificates of Entitlement to increase the uptake of 'green cars'.

Mr Speaker, Sir, my Ministry is keen to promote Green Vehicles that are less pollutive and more fuel-efficient than conventional vehicles. There are in fact various ways to do so. Dr Lim has suggested a separate 'green car' category of Certificates of Entitlement (COE). We had previously studied this idea with the Ministry of Transport and concluded that it would not be appropriate for various reasons.

First, besides the cost, the pick-up rate of Green Vehicles is also affected by other factors, such as consumer preference, and the provision of maintenance support by the dealers. Their demand, therefore, is best left to the consumers to decide.

Second, in fact, it would be difficult to set a quota for such Green Vehicles. As with all vehicle categories, their growth annually would be capped as a result. But if Green Vehicles do not have a separate COE category, their take-up can increase freely in response to the demand, because they are part of the total vehicle population.

To promote the adoption of Green Vehicles, my Ministry had introduced the Green Vehicle Rebate Scheme in 2001. The Scheme aims to narrow the cost gap between such Green Vehicles and conventional ones. We had enhanced the Scheme in January 2006, and the number of Green Vehicles on our roads has since picked up significantly from 198 to 716 as at end December 2006.

Mr Speaker, one of the common complaints that has been given by the public is that they would like to drive a green vehicle. But the problem is that the importers are not bringing in enough models and even if the models are brought in, sometimes it is not appropriate for their economic status. It is no point bringing in a RX400 whereby most people cannot afford. So I am not sure whether by implementing a green category COE, it will help to further promote and force the importers to bring in such models to cater for the market that acts as a catalyst. I would also like to ask the Minister whether, especially with the release of the Fourth IPCC Report that was stated in the Straits Times on global warming, Singapore should adopt more measures now to encourage environmental sustainability and to reduce greenhouse gas emissions.

Sir, in fact, there is a selection of green vehicles available in the market - the Prius from Toyota, the Honda and, of course, the Lexus that Dr Lim mentioned. We feel that it is best we leave this to the market. In fact, the incentive schemes that we have put in place in 2001 have proven to be effective. Consumers are buying green vehicles despite the cost differential but with the upfront 40% OMV, which is the rebate, it has in fact caused a lot of people to cross over. We constantly work with the dealers to encourage them to bring in different types of models. And I agree with Dr Lim that this is a chicken-and-egg situation, ie, you have to provide

more models and therefore people will be willing to buy. I recall that Mr Hri Kumar, during the debate, mentioned that he could not buy something below $80,000. In fact, I would like to tell him that there is a model now by Honda which is below $80,000, which is a green vehicle, and I hope he will buy one.

Sir, on the second question by Dr Lim on the IPCC Fourth Assessment Report, I agree with Dr Lim that climate change is an important global challenge, and we in Singapore would have to do our part to reduce greenhouse gas emission and, of course, to maintain our good reputation as an environmentally conscious city. This point, Sir, has been raised by many MPs during the recent Budget debate and my Ministry fully agrees that the Government has a key role to play in raising awareness about global warming and to ensure that Singapore's long-term environmental sustainability is maintained. But I think we have to be mindful that we are a small country. So whatever that we do, if we do it alone, I do not think it will make a difference to global changes, such as climate change. But we must play our part as a responsible member of the international community. But if we do not have the big countries like the US, China and India on board, there will be no significant reductions in global greenhouse gas emissions, regardless of what we do here in Singapore. Because of that, we also adopt a more balanced approach towards environmental sustainability. So we ratified the Kyoto Protocol and we have put in place measures to improve energy efficiency. I announced in Parliament that the way to go is really to look at our consumption of energy and how best we can optimise it. If we do this well, we can bring down our emissions, not absolute, but our emissions per GDP dollar or, what we call, carbon intensity. At the same time, this will not affect our economy, but, in fact, will render our economy more resource-efficient and more competitive. So if we

are able to put in place the programmes that we have announced, I think we can do our part to bring down some of our emissions but, more importantly, we become more efficient in the way we use energy.

At the same time, Sir, we will have to maintain our good air and water quality because it is good for Singapore and Singaporeans. Not only does it affect the health and quality of living, but it has, in fact, become an economic competitive advantage for us because, with the good air and water quality, we have been able to attract talent, businesses and tourists. At the same time, we will use this opportunity to grow the industry so that we can then get the industry to provide solutions to environmental challenges as well as create job opportunities.

Sir, in the long run, we will do our part as a small country. But we recognise that we will need to get other big countries on board, and we hope that Dr Lim will support our initiative on the ground in terms of energy efficiency.

9. Dr Lim Wee Kiak asked the Minister for the Environment and Water Resources whether his Ministry will consider a ban on incandescent bulbs, following a similar ban in Australia.

Sir, moving away from the use of incandescent light bulbs to Compact Fluorescent Lamps (CFLs) is a highly effective way to conserve energy. CFLs, which can fit into the light sockets of most incandescent bulbs, use only about a quarter of the electricity used by incandescent bulbs to produce the same amount of light. This translates into cost savings, for example, of about $110 over the lifetime of an 18-watt CFL, compared with that of a 75-watt incandescent bulb. These cost savings far exceed the higher

upfront costs of a CFL over an incandescent bulb, which are less than $10. Furthermore, as CFLs can last up to 10 times as long as incandescent bulbs, the owner would not have to buy and replace light bulbs as frequently. For Singaporeans who prefer the warm lighting of incandescent light bulbs, CFLs that produce warm lighting are already available.

However, Sir, to convince people to switch to CFLs, raising public awareness is an important initial first step. A decision to switch to CFLs based on the individual’s choice through public persuasion is more lasting than it being imposed. We need to raise consumer awareness of energy-efficient lamps in Singapore, and ensure that lamp manufacturers provide accurate information on their lamps.

Sir, under the Climate Change Awareness Programme run by the Singapore Environment Council, one of the 10 energy-saving tips shared with the public is to switch from incandescent light bulbs to CFLs. The South West CDC recently launched an initiative at Hong Kah North in which a CFL was given free of charge to households using incandescent bulbs to encourage them to make the switch. In fact, it was a surprise to all that almost 80% of the households have already made the switch. Such community efforts by grassroots organisations can play a very effective part in raising consumer awareness.

To help consumers make more informed choices, NEA is working with major lamp suppliers on consistent labelling of lamps. NEA will also study whether there is a need for Singapore to adopt minimum energy performance standards for lamps, which would remove energy-inefficient lamps from the market.

Sir, we will monitor the effectiveness of these actions, and continue to look into

other measures which can significantly improve energy efficiency in Singapore.

Mr Speaker, Sir, there was a recent report talking about Paris as well as Sydney which switched off the lights for a few minutes or hours - I am not sure about that. But does what we are trying to do now to save energy contradict our efforts to try to light up the city at the same time at night, since I understand that Ministries are also trying to encourage buildings in the downtown area to light up the city so that we will have a beautiful downtown area?

Sir, we do not see this as a contradiction. In fact, NEA is working very closely with URA. If we do the right choice of lighting, we do not have to necessarily light up the entire building. But if we light up the correct spots - and here we need to engage lighting consultants - we can actually have a very beautiful downtown at night, with energy consumption not so high. So we will work closely with URA. Sir, if we do this well, it will complement Singapore's image as a buzzing and vibrant city. Sir, I think the lighting will be done judiciously together with the URA.

10. Er Lee Bee Wah asked the Minister for Transport whether his Ministry will consider dispensing with the taxi surcharge and replacing it with other incentives to improve the availability of taxis during peak hours.

Sir, the deregulation of taxi fares and the supply of taxi services in September 1998 and January 2003 respectively have allowed market forces to determine the appropriate fare structure according to the demand and supply of taxi services.

The demand for taxi services fluctuates through the day, as Members will be well aware of. It is high in the morning and evening peak hours, and considerably lower at other times. Demand for taxis is also more concentrated at certain locations. We cannot expect taxi companies to plan their fleet size based solely on peak demand requirements. Hence, the surcharges set by the taxi companies enable taxi services to be priced differently at different times and for locations so as to strike a balance between supply and demand. Without these surcharges, the shortage of taxis during peak demand periods will only worsen.

While fares and taxi supply are left to the market to determine, the LTA ensures that taxi service standards are not compromised. For instance, to ensure that commuters can get a taxi, if they choose to phone-book a taxi, LTA has, with effect from January 2007, extended the monitoring period on taxi companies’ call booking performances from between 5.00 pm and 8.00 pm to between 5.00 pm and 11.00 pm under the Quality of Service standards. LTA also works closely with stakeholders, such as the taxi companies, taxi driver associations and building landlords, eg, shopping centres and hotels, to raise the quality of our taxi services.

Mr Speaker, Sir, I would like to ask whether the Ministry has carried out any study on the waiting time for taxis during peak hours and whether we are satisfied with the result. Is there anything that we can learn from Hong Kong, which seems to have better taxi services than ours?

Sir, indeed, there are many surveys that had been carried out on all components of taxi service standards, and waiting time is one of the key factors, and that is where the surcharges come in. Ultimately, we are

really aiming for a situation where the market demand would determine the kind of charges that commuters would be prepared to pay and whether they would decide to therefore phone-book a taxi or to wait along the street to hail. At some point, there would have to be a balance that is struck between the commuters and the taxi companies.

Sir, it seems that presently the balance is towards phone-booking. Can I ask the Minister of State whether she can make sure that the taxi companies would improve their service so that they do not only respond to phone-booking but also to customers in the queue?

Sir, the observation is a valid one. But allow me to put that in perspective. LTA's figures show that only about 10% of taxis on the streets are actually booked during peak hours. In other words, the vast majority of taxis or about 90% are still available for street hailing during peak periods, and these taxi drivers would certainly not want to miss having a fare during these lucrative business time belts.

Mr Speaker, Sir, I think MOS did not answer my question on whether there is anything that we can learn from Hong Kong which seems to have a better taxi service than ours.

Sir, I believe this point was actually debated and covered during the recent COS debate where my Minister had given a thorough comparison of the Hong Kong taxi situation where, if I recall correctly, the supply of taxis is in greater proportion relative to demand than that in Singapore. Ultimately, it is again a balance that we will have to strike because one way of meeting all the needs is to have the supply at the peak period requirements. But that would mean that, during the off-peak periods, there would

be a lot of taxis cruising the streets empty.

11. Assoc. Prof. Kalyani K Mehta asked the Minister for Transport whether there are plans to (i) educate the public on civil courtesy towards wheelchair passengers riding the MRT trains especially upon embarkation and disembarkation; (ii) enforce the 'yellow lines' rule on MRT platforms so that embarkation and disembarkation are organised; and (iii) put up signs to indicate where a wheelchair person should 'park' in the train so that public consideration can be given towards his or her needs.

Sir, since the early 1990s, our rail operators have regularly implemented public education initiatives, such as courtesy programmes, roadshows, school talks and learning journeys, to promote courteous behaviour on the MRT. These have so far not specifically focused on civil courtesy towards wheelchair-bound passengers using the MRT. However, the Land Transport Authority (LTA) is working with the rail operators to facilitate greater usage of our MRT by wheelchair-bound passengers.

On provision of signs to indicate where a wheelchair user could "park" his or her wheelchair in the train, I am pleased to inform the House that for the Northeast Line (NEL), this is already done as the trains have a designated recess area for wheelchair users. There are also signs at designated platform screen doors to guide wheelchair users to the train car with such a recess area for their use. Similar signage will also be introduced along the North-South and East-West Lines where recess areas for wheelchair users have been provided on SMRT's older trains as part of its train upgrade project over the next two years.

Assoc. Prof. Kalyani has also asked whether there are plans to enforce the yellow queue lines. As it is with all matters concerning civic consciousness, there is practical difficulty in enforcing commuter behaviour. Nonetheless, station staff patrolling the platforms will advise commuters to follow the yellow queue lines, and regular announcements will continue to be broadcast to remind commuters to give way to alighting passengers.

Sir, from the feedback that I have received from my students at NUS where I teach, as well as members of the public, at peak time, it is really very chaotic at our MRT stations, especially where there are interchanges, and sometimes I think the safety of passengers is at stake here. As we have made our MRT stations more friendly to physically-disabled persons, I think we need to do the software aspect, now that we have a bit more hardware. I have seen in Hong Kong that they have more staff at the train platforms, and they enforce the yellow lines. So, perhaps for a start, we could think of some idea like that. I personally had an example where a tourist really showed his disgust at some ugly behaviour of Singaporeans when they would not allow a wheelchair-bound person to alight and the person was stuck in the train because of the crowd.

Sir, I agree with the Member's comment that there is certainly room for more public education and for commuters as a whole to be more civic-conscious.

12. Prof. Thio Li-ann asked the Minister for Foreign Affairs (a) if he will

provide an update on plans to establish an ASEAN Commission on the Promotion and Protection of the Rights of Women and Children under the Vientiane Action Programme and what form will such a Commission take in terms of supervisory or monitoring powers; (b) whether Singapore supports an ASEAN mechanism for protecting human rights in general; and (c) whether the ASEAN Charter will incorporate provisions to promote and protect human rights and to adopt measures to realise this objective.

Discussions within ASEAN on the establishment of an ASEAN Commission on the Promotion and Protection of the Rights of Women and Children are on-going. ASEAN officials are looking at possible modalities. Track II discussions on this issue, organised by the Working Group on an ASEAN Human Rights Mechanism, are also concurrently ongoing among civil society, academia and government agencies. There have been two consultations conducted to date, with the last one taking place last week in Bangkok.

I believe that Professor Thio attended the first Track II consultation on the Commission in November last year, and I thank her for taking an interest in this issue. I understand that some preliminary proposals on the modalities of the Commission will be submitted to the ASEAN Senior Officials later this year. We look forward to receiving them.

As for the question on whether Singapore supports an ASEAN mechanism for protecting human rights in general, there is a growing consensus of the need to protect and promote human rights as we step up our community building efforts. The fact that measures such as human rights education, the rights of women and children, and the rights of

migrant workers have been inscribed in ASEAN's own action plan reflects its growing importance. Singapore supports the moves within ASEAN to raise the general level of awareness of human rights, including the rule of law and good governance, as they are all inter-related.

At the same time, we should respect the diversity within ASEAN. ASEAN members are at different stages of development, each with its own history, culture and heritage. Any regional mechanism for human rights has to take this diversity into account.

Human rights are best protected when they are underpinned by strong economic, cultural and social foundations. Sound national policies that promote economic growth, raise living standards and provide basic social welfare are more important than any regional mechanism.

Drafting of the ASEAN Charter is on-going. There is a clear consensus within ASEAN that the Charter will contain a strong affirmation of the respect for human rights, as one of the basic principles of ASEAN. We have still not decided whether to have a Human Rights Commission. Being a Constitution, the Charter cannot go into details like a specific action plan. Instead, it should allow for the introduction of specific measures as and when the Leaders agree on them.

Sir, I would just like to ask the Minister for Foreign Affairs whether, in his opinion, he discerns a shift among ASEAN states in their willingness to raise human rights concerns with each other and whether this is a qualification to the principle of non-intervention in internal affairs. Also, Singapore, as a responsible member of the international community, do we have any concerns about the human rights

practices of other ASEAN members and are we willing to raise these with them, or do human rights issues remain

within the OB markers for international affairs?

Mr Speaker, Sir, I assure Prof. Thio that among Foreign Ministers, and among the Leaders and Ministers of ASEAN, that there is growing interest in this field -- a growing acceptance that we are interdependent, we live together in one global community. Therefore, there should be minimum human standards which govern our behaviour. But as to what specific steps we should take, these are issues that we have got to think over and compromise on. Should Singapore be telling what our neighbours should do? I do not think we should do that, because to begin with, why should they accept what we tell them? The best that we can do is to achieve high standards in Singapore, and then set an example which others would naturally want to study. And if we lead, let us lead by example.

13. Mdm Cynthia Phua asked the Minister for National Development whether the Government will introduce an Interim Upgrading Programme for private housing estates so that more estates could be upgraded in view of the limited funds.

Sir, the public areas and amenities in the private residential estates come under the purview of various public agencies. For example, LTA manages roads, pavements and street lightings; PUB oversees drainage-related works; while NParks is in charge of works relating to parks. These agencies have their respective maintenance and upgrading programmes for the

private estates, and do consider feedback and requests by the estates for improvement works when executing their programmes.

In addition, MND has an Estate Upgrading Programme (EUP) for selected private estates, when more comprehensive upgrading is done. In carrying out EUP, MND coordinates its works with those of other public agencies.

My Ministry is open to any suggestions to improve the current arrangements, to better serve the needs of the private estates’ residents in a more comprehensive and cost-effective way.

Sir, the Parliamentary Secretary is not supportive of the Interim Upgrading Programme (IUP) for the private estates which is one way of coordinating the various agencies in upgrading the estates. I would like to ask the Parliamentary Secretary to look into two systematic infrastructures. One is the lighting level. In the private estates, the lighting level is really not up-to-date. Secondly, it is the temporary shelters along the private estates because a lot of residents as well as school children walk to the bus stops and go to the basic amenities. These are two major improvements that are needed in the private estates.

My second supplementary question is this. Without the Interim Upgrading Programme, would the Ministry consider setting up a body to coordinate the agencies, as he rightly said in his answer that there are many agencies involved in the private estates?

Sir, I think Mdm Cynthia Phua did not quite understand my earlier answer. I did not say that we did not support the request for any Interim Upgrading Programme. I said that we are open to any suggestions to improve the current arrangements.

Specific to the request that she has made, we will study those requests, as we understand that private estates also have got issues that they have put across through the Advisors. We are open to any possible suggestions. We will study those suggestions accordingly.

I would like to ask the Parliamentary Secretary to enlighten the House on the criteria for the Estate Upgrading Programme and, to date, how many private estates actually had undergone such an exercise. And for those who are on the queue - I understand that quite a number of estates are on the queue - what is the estimated duration that they would have to wait?

Sir, seven estates have recently been selected for EUP Batch 5. With this, altogether, we have some 30 estates that have already been selected for EUP since the year 2000 and a total of some 23,300 dwelling units would have benefited from EUP.

As in the case of public housing estates, it is not possible for us to upgrade all residential estates at one go. Estates in greater need of upgrading would therefore be given higher priority. So far, EUP batches are launched between one-and-a-half and two years' intervals. Mdm Ho asked for the selection criteria. The selection criteria of the EUP, as I have written to all Advisors, include, firstly, the age and the physical condition of the estate. Certainly, those which are older and need higher levels of upgrading will get higher priority. Secondly, the level of community bonding that exists. For example, existence of network committees and residents' associations, because we want some level of ownership with regard to the kind of works that are going to be done. Thirdly, the scope of the significant estate improvement works that need to be done.

Fourthly, how well the residents maintain their own property. And, lastly, we want to also ensure a good geographical spread across all the different selected estates.

Mdm Cynthia Phua, last question.

Sir, I am glad that the Parliamentary Secretary has said that he is open to suggestions. But I would like to know when a study can be made and whether he can tell us when he is looking into it. Secondly, I hope he will include the two items - the lighting level as well as the shelters. Thirdly, the Parliamentary Secretary has not answered the second supplementary question, ie, is he setting up a coordinating body to help our private estate residents in maintaining their estates?

I am very aware that Mdm Cynthia Phua is very anxious about when we can complete EUP projects and when we can complete studies in relation to it. I assure her that we will take up all the suggestions. I am not able to give a timeframe as of now because, as I have said, we are open to suggestions. We are studying possibilities of different ways of improving the programme.

With regard to coordination work, we know that the Government has implemented a "no wrong door" policy since 2004. This means that the officer of any public agency receiving calls will help to put queries from members of the public to the right agencies. I think, today, we know that in every estate, there are different agencies that are involved in this kind of upgrading work that is needed, and the cyclical maintenance works of these different agencies may differ along the lifespan of that estate. So it is difficult to see when, what needs to be done and how. But when we do a proper EUP, that

means that an estate is selected for EUP, we will try to coordinate as far as possible to minimise the inconveniences that will affect the residents of that particular estate.

14. Mdm Cynthia Phua asked the Deputy Prime Minister and Minister for Home Affairs (a) how many people have been convicted for failing to report their change of addresses to the National Registration Office during the past five years; (b) what are the common reasons for their failing to so report; and (c) what action has been taken against people who use their identity cards with old addresses to borrow money from illegal moneylenders.

Sir, under section 8 of the National Registration Act, a NRIC holder is required to report his change of place of residence within 28 days. Over the last five years, 250 persons have been convicted under this section.

Sir, Police does not track the reasons for people failing to report change of address. Anecdotal feedback, however, suggests that the common reasons are:

the lack of knowledge of legal requirements;

this was overlooked because of busy work schedule;

person is living on a temporary basis outside the residential address because of family or marital problems; or

person has no fixed place of abode.

Sir, Police is aware that there are debtors who intentionally avoid changing their address so as to evade loansharks.

As such, while conducting operations against unlicensed moneylenders, Police will also investigate debtors who fail to report the change of their residence or who abuse the change of address facility.

Sir, to reduce the likelihood of innocent households being harassed by unlicensed moneylending syndicates due to abuse of the change of address system, ICA is undertaking a review of the existing procedures for reporting the change of address to deter abuse. We will announce the details after the review is completed. In the meantime, those who have evidence or reasons to believe that someone has wrongfully used their addresses should lodge a report with ICA or the Police so that the authorities can look into the matter.

15. Ms Denise Phua Lay Peng asked the Minister for the Environment and Water Resources if his Ministry will take over the construction and operation of temporary markets in Hawker Centres Upgrading Programmes so that volunteer hawkers do not end up constructing the temporary markets and undertaking risks in money collections and running of the markets.

Sir, the Government bears the full cost of the Hawker Centres Upgrading Programme (HUP) under a $420 million 10-year programme announced in 2001.

Under the HUP, centres are closed for upgrading and the period of closure depends on the extent of works. Based on previous HUP upgrading exercises, some stallholders prefer to take a break while others would like to continue their

business. During the period of upgrading, the Government extends assistance to all stallholders affected, depending on their preference. For those in the first group, their rent for the period of upgrading is waived. For the latter group, NEA makes arrangements for them to operate temporarily at vacant stalls in other centres, subject to availability. In addition, stallholders are given an allowance of $1,000 each when they return to the upgraded centre, to defray part of their relocation expenses. Temporary hawker centres are not part of the package. Hence, the question of whether the Government plans to take over the building of such temporary centres does not arise.

The experience so far shows that not every hawker centre undergoing upgrading requires a temporary centre. Thus far, only 41% of the 63 markets/hawker centres that have been completed or are currently undergoing HUP upgrading have decided to construct temporary centres. The Government's policy has been to help stallholders secure the use of vacant state land for temporary centres at zero land cost. As for the physical construction of the centres, this has been left to the local grassroots organisations and Town Councils to work directly with the Hawkers Associations and Advisors.

My Ministry will continue to provide technical assistance where required to facilitate the building of temporary centres. My Ministry will also continue to give at least nine to 12 months' notice to Advisors and stallholders before the closure of a centre for upgrading. This will give sufficient time for those who plan to construct temporary centres to sort out funding arrangements among stallholders.

Sir, I would like to take this opportunity to commend the grassroots organisations, Hawker Associations and

Town Councils for playing important facilitative roles in the HUP programme.

I would like to ask if the Government can provide some more help since 41% of the stallholders opt to choose the temporary market as a way of extending their livelihood. Currently, I am involved in two HUP projects and the grassroots organisations, grassroots leaders and the stallholders themselves are advised to get involved in selecting a site together with Government's help, but they are also supposed to get the tender, collection of money, millions of dollars, and get involved in operating the market. I really hope that the Government can provide more help. I was even told that they are advised to start a private limited company to do this.

Sir, I would be most happy to ask my NEA officers to work with Kampong Glam division to sort out the problems. This is not new. We have done it in all our centres. I am sure we can sort out the problems. But ultimately, the responsibility must rest with the local community. I have just completed one HUP in my division. It is manageable. And other centres, like the one in Dr Lily Neo's constituency in Jalan Besar GRC, is quite huge and costing a lot of money. But she managed it all by herself. So I am sure we can sort out the problems. Let me get my NEA officers to work with you closely on this.

Sir, I would like to ask the Minister if there are any plans by NEA to actually assist some of the stallholders in the older-generation hawker centres where business is really taking a downturn. They have problems and because of their lease they cannot return the stalls. I am referring to perhaps something like the RPS programme done

by HDB or if there are any other options. Because lately, we have seen a lot of stallholders approaching us for assistance in terms of poor business.

Sir, we look at this request on a case-by-case basis. There are people who decide to exit their business and, therefore, we can facilitate that. I would not want to give a definite answer but I would like to look into the case specifically. There may be an instance whereby we may want to give them an alternative site so that they can improve on their business. I think there are measures in place by NEA to help affected hawkers but, ultimately, we would leave to the hawker to decide what is the best outcome for him in terms of his business.

16. Mdm Ho Geok Choo asked the Minister for Transport whether his Ministry plans to install road humps in the vicinity of schools to slow down speeding vehicles and prevent accidents involving students and what is his Ministry's policy on the installation of road humps.

Sir, road humps are a traffic calming measure normally constructed along minor or local residential roads where traffic volumes are relatively lower and where fast-moving traffic poses a safety concern. Road humps are not used on major roads as they affect the efficient performance of these roads. Instead, road signs or road markings are used to alert motorists to keep to a safe speed. Therefore, where appropriate, road humps have been provided in the vicinity of schools sited on minor or residential roads.

The safety of road users, including school children, is a top priority when LTA

constructs new roads or modifies traffic schemes to cater to changes in the environment. Recognising the need to pay special attention to the needs of younger school children, LTA has introduced the Enhanced School Zone (ESZ) scheme to all primary schools since 2004.

The ESZ comes with special features: a red textured asphalt pavement, road markings and traffic signs placed within the vicinity to alert motorists to slow down and look out for school children. Depending on the specific road conditions, the ESZ may be complemented by other traffic management measures such as road humps, signalised pedestrian crossings, zebra crossings, railings, centre dividers, traffic warning signs or road markings.

Ensuring road safety is a shared responsibility. I therefore encourage motorists to drive carefully when travelling on roads near schools, and pedestrians to make use of pedestrian crossing facilities. Schools and parents can also play an important role in inculcating good road safety habits in our young.

Sir, I would like to ask the Minister of State when does the Ministry actually consider it appropriate to install road humps in addition to the signages like the Enhanced School Zone and Slow Down markings.

Sir, as I have explained in my reply, road humps are used judiciously, and the overall performance of the road concerned would be a major consideration.

17. Er Lee Bee Wah asked the Minister for National Development what is the policy on the setting up of columbariums

at places of worship and whether the Ministry takes into account the location of such places of worship, which are near to residential areas.

Sir, currently, columbariums are allowed within places of worship as well as other institutional premises, such as clan associations, homes for the aged, nursing homes or religious schools. This is to provide for the needs of members of such institutions, as well as members of the community. Increased public accessibility inevitably means that these columbaria are located closer to residents.

We are mindful of residents' concerns over the presence of columbaria in their neighbourhoods. Therefore, proposals involving columbarium use in places of worship are carefully evaluated, based on the following stringent guidelines:

First, the columbarium must be integrated with the place of worship building. It must be co-located with the religious use in the same building and not be in an independent block;

Second, it is to be completely screened from public view. The columbarium should not have any openings facing residential houses; and

Third, the columbarium use cannot exceed 20% of the total gross floor area of the development.

To avoid possible traffic congestion or parking problems in the surrounding residential estate, road access and sufficient car parking lots within the development site are also carefully evaluated before columbarium use is allowed. The columbarium also is required to provide its own car parking facilities in accordance with LTA's requirements. Where possible, access to the site should be taken directly from the

main road without having to pass through a residential estate.

These measures have helped to minimise potential disamenities arising from the location of columbaria at places of worship near residential areas.

Order. End of Question Time.

2.48 pm

Resolved,

That, in accordance with Standing Order 10(2), the Ministerial Statement by the Minister for Defence be taken after the Introduction of Government Bills listed in the Order Paper for today. - [Mr Mah Bow Tan].

"to amend the Competition Act (Chapter 50B of the 2006 Revised Edition)",

presented by the Minister of State for Trade and Industry (Mr Lee Yi Shyan); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

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

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

"to amend the Environmental Pollution Control Act (Chapter 94A of the 2002 Revised Edition) and to make consequential amendments to certain other written laws",

presented by the Minister for the Environment and Water Resources(Assoc. Prof. Dr Yaacob Ibrahim); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to repeal and re-enact with amendments the Radiation Protection Act (Chapter 262 of the 1992 Revised Edition) so as to control and regulate the import, export, manufacture, sale, disposal, transport, storage, possession and use of radioactive materials and irradiating apparatus, to make provision in relation to the non-proliferation of nuclear weapons and to establish a system for the imposition and maintenance of nuclear safeguards, to provide for matters connected therewith, and to make consequential amendments to certain other written laws",

presented by Assoc. Prof. Dr Yaacob Ibrahim; read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to amend the Goods and Services Tax Act (Chapter 117A of the 2005 Revised Edition)",

recommendation of President signified; presented by the Minister of State for Finance (Mrs Lim Hwee Hua); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to amend the Financial Procedure Act (Chapter 109 of the 1992 Revised Edition)",

recommendation of President signified; presented by Mrs Lim Hwee Hua; read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to amend the Employment of Foreign Workers Act (Chapter 91A of the 1997 Revised Edition) and to make consequential amendments to certain other written laws",

presented by the Minister for Manpower (Dr Ng Eng Hen); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

2.53 pm

Mr Speaker, Sir, modern Singapore is a testimony to the perseverance, ingenuity and hard work of our people. In a short span of 40 years, we have transformed our island state into a developed nation. Singaporeans enjoy peace, stability, economic progress, good housing, healthcare, education, and a clean and safe environment.

The mission of the Public Service is to work with the elected Government to ensure Singapore’s continued survival, security and success. Public officers work with the political leadership as stewards of Singapore’s present and future. The work of the Public Service is closely linked to the lives of Singaporeans. Through the work it does, the Public Service provides infrastructure, homes, education, and law and order. It creates a conducive environment for Singaporeans to create wealth, earn a living, raise a family and lead a fulfilling life. We have a diverse group of officers, with different aptitudes and capabilities.

There are policy developers, policemen, teachers, social workers, economists, statisticians, engineers, clerical and administrative staff. We need a whole host of officers with different backgrounds and talents in the Service - to think, plan, and do. Together, they make the Service tick.

Richard Vietor, a Harvard Business School professor who specialises in teaching and research on business and government policy, recently published a book titled “How Countries Compete.” He devoted one chapter to Singapore and described us as “the best example of government that works.” And, indeed, ours is a Government that works for Singapore and Singaporeans.

Eight or nine years ago, when I was the Minister for Education, I briefed the EDB's International Advisory Council on our then new initiatives in education. These were a group of top CEOs - experienced industrialists and businessmen from the US, Europe and Japan, several of whom had sat on or given advice to their governments' education review panels. After listening to my briefing, they said, "We've heard all that before in our own countries. What makes you believe you can succeed in doing that when we have difficulties putting through similar reforms in our own countries?" That question gave me pause. Then I replied that it is because Singaporeans place great importance on education. And in the Ministry, we have the people and a system in place that will see this through. We also have a teachers' union that understands what we are doing. Instead of resisting change, they are supporting it - for example, organising courses in IT so that teachers can keep up-to-date. I am glad that my confidence in our parents and students, teachers, our educational administrators and our institutions has been proven right. Today, they have brought our system forward to new heights.

As Minister-in-charge of Civil Service matters, I often hear from my counterparts from other countries that Singapore is a place where things happen. We do not just envision and talk, we act. Each time they re-visit us, what we talked about doing during their last visit would actually be already happening. This is possible because we have strong institutions, and a team of dedicated officers at all levels who will work through the details and carry out the plans - Biopolis, Marina Bay, upgrading of our housing estates, skills redevelopment, Workfare, preparing for an ageing society, making our waterways active, beautiful and clean.

Going forward, the opportunities and challenges confronting Singapore are increasingly complex. There are no 'ten-year series' or 'model answers'. The Public Service has to break new ground and draw upon the ideas and energies of the private and people sectors to address these challenges together - to develop our own solutions, challenge old paradigms, experiment with untested approaches and learn from our mistakes along the way.

Singaporeans have a Public Service they can all be proud of. The Political and Economic Risk Consultancy (PERC) 2007 Report, and the World Economic Forum’s 2006 Global Competitiveness Report ranked Singapore first in the quality and competence of its Public Service.

Here, I would like to take the opportunity to acknowledge and thank every public officer for his or her contribution to Singapore. It does not matter which service or agency you work in. Every officer can and should be proud of being part of the Singapore Public Service, a highly respected and well regarded organisation.

We do not have to just rely on comparisons by think-tanks. Every Singaporean who travels abroad will, in his heart, be grateful for the quiet efficiency, courtesy and impartiality of our public officers when they cross the immigration and customs counters at their various ports of entry and exit around the world.

But the Service can and must do better. Singaporeans are more informed, and vocal. The standards expected of the public service today are higher. And public officers can expect more to be asked of them. Demanding customers spur improvements. Public officers do not have all the answers. We have to do more to cultivate a serious listening ear, to better understand the needs of the public and to consider ideas and suggestions to improve the way we work and serve the public. There is a need to constantly improve.

Good People are Key

How do we do this? The key is to have good people in the Service, enough of them, with the right values and passion for Public Service - well-led, well-trained and well-motivated. We need good people and leaders to helm our various institutions and services - principals for our schools, commanders of our police divisions, managers of our various line departments and customer touch points. We also need the support of our rank and file officers who quietly do good work behind the scenes, or courteously at the counters, helping to implement and execute policies well.

To bring it all together, to provide vision and coherence, and set the tone and direction, we also need exceptional public service leadership. This means having strong and capable leaders who can anticipate challenges and change, take a long-term strategic view, tackle the complex issues, and yet at the same time come up with workable solutions that are

needed today. We need leaders who can energise, organise and galvanise the Public Service to move the agenda forward and ensure that implementation accords with intent.

Sense of Meaning and Mission

As a progressive employer, the Public Service’s human resource management practices must keep pace. We must commit to pay competitive wages for our officers and provide them with the development and training to improve and stretch themselves so that they can better contribute to their agencies. We must make the Public Service an organisation that provides our officers with a sense of meaning and mission, that ultimately it exists to serve the people of Singapore.

We see such examples everyday in the work of our public officers. Many go the extra mile to work for the good of Singaporeans, not just at the policy level, but also at the individual level, helping to deal with and solve the problems of individual Singaporeans. We recognise the most outstanding of such efforts every year with the PS21 Star Service Awards. I hope to see more of such examples. Officers who work in our Ministries and statutory boards must feel a sense of challenge and must believe that individually and collectively, they make a real difference in the lives of Singaporeans. We need to tap on their passion, energy and mobilise them to do their best, and achieve their best - for Singaporeans and for themselves.

Making sure we can get and keep good people

Attracting and retaining able people to build a team, especially those who have the potential to take up top leadership positions in the Public Service is however becoming more difficult. Final year students in our local universities are

invited to attend many tea sessions and career talks, and many are now offered jobs three to six months before graduation.

The competition for talent is not just within Singapore. Our people are being talent-hunted to work in Hong Kong, China or Vietnam and the Middle East. In February this year, a group of public officers attending one of the Civil Service College’s leadership training programmes, made a study trip to Dubai. At a networking dinner, they met a fellow Singaporean who had been headhunted to take up a very senior position in a Dubai company. He told our officials that his Chairman is very impressed with Singapore and the ability of Singaporeans. So, he promised his Chairman that every time he is back in Singapore, he will speak with two to three Singaporeans to interest them in working for his company. I do not know how often he comes home, but we should be worried.

Paying competitive salaries

For the Public Service to remain an attractive employer, our terms must keep pace with the private sector. That is why our policy is to pay public officers competitive salaries, salaries that are commensurate with private sector earnings. We do not seek to lead the market, but to keep pace with it.

Salaries in the private sector have been moving rapidly, especially in the last two years, in certain sectors. In February this year, the two healthcare clusters adjusted nurses’ salaries upwards by 3%-7%. On 31st January 2007, a Business Times report cited that some law firms had raised salaries amid the growing demand for legal work and a shortage of lawyers. Reports from HR consultancies point to more firms hiring executives, and offering attractive salary packages to attract them.

The financial and banking sector is growing rapidly and many potential job seekers are attracted to it. According to a 12th February Wall Street Journal report, there is a shortage of talent in the private banking sector. The earnings of some of the relationship managers in Singapore surpass the pay levels in Switzerland. Singaporeans are being attracted to these jobs, including one young ex-SAF officer who was featured in the report.

As I informed the House in March, the Civil Service is experiencing the effects of the tightening labour market. Our overall resignation rate has increased from 4.8% in 2005 to 5.7% in 2006. We are losing our lawyers, accountants and management executives. The resignation rate of the Management Executive Scheme (which employs graduate officers across the Ministries) was 10.6%, up from 7.4% in 2005. At some of our entry grades, the situation is quite serious, with resignation rates as high as 25%. Members of the House would also have read from the newspapers that for our Home Team, there has been a 40% increase in the resignation of junior officers in January and February this year, compared to the same period last year.

We need to act before the situation becomes more serious. The Government, as an employer, has to respond quickly and decisively to stay competitive and close the wage gaps. Otherwise, we will deplete the Service of the able people we need, and the service level to the public will be affected.

Civil Service salary adjustments

Approach

The last major salary revision for the Civil Service was in 2000, seven years ago. During the recession years, civil service salaries moved down with the

market, and were restored recently in 2005. In recent years, we have made adjustments to specific schemes that have fallen behind their benchmarks.

For this review, we have taken a comprehensive look at all the schemes, assessed the attrition rates and wage levels of each scheme relative to their respective market comparisons, and identified the underlying issues affecting the schemes. Let me explain the approach we have taken and the principles behind this round of revision.

First, we are not making a uniform across-the-board revision, where everyone receives a standard ‘x%’ increase. Adjustments are made according to the needs of individual schemes. Where the salaries are severely lagging the market and there are high attrition rates, we will make larger adjustments. Where the lag is smaller, we will, of course, make smaller adjustments. Some schemes have been reviewed recently, and are already being paid close to market salaries.

Second, we will bring our salary structures more in line with our philosophy of linking pay to performance. Many of the adjustments will not be in the monthly salaries but in the form of a performance-related payment. Only those civil servants who have performed beyond the satisfactory level will receive this performance-based payment, with those performing very well receiving a higher amount. These payments allow us to close wage gaps quickly this year. For subsequent years, these payments are likely to be incorporated into the performance bonus structure of the officers, if the market salary levels are sustained, so that those who are consistently good performers will continue to enjoy the higher salaries. For schemes which are lagging severely behind the market, we would have to adjust both monthly salaries and annual components in order to close the gap.

Third, we recognise that salaries alone are not the panacea to our problems. We need to look at the whole career proposition, such as sense of purpose, job scope, interesting assignments, exciting career prospects, and developmental opportunities. These issues have to be addressed so that a career in the Civil Service will remain attractive not just to young people fresh out of school, but also to serving officers.

That is why, in conjunction with the pay increases, we will continue with our reviews to address the fundamental issues for specific services. Let me give a recent example. The Education Service was reviewed in August last year. We raised the starting salaries and increased the retention bonuses for the teachers.

But the review went beyond pay. The Ministry of Education solicited feedback from teachers and made changes to allow teachers to have study scheme leave, to take longer periods of study leave, a special fund was set up for teachers to use for learning and developmental needs, and promotional grades were added for classroom teachers. This year, some 10,000 teachers have been promoted, many of them to the new promotional grades introduced in the restructured scheme of service.

I will now brief the House on the pay revisions for the different groups of civil servants. The revisions will apply to the Civil Service. Statutory Boards will review their salaries concurrently and make adjustments, where appropriate. A number of Statutory Boards (eg, EDB, MAS) have already adjusted their salaries earlier this year.

Starting salary revisions

As I mentioned earlier, at the entry level, the competition for fresh university graduates is getting more intense. The recent surveys by the Singapore Management University, and preliminary

indications for NUS and NTU show that pay offers for fresh graduates have been rising. For example, the average salary offer for a SMU graduate is about $2,800.

The Civil Service has adjusted starting salaries annually to keep in step with the market, both upwards and downwards. We dropped starting salaries by 10% during the recession years, and increased them when the economy recovered in recent years. With effect from June this year, we will raise starting salaries to keep pace with the market. For a graduate with a Good Honours degree who is appointed to the Management Executive Scheme, the starting salary will be raised by about 10%. Starting salaries of other graduate schemes will be adjusted according to their market benchmarks. We will also adjust the salaries of officers who have been appointed recently, to maintain relativities with the incoming batch of fresh graduates. We will continue to monitor our salaries at these entry grades and make adjustments as necessary to maintain competitiveness.

Schemes with In-Built Market Adjustment Components

Some Civil Service professional schemes, such as accountants, economists and statisticians, have an in-built “market adjustment component”. The market salaries of these professions tend to be volatile - with large bonuses in boom times, but falling sharply during a recession. The market adjustment component allows the annual salaries of these schemes to be adjusted rapidly, up or down, without affecting the monthly salaries.

We will raise the market adjustment components of these schemes according to their individual benchmarks. There is no further need to make other forms of adjustment for this group.

According to Mercer HR Consulting, private sector salaries are projected to increase by 4% in 2007. For the officers in the Civil Service, we will make a basic payment amounting to 3%-5% increase in the annual salaries. This payment will be performance-based and will be in the range of 0.5-0.75 months. Good performers will receive up to 0.5 month whilst better performers will receive up to 0.75 month.

This payment will apply to schemes which are currently at or close to their market benchmarks. It will ensure Civil Service salaries are competitive. On top of this payment, civil servants will continue to receive their annual increment and the mid-year annual variable payment. Like other Singaporeans, they will also enjoy the 1.5% increase in the employer CPF contribution from July this year.

This payment will apply to the Education Service, the Corporate Support Scheme and the Operations Support Scheme.

The Education Service completed its review last year, but there are still issues to be addressed. The Ministry of Education will be adjusting starting salaries, and making corresponding adjustments for teachers who were recently appointed. We must also identify high-calibre teachers who have the potential to make it as our future leaders in education and develop and reward them in a timely manner. Corporate Support Officers and Operations Support Officers will also receive this basic tier. The payments will be made next month, in May. If the economy continues to do well and the higher market salaries are sustained, these payments will be incorporated into the annual performance bonuses of these schemes of service so that officers who

are performing well will continue to receive them.

We will also be looking into re-designing the jobs and upgrading the skills of our officers in the Corporate Support, Operations Support and similar schemes. Traditionally, these schemes have been designed with rather narrow job scopes. We will work together with the public sector unions to prepare our officers to take on a wider scope of work and responsibilities, and provide more opportunities for progression.

These schemes of service, which will receive the basic tier for officers who have shown more than satisfactory performance, account for approximately two thirds of the officers in the Civil Service.

Schemes which are lagging the market

There is a group of schemes which is lagging the market, for which we will make larger increases than the basic tier to close the gap. I will highlight the key services, namely the Management Executive Scheme, the Management Support Scheme, the Home Uniformed Services and the Foreign Service. Collectively, these schemes account for almost one-third of the officers in the Civil Service.

Graduate officers on the Management Executive Scheme work across all Ministries performing a wide range of jobs, including policy development and implementation, corporate services and operations work. Salaries for this group of officers have fallen behind the market. We need to make an upward adjustment of 16% this year in order to level up. As a first step, we will halve the gap through a 5%-8% adjustment. This will be in the form of a performance-based payment of 0.75-1.25 months of salary. Good performers will receive up to 0.75 month, which is equivalent to a 5% increase, and

the better performers will receive up to 1.25 months.

A more fundamental review of the Management Executive Scheme is also ongoing. The review will look into all aspects, including pay, career advancement and progression, job challenges as well as training and development of officers. We want to make the scheme more attractive, both to fresh graduates, as well as to mid-career entrants to the Civil Service. In particular, we will need to identify, develop, and reward more substantially, those among the Management Executive officers who are performing very well and have demonstrated the capability to take on greater responsibilities. The review will be completed in the second half of 2007. There will be a second round of adjustment later this year when the review is completed. The form of the adjustment will depend on the findings or recommendations of the review. In the same vein, we are making changes to the Management Support Scheme and Technical Support Scheme, which employ officers with diploma qualifications. These schemes are also lagging behind their benchmarks, and we will make a performance-based payment of 0.5-1 month. Good performers will receive up to 0.5 month, and the better ones, up to 1 month. Similarly, a more fundamental review of the Management Support Scheme is ongoing, and we will make a further adjustment before the end of the year.

The Home Affairs Uniformed Services, comprising the Police, Prisons, Civil Defence and Narcotics services, are lagging their benchmarks by up to 26% in certain grades. As the gap is large, these services require major adjustments. These services are now dealing with more complex and challenging tasks given the threat of terrorism and the increased security measures required. We need to

pay our Home Team officers competitively, so that the uniformed services will be well-staffed and able to address any emergency. The first step of this adjustment will be carried out now, amounting to 10%-13%.

Senior officers in the Home Uniformed Services will receive a performance-based payment of 1-1.5 months, with the higher quantum going to better performers. Junior officers will also receive performance-based payments ranging between 0.75 and 1.5 months. In addition, to address the market pay gap, we will increase their monthly salaries by 4%-5%.

Beyond pay, the Ministry of Home Affairs will also be looking at other aspects to better attract and retain their officers. There will be more opportunities for junior officers to progress into the senior ranks. The Ministry is also streamlining its promotion and ranking process, and reviewing benefits and other terms, to make the Home Uniformed Services a more attractive career. After the review is completed, a second adjustment will be made later this year to close the remaining gap.

The Singapore Armed Forces will make similar salary adjustments to maintain competitiveness.

The Foreign Service is also lagging the market substantially. Our diplomats are a small but critical group of officers who promote and safeguard Singapore’s interests in the international arena.

Foreign Service officers will receive a market adjustment of 0.75 months. In addition, the performance bonus structure has been revised to identify and reward the top performers better. Annual increments have also been increased and tied to performance. Other adjustments include a revision of the monthly salaries at the entry grades and a revamp of the

retention bonus framework. On average, Foreign Service officers can expect an 8% salary increase.

Administrative Service and P/J/S appointment holders

Administrative Service

Let me now move on to the salary adjustments for the Administrative Service, and Political, Judicial and Statutory Appointment Holders.

The Administrative Service is at the core of the Public Service. Administrative Officers serve in many of the top Public Service leadership posts. We set very high standards for admission into the Administrative Service. Officers with high ability and potential from all schemes in the Public Sector, as well as private sector candidates are welcome, regardless of whether they had previously received scholarships or not. They are brought into the Administrative Service so long as they meet the stringent requirements and have a passion for and dedication and commitment to Public Service. Once brought in, they are developed, stretched in challenging responsibilities and tested for future top appointments in the Public Service.

A lot is demanded from our Administrative Officers. They are expected not only to do their primary jobs well, but to also actively lead, participate and contribute to inter-agency issues and service-wide initiatives. This is a key role of the Administrative Service - to ensure that the whole Public Service operates with collective vision and coherence. The officers are assessed rigorously every year and those who do not meet the mark are asked to leave the Administrative Service. They may then be transferred to another scheme in the Public Service. There are also officers who themselves ask to leave

the Administrative Service as they prefer a more specialised area of work. Those who make it to top positions as Deputy Secretaries and Permanent Secretaries have fixed term appointments, and are expected to step down at the end of the term to make way for younger officers. This provides for orderly succession and a pipeline of potential future Public Service leaders in order to maintain the drive and energy of the whole Public Service.

Administrative Service Salary Benchmarks

The salaries of the Administrative Service were last adjusted in 2000. It is one of the schemes that have fallen behind their benchmarks. The salaries of Administrative Officers are pegged to two market benchmarks. I will now ask for the slides to be projected. At the SR9 grade, which is the entry level into the Superscale grades, the benchmark is defined as the salary of the 15th person, aged 32 years, hence, 15P/32, from six professions,

namely, bankers, lawyers, engineers, accountants, employees of MNCs and local manufacturers. The next slide will illustrate how the benchmark is computed and derived. It, too, sorts the top earners aged 32 by income and then find the 15th person, the median. Administrative Officers at the SR9 grade are typically in director-level positions in their organisations.

The second benchmark is set at the higher end, the Staff Grade I, or what we call the MR4 grade. This is the grade at which senior Permanent Secretaries are paid. The benchmark is defined as two-thirds of the median salary among the top eight earners in the same six professions. This is also the entry-level grade for Ministers. We first find the top eight earners from the six professions. We sort the 48 persons by income, we find the median income earner, ie, between the 24th and 25th, and then we multiply the result by two-thirds, so there is a one-third discount of this median income.

Last month, we released information on how the two benchmarks and actual salaries have moved over the last seven years. This has been widely reported. I will briefly recap the trends and request Members to refer to the handouts* [Copies of handouts distributed to hon. Members]. The income tax data that we are using for the benchmarks are for Year of Assessment 2006, ie, for income earned in 2005. The benchmark salaries are, therefore, almost two years old.

In 2000, SR9 salaries were at 67% of the benchmark and we adjusted salaries then to close the gap fully, to increase salaries by 50%. This benchmark dipped in 2004 to 2005, but has since risen. It currently stands at $361,000, similar to what it was in 2000. The SR9 salaries were reduced during 2001-2003 due to the economic recession but the cuts have since been restored. Currently, the SR9 salaries are close to the benchmark.

At the MR4 grade, salaries were at 71% of the benchmark in 2000. We raised salaries to 80% of the benchmark then, with the intent of closing the gap over a three-year period. We made the first adjustment in the first half of 2001, raising salaries to $1.2 million, according to plan. Thereafter, Ministers and senior civil servants took a pay cut of 10% after the September 11 attacks in 2001 and another 10% cut after SARS in 2003. The two cuts were restored about two years later, in July 2004 and January 2005, respectively. So, that is the red line on the chart. Since then, there have not been any salary adjustments for the Administrative Service. Salaries at the MR4 level are at $1.2 million, the same level as in 2001.

In the meantime, the blue line, the benchmark for MR4 has moved. It rose from $1.4 million in YA2000 to $1.9 million in YA2001, reflecting income that was earned during 2000, which was a

particularly good year for Singapore. Thereafter, the benchmark dipped during the recession years, but it never fell below the $1.4 million mark. In recent years, the benchmark has increased, in tandem with Singapore’s good economic growth. Currently, it is at $2.2 million, based on income earned in 2005. This also means that, at the MR4 level, salaries are now at 55% of the benchmark, compared to 71% in 2000.

The principle of benchmarking Ministers’ and senior civil servants’ pay has been established and widely debated in Parliament. Our philosophy is to pay competitive salaries to facilitate the recruitment and retention of the quality of talent we need for the Government and public sector. To do so, we have to benchmark against the comparable top jobs in the private sector. These are the realistic alternatives that a student considering a scholarship, or a person considering a career in the public sector could pursue. Indeed, for the public officers in their 20s and 30s, their peers in school and university would be pursuing just such careers and, in a rising job market, these are precisely the jobs that headhunters are targeting them for. For those considering whether to serve in political office, these are often the careers that they are currently pursuing with good prospects of rising further in the private sector. Some of those in their late 30s or 40s are at or near the top jobs in their companies or field of work.

Sir, there is no perfect method for doing this benchmarking. The methodology of establishing these two market benchmarks at SR9 and MR4 was set out in the White Paper on ‘Competitive Salaries for Competent and Honest Government’ in 1994. The White Paper was thoroughly debated in this House. In 2000, when the last salary adjustments were made, the benchmarking methodology was reviewed and there was a thorough debate in this

House again. The benchmark of 15P32 for SR9 was found to be sound, while the benchmark for MR4 was modified in 2000 to make it more robust by expanding the base to the current top eight income earners in each of the six professions, to discount stock option gains by 50%, and using the median rather than the mean. For this round, we have looked carefully at the benchmarks again, and have found that they remain sound. They follow economic and employment market conditions up and down. But after calculating the benchmark figure, we also do a check against private-sector income earners and we rank them against private-sector income earners. The ranking of the benchmark against the private sector income earners is stable and does not fluctuate widely.

I understand that many Members have views and suggestions on this issue and I look forward to hearing their views and ideas.

Salary revisions - adjustments for MR4

Salaries at the MR4 Grade are currently at 55% of the benchmark. Given the large gap, it is not realistic to close the gap fully in one go. Instead, we will close half the gap, ie, from 55% of the benchmark to 77% of the benchmark by the end of this year. This will be effected in two steps - one step now, and another step at the end of the year, to bring it to 77%. Next year, we aim to close half of the remaining gap, bringing salaries to 88% of the benchmark by the end of 2008.

But for now, in the first step, we will increase the annual salaries for MR4 grades and above, by an average of 25%. The percentage increase will range from 33% at MR4, decreasing to 14% at the higher grades. The annual salary at MR4 will be increased from $1.2 million to

$1.6 million. This will bring the MR4 salary to 73% of the benchmark, fairly close to the 77% of benchmark we want to be at, at the end of this year.

The revisions will be effected through adjustments to both monthly salaries and annual components. Monthly salaries for the MR4 grade and above will be increased by an average of 15%. Monthly salaries at the MR4 grade will be increased by 22.5% from $42,800 to $52,400. The percentage increase in monthly salaries tapers off progressively for the higher grades.

We will restructure the pay to remove components which are no longer relevant and to build up performance-linked components. We will make three main changes - removing of the Car Allowance, increasing the GDP Bonus and increasing the Performance Bonus.

First, the Car Allowance. This is a legacy payment from the time when the Civil Service stopped providing senior officers with an official car. The Car Allowance is currently 2.5 times the monthly salary of the officer. This is not the market practice. Typically, private sector companies pay car or transport allowance at a flat rate. As the Car Allowance is no longer relevant, we will remove it formally. In its place, we will increase the GDP Bonus which depends on the performance of the economy, and performance bonus which depends on the individual's performance. This will apply to all appointment holders, the Administrative Service, as well as senior officers in all Ministries and statutory boards. I should emphasise that the Car Allowance is already counted into the annual salary package of these officers. Hence, this change does not change the total annual salary package but restructures it to be more performance-based.

The President, Prime Minister and Speaker do not currently receive the Car

Allowance as they are provided with an official car. The restructured salaries, however, that replace the Car Allowance do so with higher GDP Bonus and Performance Bonus. The President, Prime Minister and Speaker will draw this new restructured salary. The total salaries of the President and the Prime Minister will increase by about 25%, close to the average percentage for the MR4 grade and above. They will continue to be accorded the use of an official car. This car benefit will be subject to tax.

Second, we will revise the GDP Bonus. This bonus payment depends on the real growth figure for the year. Currently, the norm payment is two months, if the economy grows by 5%. There will be no GDP bonus if the economy grows by 2% or less, but a maximum of four months will be given out if the economy grows by 8% or more. In between, the bonus varies linearly with the real GDP growth rate.

We will put a major part of the salary increase into the GDP Bonus, to make a larger proportion of the annual salary package dependent on growth of the economy. Ultimately, every senior civil servant and appointment holder plays a role in ensuring that Singapore continues to thrive and prosper. We will increase the bonus to a norm payment of three months, if the economy grows by 5%. The minimum payment will still remain at zero if the economy grows by 2% or less. The maximum will be increased to eight months, if the economy grows by 10% or more.

Third, in line with our philosophy of paying for performance, we will increase the Performance Bonus by two months for officers at this level, to typically seven months.

With the above revisions, close to half or 47% of the annual package of MR4 grades and above will be variable,

compared to about one-third or 34% today. 20% of their salaries will be predicated on the GDP bonus. Another quarter of their salary is performance-dependent. The Prime Minister decides on the level of performance bonus each Minister receives.

The President, Prime Minister, Judiciary and Statutory Appointment Holders currently receive a fixed Service Bonus of five months instead of Performance bonus. The Service Bonus will be increased to seven months which is in line with a two-month increase in Performance Bonus quantum that those in grades MR4 and above could qualify for. About 20% of their salaries will be predicated on the GDP bonus.

All the salary revisions are non-pensionable. There will be no increase in pension cost.

The new salary levels will bring the rankings of MR4 and above salaries amongst all income earners to a level comparable to their rankings in 2000.

The Prime Minister's salary currently ranks 164th among income earners. After the revision, the Prime Minister's salary, at $3.1 million, will rank 102nd among the private sector earners. In 2000, the Prime Minister's salary ranked 63rd. The MR4 salary currently ranks 769th among income earners. The revised MR4 package will rank 438th compared with 367th in 2000.

Adjustments for SR9

We have to make sure that salaries at the SR9 benchmark stay competitive to retain our top officers. For Administrative Officers who are bonded, their bonds will be ending when they are in their late 20s and early 30s. This is a critical juncture in their careers, when they will ponder alternative career options. These officers

are most mobile and likely to be drawn to all the attractions of the private sector, in particular the banking industry.

At the Superscale entry grade, or SR9 grade, our salaries are close to the benchmark level. But we should be mindful that the benchmark measures salaries received in 2005, almost two years ago. The market for talented young professionals is very competitive and we expect that market salaries have risen further in 2006 and 2007. As the SR9 salary is currently near its benchmark, we will not be making any adjustment to the monthly salaries at this grade or in the grades below. But we will make a performance-based payment of 0.5 to 0.75 month. This is in line with other civil servants whose schemes are at or close to their benchmarks.

This payment, together with the higher GDP bonus paid out this year, will raise annual SR9 salaries by 3%, from $372,000 to $384,000. About 36% of the revised salary package will be variable depending on how well the economy and the individual perform.

The salaries for grades between SR9 and Staff Grade I or MR4, will be adjusted by between 3% at SR9 and 33% at MR4.

We will watch private sector salaries at the SR9 benchmark carefully. Should we see the market moving, we will move promptly to make a further adjustment, later this year if necessary. I will now ask for the tables* on the Civil Service revisions and on the 2000, 2006 and revised 2007 salaries for PM, Minister (MR4), and SR9, including ranking information to be circulated. The tables will also include the salaries and rankings for the President, the Senior Minister, Minister Mentor and the DPMs. [Copies of tables circulated to hon. Members. ]

Adjustments for MP Allowance

In 1995, the annual package for Members of Parliament was $100,500, or 56% of the SR9 annual package. Over the years, the SR9 annual package has risen but with a large proportion of the increase paid as annual components - the GDP Bonus and performance bonus. As MPs do not receive these components, their annual package has decreased as a proportion of the SR9 annual package. The current MP annual allowance is 47% of the SR9 annual package.

We will bring the MPs’ allowance back to 56% of the SR9 annual salaries. The monthly MP allowance will be raised from the current $11,900 to $13,200. The GDP Bonus will also be extended to MPs, so as to link their annual package to the state of the economy. MPs will receive one month of GDP bonus if GDP grows at 5%, and up to two months of GDP bonus if the GDP growth reaches or exceeds 8%. But if GDP growth is 2% or less, there will be no GDP bonus paid. This is the same as the GDP bonus at the SR9 level. The combined changes will bring the 2007 Members of Parliament package back to 56% of the SR9 package, similar to the 1995 levels. We will make corresponding adjustments to the allowances for Non-constituency MPs and Nominated Members of Parliament.

We will also increase the allowances for a Member of Parliament to engage a Legislative Assistant from $1,000 to

$1,300 and for a Secretarial Assistant from $350 to $500.

Costing

All the adjustments will take effect from 1st April 2007. The total salary revisions for the Civil Service will increase the Government’s wage bill by about $214 million or 4.7%. The wage bill for political appointment holders will increase by $10.5 million (or 23%) to $56 million.

Ex-gratia payment

The pay revisions outlined above are to ensure that we continue to have a good public service for the future. We should, however, not forget those who have laboured hard to lay the strong foundation for us. One group comprises the former officeholders and Members of Parliament who were elected between 1959 and 1980 and retired before December 1992 and are now drawing a pension. They were among the first generation of leaders who toiled during the early years of independent Singapore and did not have a chance to enjoy the fruits of their labour. Another group is the civil service pensioners who worked with the Government during the turbulent times of the 1950s and 1960s and who retired before January 1982. These pensioners served at a time when civil service pay was lagging well behind the private sector. Some did not enjoy the benefits of employers' CPF contribution while others did not have their wage increase consolidated into their pensionable salaries. We would like to acknowledge these early pioneers and their dedicated service, even as the civil service adjusts its pay level for the current batch of officers.

In 1996 and 2000, we made ex-gratia payments to these two groups as a tangible recognition of their contributions during the early years of nation building. This year, we will make another gesture in

the form of an ex-gratia payment of the same quantum to these two groups. The payment is estimated to cost $2 million for 43 retired MPs and officeholders. About 2,400 civil service pensioners are expected to receive the payment, costing $7.6 million.

Conclusion

Mr Speaker, Sir, three weeks ago, I met Dr Henri Ghesquire. He had worked in the International Monetary Fund for over 27 years advising and observing many countries. He served in Singapore in 2004 and 2005 as Director of the IMF-Singapore Regional Training Institute. He wrote a book and in his recent book called "Singapore’s Success - Engineering Economic Growth", Dr Ghesquire analysed Singapore’s rapid development. In the concluding chapter, he wrote and I quote:

"Singapore succeeded because its leadership was assiduous, highly intelligent in a practical way, determined to achieve shared prosperity, and committed to act with integrity. Leading with vision and fortitude is possible. Its benefits can be invaluable. This is Singapore's ultimate lesson."

Sir, we know financial rewards cannot and should not be the main motivation of those in the Public Service. There are many intrinsic rewards that come from working in the public sector. However, that does not mean that we do not need to pay them market-competitive salaries. We do not want pay to be the reason for people to join us. But we also do not want pay to be the reason for them not to join us, or to leave after joining us.

Few countries have implemented our philosophy and practice of benchmarking and paying public officers salaries that are pegged to the market, but this system has worked for us. Competitive wages have helped us bring in and retain able men and women in Government and in the Public

Service in Singapore. This policy has served us well. We must maintain this competitive advantage - a clean, effective and efficient Public Service. We need a team of good people to develop the vision, ideas and plans, as well as to see through the execution.

In the end, what is our objective? Our objective is to have a public service that works, that works for the people of Singapore. This way, we will be better placed to realise our vision and dreams for Singapore.

Mr Speaker, Sir, pursuant to Standing Order No. 44, I beg to move,

That the Ministerial Statement on the Civil Service Salary Revisions be considered by Parliament.

Question proposed.

*Cols. 175-180. We will also adjust the allowance for Members of Parliament. The Members of Parliament Allowance is pegged to the Administrative Service SR9 grade. MPs currently receive a monthly allowance, as well as the Non-Pensionable Annual Allowance or the 13th month pay, and they also receive the Annual Variable Component which is paid in July and December each year. *Cols. 181-194.

3.55 pm

Mr Speaker, Sir, my first reaction, and I suspect the same of many of my fellow MPs, when I heard that there was going to be a pay revision for Ministers and also MPs was: how to explain this to our residents, especially coming in a matter of months after the announcement to increase the GST? There was surely going to be a chorus of disapproval and complaints about this or that Minister not deserving his or her high pay. But amidst the heat and dust, we will do well to bear in mind two points. The first is that the Government is coming out in the open about what it proposes to do and that we get the opportunity to debate the merits, and the people get the opportunity to vent their feelings, with the Ministers and MPs having nowhere to hide. After all, the policy of benchmarking was adopted some 10 years ago in the 1990s. There

would have been nothing to stop this Government from just following the benchmark to its full extent without any public debate.

Indeed, as someone who was not in Parliament at that time - in fact, not until last year - I had simply assumed that that was being done. So, the present figures, where the Ministers' salaries at the entry level come up to 55% of the benchmark, came as something of a surprise to me. I consider that whatever our views about the pay revision, whether for or against it, we cannot complain that it is not being done in a transparent and open manner.

The second point to bear in mind, which is easy to overlook, is that this proposed revision covers the entire civil service of tens of thousands of employees, roughly half, I think, are made of teaching staff, and another 15-20% made up of Police and Civil Defence officers. It also covers our Judges and statutory appointment holders like the Auditor-General. Most of the public's attention has been focused on the Ministers' pay, and now perhaps also the MP's allowance, which is only natural and understandable, given that we are elected by the people. But the sweep of the revisions and the objectives behind them are much wider than that.

There are several measures in this package to make sure that our civil service remains strong, is adequately staffed and is staffed by the right sort of people, which are too important to overlook, and we should not overlook them.

So, what is it about the pay revision that sparks such outcry? Without a doubt, it is the $2.2 million benchmark or the sticker price on an entry-level Minister. The Minister's statement that pay will go up to less than the benchmark, and only in stages, will make

it easier for the public to swallow, but only slightly easier, I suspect.

So, should we be outraged that entry-level Ministers would, I think, earn something like $1.6 million with effect from this year, going up to close to $2 million next year, assuming that the benchmark remains the same? It is correct that that is a lot of money. It is correct that that is more than some Singaporeans will earn in a lifetime. However, we need to look at what the private sector, which is the other competitor to the public sector, what they would pay for people of similar skills and abilities.

In that regard, I note the Minister's statement that fresh Honours graduates joining the civil service will have their salaries pegged to be competitive with the private sector. I think he mentioned that an SMU graduate would earn, on average, $2,800 per month. By way of comparison, the top legal firms - and I note that lawyers form probably the largest single block of Members in this House - were paying newly-qualified lawyers that kind of salary - $2,800 - 10 years ago. Now, the major law firms pay new lawyers about 50% more - between $4,200 and $4,500 per month. On top of that, they can get good performance bonuses of up to six or seven months.

As regards the Ministers, well, we live in a world where the average income last year of the CEOs of our three local banks was over $7 million, where the Chief Executive of our largest property company was paid in excess of $5 million, where his counterpart in our largest conglomerate got over $5.5 million the year before. And where the CEO of our largest telecommunications company - both the outgoing CEO and the incoming CEO - got an annual package which, together with stock options, was worth $5 million or more. These figures have all been widely reported in the press,

including in the Business Times today in a story at page 7.

$5-$7 million a year is a huge number by any measure. But even if one says, "That's for the No. 1 person in the organisation, and we should be looking at the No. 3 or No. 4", if you halve those figures, you would still be in the $2.5-$3.5 million range, which approximates to the $3.3 million median derived from the 48 top earners. To then cut that median by a third or 33% is no small matter for the person who stands to earn that amount, but reflects the element of sacrifice that public service demands.

The market reality is this. Someone earning $2.5 to $3.5 million, or with the potential to earn that much or more, may not give that up for an annual package of $1.2 million, no matter how public-spirited. Something more than that would still represent a pay cut to such a person, now or in the future, but may be a sacrifice that he or she would be prepared to make.

In the run-up to last year's General Election, I read that the hon. Member for Hougang proposed that Ministers' pay should instead be based on the median salary for the lowest 20% of the workforce with a multiplier of 80 or 100 times. That sounds appealing at first blush. But does it represent market reality? I do not know of any major commercial organisation that derives its CEO's pay from a multiplier of its workers' salaries. I doubt very much if one asks compensation consultants whether they would recommend such a formula for a high-level hire. The harsh reality is that when looking for a CEO-calibre person, you set his pay based on what other CEOs are getting, not a multiplier of their workers' pay. That is the market economy at work. That is the world we live in.

This sounds elitist. But do we not want our leaders to be the elite in terms

of ability? At the end of the day, are we looking for the 10 or 20 people with the most ability to govern, or the 10 or 20 people who are most willing to take pay cuts to join the public service? Being typical Singaporeans, the answer is we want both. But unless one can find the ideal combination in a person and a number of such people, we do need to strike a balance. That is what, I think, the proposed revision sets out to do. And to learn that after the revision, there will be a hundred people in the private sector who would earn more than the Prime Minister, and that there would be about 400 people who would earn more than an entry-level Minister does not make the revision seem out of balance when one considers the importance of their role and the heavy responsibilities they bear.

This does not mean that the revision cannot be improved or refined. I would like to put forward three measures for the Minister to consider.

I am happy to note that there will be a substantial performance element to the Ministers' remuneration. I think the figure mentioned was 47%. I would suggest that the performance element should be at least half and maybe up to 60-70% of the total package. This is to bring it closer in line with private- sector pay packages, which is, after all, what we are benchmarking against. This would also help to refute the notion that the Minister's pay is somehow all locked in - he, basically, just has to avoid any major bungles to get the full amount.

The performance element has two main components - one, based on the performance of the individual Minister, and the other on the performance of the overall economy. The first is necessarily based on individual assessment. But the second, based on the GDP growth of the Singapore economy, can be objectively

worked out, and the Minister has clearly explained how that ranges from zero to a maximum of eight months, depending on the GDP growth figures. I would suggest that this GDP component, which is said would come up to something like 20%, should form either 25% of the total package or at least half of the performance element. This will expose our Ministers to the risk and rewards of the overall economy in the same way private CEOs' pay gyrates with the financial results of their companies, and would serve to bring down our leaders' pay in times of recession where it seems only right to do so when many workers would be struggling.

My second suggestion for the Minister to consider is rather to adjust the benchmark based on the figures from year to year, to derive it from a moving average over the preceding 3-5 years. This would help to smoothen out the swings, up and down, of executives' pay which tends to move in line with the economy. That is, after all, the aim of good government, to build sustained growth by adopting policies which may have a long lead time, rather than artificial pump-priming. A moving average basis seems consonant with the medium to long-term outlook that we want our leaders to adopt.

My third suggestion is to borrow a concept from private-sector corporate governance - that of the Remuneration Committee. Perhaps an independent body could be set up with members from leading non-political organisations and the public, possibly including some NMPs, to review the manner in which the benchmarks are derived. Such a move would increase public confidence that the benchmarking policy set by this House is being implemented in a fair and transparent way. And, hopefully, we move some of the niggling doubts in people's minds about certain issues, like whether the Ministers' pay includes free

COEs, waiver of maid levies or other suspected "perks".

In the final analysis, the issue comes down to the selection of talent - the calibre of our Ministers. To take the three most obvious examples - not the only examples, I hasten to add - of the Prime Minister, the Senior Minister and the Minister Mentor, I suspect that the majority of our population would not begrudge paying them several times over the benchmark. With the right leaders, no amount is too much. But with not-the-right leaders, any amount seems too much.

That is the heart of the issue. The proposed revision is not an end unto itself - some clever method to fatten the wallets of our Ministers. If that were so, some quieter way, without the need for this public debate or public statements, could be found to achieve that. Rather, it is a means to an end. And that end is the search to find the leaders of tomorrow while developing the leaders of today. The pay revision is but one element in this drive - albeit an important one. So we should look at it in its proper perspective, as one component of the renewal of our leadership. And one should assess that search for talent by the results it yields. So if this revision helps to bring our civil service to the highest standards of service, helps us to build a world-class judiciary, to find the leaders to take our country to the next level, it would have been worth it.

As the Minister remarked, there is no perfect formula, no magic bullet to derive the benchmark. But let us look at this issue in the wider context as part of the drive for the wide talent to lead our country. And let us judge it on the track record of the Government, both now and in the future, and the leaders that come to the fore.

On that basis, Mr Speaker, Sir, I support the revision.

Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 4.35 pm.

Sitting accordingly suspended at 4.13 pm until 4.35 pm.

Sitting resumed at 4.35 pm

Debate resumed.

Sir, thank you for allowing me to speak on this issue. The whole issue of salary adjustments for the civil service and the Ministers has been emotionally debated by the public and I can understand why it has become emotional. I feel that had the Government done things differently which, in my view, would not have been a very difficult thing to do, the public discussion could actually have been on the merits of the proposed salary revision, which I do support.

The whole salary debate started with the debate on “Competitive Salaries for Competent and Honest Government” which the Minister spoke about just now, and it took place in this House sometime in 1994, and I still have all the cuttings [indicating ]. It has drawn a lot of interest. I was the newly appointed second adviser and I took a lot of interest on this issue and I have kept them since then. Thirteen years later, however, the debate has not shifted very much, which means that the Government has failed to address the contentious issues. The central question here is whether our Ministers and top civil servants deserve so much in the way of salary but discussions have unfortunately been clouded with other issues. I think

people already accept that Ministers and civil servants deserve the high salaries but how the Government is justifying it is the main problem.

My comments today will focus on three areas:

Whether our Ministers and civil servants should be paid the very high salaries;

The usage of the benchmark to calculate the Ministerial salary increase; and

The timing of the proposed increase in salary – in other words, whether it is something that needed to be done at this time.

Sir, let me say at the outset that I strongly support the Prime Minister’s initiative to increase the remuneration of Ministers, but I disagree with the benchmark that is used to decide this salary scale or, in fact, the use of any benchmark, and I also have some concerns about the timing of the proposed revision.

First, on the Ministerial salary – do our Ministers deserve so much of remuneration?

Rationale

Sir, the rationale for paying our Ministers and top civil servants so much has been explained by the Prime Minister, Minister Mentor and, also, by Senior Minister during his Prime Ministership, when the salary debate first took place in 1994. And today, the Minister for Defence also gave us the reasons. People generally have accepted the fact that our Ministers must be paid well. And I am in full agreement with the rationale although I cannot agree with the rather extreme

scenario raised by the Minister Mentor of a meltdown and Singapore landing in the dumps if we do not increase our Ministers’ salaries from $1.2 million to $2.2 million this time. Our history over the last 40 years shows that we have had many committed men and women who have made sacrifices for the country by coming to serve at all levels of government. Many of the Minister Mentor’s generation, including the Minister Mentor himself, made such a sacrifice. Even in this generation, as the Minister Mentor highlighted a few days ago, we had three doctors who left lucrative practices to join the Government, giving up well-paying compensation packages. Many of the Members of Parliament even today are sacrificing a lot to serve the country. Some lawyer MPs are giving up clients because of the time that they devote to their constituency work. Businessmen MPs could have spent more time on their business and made more money for their companies and for themselves, but they have made the choice to spend it serving the country. So, the Minister Mentor is not quite right in thinking that Singapore will sink if we do not make Ministers the highest paid in the land.

Sacrifice and whether we should demand it

But having said that, should we have a system or a situation where we demand sacrifice by all people who join the Government, whether the civil service, or as Ministers or as MPs? It sounds like a compelling argument but we have to be realistic and fair, especially in these times of intense competition for talent.

We have to realise that on a system-wide level, altruism alone will not give us the critical numbers that we require in leadership, which SM himself noted in the debate in 1994. So, are we willing to leave the future of the economy to chance that we will get good people who

will give up their competence without caring about their salary?

We should not take advantage of the situation and the good nature of the people we bring in to work as Ministers and pay them less than what they should command. It is the responsibility of the organisation - in this case, the Government - to reward them even if they do not demand it.

In enlightened organisations, good people do not worry about whether they will be well paid for the good job they do - they just go out and do the job and have faith that the organisation will ensure that they will be equitably rewarded. The Prime Minister should therefore take the responsibility to pay those who join the Government what they deserve even if they do not ask for it. We should want the best to know that if they are committed to give their best, they will not be worse off. So, in principle, I agree that we need to offer packages that, on balance, are comparable with the best in the private sector.

Sir, I have heard the argument that Ministers and civil servants do not work as hard as people in the private sector. This is a wrong perception. It is well known that most politicians spend weekends and nights doing constituency work and other political related work. But it does not end there. It is also a 24/7 preoccupation for many of our top leaders, our Prime Minister included. Many a time, I have emailed the Prime Minister at midnight, and sometimes at 1.00 am, and five minutes later I get a reply, and then I am pressured to send him another email, and it makes me wonder whether he ever sleeps. About a week ago, I was in the USA doing my business and it was about 10.30 in the morning, my time in San Francisco, and I emailed a message to Minister Tharman. It was about 1.30 am (Singapore time). I got a reply five minutes later.And I also

knew that Minister Tharman had to attend a breakfast meeting at 8.00 the same morning, a meeting which I was supposed to attend but could not because I was in the USA. I do not think that Ministers work less hard or have jobs that are any less challenging than anything one can find in the private sector. It is the same with MPs and many civil servants.

The model that we are heading to

Given that we then recognise that there is a need to pay top-dollar salaries for top talent, the question is where we are heading as far as the idea of public service is concerned. It is a fine balance to strike, but once we acknowledge the market reality, the logical conclusion is that we move away from the concept of pure public service to performance-linked pay. The more we move towards a purely monetary-based compensatory package, the more we take the moral shine off our leadership.

As we move more and more towards a system that is properly compensatory in monetary terms, the Prime Minister must also ensure greater correlation to performance and that each Minister or civil servant should be subject to stringent performance management. Hence, should there be less than the desired level of performance, strict action should be taken whether in adjusting the salaries or the total compensation or, in fact, removing non-performers and poor performers. No longer can we say that this person is just doing public service or is making great personal sacrifices for the nation and therefore we should be more tolerant towards less than top-notch performance levels of such people. So the whole system will naturally evolve towards one of Ministers doing a job and less of just doing service to the nation.

Still, the proof of the pudding is in the eating. The facts speak for themselves. No country compares with the stability

and security and the overall potential of Singapore. These are, in large part, the result of enlightened leadership. We cannot risk diminishing this. I therefore support the move to pay our leaders high enough salaries so that we have a team of people in place in Government who can continue to make the right policies for Singapore.

So having addressed the issue of whether our Ministers should be paid top-dollar, I now turn to the question of what is the appropriate way to decide on the amount that they get paid. This is where the problems start to arise.

The validity of the benchmarks - Do we need them and should we keep them?

As we know, the Ministerial package is pegged to a benchmark. This benchmark is the reason why the whole debate has become emotional. Many holes have been poked into this benchmark formula.

Some of the issues raised in 1994 about the benchmark remain the same till today, and I read many of them through this cutting [indicating ] that I get. First, the arbitrariness of selecting the six professions and why other professions are left out and why only the top eight are being selected. Second, the big difference in risk between the public sector and private sector. Third, the upward bias, I heard, of taking the top earners - those at the top in one year may not be at the top the following year, whereas the Ministers would always be getting paid based on whoever was at the top, insulating them from the vagaries of the private sector. Fourth, the assumption is that the Ministers could have commanded the high pay had they been working in the private sector.

Why then after 13 years we still have not been able to convince Singaporeans

about the rationality of using the benchmark formula as it was designed? I do not intend to suggest a better formula. I know many Members in this House will do so. Mr Alvin Yeo also spoke about some of his suggestions on how it can be modified. Instead, I am going to suggest that we eliminate the use of the private sector benchmark to set salaries for the Government. Here are my reasons.

First, if we were to stick with a formula-based system, we would have to be making discounts for many things. The risks CEOs and the professionals face in the private sector are much different from the risks faced by Ministers and civil servants. So, if you really want to use a benchmark formula, a big discount would have to be given for the fact that CEOs are judged on an annual performance while Ministers face elections every five years. So are we then prepared to a discount of 1/5 of what the CEOs earn to account for the lower "risk"? What about a lawyer or a professional who is subject to law suits from clients if a job is poorly done? Their risk level is much higher than a Minister's or a civil servant's as they are immune to such law suits even if they do a bad job in their Ministries. Are we willing to throw in another discount for this? Or for the fact that Ministers have pensions while the top earners in the selected sample do not? So, let us add another discount factor because of the pension. And we can find many other holes with the benchmark formula and I am sure we will be hearing many of this in the next few days of the debate. So, therefore, why use a benchmark?

In fact, over the years, the benchmark formula was not adhered to as planned, which is a reason why the Prime Minister has highlighted the big gap but has opened up in the salaries as compared to the top in the private sector. In the past 13 years after the benchmark formula was implemented in 1994, the Government and the PM decided what

was thought to be fair compensation for the civil servants and Ministers and apparently never really used the benchmark. Salaries were still adjusted. So in some years, salaries went up and in other years, there were pay cuts, especially during the recession years. This alone shows that it is possible to do without a benchmark. And, also, in reference to the handout given for the SR9 grade, it clearly shows that in the last two years, we did not adhere to the benchmark because it was at 116% and 103% for the last two years. So we are not following the benchmark.

People on the ground have told me, "Let's not kid ourselves with a benchmark formula, because we can target any number as the final number that we want a formula to calculate, and then reason backwards to find a formula that will give us a final number." Sir, elements in the formula can be varied, such as which professions are chosen, or how many of the top earners should be considered as part of the sample. And therefore, frankly, I can use just any formula to justify the final number I want. So, for example, if I want the salary to be $1 million a year, I can design a formula to choose the variables to give me the answer. And similarly, if I want it to be $5 million a year, I can design that formula. So this is what many, among the professionals, perceive this whole benchmark mechanism to be - although I can understand it is one way of measuring Ministers' salaries against a benchmark, they are very cynical about this with the kind of explanation that I have just spoken about - in other words, they think that it is an eyewash. The public finds this approach patronising. The professional and the better educated Singaporeans just do not agree with the comparisons made as there are too many variables and the scope of work and risks are a world of difference. I agree with this and, I think moving forward, there is little point in trying to justify salary increase using a

benchmark formula. So, to use a benchmark formula which compares to the private sector is a futile exercise and we will always draw criticisms and we will never win the argument of justifying Government salaries that way. It only serves to cloud the real issue, ie, whether high pay is deserved.

A possible benchmark

If the Government really wants to use a benchmark which, in any event, I do not recommend, then perhaps it should be pegged to the compensation and benefits of Ministers and officials in other similar developed countries but adding in the additional perks and benefits which they get during and after their service. That may have some hope of being better accepted than the current benchmark comparing, as it would, apples with apples.

The 1994 decision to benchmark in context

Does this mean that the decision to move to a formula-based system in 1994 was wrong? Let us give the Government the benefit of doubt, perhaps it had no other way but to develop and use the famous "6 professions" benchmark. I think many countries have since also increased their salaries to justify why civil servants and Ministers should be paid as high by referring to Singapore.

Sir, 13 years later, we are already used to this new range of million-dollar salaries that Ministers are paid. I feel that there is no longer a need to use such an arbitrary benchmark formula for justifying further increases in Ministerial and civil servants' salaries.

Sir, we already have a good base from $1.2 million and, like any other company, all that is needed is regular internal reviews to make adjustments. If later the

Prime Minister cannot successfully hire certain people he wants and this becomes a systemic problem, he may need to review the overall compensation package to come up with one that can let him achieve his hiring and retention goals. Then he could do a check against the private sector chiefs who are earning to give him comfort that his Ministers and civil servants are not too far off from the top earners. Using the private sector salary benchmarks then would be merely one of the tools rather than the main means to calculate salaries in Government.

I therefore strongly urge that the Prime Minister drop the benchmark approach. You needed a system 13 years ago but now let the setting of salaries for the public sector take a life of its own. You will achieve the same outcome. The Prime Minister should decide what he needs to pay the Ministers, whether it is $2 million or $5 million, the people will then decide whether they endorse the decision every five years when they go to the polls. Dropping the benchmark formula will go a long way towards taking the emotions out of the salary debate. Some will still question the high salaries but at least they will not feel that the Government is using a "smoke and mirror" approach of using private sector benchmarks to justify the high salaries.

Among my grassroots leaders and residents, the general feedback is that they have already learned to accept the fact that Ministers need to be paid high salaries. So if the CEO of SingTel or Temasek Holdings can earn $5 million a year, should the Finance Minister who is overall in charge be earning less? The public understands this argument. And whether it is $1.2 million or $2.2 million, it is something, if the Prime Minister feels necessary, they will accept it. As an aside, many of them already cannot

imagine a $1.2 million salary and another million for them is in the same order of magnitude, but their biggest issue is with the timing of the salary adjustment.

I will therefore address the issue of timing.

Timing

Sir, we are in the midst of a long-term recovery from the poor economic years of the post-Asian economic crisis. We have just introduced Workfare for the less well off - surely an acknowledgement that times are tough for many people in Singapore.

Things are going to get tougher for the man-in-the-street this July when the GST increases to 7%. The Minister for Finance, when delivering his Budget speech this year, said that the GST increase this year was expected to raise "additional $750 million this year, and $1.4 billion per year going forward". This is money that is to come from the taxpayers' pocket. It will be painful but necessary to reposition our economy.

I can understand if this sum is needed to make the economy more competitive, for example, if the new revenue will allow us to cut corporate taxes so that more companies set up here, bringing jobs for Singaporeans. But how do we answer the man-in-the-street when he is told that about 1/4 to 1/3 of the expected revenue increase this year from GST is going to be the bill for the proposed Ministerial and civil service salary increases. I was told it is about $240 million. Many of those I spoke with now think that the key driver for a 2% GST increase was in fact to fund the salary revisions primarily for the civil service. This seriously undermines the Government's ability to make tough decisions and convince the public in future.

Coming as it is at a time of belt tightening for the public at large to cope

with the GST increase, the timing of the proposed increases we are debating could have been better.

As to the timing, although there have been some suggestions that the world would become catastrophic if the salary revisions were not done, I disagree. The danger we face is a slow attrition of talent in the Government. Has the Prime Minister really lost a Minister or a Permanent Secretary? Have any of the Prime Ministers in the past lost one purely because of pay? I think the issue is not as urgent as it is being made to seem.

We were in the House about a month ago debating and arguing why we should not be giving our public assistance recipients, some 3,000 of them, another $100 monthly assistance increase and we are talking about million-dollar salary increases. And the total expenditure on civil servants' and Ministers' salary increases is almost the same as the total Workfare Income Supplement Scheme. What signal are we sending to Singaporeans?

Sir, in conclusion, I broadly support the move to keep Ministerial and civil service salaries attractive but state that the benchmark has outlived its usefulness and the sooner we abandon it, the sooner the debate will be more focused on the real issues. Regardless of my support for the revision generally, I am just a little concerned at the timeliness of the measures, coming as they do hard on the heels of the painful measures that Singaporeans will have to learn to cope with after the GST is increased in July. While attractive salary in the top echelons of the Government sector is desirable, we could have achieved better results in this whole salary adjustment exercise had we been more sensitive to these emotive issues of using a benchmark and, also, the timing.

Sir, I support the salary increase but I do not agree with the benchmark formula.

Mr Speaker, Sir, any public discussion on salaries, particularly salaries for those public guy in the public service is likely to be an emotive issue. The open discussion we had on this sensitive subject has generated feelings of uneasiness and even some envy and resentment. A strong, responsible and sustainable leadership requires difficult and controversial issues to be discussed in an open and transparent fashion, not behind closed doors. Hence, it is to Government's credit that it has taken bold steps of openly bringing this important, if not sensitive, matter for public discussion and debate.

4.56 pm

Sir, in any organisation, there will always be some who are unhappy with how much their leaders are paid. They see it as a zero sum game. They wrongly assume that the size of the pie is always fixed. They think that what is given to their leaders is entirely at their expense. But this is not the case in dynamic and growing organisations. If an organisation is able to attract and retain the best and brightest who would then bring about growth in the size of the pie, all stakeholders will benefit from it. Conversely, if an organisation is unable to attract and retain its best and brightest, it will end up being managed by less than competent people. All things being equal, chances are that this pie will shrink and the stakeholders will eventually lose out as the competition intensifies. Paying less may be a populous tactic to achieve short-term gain and will appeal to those who want to play to the gallery. But it is a wrong strategy to pursue in an organisation's objectives or to achieve

long-term sustainable growth and development. This is because good leaders and good governance will inevitably increase

the value of an organisation which, in turn, will bring about greater value to all its stakeholders. If we apply this reasoning to the motion, I believe there are three fundamental questions that we need to address. They are:

Firstly, do we have a good Government in Singapore?

Secondly, what is the price that we are willing to pay for good Government?

Thirdly, what might be the consequences of not willing to pay for good Government?

Let us commence with the first question, "Do we have a good Government in Singapore?" Before we can decide how much to pay someone, we must begin with an assessment of the value that the person brings to the position. Have our top civil servants and Ministers brought value to Singapore? Here, I would like to share my personal experience and those of my senior local, regional and global colleagues who have been in and out of Singapore for various meetings and conferences over the years. During their visits to Singapore, they have had the opportunity to meet our Prime Minister, some of our Ministers, ex-Ministers and top civil servants. My overseas colleagues have themselves established personal and working relationships with Government leaders and senior civil servants in their respective countries. So I asked them if they were impressed by the calibre of leaders that we have in Singapore, compared to their own leaders. Their answer is an overwhelming yes. My answer is also an overwhelming yes because, for more than

two decades, I have personally witnessed how effective, far-sighted and pragmatic government and governance have helped businesses flourish and bring about a significant improvement in living standards for most Singaporeans.

But we need not have to rely on anecdotal evidence, because there are many independent studies and surveys that benchmark Singapore very positively across a range of variables and indicators. For example, a recent study by the partnership for New York and my firm on 11 global cities has ranked Singapore as the global city which is most conducive for doing business. Considering our short history, the fact that Singapore is even shortlisted as a global city alongside such giants as New York, London, Paris and Tokyo is, in itself, no mean achievement. Singapore is also ranked fifth in the World Economic Forum's latest Global Competitiveness Index. Our per capita income puts us in the league of first-world countries. The only other post-colonial nations in this premier league are Kuwait, Qatar and the United Arab Emirates, all countries which are rich in natural resources. Compared to other countries that achieved independence in the 1960s, we are way ahead of our peers. Under the World Bank classification format, many of these countries are still languishing in the low-income group of less than US$875 per capita, whilst we have already made it to the high-income bracket with per capita which is at least 12 times higher. Singapore also tops the ranking of 13 Asian communities for being the least corrupt country in the region, according to a survey by Political and Economic Risk Consultancy (PERC).

To what do we attribute all these accomplishments? Of course, our people are very hardworking and industrious but, without a good Government and good public institutions, it would not have been possible to achieve this exemplary report card.

But there are still many more challenges that the Government faces in its efforts to bring greater value to Singaporeans from all walks of life. A number of our citizens are suffering from the adverse effects of globalisation, which inevitably creates winners and losers. Those that have been left behind by globalisation would need to be nurtured back into the economic and social mainstream and we will have to preserve social mobility by steadfastly holding on to our meritocratic traditions. Our ageing population will pose challenges for public policy and we need to do more to engage our younger generations and netizens.

But, on balance, our Ministers and top civil servants have brought much value to our Singaporeans. I believe that no reasonable person inside or outside of this House can dispute this claim. What is disputable though is whether the current situation is sustainable. There is a Chinese saying that wealth cannot be retained beyond the third generation. Thus far, our third generation leaders are trying to prove this saying wrong. Can Singapore's wealth be maintained by our next generation of leaders? That will depend on whether we still have the best and brightest in this House and in the civil service. Looking at the attrition rate in the civil service, I am not so sure.

Sir, the competition for talent is very real. We are losing talent in the civil service to the private sector, the private sector in Singapore is losing talent to other competing cities and countries. Perhaps, we are making up by having foreign talent come to Singapore to compensate this, but the civil service risks being the biggest loser in the competition for talent, especially in a buoyant economy. This does not augur well for the future of Singapore. How can we attract and retain the best and brightest in the Government? This leads me to the second fundamental question: what price

are we willing to pay for good Government?

For me, whether it is from the business sense or from the view of a private citizen, the answer is an obvious yes. We must pay our politicians and civil servants well. However, when I read the Forum page and what netizens have to say, the answer is not obvious to everyone.

Sir, there are some imaginative people who think that Singapore is now on auto-pilot and there is therefore no need to pay our leaders much. They feel that the challenges that our current leaders face are nothing compared to our nation's first generation of leaders. They reason that since our first generation leaders did so much and yet were paid much lesser, why should our present leaders be paid so much for doing much less? Let us ask ourselves: are the challenges that the current Government facing any less difficult? I certainly do not think so. To begin with, this is not a fair comparison. The challenges are of a different nature, as our nation is now at a different stage of development. Challenges of globalisation and keeping Singapore ahead of the competition are no less daunting than the pioneering industrialisation efforts. The challenges of binding a nation of cosmopolitans and heartlanders are no less difficult than the challenges of starting a new nation. The threat of terrorism is more pervasive and sinister, compared to the strikes and demonstrations of yesteryears. The views and expectations of the present population are of a different level of sophistication. All things considered, there is no way in which our present Government can operate in the auto-pilot mode.

Sir, there are others who feel that our Government leaders are paid too much, compared to the leaders in other countries, such as the United States of

America, Britain or China. They argue that Singapore is a small country. They ask, "Why should our PM be paid more than President Bush when the latter has a more demanding job?" This comparison is grossly unfair and misses the point altogether. The key issue here is that of opportunity cost. If our Ministers decide not to be Ministers, they would not be Ministers in another country. Chances are that they will be in the private sector. What if some of our Ministers opted out of politics? Chances are that they will be the head honchos of some of our listed companies and command higher remuneration packages. There are several such examples of ex-Ministers running successful public and private companies. Is the calibre of our Ministers less than our top CEOs? With all due respect, no. Can our Ministers do an equally good job, if not better, in leading any of our top listed companies? You only have to look at the track record of our former Ministers who are now at the helm of successful public and private sector companies.

Why are they not paid as well as the private sector? That is because of the notion that public service is a calling that involves personal sacrifice. Paying public servants too much, it seems, would otherwise send the wrong message that money is everything. Public servants are expected to look after the people's interests over and above their own personal interests. Public servants are expected to be noble people with an overarching mission to do good for all Singaporeans.

I agree with this view, but only to a certain extent. I agree that attracting and retaining talent in public service is not by way of high remuneration package alone. Our public servants must demonstrate that they are in it for the long haul and for the good of the people and not just for the money. But the important point this misses is the battle for talent that rages in

today's global and connected world. Our Administrative Officers and Ministers are paid well in absolute amounts, compared to most people. This is because they are the cream of the crop and there is a price that we need to pay for such talent. Whilst this absolute amount may seem large, it is actually much less than what they would have received if they had chosen a different career path. Talent today is highly sought after and extremely mobile. If they decide to walk off to another job tomorrow, the opportunities are abundant for them and they are almost guaranteed to be paid higher. They can opt for more privacy and not have their pay subject to public debates. This is a reality that does not sink in well with most people. But it is a stark reality that has far-reaching implications for the future of Singaporeans.

This brings me to the third fundamental question: what choice do we have if we are not willing to pay for good Government? Can we afford not to have good Government? I dread to contemplate a scenario whereby Singapore is no longer able to attract and retain the best and brightest in the civil service and the Government. Imagine having no long-term strategies, substandard policies and poor execution of public policy. Investor confidence would crumble and our economy will go down a few notches. The personal equity and worth of all Singaporeans would be at risk. Other countries can rely on their natural resources in case things go wrong. But, in Singapore, we do not have this luxury. We must continue to invest in our leaders and have good faith that they will deliver a bigger pie and secure a better future for all Singaporeans. Top civil servants and Ministers are not promised an iron rice bowl as there are already mechanisms in place to motivate them to do well and to deal with under-performance.

Sir, before I conclude, let me now make some observations on the present

benchmarking system, since both speakers before me had some comments on the system.

After so many years, should the benchmark still be based on the salaries of the six professions identified in 1994 and last reviewed in 2000? While benchmarking is important and brings credibility to the whole argument of having Ministerial and civil service salaries pegged to the market, I would suggest that fine-tuning is necessary to ensure that the professions selected are indeed the alternative professions that our top civil servants and Ministers would have joined. In the constantly evolving world of business and commerce, we are seeing new categories of employers attracting the best and brightest. One possible new category, for example, would be private equity. I would also create a category to include the top listed companies in Singapore by market capitalisation. This, in my opinion, is a more relevant grouping today than local manufacturers, which is presently included as a category for the benchmarking exercise. For our Ministers to decide on an alternative career in the private sector, it is not inconceivable that they would end up as CEOs for our listed companies.

I would also recommend that the review of the benchmarking process be done at more regular intervals because of the fast-paced world we live in, with business cycles becoming ever shorter. Refining and updating the way we benchmark Ministers' salaries to the private sector will help to clear the noise around leader quality and process which has caused unnecessary distraction from the real issue that our Ministers' and civil servants' remuneration has substantially fallen behind what they could possibly earn in the private sector.

Sir, I support the motion.

5.12 pm

Mr Deputy Speaker, Sir, when this topic on market benchmarking of Ministerial and civil service salaries against the top private-sector earners was first debated in Parliament in 1994, I spoke against it. Thirteen years after Parliament agreed to the salary benchmarks, the debate continues over whether Ministers are being paid too much. The issues I spoke on at the debate remain relevant to date. This is blatant evidence that the public, like me, was not and is not convinced that the salary benchmark is fair and just. I see no point in wasting public resources debating this salary issue every few years, if the sole purpose of having this supposed debate is just to pacify the people that the Government has given it fair thought before approving the high salaries.

While the Government can claim to have secured the mandate of the people at the recent elections last year and therefore has the right to pay itself based on the terms of the Government deemed most suitable, I wish to remind the Government that I do not think Singaporeans have given the Government a blank cheque. Given the public disquiet and debate outside this House after the intended salary revision was announced, the Government should seriously consider setting up a panel for public consultation and coming up with a remuneration formula for the public service that can be adhered to, is practical and deemed reasonable by the public. Many people are not convinced of the rationale of benchmarking the current salaries of the Administrative Service, including the Ministers', against the top earners in the private sector. One concern is that it is volatile. This is inevitable when the variable components of private sector wages, such as bonuses and stock option gains, are taken into account in the

setting of annual wages. In addition, the benchmark not only considers the earnings of Singaporeans but also those of Malaysians and Permanent Residents. While most of the individuals in the benchmark change every year, the level of wages taken into consideration will most likely increase over the years. This is largely due to two factors.

Firstly, a larger income gap due to globalisation will result in more outliers earning very high incomes.

Secondly, the embrace of foreign talents in Singapore will result in a greater pool of high-wage earners that will qualify under the benchmark criteria, alongside potentially increased wage.

Even if the Government takes an average from the range within the benchmark, it may not be representative of the general trend of income earned by Singaporeans. In the worst scenario, such a benchmark may even encourage money-minded civil servants to focus on policies that ensure the existence of the pool of top earners that satisfies the benchmark criteria. Apart from the potential embarrassment from an escalating benchmark,

that is headed for alarming high levels, it is also highly ludicrous that senior civil servants are consistently one of the highest paid in the workforce. Remuneration in the private sector is volatile and employees are subject to stringent performance reviews. For instance, stock option gains are possible only when an individual makes the correct investment decisions. More often than not, such individuals have also helped to improve the value of the company. However, human beings do not always make the right decisions throughout their entire life.

By benchmarking civil servants' annual pay against individuals who have

performed well during that year, there is an implicit assumption that civil servants and Ministers never make incorrect decisions. But are they truly super human beings, forever error-free? In addition, is there any job in the private sector that can guarantee that an employee is always amongst the highest paid in that sector regardless of the performance of that employee? There is much less job security in the private sector and even top performers face continual and fierce competition. Civil servants have an advantage as they are shielded from competition by foreign talent. Ministers too are guaranteed at least five years of job security from one election to next. Moreover, for the ruling party, there is always the flexibility of changing election rules in their favour to significantly increase job security for their Ministers. After all, did SM Goh and MM Lee not previously admit that the GRCs enabled them to bring in Ministerial materials?

It is also ironic that we are consuming taxpayers' money and we are also discussing how much more of a fraction of a million to pay civil servants and Ministers, whilst we haggle over additional tens of dollars to hand out to our needy and disadvantaged citizens. According to the 2005 report by the Department of Economic and Social Affairs, United Nations, the Singapore Civil Service has some of the highest paid civil servants in the world. Our Government holds the view that this will ensure a clean, competent and effective civil service. However, the fact shows that other countries with lower paid civil servants are able to enjoy such qualities. Based on the corruption perception index and global competitiveness index, Singapore ranked below Finland and Denmark in 2005 and 2006. However, the governing of a country should not only take into account these two factors. A more important factor that directly affects the lives of every Singaporean living here is the quality of life. A survey

that evaluates 39 quality of living criteria, including political, social, economic and environmental factors, personal safety and health, education, transport and other public services, found in 2006 that Swiss cities had topped the annual survey again while Singapore, with its highly paid and thus highly competent and clean government, ranked best amongst Asian cities, but was 34th in the world.

Based on the above facts, it would be interesting to know how much the civil servants are paid in countries such as Denmark, Finland and Switzerland, just to name a few. According to a United Nations' report, the Switzerland Federal Office of Personnel revealed that the basic remuneration of civil servants ranged from 55,000 Swiss francs to 321,000 Swiss francs in 2006 which, based on an exchange rate of about 1.25, was about S$69,000 to S$402,000.

Good performers receive merit increments of up to 6% while worst performing staff may get a decrease in salary. Although bonuses can reach 12% of salary for outstanding performers, the residence and overtime allowances are paid, it still seems that the highest-paid Swiss civil servants receive a lower salary than what Singapore civil servants and Ministers receive. But, Sir, we have to note that they have neither a Prime Minister nor a President in Switzerland.

Sir, to cite another example, the 2006 United Nations' report listed that the lowest monthly civil service salary in Finland was 1,200 euros, while the average was 2,600 euros for all wage earners. Even if the purchasing power parity is taken into account, it is highly likely that our civil servants here have a much better deal. Based on such evidence, we believe that there is no need for enormously large salaries to attract and retain the right talent to run a country in an efficient and corrupt-free manner.

The Worker's Party is of the view that the Government should consider modifying the current benchmark in place of a more equitable and sustainable one. We suggest that the benchmark should take into account international practice, in particular, countries that could be taken into consideration would be those just cited, such as Switzerland, Denmark and Finland as well as those developed countries.

Sir, Denmark, like Singapore, employs a pay adjustment scheme to ensure that the pay of state employees in general and over a long period of time develops in parallel with the wages and salaries in the private sector. For the Danish, their pay adjustment scheme automatically adjusts the central government pay development to the private sector pay development, but subject to a certain time lag. Hong Kong tries to maintain their civil service pay level with the private sector, but they only maintain the broad comparability and not any explicit link. Unlike Singapore, they all do not have a sure-win formula that ensures civil servants always have the best deal by benchmarking specifically to the top few earners.

While we accept that basic salary may be benchmarked broadly with the private sector in line with international best practice, we believe that performance pay should also be introduced to establish a visible correlation between performance and pay. Currently, the civil service has no financial bottom line in ensuring good outcomes although part of the senior officers' salary is linked to GDP growth.

Sir, while it is necessary to link a percentage of salary to performance, it is also imperative to provide a performance regime whereby it is possible to discriminate performance for non-performers or under-performers, and to reward them accordingly. Sir, in this respect, I welcome the adjustments in civil service pay structure just announced

by the Minister. A performance-related pay system requires a comprehensive and objective system of measurement, in particular, performance appraisals have to be more vigorous and transparent to the public, something that the public can identify with. Variable bonus will only be given to civil servants and Ministers if the key performance indicators of the respective Ministries had been met. We recommend having different KPIs for different Ministries from time to time so that Ministers and civil servants can concentrate their effort in deriving the right policy for Singapore in their respective areas.

For instance, Sir, some possible KPIs that the Government can consider adopting at this point in time are: a 5% drop in Gini coefficient, reflecting efforts to reduce income disparity, for the Prime Minister; a 2% increase in the proportion of trips taken on public transport during the peak hours, reflecting efforts to make public transport a choice mode by the Ministry of Transport; a 5% increase in the total fertility rate, reflecting efforts to address the ageing population by Ministers and civil servants involved in the Committee on Ageing Population; and perhaps, a minimum long-term unemployment rate, reflecting efforts to address structural unemployment by the Ministry of Manpower.

By linking variable bonuses to clear and objective KPIs, the Government can concentrate on making the right policy for Singapore, rather than spending valuable resources and time tracking how much private sector's top-earners had made each year and how the Government should therefore be paid. Such objective short-term goals also track the success and ensure that long-term policies can be gradually attained. In addition, this system will ensure that public officers are both accountable and responsible for the

outcome of their formulated policies and keep the Government transparent to the public, in terms of its achievements, capabilities and accountability.

Sir, I would now like to move on to the issue of recruiting and retaining talent within the civil service. MM Lee has said that it is not possible to hire a foreign talent to run this country because political leaders must have the passion, the commitment and must share the dream of the people. Likewise, such qualities are essential in each and every one of our civil servants. Not everyone is cut out for a career in the civil service and the loss of able people who lack such qualities is not a loss to our country. In fact, I believe that civil servants with such qualities will never be induced by the attraction of a private career and a private life, no matter how great the financial rewards offered by the private sector. More importantly, Sir, it is common knowledge that the senior civil servants and Ministers in Singapore are hardly paid peanuts. Although statistics show that officers aged between 28 and 33 make up more than 80% of resignations in the past five years - and I suppose many of these are scholars - it is not unexpected that these officers will review their options when their scholarship bonds end. The alarmingly high percentage speaks of a bigger problem, perhaps, that scholarships funded out of taxpayers' money did not attract the right mix of people.

According to one such civil servant who has resigned from the service, he said that the Administrative Service was not the best fit for him. In fact, some who left said that they were drawn by the different challenges and new experiences, more so than by the money. The earlier the Government comes to terms with this, the better for the people of Singapore. If the original intention for the scholarship holders to serve as civil servants is not met and the Government continues to invest more resources in the same

process in the hope for a reverse trend, the Government could be wasting precious resources for the wrong reasons and expectations. In view of the above, I think more efforts should be made to explore other recruitment and screening methods to attract the talent for the right fit.

Sir, we agree that public servants should not be expected to make unreasonable financial sacrifice to be in the public sector. However, neither should they be seen being paid unreasonable wages for their contributions. According to the Department of Statistics, the bottom and top 10 decile of employed households registered an average monthly income of $300 and $6,990 respectively in 2006. Given such statistics, the argument that civil servants make unreasonable financial sacrifice is not convincing. Even in the private sector, no organisation can afford to keep paying increasingly high salaries just to retain and attract top performers since resources are inevitably limited. Moreover, in the case of public service, we need a different breed of people to come forward to serve. There is simply no point in offering high remuneration just to entice people to serve if what they are interested in is to make more and more money for themselves and their families in pursuit of material interest in life. Sir, do not forget that even if you do not pay peanuts, but pay with a bigger piece, say, a banana instead, you can still get a monkey.

In conclusion, Sir, the real issue is how to find the right leaders to run Singapore and to ensure that Singapore continues to succeed. Benchmarking the civil service and Ministers' salaries to the cream of the private sector's income-earners who may or may not be at the same top all the time is controversial and distracting. I would like to end this speech by quoting what Chua Mui Hoong said in the Straits Times: "How much they are paid is secondary. Pay them well, but

do not let pay drive the search for leaders."

5.26 pm

A point of clarification, Sir. The Member has compared Singapore against Switzerland, Denmark and Finland. Can I ask him if he considers Singapore's population to resource ratio equal to Denmark, Switzerland and Finland?

Second, have they brought the standard of living of their people up, multi-fold times, from third-world to first-world in one generation? To maintain that quality of government both in the political leadership that sets the tone for the whole civil service and for the whole country, can you get a Swiss-type government, Finnish-type government or a Danish government to bring about the results that Singapore has brought about in their own countries, let alone bringing them and their systems into Singapore? Please explain.

Sir, I have to admit that these are the reports that I got from the United Nations. They have put up these reports. I believe that, based on the reports of what they have assessed today, they are not lousier than Singapore, in terms of living standards or the performance of the government. They have different conditions from us, but I gather that when we move forward, we are also emulating the standard of living of Switzerland. Are we not?

The Member has not answered my question. Is he saying that we are comparing apples with apples? Is he saying that the system of government in Finland, Denmark and Switzerland can bring them from First World to a superpower? Can they do that? Does he realise that Singapore's GDP is only one-third of its external trade - that our external trade is three and a

half times that of our GDP, higher than Hong Kong, by three times. And that if this economy ever falters, it is the end of Singapore and its First World status.

Denmark, Switzerland and Finland are part of Europe. They can fail and they are still caught in a European situation. If we fail here, we fall back to a South East Asian situation. Just look around you.

Sir, is the Minister Mentor saying that without paying such a high salary, we are bound to fail? Even if we pay top-earner salaries, I do not think the present Government can bring Singapore to superpower status.

I am putting a simple question and ask for his clarification. He has compared Singapore as if it were a Denmark, a Switzerland or a Finland. Their system, their governments, never produced the kind of transformation that we have had, and their system and their governments have a broader base, and can afford a mediocre government.

The Singapore base is less than 700 square kilometres. When we started, it was less than 600 square kilometres. Could the system in Denmark, Switzerland or Finland produce a transformation as in Singapore?

Sir, on what basis does Minister Mentor think that if the system in Denmark and Switzerland is put in Singapore it will not be able to transform Singapore into what we are today? I want to know what is the basis. I have no claim that it will happen. But I would like to know, from the wisdom of Minister Mentor, why he thinks that it will not happen.

Mr Low, I do not think that you can see the clarification of Minister Mentor! Mr Lee.

I would like the Member to explain why he thinks Singapore is comparable to Denmark, Switzerland and Finland. Look at the size of the country, the location of the country, the resources of each country and the history of its people. Then look at Singapore, its size, its history and the nature of its population.

To make the transformation from what we were in 1959 or 1965, whichever the starting point, to what we are requires an extraordinary government with extraordinary government officers to support it, to bring to where it is.

If we go back to an ordinary system that exists around us, then we will go down to those levels. It is as simple as that. There is no guarantee that Singapore with less than 700 square kilometres can maintain this position.

Ms Irene Ng, do you have a clarification?

Sir, a point of clarification for Mr Low. Mr Low seems to have a very rosy view of the system in Denmark, Finland and Switzerland. I wonder whether he is aware that in Finland, the unemployment rate is 17% compared to our unemployment rate. And at their recent election, the Prime Minister of Finland won the election only by a very narrow margin and is now forced to negotiate a four-party coalition, and might change his policies. Is this the type of Singapore that he wants - with a high unemployment rate?

As far as I am aware, based on the report that I have looked at, which was published by the United Nations, these are the comparisons. Are they that bad? They are not Third World countries.

5.38 pm

Mr Deputy Speaker, Sir, I would like to share my perspective as a human resource practitioner in the matter of the Ministers' salaries.

From HR's standpoint, usually, when we hire people, we determine the salary based on three factors. The first is the expected job size; second, the candidate's level of competence; and, third, some sort of a market comparison.

Let me, first, deal with the issue of job size and competence. I think that few jobs are as demanding and as complex as that of a Minister. There is not much argument on that. I think in terms of competence, few would also question that our Ministers are very well qualified, and all have proven track records in their chosen fields.

So, the key question is, in terms of market comparison, how much are others with similar job sizes paid? Our Ministers' salaries are being compared to those of political leaders elsewhere in the world, eg, that of the US President. I think it is reasonable to compare, but I do think that we have to recognise that for many political leaders in these other countries, the financial returns come after and not necessarily during the term of office - this is the point that Mr Inderjit Singh had mentioned.

One example for the House's information is that in the case of Bill Clinton, when he left office, he wrote a book entitled My Life, and the book advance alone was believed to be worth US$12 million. In an article in the International Herald Tribune, that was published on 2nd March this year, it was reported that, "In the six years since Bill Clinton left office, he has pocketed a staggering US$40 million in speaking fees. Two-thirds of his speaking money

has come from foreign sources, according to the Washington Post, including a Saudi Arabian investment firm and a Chinese real estate development group run by a local Communist Party official."

The article adds that Clinton is hardly the only former President to leverage the prestige of the Presidency for big bucks. It is also pointed out that former Presidents received generous pensions and are granted hundreds of thousands of dollars in annual staff, office and travel allowances.

In the article, it was reported that for the fiscal year 2007, Clinton will receive approximately US$1.16 million from the US Treasury, and that includes his telephone stipend which will come to US$77,000.

I think the key point is that while we want to make comparisons, we cannot just compare what political leaders are paid on paper. And the real question is whether we would like to see what is happening in the US also happen in Singapore. If our answer to this question is a clear no, then we must ask what all HR practitioners do, ie, what is a fair salary to pay a Minister based on job size, competence and market comparison. And is there an alternative benchmark that we would like to consider?

Mr Low Thia Khiang had criticised the pegging of Ministers' salaries to that of top-income earners. And on previous occasions, he had suggested to peg Ministers' salaries to that of the bottom 20% income earners. This is a seemingly attractive idea, as pointed out by Mr Alvin Yeo, and quite unusual from the HR standpoint but not to be dismissed without due consideration. I would like to consider the situation if his proposal is really adopted, and I would now like to speak in Mandarin.

(In Mandarin): [For vernacular speech, please refer to Appendix A*.] Mr Low

Thia Khiang has suggested that the Ministers' salaries should be pegged to the lowest 20%. If we really adopted such a measure, what would be the consequences? The Ministers would definitely be concerned about the salary fluctuations of the lower income. Of course, that is a good thing. But the Ministers should be concerned with the income levels of all strata, and not just the lowest 20%. In order to solve the problem of the lower income, we need many approaches - re-training, skills upgrading, job re-design - and through these, raise their employability and productivity. All these cannot be achieved overnight.

But there is a short cut, which is to promote welfarism or Workfare, or provide free medical and education. But where does the money come from? The money can come from the reserves. Our current Ministers may not have to worry about this for a few years, because our reserves are quite abundant. But, the future Ministers will be in trouble.

The problem of the lower-income group would not really be solved. But, more importantly, for all Singaporeans, the safety net for our people, in this case, the reserves will be affected. The Ministers each has different responsibilities. Do we want to see the Minister for Defence, the Minister for Foreign Affairs, or the Minister for the Environment and Water Resources to also spend most of their time focusing on the income of the lower-income group and neglect their own responsibilities like national security issues? Are we only concerned with the salaries of the lower-income group but forgetting about the incomes of the sandwich class and professionals? So, Mr Low's suggestion has its drawbacks.

From the HR practitioner’s point of view, a better method is like what Minister Teo Chee Hean has said, which is to allow a larger portion of the Ministers' salaries to be pegged to the national performance of the GDP. So when the national well-being has gone up, then the Ministers' salaries will also increase. We should let the Prime Minister assess whether each Minister has been effective in his area of responsibility, and decide the kind of bonus each should get. This is in line with what the Minister has mentioned.

Ministers’ salaries reflect the importance of their job, and their impact on the national issues. Although the Ministers' salaries are high, our system is transparent. The advantage of this system is especially admired by the Chinese. Prof. Lu Yuanli of the Institute of Modern Chinese Studies in Shenzhen University has made an in-depth study of Singapore. He wanted to know and analyse why over a long period, Singapore, as a one-party Government, has remained clean and honest. He uses four phrases to describe us. Firstly, we have invoked the sense of morality to promote the virtue of clean government, thereby discouraging corruption. Secondly, we have instituted the payment of competitive salaries, thus removing the need for corruption. Thirdly, we have put in place clear rules to minimise opportunities for corruption. Fourthly, we have not hesitated to impose strict laws as a strong deterrence against corrupt actions.

Prof. Lu explained that payment of competitive salaries to those in public service allowed them to achieve a better standard of living, thus effectively removing the need for corruption. He highlighted two points that reflect the core of the system. First, we take an honest view of human nature, and that is to recognise that political leaders respond simultaneously to their social

responsibilities and also economic instincts. We also look at politics honestly. It is a calling requiring a sense of self-sacrifice, and at the same time a career choice impacting the economic well-being of family and dependants. In other words, when we demand that the leaders must have high moral standards, we must also provide good income, and establish strict rules and laws to ensure an honest and clean government.

(In English): Therefore, as noted by Prof. Lu of Shenzhen University, paying Ministers well is one of the key measures needed to ensure a competent and honest government. In his opinion, it is better for us to pay well but to hold the Ministers accountable for their performance.

As I have mentioned, notwithstanding some of the pitfalls of Mr Low's proposal to peg Ministerial salaries to the lowest 20% income earners, I do believe that the intent behind his proposal is a good one, ie, to bring home the message that Government has the responsibility to ensure the progress and well-being of all levels of society, whether it is the lowest 20%, the middle 30%-70% and the highest 20%.

The labour movement, in particular, stresses this point, because workers at all levels matter to us. For the low-wage workers, we want to continue to have able people in Government work hard to support job redesign and skills upgrading, so that more low-wage workers can get better jobs and better pay. For older workers, we want to continue to have a caring Government that is planning ahead to raise the effective retirement age, so that more older workers can keep in good health and to stay in employment for as long as they wish.

*Cols. 195-198.

For the PMETs, we want to continue to have a bold Government to create new jobs and to invest in retraining so that their new careers are better, if not as good as their old ones.

So, now do we, as Singaporeans, collectively hold the Government accountable for improving the lives of not just one segment of Singaporeans but all Singaporeans? It is with this in mind that I support the stronger linkage between the Ministers' salary and the GDP as it is one of the most representative indicators of the well-being of a broad base of Singaporeans. And it is definitely not something that will enable the Ministers to earn a "sure-win" salary because the economy can go up and can go down. So the Ministers' packages will also have to be adjusted because of that.

At the end of the day, in companies, if an employee does not live up to the expectations and to the salary that he is paid, he can be fired. Likewise, in Singapore, an incompetent and uncaring Government can be voted out. Every five years, all Singaporeans, regardless of income levels, have an equal vote in deciding whether or not the Government has done enough for them. The people will decide whether or not the Government acted as though it has a blank cheque, which Mr Low talked about, or whether the Government acted in a responsible manner with their long-term interest at heart, implementing policies that do indeed improve their livelihoods and well-being. If the Government takes care only of top-income earners, who are a small minority, and forgets about the low-wage workers, the older workers, or the PMETs, it cannot win enough votes to stay in power. And Singaporeans must judge the whole Government for its record in the next few years and decide if it is good enough. This is how Ministers will be held accountable for their efforts to improve the lives of all Singaporeans, and not just those at the top or at the bottom.

Mr Deputy Speaker, Sir, in conclusion, I think if we want people, including Ministers, to give of their best, we should not create the conditions to make them

feel disaffected, for example, by paying them far lower salaries than commensurate with the demands of the job. We can never fully measure the value of competent and honest government. What matters most is whether the Ministers deliver on their promises to Singaporeans and that, over time, all our lives are improved. All Singaporeans can and do judge the Government according to their own yardsticks, whether it is the unemployment rate or any other yardstick that they deem to be important, and they will express their assessment through their vote. Because of this, I support the revision and the stronger linkage of the Ministers' pay to the GDP.

Mr Low, is it a clarification?

Mr Deputy Speaker, can I clarify what the Member has talked about? In Mandarin, Sir.

(In Mandarin ): Mrs Josephine Teo said that I had mentioned during the General Election that the Ministers' salaries should be pegged to the lowest 20% of the workers. But I did not mention it in my speech just now. Most importantly, it is now that the Ministers' salaries are pegged to the top 48th earners in the private sector. This has always been the concept. So, a very important point is that the Ministers occasionally may forget that there are some people who are in the very low-income group - they are the poor people. It is for this reason that I mentioned during the General Election that Ministers' salary should be linked or pegged to the lowest 20% income group. Maybe you multiply it by 100 times, is that considered high enough and, if it is not enough, then how much more do we need, maybe an astronomical figure?

The second point that I would like to clarify is that she said that we must have high salaries so that we can have a clean and honest government. But I would like to tell her, if a person is greedy, no matter how high the salary is, he will not be satisfied. So can high salary ensure a clean and honest government? This is still a controversial question. Thirdly, I want to clarify that she said that the PAP can be ruling for a long period of time because the Ministers have high salaries, all the civil servants are highly paid, so they are all very clean. But I think the reasons for ruling over a long period of time should be more than this. It includes, for example, during the General Election, amend the General Elections rules ---

Mr Low, those are not points of clarifications.

Thank you, Sir.

(In Mandarin ): Sir, regarding what Mr Low said just now - the quote about high salary fostering a clean government - I had shared an observation by Prof. Lu Yuanli of Shenzhen University. It is not just my view, but a view of the Professor as well. So, whether Mr Low agrees or not, he is free to have his own view. Earlier on, Mr Low mentioned the point of linking the Ministers' salaries with the bottom 20%. In my previous speech, I did point out that if we really did that, then all the Ministers will only be concerned with the welfare of the lowest-income group. But what about the sandwich class, what about the professionals - is their welfare not important? Is the Ministers’ work not concerned with raising the living standards of the whole society, and not just of the lowest income? So, I believe that the people will understand that what we want are Ministers who are concerned about all Singaporeans, and not just a small segment of society.

5.58 pm

Mr Deputy Speaker, I do not think I can add anything to the thinking behind why we need to pay for talent. Minister Mentor Lee Kuan Yew has said it simply and said it best - the price of not having the top talented people in the Government and the civil service is the failure of Singapore. No one can deny this point. It is a given. But I would like to raise several points that the Government, this House and the civil service could consider and reflect on.

All of us here are for a purpose and while we are here in this Chamber as Members of Parliament, we have the responsibility to uphold the basic tenet of what makes this country work and why we should defend that principle. Though it is ironic that we should be discussing and debating on something that we may have direct benefit, it is for this very reason that the Members of Parliament are elected to do. In fact, this matter does not concern any individual civil servant or Minister. It concerns every Singaporean because it is about the future of our civil service and our leadership.

Let me start by offering one perspective for my fellow Singaporeans to consider.

Support for this salary review for civil servants will send a strong, enduring and permanent signal by the people, especially to the world out there watching us, that we are committed to have and will continue to have the right and best talent in Government and political office in order to continue having the right policies and executive actions to sustain our country as one of the best places to live and to do business. This, we do so that Singaporeans will never lack good-paying jobs, continuous employment, better facilities and infrastructures, like schools and homes, and steady economic growth

to assure a better future for our children and their children.

However, Sir, I do recognise that the timing for this salary review comes at a time when there are still quite a number of people out there without jobs or facing retrenchment or have unpaid utilities bills to settle or long-term medical expenses to meet or have difficulties to service housing loans or struggling to cope with their children's future needs or having difficulties to upgrade and improve their careers amidst a rapidly changing globalised world. My heart especially goes out to those who are struggling with low-paying, very often temporary, jobs and have aged parents to support too. We can emphathise with them. We can feel their frustration and pains and they do confide with us when they come to see us at the meet-the-people sessions. Many of these folks are normal folks who, like any other Singaporean, have hopes and aspirations for their family and children.