Hansard, 2007-08-27

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 Mah Bow Tan 22 Jul 23 Jul 04 Sep 08 Sep Mr Masagos Zulkifli B M M 22 Jul 27 Jul 22 Aug 24 Aug Mr Sam Tan Chin Siong 22 Jul 24 Jul 16 Sep 28 Sep Mr Ang Mong Seng 27 Jul 01 Aug 02 Aug 05 Aug 20 Aug 24 Aug 07 Sep 10 Sep Mr Charles Chong 27 Jul 29 Jul 07 Aug 08 Aug 18 Aug 24 Aug Mr Seng Han Thong 27 Jul 31 Jul Dr Amy Khor Lean Suan 29 Jul 29 Jul 23 Aug 26 Aug 30 Aug 03 Sep Mr Gan Kim Yong 30 Jul 02 Aug 12 Aug 15 Aug 29 Aug 01 Sep Dr Ong Chit Chung 31 Jul 02 Aug 14 Aug 16 Aug 03 Sep 04 Sep Assoc. Prof. Dr Yaacob Ibrahim 31 Jul 31 Jul 15 Aug 17 Aug 24 Aug 25 Aug 28 Aug 29 Aug Column: 1297Dr Balaji Sadasivan 01 Aug 07 Aug 24 Aug 26 Aug Mr Sin Boon Ann 01 Aug 02 Aug Mr Tharman Shanmugaratnam 01 Aug 03 Aug 29 Aug 29 Aug 31 Aug 01 Sep Mr Yeo Guat Kwang 01 Aug 04 Aug Mr Zainul Abidin Rasheed 05 Aug 08 Aug 13 Aug 15 Aug 20 Aug 22 Aug Mr Baey Yam Keng 06 Aug 07 Aug 18 Sep 21 Sep Dr Lim Wee Kiak 06 Aug 07 Aug 20 Aug 24 Aug 06 Sep 09 Sep 27 Sep 30 Sep Mr Chan Soo Sen 10 Aug 24 Aug Assoc. Prof. Ho Peng Kee 11 Aug 12 Aug 28 Aug 29 Aug Dr Mohamad Maliki Bin Osman 11 Aug 15 Aug 26 Aug 02 Sep Mr Lim Swee Say 12 Aug 18 Aug 28 Aug 29 Aug Dr Teo Ho Pin 12 Aug 24 Aug Mrs Yu-Foo Yee Shoon 13 Aug 17 Aug Dr Ahmad Mohd Magad 14 Aug 18 Aug 05 Sep 09 Sep 23 Sep 29 Sep Ms Jessica Tan Soon Neo 14 Aug 16 Aug 29 Aug 31 Aug Mr Teo Chee Hean 14 Aug 16 Aug 26 Aug 02 Sep Mdm Ho Geok Choo 15 Aug 26 Aug Mrs Jessie Phua 15 Aug 18 Aug 20 Aug 07 Sep Dr Ong Seh Hong 15 Aug 19 Aug Miss Penny Low 15 Aug 31 Dec Mr Zainudin Nordin 15 Aug 17 Aug Mr Cedric Foo Chee Keng 16 Aug 16 Aug 23 Aug 26 Aug Mr Lim Boon Heng 16 Aug 17 Aug Prof. S Jayakumar 16 Aug 18 Aug Mr Liang Eng Hwa 17 Aug 24 Aug Column: 1298Mr Abdullah Tarmugi 19 Aug 24 Aug Mr Inderjit Singh 19 Aug 24 Aug Mr Matthias Yao Chih 19 Aug 24 Aug Mdm Cynthia Phua 20 Aug 24 Aug Mr George Yong-Boon Yeo 20 Aug 01 Sep 04 Sep 10 Sep Mr Hawazi Daipi 20 Aug 24 Aug Mr Lim Biow Chuan 20 Aug 24 Aug 08 Sep 11 Sep Mr Seah Kian Peng 20 Aug 24 Aug 09 Sep 11 Sep Mdm Halimah Yacob 21 Aug 24 Aug 30 Aug 03 Sep 08 Sep 11 Sep Dr Vivian Balakrishnan 21 Aug 21 Aug Dr Lee Boon Yang 22 Aug 25 Aug Mr Lim Hng Kiang 22 Aug 27 Aug 28 Aug 29 Aug 03 Sep 08 Sep Mr Heng Chee How 24 Aug 25 Aug 08 Sep 11 Sep Mr Teo Ser Luck 24 Aug 26 Aug Mr K Shanmugam 26 Aug 05 Sep Mr Khaw Boon Wan 27 Aug 01 Sep Mr Lee Kuan Yew 27 Aug 27 Aug Dr Ng Eng Hen 28 Aug 29 Aug Mr Lee Hsien Loong 30 Aug 31 Aug 06 Sep 09 Sep Er Lee Bee Wah 01 Sep 03 Sep 07 Sep 09 Sep Mr Wee Siew Kim 03 Sep 06 Sep 11 Sep 15 Sep Mr Goh Chok Tong 04 Sep 12 Sep Assoc. Prof. Koo Tsai Kee 05 Sep 05 Sep 28 Sep 30 Sep Mrs Lim Hwee Hua 06 Sep 09 Sep

Dr Balaji Sadasivan

Mr Abdullah Tarmugi

ABDULLAH TARMUGI Speaker Parliament of Singapore

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

27th July,2007 (1) Constitution of the Republic of Singapore (Amendment) Bill (2) Public Service Commission (Amendment) Bill (3) Passports Bill (4) Postal Services (Amendment) Bill (5) Commodity Trading (Amendment) Bill (6) Optometrists and Opticians Bill (7) Ngee Ann Kongsi (Incorporation) (Amendment) Bill ABDULLAH TARMUGI Speaker Parliament of Singapore

[Mr Speaker in the Chair]

1. Ms Jessica Tan Soon Neo asked the Minister for the Environment and Water Resources what is being done to support recycling efforts in Singapore.

2. Ms Jessica Tan Soon Neo asked the Minister for the Environment and Water Resources whether the Ministry has plans to do more to reduce the dependency on petroleum-based products such as plastic

water bottles and plastic bags and if so, what are they, and if not, why.

Mr Speaker, Sir, may I have your permission to take Question Nos. 1 and 2 together?

Yes.

Sir, to encourage recycling among Singaporeans, the National Environment Agency (NEA) launched the National Recycling Programme in 2001 to provide households with easy access to recycling facilities. Under this programme, residents are given recycling bags or bins to store their recyclables which are then collected fortnightly. In addition, NEA is in the process of placing 1,600 centralised recycling bins in the common areas of all HDB estates. With these bins, residents can now deposit their recyclables conveniently at any time. These are further complemented by a network of public recycling bins in various shopping centres, commercial buildings, food courts, as well as in public areas with high human traffic such as along Orchard Road.

At the workplace, NEA has worked with JTC to install recycling facilities in all their 21 flatted factories and 9 industrial terraced workshop estates.

In the schools, students learn about Singapore's waste situation in their curricula. NEA has also been working with schools to install recycling bins under the School Recycling Corner Programme. To date, 90% of our schools have recycling corners and recycling bins.

NEA promotes development of the recycling industry in various ways. The Sarimbun Recycling Park was set up to make land available to start up recycling companies. NEA administers the Innovation for Environmental Sustainability

Fund whereby companies can apply for funding to help defray part of the cost for pilot-testing of new technologies including recycling technologies that would help contribute to environmental sustainability in Singapore.

NEA also works with grassroots organisations, Community Development Councils and Non-Governmental Organisations such as the Singapore Environment Council and the Environmental Challenge Organisation to organise recycling events in the heartlands, including the annual Recycling Day to drive home the recycling message.

Sir, my Ministry promotes the minimisation of wastage of petroleum-based products such as plastic water bottles and plastic bags, which will continue to serve a purpose in a modern society like ours. Plastic bottles facilitate the portable consumption of water and plastic bags facilitate the transportation of goods. Many people reuse such items for other uses such as bagging of refuse in plastic bags.

With regard to plastic bags, the National Environment Agency launched the "Why waste plastic bags? Choose reusable bags!" campaign in February 2006 to promote the use of reusable bags and reduce the wastage of plastic bags. More recently in April 2007, the "Bring Your Own Bag Day" campaign was also launched in partnership with the Singapore Environment Council and major supermarkets and retailers. Under this campaign, on the first Wednesday of the month, shoppers who do not bring their own shopping bags are requested gently to donate 10 cents for each plastic bag taken at the checkout counters. The response to the campaign has been encouraging so far. In a survey conducted during the August "Bring Your Own Bag" Day at 36 outlets, it was observed that

20% of shoppers brought their reusable bags and another 5% bought reusable bags on the spot.

With regard to plastic water bottles, the bottled water consumption in Singapore currently constitutes only a very small proportion of the total domestic water consumption in Singapore. Nevertheless, we still encourage Singaporeans to recycle their plastic water bottles.

Sir, I would like to thank the Minister for the comprehensive answer to the Questions. With regard to the bins or bin sites, can more be done in terms of the actual structure and in making them more user-friendly? If you look into some of these bins today, many of them are not sorted even though there is labelling for sorting. In terms of public education, can more be done to what is recyclable, even for plastic bottles, as not all of them are recyclable?

Sir, I agree with the Member that at the end of the day, for a change of behaviour to happen, we have to facilitate it by having very good structures which are friendly. This is left to the public waste collectors to design. Some will use bins and some will use plastic bags. We constantly give feedback to the public waste collectors and others who are involved in the recycling programme so that they can come up with more innovative ideas. But at the end of the day, the individual also must make the effort and I agree with the Member that public education is important.

Finally, it is sorting at source which is important for the programme to succeed. Based on our results so far, our recycling rate now stands at 51% which is very good compared with 40% a couple of years ago. What it means is that our efforts are beginning to bear fruits but for

us to make that leap I think more needs to be done in terms of educating the households, especially people who are at home would have to try and sort it out because the frequency is only once a fortnight.

But having said that, Sir, there are recycling bins now available all over the island and they do not have to wait for the public waste collectors to come and collect them. They can actually do it themselves. But that requires the individual household to make the effort. We take the Member's point and we will do our best to try and facilitate as much as possible.

Sir, I would like to ask the Minister whether he will consider pushing for the recycling bins and recycling chutes to be included as part of the building codes for new public as well as private housing in the future.

Sir, that is a very good question. The Ministry, together with NEA, is in constant discussion with MND on this particular aspect of environmental sustainability in our towns. There is of course the cost concerned but we will endeavour as much as possible to make this as part of our lifestyle. When it will come, I suppose it will depend on when these agencies can come together and find a common ground. But certainly this is an item that is hot on the agenda that we want to try to push as fast as possible.

3. Mr Liang Eng Hwa asked the Minister for Trade and Industry (a) whether there is a risk of overheating in the Singapore economy; and (b) whether the recent price, rental and wage increases, coupled with our strong

Singapore dollar, will impact our export competitiveness relative to our regional competitors.

asked the Minister for Trade and Industry (a) if there are signs of the economy overheating; and (b) apart from unexpected external shocks, what factors can limit the growth of the economy in the next three years.

asked the Minister for Trade and Industry what are the effects of rising prices and property rentals on the competitiveness of Singapore in attracting foreign direct investments and as a place to live, work and play.

asked the Minister for Trade and Industry (a) whether he can give an assessment on the impact of the rising cost of commercial and residential properties on the cost of doing business in Singapore; (b) whether this situation has eroded Singapore's competitiveness; and (c) what measures the Government intends to put in place to ensure that the overall cost of doing business, not just labour cost, remains competitive.

Mr Speaker, Sir, may I have your permission to take Question Nos. 3 to 6 together?

Yes.

Sir, Members have asked about the impact of rising costs on Singapore's competitiveness.

The current cost pressures are reflective of our competitiveness and resultant strong economic growth. The economy has grown at above 6% for the past three years, and is projected to grow by 7-8% for the current year. In addition, growth is broad-based across both the manufacturing and services sectors. As a

result of continued efforts in restructuring, we are also well positioned to ride on the new growth trends and favourable economic conditions ahead.

Despite our sustained strong growth in the recent years, we have been operating in an overall low-inflation environment. In the past three years, our Consumer Price Index increased at an average annual rate of 1.0% while Overall Unit Labour Cost actually declined at an annual average rate of 2.2%. However, in recent quarters, we have seen increases in property prices and rentals, as well as wages. We have to maintain vigilance over our costs, as excessive cost increases would dampen our growth prospects.

We have taken a proactive approach so far. To address immediate space constraints, we have introduced some interim office space supply, and HDB flats for rent. The Ministry of National Development has also released additional information on property prices and rents to allow the public and businesses to make more informed decisions on property purchases or rentals. This will increase awareness that attractive housing options remain available for foreign talent beyond the central districts. For longer-term demand, MND has been putting out ample supply of land, with more than 42,000 private residential units and 640,000 square metres of office space to be completed by 2010.

On the manpower front, with a near full employment trend, we are looking into ways to help more Singaporeans, such as older workers and women, take advantage of the strong employment market and rejoin the workforce. Reskilling efforts will also continue to allow Singaporeans to obtain better-paying jobs, while we supplement our workforce with foreign workers. Our

focus is to create better jobs for Singaporeans and better opportunities to attract global talent.

Even as we take concrete steps to alleviate short term tightness in the resource markets, we should distinguish facts from impressions given by media reports of sky-high rentals in selected locations or transactions. For instance, the median prime office rent in the second quarter of 2007 (2Q07) was $9.50 per square foot per month (psf pm). However, median rent in other locations, which account for about 80% of office space in Singapore, was less than half of that, at $4.50 psf pm. Similarly, residential rents are also highly location dependent. In 2Q07, the median rents in 156 private condominium developments across the country published by URA ranged from $1.40 psf pm to $6.30 psf pm. In this regard, MND's recent release of additional information on property prices and rents will facilitate more informed decisions on property purchases or rentals.

Our Overall Unit Labour Cost has increased by 5.8% year-on-year in the first half of 2007, although it is still at a level which is 13% lower than 2001. Similarly, Unit Business Cost for Manufacturing has increased by 2.6% year-on-year in the first half of 2007, but remains at a level which is 11% lower than in 2001.

Singapore remains cheaper compared to other global cities in the region. According to ECA International's comparison of 2006 monthly rentals for 3-bedroom apartments in areas equivalent to Singapore's districts 9, 10, 11 and East Coast, Singapore's rental was less than half that of Hong Kong and Tokyo. In a comparison of global office market rentals by CB Richard Ellis in May 2007, Singapore's office rental was found to be 30% lower than that of Hong Kong and 50%-60% lower than that of Tokyo.

More importantly, competitiveness is more than offering lower costs alone. It is about value creation. London, Tokyo and New York are high cost locations, but they are thriving global hubs because they offer good value for businesses. Singapore has many attributes that enhance our value proposition to investors, which are not easily replicated by other regional cities. We have a pool of highly skilled talents that enable us to engage in high value-add activities. We are renowned for our liveability, clean environment, security and, increasingly, vibrancy as well. In June this year, Monocle (European lifestyle magazine) rated Singapore as the most liveable city in Asia outside Japan, and cited Singapore as being "extremely affordable" despite our "first world living standards".

Despite increased costs, the World Competitiveness Yearbook ranked Singapore as the second-most competitive economy overall among 55 countries, second only to the US, in May this year. Beyond the multi-billion investment projects such as the two integrated resorts that are being developed, our project pipelines for 2007 remain strong. For example, Mitsui Chemicals has recently announced that it will invest $240 million to expand its elastomer plant in Singapore. Qimonda will be building its first fully-owned 300 millimetre wafer fabrication facility in Singapore, and estimates that it will invest approximately $4 billion over the next five years. Singapore's tourism industry also hit record highs in the first half of 2007, achieving an estimated $6.4 billion in tourism receipts and welcoming 4.9 million visitor arrivals. These suggest that Singapore is still an attractive location for economic activities for investors, talents and tourists.

Having said this, we cannot afford to be complacent. The Government will continue to keep a tight watch on business costs and, most importantly,

strengthen our competitive advantage and value creation to investors, for Singapore to remain on its growth path.

Sir, the Minister mentioned about the low inflation environment. I would like to ask the Minister whether the CPI numbers have fully captured the rising cost, particularly in those items that reflect our population's now more affluent lifestyle.

Secondly, in the Minister's view, will our business cost continue to rise in the coming quarters, given the supply bottlenecks that we are facing, particularly the tight labour market and the office space shortages?

Mr Speaker, Sir, this is a perennial question, whether our CPI effectively captures the cost of living here. As you know, we follow international standards in working out and monitoring the CPI. We have a basket of goods which reflect the different segments of the population, the top 20%, the middle and the bottom 20%, and this basket of goods which represents the different income levels is regularly updated once every five years. So I would say that the numbers do reflect the spending patterns of the different groups in Singapore.

Mr Speaker, I would like the Minister to share with the House on the current assessment of the investors as well as prospective investors with regard to the importance of cost of living as well as cost of property and land ownership relative to the other factors that they consider when they invest in Singapore.

It depends on which segment of the investor community we are looking at. If you look at the manufacturing sector, we still find a very strong pipeline of investments coming to

Singapore and both EDB and the various agencies, like the JTC, are very conscious of cost in their investment promotion activities. They engage actively with the prospective investors to make sure that they understand the situation in Singapore and we take proactive action to mitigate these cost increases. Let me give you an example. We must see these cost increases in the context of what has happened in the last five years. For the last five years, the property rentals and prices and, in fact, cost in general had been kept very low in Singapore. In the construction sector, for example, there has been a shake-out for contractors. As a result, there is a shortage of capacity. So when the economy takes off and there are a lot of construction activities - in part, also because of the global shortage of resources and higher steel prices and other commodity prices, plus the smaller contractor capacity that we have in Singapore - all this adds to the construction cost. So we are very conscious of this and the various agencies and Ministries try to take proactive action.

Investments also come in cycles. For example, in recent years, we have been watching a very strong interest in the petrochemical sector and, together with the reduced capacity in the construction sector, it results in the process industry facing higher costs. One of the ways we try to mitigate this is to liberalise some of the labour constraints by allowing bigger allocation of foreign worker quota so that the contractors can take that into account and knowing that they can expand the construction capacity, they are then prepared to bid at a more competitive price. These are some of the dialogues that we have with the prospective investors and some of the proactive actions that we take.

Dr Neo, last question.

Thank you, Mr Speaker. The Minister earlier mentioned about the inflation rate. May I ask him whether he is concerned about the very high inflation rate in the last quarter? And how would this affect Singapore and Singaporeans as a whole if this should continue? Are there measures that he would plan to take to contain this increase in the inflation rate?

If you ask me candidly, I would say we have been enjoying practically 16 quarters of growth and, in fact, I am surprised that our inflation numbers are as low as they are. This partly reflects the more benign global inflation rates - Singapore is of course enjoying this - and partly our low inflation in the past was also because of the economic conditions in 2001 up to 2003. But, as I said, in the last 16 quarters, we have been enjoying highly robust growth, the higher end of our potential growth. So one would expect inflation in fact to pick up. And, indeed, it may well pick up. In the first half of this year, our inflation rates were very low, between 0.5% and 1%. I think Dr Lily Neo probably refers to the July numbers which show a blip of 2.6% for the month of July. We are of course watching this closely.

We do expect inflation for the second half of this year to go up, partly reflecting the global inflationary trends. If you watch the inflation trends in US and Europe, you will notice that there is a lot of strong pressures on cost, and China recently has also reflected higher inflation numbers. So we expect, generally, cost to go up higher than the first half. Then, of course, we also have the one-off impact of the GST. But our experience shows that in the past when we had similar increases of GST this was a short-term impact and that, over time, the impact on cost would be mitigated. So, overall, we still look at an inflation forecast of between 1% and 2% this year, which is a little higher than our

previous years, but definitely still very reasonable considering that this is already more than 16 quarters of growth.

7. Ms Indranee Rajah asked the Minister for Foreign Affairs if he will provide an update on the outcome of the recent ASEAN Regional Forum (ARF) including (a) whether there are any specific initiatives or projects to be undertaken by ASEAN or Singapore arising out of the ARF; (b) the current direction of ASEAN-US relations; and (c) the objectives of the proposed first ASEAN-US Summit to be held in Singapore.

Mr Speaker, Sir, the ARF Ministers had a good meeting in Manila. There was a frank exchange of views on key regional and international issues, in particular progress in the Six-Party Talks. We issued two ARF statements on the Promotion of Inter-civilisation Dialogue; and on Supporting National Implementation of UN Security Council Resolution 1540 which deals with the issue of non-proliferation of weapons of mass destruction. We also adopted a set of ARF Guidelines for Disaster Relief Cooperation. In addition, we agreed on the Terms of Reference of a new advisory body to be called Friends of the Chair. This body will comprise the incoming and previous ARF Chairs and a non-ASEAN ARF country, to be convened in times of emergency to assist the ARF Chair in decision making. More importantly, the Ministers also agreed on the need to move forward on more concrete cooperation projects. They approved a list of ARF activities to be carried out in the next 12 months. Singapore and the EU will be co-chairing an ARF Seminar on Energy Security in the

first half of 2008; and we will partner New Zealand to hold the Second ARF Peacekeeping Experts' Meeting in March 2008. In addition, Singapore also proposed that the ARF undertake a comprehensive review to make it a more effective body. We will work with our ARF partners to prepare a report for consideration at the next ARF.

The US is and remains a key partner of ASEAN. Without the stabilising influence of the US in our region, ASEAN members would not have achieved the sustained growth that we have enjoyed over the past few decades. But we must also acknowledge the reality that the US is a global power with global responsibilities and Southeast Asia will not always be among its top priorities. At present, developments in the Middle East, particularly the very difficult situation in Iraq, demands most attention in Washington DC and understandably so. Of course, it was disappointing that the US Secretary of State Condoleeza Rice could not make it for the ARF in Manila this year; and that the ASEAN-US Commemorative Summit originally scheduled for September 2007 had to be postponed, both because of pressing developments in the Middle East. But we should take this in our stride. The relationship is strong enough to take these hiccups and we should not forget that if the situation in the Middle East were to get out of hand, Southeast Asia will not escape unscathed.

Still, despite its global preoccupations, the US has been doing what it can to enhance its engagement of ASEAN. In 2002, it started the Enterprise for ASEAN Initiative which seeks to advance mutual interests in areas such as trade promotion as well as an ASEAN Cooperation Plan which focuses on developmental cooperation. In 2005, President Bush and ASEAN Leaders launched the ASEAN-US Enhanced Partnership. This was followed by a Plan of Action to implement this

partnership as well as an ASEAN-US Trade and Investment Framework Arrangement (TIFA). As this year marks the 30th year of ASEAN-US relations, the US is looking to appoint a US Ambassador for ASEAN Affairs, initiate a Fulbright Programme for ASEAN scholars, and conclude a landmark Science and Technology Agreement that will promote research and development collaboration between the research communities in ASEAN and the US. Clearly, within the unavoidable constraints imposed by its many other responsibilities, the US is committed to ASEAN. On our part, ASEAN will do what we can to continue to foster closer engagement with the US.

8. Prof. Thio Li-ann asked the Minister for Foreign Affairs (a) if he will provide an update on the reported ASEAN proposal to set up a human rights commission and what kind of time frame is envisaged before this is up and running; and (b) what implications, if any, this may have for Singapore's domestic laws and foreign policy.

Mr Speaker, Sir, at the recent ASEAN Ministerial Meeting in Manila, ASEAN Foreign Ministers agreed that the ASEAN Charter should state clearly our intention to establish an ASEAN human rights body.

This is a significant step forward for ASEAN. Some countries were reluctant to make this move at first because of the way the issue of human rights has been politicised by special interest groups. However, as Indonesian Foreign Minister Hassan Wirayuda pointed out, there is no

reason why we should be 'allergic' to the protection of human rights as if this is not an objective of our governments.

Once the Charter has been signed by the Leaders at the Summit in November, officials will proceed to draw up the terms of reference for the human rights body. This will have to take into account the history and diversity of political systems in ASEAN. Its powers are more likely to be consultative than prescriptive, and will of course evolve with time. Singapore as ASEAN Chair will work with all the member countries to ensure that we establish something that is practical, meaningful and has everyone's support.

I do not see the human rights body affecting Singapore's domestic laws or foreign policy. It will, however, raise ASEAN's international standing.

I have two supplementary questions, Sir. First, I would like to ask the Minister, as interpretation of human rights differs in the region, what kind of benchmarks or reference points will be used by this commission in order to assess the standards of observance of human rights in the region. Second question, Sir: will there be a mechanism put in place in the human rights commission for individuals or anyone in the region to make complaints of violation of human rights?

Sir, the Minister said that this commission is likely to be only consultative. It will then lead to the question whether this commission will really be effective in monitoring human rights in the region, if it is only meant to be consultative.

Sir, as I said, it is premature right now to prejudge what is the outcome of this human rights body. We are just at the early stages. Discussions are just starting. So we need to see exactly how it goes. But what is

important, like what the Member has said, are the standards and whether

individuals have rights. Here, we need to take into account quite critically what are the history, realities and cultures of all the 10 ASEAN member states. This is to ensure that what we have is meaningful and have the full support of all the ASEAN member states.

Given that the idea of human rights beyond a core of rights like the prohibition against torture or genocide remains controversial, we still need to have a meaningful standard. We must ensure that the human rights standards in this new proposed mechanism will not be diluted. I would like to ask whether or not there are any plans to peg it to something like the Universal Declaration of Human Rights or whether guidance would be taken from those UN Human Rights Treaties that I believe all ASEAN states have already signed.

As I said, Mr Speaker, Sir, it is really too early to prejudge this. They have just started discussing. Whether it will be the Universal Declaration of Human Rights or the International Covenant on Political and Civil Rights, or economic, social and cultural rights, all these are quite early stages. We will take it a step at a time.

9. Mr Gautam Banerjee asked the Deputy Prime Minister and Minister for Home Affairs whether the rights and obligations that come with becoming a permanent resident of Singapore are clearly communicated to foreigners when they are conferred permanent residence status in Singapore and whether National Service obligations for all male minors and future male offsprings of Singapore permanent residents are made explicit to

all foreigners before they accept Singapore permanent residence.

Mr Speaker, Sir, I agree that information on the rights and obligations that come with becoming a Singapore Permanent Resident (PR) should be communicated clearly to potential applicants, to allow them to make an informed decision before they take up PR status. Currently, those who want to have more information on how the various Government policies may apply to them can access the Government information portal at www.ecitizen.gov.sg. As the eCitizen information portal is not a website specifically designed for PRs and new citizens, we are exploring how we can consolidate relevant information on the rights and obligations of PRs and citizens and make them available to applicants for PR and citizenship to assist them in their decision-making process.

Sir, as a first step, in the information package recently developed by the Immigration and Checkpoints Authority (ICA) for foreigners and PRs to encourage them to naturalise, ICA has set out some of the benefits enjoyed by PRs and Singapore Citizens, such as educational subsidies, healthcare financing schemes and eligibility to purchase properties.

As for specific information on National Service (NS) liability for male PRs, this is made explicit to the applicants at the various stages of the application process. For example, at the pre-application stage, when a foreigner checks ICA's website for information on applying for PR, the requirement for all male Singapore Citizens and PRs, including male children who are granted PR status under their parents' sponsorship, to serve NS is clearly spelt out. It is also clearly stated in the website that, should NS-liable PRs renounce or lose their PR status without

serving or completing full-time NS, there would be an adverse impact on any application by them to work or study in Singapore.

Should he decide to apply for PR status, he will find the same information on NS liability stated in the explanatory notes that accompany the PR application form. If his PR application is successful, he will receive an approval letter from ICA notifying him as to the administrative details for completing his PR formalities. In the approval letter, information on NS liability for male PRs is once again mentioned.

In short, Sir, information on the NS liability for male PRs is made explicit to all foreigners applying for PR, at various stages of the PR application process.

10. Dr Fatimah Lateef asked the Deputy Prime Minister and Minister for Home Affairs in view of the recent cases of cardiac arrest and medical emergencies happening at multiple front line and public areas (a) what steps are being taken to ensure that front line officers, such as counter staff at the immigration office, checkpoints and airports, are trained in initial response/cardiopulmonary resuscitation and first aid; and (b) whether there are specific protocols to ensure the activation of emergency services in a timely fashion.

Sir, Home Team officers, including frontline officers at the checkpoints, must first and foremost be trained in their professional core competencies and functions. New officers

training at the Home Team Academy receive basic training in first aid and CPR, in addition to their professional training. Serving officers may also be trained in basic first aid and CPR when practicable.

But, Sir, I should emphasise that it is not just Home Team frontline officers who should be trained in first aid and CPR. A medical emergency can happen anytime, anywhere to anyone. Since 2003, SCDF has been providing training on lifesaving skills under the Community Emergency Preparedness Programme (CEPP). This programme is provided free-of-charge at the four SCDF Division Headquarters, seven days a week. Members of the public are encouraged to go for this training. Once trained, they can help make a difference by applying first aid or CPR in an emergency situation before the emergency response team arrives.

Sir, let me cite a couple of examples. In July this year, a road traffic accident at Choa Chu Kang caused the driver to experience a cardiac arrest. Three persons in the vicinity, ie, an off-duty Home Team officer, Sgt Andrew Lee, and two members of the public, Mr Syed Ahmad and Mr Fang Sian Piaw who are trained in CPR, immediately helped the victim out of the car and took turns to perform CPR. They resuscitated the victim before the arrival of the emergency ambulance. A life was saved due to their timely intervention. Another example which I think Members would also recall, which was reported in the media, was how Ms Esther Tan, a junior college student, helped to save a life in February last year, when she applied CPR for six minutes until SCDF paramedics arrived.

As to protocols to ensure the activation of emergency services in a timely fashion, stringent operational Key Performance Indicators are already in place and regularly reviewed to ensure the timely response of the emergency ambulance service following the receipt of

a 995 call. Over the past three years, the SCDF emergency ambulance service has consistently met its target of reaching its destination within 11 minutes more than 80% of the time.

11. Mr Chiam See Tong asked the Minister for National Development (a) whether the Ministry can provide figures of new HDB flats in the market for the last three years; (b) whether there is enough supply of HDB flats for newlyweds to purchase from HDB instead of having to go to the resale market; (c) will the Ministry consider giving priority to newlyweds under the Fiance/Fiancee Scheme during the bi-monthly sales exercise; and (d) will the Ministry consider holding a dialogue with couples who have registered for marriage to hear their plight in such purchases.

Sir, from January 2004 to June 2007, HDB offered for sale more than 31,000 new HDB flats under various sales exercises. HDB plans to offer another 5,000-6,000 new flats in the second half of 2007. In total, that will bring the number of new flats offered in 2007 to 10,000 units. It will also continue to monitor the market closely, and make appropriate adjustments to the new flat supply, if necessary.

Mr Chiam asked whether there is enough supply of new HDB flats for newlyweds so that they do not have to buy a resale flat. I would like to clarify that the demand for housing from first-timers is met through new flats as well as resale flats. There are three reasons for that.

First, new and resale flats have different attributes and their own

attractions to flat buyers. While new flats come with more modern designs, they tend to be in newer towns which are less centrally located and may not be ready for immediate occupation. On the other hand, resale flats, whilst older, tend to be situated in more established towns with a wider range of facilities and are ready for immediate occupation. Resale flats are a good option for newlyweds who wish to live near their parents or are planning to get married soon. With the large stock of more than 800,000 flats in Singapore, resale flats come in a wide variety of sizes, locations and prices to meet different housing needs and budgets.

Second, a large number of first-timers are really asking for new flats in mature estates. Some of them wish to stay near their parents, while others like the location and seemingly better resale value. Much as we empathise with young couples, especially those who want to be located near their parents, there is simply not enough land in the mature towns to meet every need. From time to time, HDB identifies a site in a mature estate for redevelopment, and is able to offer a small number of new HDB flats for sale to the public after re-housing SERS residents. Dawson Estate, which was mentioned by PM in his National Day Rally speech, is one such example of HDB's effort to rejuvenate the mature estates.

However, this supply is small. It takes time for HDB to collect sufficient land parcels, and it is not enough to meet all the demand for new flats in mature towns. Where possible, HDB will do what it can to rejuvenate old estates, intensify the use of land, and introduce new HDB flats for sale to the public. However, given the land constraints, the majority of new flat supply will be located in the newer towns. It is not possible for HDB to provide a new flat to every young couple who wishes to stay near their parents.

Therefore, first-timers who wish to buy a flat in a mature estate should consider the option of buying a resale flat. First-timers who buy resale flats can enjoy a HDB Housing Grant of $30,000, while those who live near their parents enjoy a higher tier grant of $40,000. To help the lower income group in buying their first flat, the Additional Housing Grant has been enhanced recently. For those whose monthly household income is below $4,000, they will also enjoy an Additional Housing Grant of up to $30,000. Therefore, first-timers can enjoy up to $70,000 in housing grant or about 40% of the price of a three-room resale flat.

Third, the building of new flats must be in line with the net household formation rate, which takes into account the number of new households formed as well as the disbanding of households due to deaths, changes in marital status and other factors. If HDB were to provide every young couple with a new flat, while we will make the young couples happy today, we are creating a big problem for the same young couples in their later years. The same couples, in their perhaps not-so-young days, will have difficulties selling their flats later when they need to. We must not forget that a flat buyer today may be a flat seller later. In other words, if we over-provide for the young couples, we will inevitably affect the older couples who are thinking of monetising their HDB flats, or the couples who aspire to upgrade to a private property. HDB, therefore, needs to calibrate the supply of new flats to ensure a healthy resale market where both buyers and sellers can meet their needs.

The Member has also asked MND/HDB to consider granting newlyweds priority under HDB's bi-monthly sales exercises for unsold flats. I wish to clarify that HDB has already been giving priority to first-timers (which includes newlyweds and

those applying under the Fiance-Fiancee scheme) when they apply for new HDB flats under the Build-to-Order and Balloting Exercises.

This is in recognition of the more urgent needs of this group of flat buyers who are seeking a home to settle down and start a family. In the HDB Heartware Forum project which I have recently completed, we have taken note of the desire of the young couples to stay near their parents and have made recommendation to HDB to improve the priority scheme accordingly. HDB has announced on 14th August 2007 that the priority framework will safeguard for first-timers at least 90% of the flat supply under the Build-to-Order and balloting exercises. Under the revised system, first-timers will also enjoy double the chances over second-timers; and first-timers applying to live near their parents will be given four times the chances compared to regular applicants. First-timers who have applied unsuccessfully for four or more times will also be given additional chances, starting from their fifth attempt.

We have not extended the priority system to the bi-monthly sales exercises for unsold flats, as the flats offered are leftover units from

Build-to-Order and balloting exercises, where priority has already been given to first-timers. These leftover flats are usually not so popular and often, they remain unsold and available for subsequent selection after applicants have been invited to select their flats. For example, in the April 2007 bi-monthly sale exercise, for flats in the North/West sector, 190 flats remain (or 14% of the units offered) available for walk-in selection today.

As to the Member's question on whether MND will consider holding a dialogue with newly-wed couples, I would

like to inform the Member that HDB regularly carries out surveys and gathers feedback from potential flat buyers. Most recently, the Forum on HDB Heartware has also conducted extensive focus group discussion, public consultation, and email feedback on enhancing HDB community. Young participants in the age band of 25-34 years from all races and both genders formed one such focus group. Arising from the Forum's recommendations, HDB has increased the priority for first-timers and those buying flats to live near their parents. HDB has no plans to conduct another dialogue session with the newly-weds in the near future.

12. Ms Eunice Elizabeth Olsen asked the Minister for Education (a) what are the stringent criteria the Ministry sets in the recruitment of teachers and relief teachers; and (b) how much autonomy do Government schools have in choosing their relief teachers.

13. Mr Siew Kum Hong asked the Minister for Education (a) what are the criteria for the hiring of relief teachers; (b) how many applicants to be relief teachers have been rejected in the past five years; and (c) what was the reason for rejecting the application of Mr Alfian Sa'at, who had scored A1s at the GCE 'O' Levels.

Mr Speaker, Sir, with your permission, I will take Question Nos. 12 and 13 together.

Yes.

Teachers are in a unique position of authority and have great influence over the children they teach; engaging hearts and minds

and shaping their attitudes and perspectives. Whether permanent or relief, teachers are expected to conduct themselves in a manner which befits this role and to uphold the integrity of the profession, both in their professional and personal capacity.

To be engaged as teachers, applicants need to have the requisite educational qualifications, an acceptable level of content mastery of the subjects that they intend to teach and demonstrate the aptitude and a genuine passion for teaching. The values they hold and espouse are also an important consideration as they are important role models for our children.

Applicants for relief teaching can apply directly to MOE. On an annual basis, we receive about 3,000 applications for first time registration as relief teachers and about 3% of these are rejected. Once provisionally accepted, their names are entered into MOE's central database of registered relief teachers and schools in need of relief teachers can then approach them directly. Schools can also engage relief teachers who have met minimum criteria but are not registered in the central database. Schools would then recommend these relief teachers to be registered with the Ministry.

Finally, let me say that it is not appropriate to discuss individual cases of teachers or relief teachers in this House.

I would like to thank the Minister of State. I have two supplementary questions for him. First, I would like to ask him whether the Ministry informs the applicants who are rejected as relief teachers or teachers the reason as to why they do not meet the criteria and what criteria they do not meet. My second question is: what kind of a teaching force the Ministry is looking to

build, what qualities a person might have to contribute to that, and what kind of liabilities will detract from that?

In response to the first supplementary question, we may give applicants a general idea of the areas in which they have fallen short of the criteria. This depends on a case-to-case basis. And, secondly, on the teaching force, our target is to have approximately 30,000 teachers in the teaching force by the end of 2010. We are on track to accomplish this target. The criteria that we look for in our teachers, as I had mentioned earlier, include not only their academic qualifications but also demonstrating a genuine passion for teaching, being able to engage people and children, as well as holding and espousing the right set of values.

Sir, I have two supplementary questions for the MOS. My first question is, from the numbers cited by the MOS, it seems that annually, about 90 applicants for registration will be rejected. I would like to ask the MOS what are the typical reasons for rejecting these 90 or so applicants every year. My second question is with regard to this specific application of Mr Alfian Sa'at, and I take the MOS' point that it is not appropriate to discuss specific applications in this House. Having said that, I understand from Mr Alfian Sa'at that the reason for the rejection of his application was not really explained to him. So I would like to ask the MOS whether it is the Ministry's position that it is appropriate to reject this sort of application without going to specific reasons, if only to let the applicant know how he or she may improve himself or herself, so that he or she may take up a teaching position in future.

The Member is correct in that we have a

rejection rate of about 3%, rounding up to about 100 cases that are rejected annually. The reasons vary. Some of them are because the applicants do not meet the minimum educational criteria. Or, sometimes, it is really because of a variety of reasons like, for example, their past records, disciplinary cases, and so on. On Mr Sa'at's case, like I have said, I think the most appropriate thing to do would be for him to engage MOE directly and we can deal with the case on an individual basis.

14. Ms Irene Ng Phek Hoong asked the Deputy Prime Minister and Minister for Law what recourse is available to unhappy residents affected by en bloc sales of their units and who cannot afford to hire legal counsel to pursue their case, especially regarding unscrupulous and intimidating practices.

Mr Speaker, Sir, currently, the law allows an owner who does not agree to an en bloc sale to file an objection with the Strata Titles Board. There is no fee for filing an objection; and the owner is not required to be represented by a lawyer and he may appear before the Board himself.

Besides this, any owner who at any time feels that he is being harassed or intimidated to consent to an en bloc sale may lodge a Police report.

Let me add, Sir, that my Ministry has completed our review of the en bloc sale legislation and I shall today, after the conclusion of Question Time, introduce the Land Titles (Strata) (Amendment) Bill. The changes to the legislation will be explained in detail by myself during the Second Reading of the Bill at the next

sitting of the House. For now, I will just say that in addition to the proposals that we had set out in the public consultation paper and which I mentioned during the Committee of Supply, the Government has also accepted a number of additional changes that will further enhance transparency and procedural clarity, as well as offer better protection to the owners of affected developments. Sir, I believe these changes will go a considerable way to address the unscrupulous and intimidating practices that Ms Ng referred to in her Question.

Sir, as the Minister has noted, there have been various reports of intimidation in the past by sales committee. Can I ask the Minister whether there are any provisions now or in the new Bill to ensure that the owners can oust the sales committee if the sales committee had been found to be either negligent, under-handed or unfair in its dealings, as well as not representing the interests of the owners but more of the buyers?

The second question is with regard to pending cases, such as Tampines Court which started the en bloc process at the end of 2002, before the property boom. The STB has yet to approve the sale, and the sale and purchase agreement will expire on 24th September, renewable by four months. I believe minority owners are opposing the sale and have filed their objections to STB. Can I ask the Minister, pending the review, how will these owners be affected by the changes that will be coming?

I would ask her to be patient as it is just a matter of time before she reads the provisions of the Bill. I hope she will understand that I would like to avoid commenting on specific cases of en bloc sales because I do not have the details and it may not be proper as some of these cases may end up in court. The general rule in legislation is prospective

application. The Bill has certain provisions for transitional and savings provisions. Later, if she has a look at these provisions, they provide that the amendments will apply to all developments, except those where 80% or 90% majority, based on share values, have already signed the collective and sale agreements at the time the amendments come into effect. And there are also provisions in the Bill concerning applications made to or pending before a Board at that time the amendments come into effect. So I think she has to study these proposals and I hope she will speak her mind when the Bill is read a Second time.

15. Mr Christopher de Souza asked the Deputy Prime Minister and Minister for Law (a) whether steps will be taken to review the Criminal Procedure Code and Probation of Offenders Act such that the newly established Community Court can better achieve its task of rehabilitating young offenders; and (b) whether the Ministry will consider widening the Community Court's sentencing powers to allow for more suitable sentences for young offenders and those suffering from mental disorders.

Sir, the Community Court was set up in June 2006. Up to December 2006, it had dealt with about 650 accused persons, with slightly more than half being youthful offenders between 16 and 18 years old. Offenders with varying degrees of mental disabilities formed the next group numbering about 150.

The Community Court has been widely hailed as an initiative of the Judiciary that

has enriched our criminal justice process, whereby punishments take into account the particular circumstances of the offence and offender, or what some have described as "creative sentencing".

Sir, Government recognises the need to continually review our sentencing options so as to better support the work of the Community Court. Towards this end, the Inter-Ministry Committee on Community-Based Sentences, which I chair, reconvened earlier this year to explore how to strengthen and add to currently available sentencing options so as to better facilitate the rehabilitation and re-integration of offenders into society.

Some initiatives we are studying are, firstly, introducing Mandatory Treatment Orders and setting up a Mental Facility. The Mandatory Treatment Order is an option to empower the Courts to require suitable offenders to undergo a stipulated course of treatment. It will be the most appropriate for offenders who are not sentenced to imprisonment but will benefit from undergoing medical, psychological or psychiatric treatment, or treatment for problems such as alcoholism or uncontrollable anger. In addition, the Prisons Department is exploring the possibility of setting up a small facility, either within Changi Prison itself or outside it, to house a limited number of prisoners with mental disabilities who are sentenced to imprisonment but are considered unsuitable for the rigours of an imprisonment regime.

Secondly, we are looking at strengthening our conditional discharge regime by injecting greater flexibility in the nature of the conditions that may be imposed when an offender is given a conditional discharge, for example, requiring him to perform community service or to pursue a course of study or vocational training. Thirdly, we are

exploring the possibility of introducing Short-Term Detention to deal with offenders deemed suitable for probation but who, in the Court's view, would benefit from an initial short period of detention. This sentencing option can also apply to probationers who breach their probation orders, who can then be sent for a short period of detention to reflect on their wrongdoing and to receive counselling and other rehabilitative treatment.

Sir, besides the above key initiatives which will principally benefit young offenders and offenders with mental disabilities, the Committee is also exploring the possibility of expanding the scope of Community Service Orders or CSOs. Currently, Community Service Orders are imposed as part of probation, mainly on youthful offenders. The Committee is considering an expanded use of CSOs for adults as a standalone option, and this is just to name an example, for example, those who commit traffic offences can be required to perform CSOs as school traffic wardens and those who commit offences involving cruelty to animals can be required to work at the SPCA.

I should add that these are proposals that we need to study further and examine with other parties, not only with the Police, Prisons and the Attorney-General's Chambers, but with medical experts, psychologists, social workers and counsellors as well as the wider community. This is because, for them to succeed, we need to muster adequate community support and professional resources.

Also, if they are adopted, their implementation will take time as additional resources and expertise will have to be built up, as well as amendments made to relevant legislation such as the Criminal Procedure Code and the Probation of Offenders Act.

Sir, will the Ministry consider widening the powers conferred on the courts, pursuant to the Probation of Offenders Act and the Criminal Procedure Code, to pass sentences that will give effect to the restorative justice rationale of sentencing available in jurisdictions such as New Zealand?

Sir, I think the Member knows the concept of restorative justice has been implemented through various measures, eg, conferencing between the offender and those who are offended to see whether they can mediate, or whether it can soothe feelings. The whole idea of the Community Court really is restorative justice, to take a problem-solving approach, to tap community resources. It is not just to punish but to try to solve the problem at hand. I think the options that I have mentioned are in line with the concept of restorative justice.

16. Dr Ahmad Mohd Magad asked the Minister for Community Development, Youth and Sports (a) whether he will provide an update on the case involving abused children at the Darul Ihsan Orphanage; and (b) what steps are being taken to prevent the recurrence of similar incidents in orphanages and welfare homes for children.

Mr Speaker, Sir, first of all, let me say that my staff and I were very troubled by the incident in Darul Ihsan Orphanage. A member of the staff had used abusive methods to discipline the residents in the Home. When we consider that these boys already come from dysfunctional or have unfortunate family circumstances, I think it makes the abuse

even worse, and this is clearly unacceptable.

My Ministry's first priority, when we heard of this case, was to ensure that the abuse had stopped and the residents were safe. The staff member responsible had already been dismissed by the Home. A police report was made and I believe that person has now been charged and the court hearing is due later this month. A team of experienced social workers from my Ministry then met with all the residents of that Home and provided them with necessary counselling and emotional support. My Ministry views the ill-treatment of children very seriously, and we will not hesitate to take tough enforcement actions against anyone found guilty of mistreating children and young persons.

The incident in the Darul Ihsan Orphanage is a reminder of the important role and heavy responsibility that the Home Management Committee members have. They have to ensure that the Homes that they supervise are safe. In this particular case, my Ministry had to reproach the Management Committee for not disclosing the incidents more promptly to us, and we also warned them to comply strictly with all the regulations under the Children and Young Persons Act as well as the MCYS' specified Standards of Care. The Home has since worked hard to ensure that the proper systems are in place so that the Home is safe for children. They have consequently reviewed and improved their SOPs.

My Ministry has also implemented some additional measures to protect the welfare of residents in these Homes. For instance, I have instructed the Board of Visitors to extend their visits to the 10 non-gazetted Homes. Let me explain a little bit more on this point. We have 20 Homes which look after children in such circumstances. Ten of these 20 Homes

are what we call "gazetted Homes" - in other words, they have statutory functions under the Children and Young Persons Act. Under this Act, I appoint a Board of Visitors who will visit and inspect the Homes and check on the conditions which the residents are living under. I have now decided to extend the Board of Visitors' role to also cover the children's Homes which today are not gazetted with statutory functions. So, for instance, a Home like the Darul Ihsan Orphanage is not a gazetted Home but, from now on, will receive visits from the Board of Visitors once every two months. These will be random visits so that they can go in and check on the conditions which are prevailing.

The Board of Visitors, after their visit, will report their observations directly to the Director of Social Welfare of my Ministry. And then from there on, we can take any necessary investigations or enforcement actions.

Secondly, my Ministry has also set up a Post Office Box address for the Board of Visitors, so that the residents can write directly to the Board of Visitors. These inputs will be forwarded to the members of the Board and these inputs can be sent to us anonymously - in other words, a kind of whistle-blowing mechanism within the Home itself. We have to do this because some of the young boys or girls there may feel shy or intimidated from making a specific complaint under their own name against a staff member. So this system provides another alternative channel. The Board of Visitors will then investigate any complaints or feedback given by these residents and then raise it with the Ministry or with the Home Management Committees.

The third thing we have done is to instruct that all children's Homes must display a national toll-free Child Protection

helpline number. The Management Committees have been instructed to also educate the residents on the various channels of seeking help if they are abused or if they wish to report an incident of abuse, either involving themselves or one of their friends in the same Home. The residents have also been reminded that they have a right and that they should approach trusted adults - their relatives, friends, school teachers or indeed other volunteers in the Home if they face any such problems.

I would end by emphasising again that no child residing in any of our Homes should be subjected to any form of abuse. When it comes to protecting children, everyone has a role to play. And my Ministry will continue to look into what more we can do to ensure that this protection extends uniformly and effectively to each and every single child. We will work with the Police and our community partners to prevent a recurrence of such incidents in the Homes.

Sir, how often does the Board of Visitors actually make visits to these Homes to investigate the conditions under which these Homes are operating? My second question relates to the extent of awareness that residents of these Homes have. Sometimes they do not know that they are being abused unless they are told in advance the kind of treatment to expect, what kind of punishment conditions they should expect if they breach the rules, and where does one cross the line of abuse. How much of this has the Ministry done to educate the residents?

Sir, the Board of Visitors should visit each Home at least once in two months. Under the Children and Young Persons Act, the Board has the right to enter a Home at all reasonable times - in other words, they do not have to pre-inform and get everything in the

Home arranged spick and span so that what they see is not a realistic picture.

On awareness, the Member is absolutely right. There is no point in having all the systems if the residents in the Home do not know how to use these avenues. That is why we have to, first, make sure that avenues are possible, for instance, the Post Office box address, make sure that the Board of Visitors goes in. And when they go in, they can also, at random, select residents to speak to.

Third, we have also reminded the Homes to put up a notice board to say that this is the national helpline number the residents can call. And also, as the Member has suggested, when any child comes in to have a standard briefing, this is a Home, these are the rules which apply to the boys or girls there, as well as the rules which the staff need to comply with, so that people are, in a sense, aware of their rights and the avenues for redress. But the most important thing is to understand that these are vulnerable children, and that staff, volunteers and management committee members are in a position of trust and that everyone really has to do his part. And it requires, in that sense, an entire village to bring up these children. So any one who is involved in these Homes needs to view himself as a member of the village. And if we can get that done, restore trust, then focus on restoring these children to the rightful trajectories which their life should take.

17. Mdm Halimah Yacob asked the Minister for Community Development, Youth and Sports whether the Government will consider increasing the $150 child care subsidy which was last revised in 1995 and which is no longer adequate in view of the rising cost of child care fees.

Mr Speaker, Sir, I would like to thank the hon. Member, Mdm Halimah, for her concern about child care development in Singapore.

While the quantum of the child care subsidy has remained at $150 a month, the Government has introduced various initiatives in the past few years to help parents defray the cost of raising children.

The Baby Bonus scheme was introduced in 2001 for the second and third child. In 2004, the scheme was extended to the first and fourth child to make it more attractive. Currently, the scheme provides a cash gift of $3,000 for the first and second child, and $6,000 for the third and fourth child. It also provides Government matching contribution of up to $6,000 for the second child, and $12,000 for the third and fourth child, if the parents open a Baby Bonus Children Development Account and put in their contribution. Both the cash grant and the Children Development Account funds can be used to pay for various child related expenditure, including fees at childcare centres.

We have chosen to provide more support through the Baby Bonus package as it provides parents with more options in how they can use their money.

In recognition of the higher cost of infant care, in 2004, the Government had also introduced an infant care subsidy of $400 to help families which place their infants aged 2-18 months in centre-based infant care.

Sir, notwithstanding the above, we will monitor the situation closely and review existing policies, including the child care subsidy policy, where necessary

to better assist parents in their child care arrangements.

Sir, I thank the Minister of State for the explanation. I would like to say that the Baby Bonus Scheme is a useful scheme. Nevertheless, it is a scheme which requires a person to top up before the Government will give a matching grant. Not everyone is able to come up with the money to top up and therefore it may have limited accessibility for some Singaporeans. Raising the child care subsidy of $150, however, will benefit everyone, including the lower income groups that we want to assist. I would like to ask the MCYS to seriously consider raising this $150 subsidy, because it has been a long time since the subsidy was last raised.

Mr Speaker, Sir, I do understand the situation. Like I said just now, besides Baby Bonus, for lower income groups such as those families with a monthly income below $1,500, the Government has the Centre-Based Financial Assistance Scheme for Child Care which provides a subsidy that ranges from $140-$320, in addition to the $150 child care subsidy

I do agree with Mdm Halimah that with the Baby Bonus matching grant, not all of them can come into this scheme. But, on average, over 90% of eligible children have opened Baby Bonus Children Development Accounts. I am sure that my Ministry and also the National Population Committee chaired by Deputy Prime Minister Wong Kan Seng will actively look into child care arrangements in Singapore, including the subsidy.

18. Ms Sylvia Lim asked the Deputy Prime Minister and Minister for Home

Affairs if he will provide reasons for the rejection of a police permit to hold the Workers' Party 50th Anniversary Cycling Event on 9th September 2007 at the East Coast Park.

Mr Speaker, Sir, the reason why political parties are not allowed to organise outdoor activities has been explained in Parliament before.

Police does not allow political parties to organise outdoor gatherings because such activities have the potential for public disorder and mischief, and may disrupt community life. Police's requirement is that such party activities be held indoors or within stadiums, so that any law and order problems would be contained. This policy applies to all political parties.

The Workers' Party had applied to the Police to organise a mass cycling event to celebrate the party's 50th anniversary at the East Coast Park. The East Coast Park is a recreational park for Singaporeans and their families.

It is not meant to be used by a political party to promote its cause. Apart from displacing the usual recreational users of East Coast Park, it is an open area where there is greater potential for a breach of the peace, public disorder and unruly behaviour. As I have explained, Police takes a more cautious approach towards outdoor activities organised by political parties. In line with this approach, Police rejected Workers' Party's application.

Sir, the Workers' Party may wish to consider organising its celebrations at an indoor venue or in a sports stadium.

Sir, is the Senior Minister of State then saying that even if political organisations organise outdoor activities for, let us say, 20 people, and there is no

risk of disruption to public life, the Police will still not grant the permit?

Sir, the Police will have to assess each application as it is made. But within the parameters is as I have stated them to be. I think we have explained this many times in the House. In fact, when Mr Low Thia Khiang became an MP in 1991, there was an exchange with Prof. Jayakumar in 1992, and this was explained very clearly. And, thereafter, I have also explained this many times - why when you have an event organised by a political party, that may have a greater potential for law and order problem, because you may be behaving well but there may be other people who may disagree with your point of view and there could be quarrels and debates on the ground, attracting other people.

So, I think it is better to keep the policy as it is. Maybe they could cycle round the stadium or have it in an indoor venue.

Yes, Mr Low. Last question.

Sir, I would like to know on what basis the Government assumes that political parties organising events at a public place will necessarily cause law and order problem. Can he cite any example that the Workers' Party had caused such problem when organising events publicly in the past, before the Government banned it? It was allowed in the past in the first place.

Secondly, I do not know whether the Senior Minister of State is saying that cycling in the stadium or maybe at the new stadium at Marina Centre is a reasonable proposal. And if it is not, then what is the alternative the Senior Minister of State will propose? Or, perhaps, he wants to consider having a designated

specific stretch of East Coast Park for such sporting activities by the political parties, like the Hong Lim Park. But don't tell me to go and cycle at Hong Lim Park.

Sir, whether cycling round the stadium is reasonable is up to the Workers' Party to decide. Like I have said, there are many ways to celebrate its anniversary. They have done it before in a restaurant and many people have come and made speeches. I think, sometimes, the press report them. I think that is all right. As to whether or not if you have an event outdoor, problems may be caused - if Mr Low had listened to my answer very carefully - I don't know whether Mr Low's hearing aid is with him because I know he wears one - I have said that there is a greater potential for law and order problem. Like I have said, you may be well-behaving but there may be other people whom you come across when you cycle, who may stop you or who may want to debate with you, and that may attract a crowd. That will result in problems that the Police wants to avoid. I think that is a reasonable approach.

19. Mdm Cynthia Phua asked the Minister for Transport (a) whether there is a requirement for LTA to review and endorse the development plan of schools with regard to vehicular access to the surrounding road network; (b) whether a traffic impact study report is required by LTA for all development/redevelopment of schools; (c) whether it is appropriate for the main access to schools to be located behind bus stops as this will entail parents alighting their children there; and (d) whether LTA approves of such access and whether they are in accordance with road management guidelines.

Mr Speaker, Sir, during a school's planning and development stage, LTA will work closely with MOE or the private education institution to give advice on and endorse the location of the school's vehicular access and drop-off points. LTA will also assess what is the traffic the school will generate and, if the impact of this traffic on the surrounding roads is significant, LTA will require a Traffic Impact Assessment (TIA) to be made to explore how this can be minimised. The purpose of the TIA is to guide the layout of the school so that the access points to the school can be sited appropriately.

Where possible, the main access to the school is located away from the bus stop. However, this would have to be balanced against making it convenient for students who take public transport to get to school.

The management of traffic around the school is an on-going process. When the school becomes operational and if there are indeed traffic concerns raised, LTA will work with the school, Traffic Police and other agencies, such as HDB or Town Council, to identify necessary improvements or modifications to the traffic scheme around the school. Measures taken could include engineering solutions, such as railings to prevent jay-walking or cars stopping, allowing parents to drive into the school to drop off or pick up students, or encouraging parents to make use of nearby HDB carparks and service roads as waiting areas.

Despite these measures, LTA recognises that there may be instances where the impact of the traffic cannot be mitigated fully, and congestion may still build up when school is about to start or end. LTA will continue to work with the schools to improve the situation, but I would like to seek residents' understanding as these periods of heavy traffic are usually predictable, and only for a short period each day.

Sir, I would like to ask the Minister why every time when the school has undergone PRIME, as a result of it, there is always problem with the road traffic around the school. If the Traffic Department of LTA has endorsed the plan, why has the situation not improved? And I do not understand why LTA does not consider making it a requirement for the traffic impact study to be done by all schools.

For most schools, in terms of the traffic congestion problem, it is quite localised, ie, it does not affect the whole area. So, to impose on the Ministry of Education this requirement - we have 336 primary and secondary schools in Singapore - when it is a localised problem, might be too onerous. But where it is necessary like, say, it does impact on the surrounding areas, this would, indeed, be done.

On the first part of her question on PRIME, going ahead, based on representations from individuals like the Member, we had a joint committee last year, comprising representatives from MOE, LTA, Traffic Police, HDB and URA, to look into this. Every time when we have a new school or a school that is going through upgrading, one of the key things that they will look at is, indeed, this traffic segregation scheme to make sure that they have a good scheme that separates between pedestrians, dropping off and picking up points for parents, and school buses. If there is a need for additional land, because the site is small, then the Ministry of Education will make the necessary representation.

20. Ms Jessica Tan Soon Neo asked the Minister for Transport what can be

done to address the challenges faced by the increase in the number of cyclists who use pedestrian walkways and to ensure the safety of both cyclists and pedestrians.

Mr Speaker, Sir, given Singapore's land constraints, my Ministry's policy is to optimise our available road and pedestrian space to meet the diverse needs of pedestrians, motorists, cyclists as well as people with disabilities. In the use of space, the Land Transport Authority (LTA) gives priority to public transport as it is the most efficient means of transportation.

Sir, we do not have the luxury of space to develop a comprehensive network of dedicated lanes for bicycles. Instead, the focus is on making it safer for the different road users to share the space we have. Hence, the LTA and the Traffic Police are working with the Tampines grassroots organisations on a trial in Tampines Town to assess the feasibility of allowing cycling on footways, which is currently prohibited. The aim of the study is to assess whether pedestrians and cyclists are prepared to share a common footway. The study started in late May and will last a year.

To safeguard the safety of pedestrians and cyclists during the trial, the organisers undertook a series of public education programmes to promote safe riding on footways. These include the dissemination of a set of guidelines for cyclists and pedestrians developed in consultation with organisations such as the National Safety Council of Singapore (NSCS), the Singapore Action Group for the Elders (SAGE), the Singapore Amateur Cycling Association (SACA) and the Safe Cycling Task Force (SCTF). Cycling wardens have also been deployed along the footways in Tampines to advise

pedestrians and cyclists on sharing the footways in a safe and gracious manner. The Police will continue to take action against cyclists who ride on the footpaths recklessly, or in a disorderly manner that endangers pedestrians or other footpath users.

Depending on the outcome of the study, the Tampines community may have the option of making the scheme permanent. Where there is community support for such a scheme in other neighbourhoods, LTA and the Traffic Police may also consider allowing cyclists to share the footpaths in their respective towns after taking into account characteristics such as road infrastructure, density of pedestrians and cyclists on footways and environmental factors.

Besides reviewing the feasibility of allowing cyclists and pedestrians to share the use of footways, the LTA has also been working with NParks to build on its Park Connector Network which cyclists can use for both recreational and commuting purposes. LTA will identify and incorporate crossing points for cyclists at locations where the park connector interfaces with the road network.

Mr Speaker, Sir, footways can be shared safely if users are civic-minded and exercise responsibility for their own safety and that of other road users. We can facilitate, but, ultimately, every pedestrian and cyclist has a part to play in making footways safe for all.

Thank you for the comprehensive reply. Can I just ask a supplementary question with regard to the trial that is happening in Tampines? I am not sure whether the Minister of State is aware that, with that trial, it has also resulted in other housing estates and

cyclists assuming that the trial is happening across Singapore, because we are starting to see that. In that aspect, I think it may be necessary to also look at how we can educate those in the other estates in terms of road sharing because there are no wardens in these other estates. And in terms of educating the people on trial, is there anything that can be done? I think education is one of the factors here, and looking at the feasibility of those other estates as well, because I do understand that it is becoming more rampant in terms of people assuming that the trials are all around Singapore.

Sir, may I reiterate that the road traffic rules currently prohibit cycling on footways and that would apply to all other towns, other than Tampines Town which is having this trial. Public education will have to continue not just in terms of cautioning people to share space properly. It will be an ongoing effort not only on the part of the Government but also of the various groups that I have named in my speech just now.

21. Mrs Josephine Teo asked the Minister for Manpower over the last five years (a) what percentage of active and inactive CPF members were able to meet the Minimum Sum at the age of 62; (b) what is the median shortfall for those who did not have the Minimum Sum at the age of 62; and (c) how many of such members opted to defer withdrawal of CPF monies so that their future drawdown period can be extended.

Mr Speaker, Sir, can I beg the Member's indulgence? She has asked for

data for the last five years' cohorts, but because CPF rules with regard to Minimum Sum and other aspects may be different for each cohort, I will give information for the most recent cohort who reached 62 years last year.

First, let me provide data for those who are active members who have been contributing regularly. Of the 7,100 active members who reached the drawdown age of 62 last year, 55% were able to meet their Minimum Sum which was set at $60,000 when they turned 55 in 1999. For the remaining members who did not meet the Minimum Sum, their median shortfall was about $34,500. On how many of them delayed taking out their Minimum Sum, about 42% delayed the drawdown of their Minimum Sum by at least one year

For all members, ie, about 22,600 CPF members, who reached the drawdown age of 62 last year, 34% were able to meet their Minimum Sum, when they turned 55 in 1999. For the remaining 15,000 members who did not meet the Minimum Sum, their median shortfall was about $49,300. Again, about 40% delayed the drawdown of their Minimum Sum by at least one year.

Currently, members are allowed to withdraw 50% of their CPF savings at age 55. This is, in fact, one important factor why many members fall short of the Minimum Sum. As announced in 2003, withdrawals below the Minimum Sum at age 55 will be progressively phased out from 2009 to 2013. These measures, together with the broad range of changes to the CPF system announced by PM at the National Day Rally, will further increase retirement savings for members.

Order. End of Question time.

[Pursuant to Standing Order No. 22(3), Written Answers to Question Nos. 23, 25, 27, 30-32, 35, 38, 42, 44 and 46 on the Order Paper are reproduced in the Appendix*. Question Nos. 22, 24, 26, 28-29, 33-34, 36-37, 39-41, 43, 45 and 47 have been postponed to a date to be fixed.]

*Cols. 1429-1452

Mr Speaker, Sir, I would like to make a clarification. During the parliamentary sitting on 17th July, in response to Mr Siew Kum Hong's Question on university admission, I said that during this year's admission exercise, a total of 28,000 local students applied to local universities. Out of that, 14,000, or 49%, were offered places. Similarly, about 23,000 foreign students applied to the universities for the same admission year and only 987 were given places, and that is 4.3%. I would like to correct the second part of my reply. The number 987 refers specifically to the number of foreign students holding local GCE 'A' levels or polytechnic qualifications. There are foreign students who were offered university places who hold other qualifications. Out of the 23,000 foreign students who applied to the local universities, a total of 4,218, or 18%, were offered places. The Ministry of Education had issued a clarification to the media on 19th July.

"to amend the Monetary Authority of Singapore Act (Chapter 186 of the 1999 Revised Edition)",

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

"to enable the President to appoint a commission of inquiry and to enable the relevant Minister to appoint a committee of inquiry, and to provide for matters related thereto, to repeal the Commissions of Inquiry Act (Chapter 48 of the 1985 Revised Edition) and to make related amendments to certain other written laws",

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

"to amend the Land Titles (Strata) Act (Chapter 158 of the 1999 Revised Edition) and to make related amendments to

the Building Maintenance and Strata Management Act 2004 (Act 47 of 2004)",

presented by Prof. S Jayakumar; read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to amend the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (Chapter 65A of the 2000 Revised Edition)",

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

"to amend the Building Control Act (Chapter 29 of the 1999 Revised Edition) and to make consequential amendments to the Building and Construction Authority Act (Chapter 30A of the 2000 Revised Edition) and the Building Maintenance and Strata Management Act 2004 (Act 47 of 2004)",

presented by the Minister for National Development (Mr Mah Bow Tan); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to amend the Strategic Goods (Control) Act (Chapter 300 of the 2003 Revised Edition)",

presented by the Minister for Trade and Industry (Mr Lim Hng Kiang); 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 Pharmacists Registration Act (Chapter 230 of the 1985 Revised Edition), to establish the Singapore Pharmacy Council, to provide for the registration of pharmacists and for matters connected therewith, and to make consequential amendments to certain other written laws",

presented by the Minister of State for Health (Mr Heng Chee How); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

Order for Second Reading read.

3.05 pm

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

Impetus for the Bill

Sir, in the post 9/11 security environment, the Government has

enhanced our security measures in key installations and upgraded the capabilities of our security forces to deal with the new threat of terrorism. However, the police cannot be everywhere. Therefore, it is imperative that we also upgrade the professional standards in the private security industry, so that it can complement the work of our security forces in contributing to Singapore's overall safety and security.

The critical role of security personnel can be seen in the many incidents that have occurred in the region and elsewhere in the world. In both the Marriott and Australian Embassy bombings in Jakarta, security personnel had approached the vehicles loaded with explosives before the vehicles were driven up to the buildings proper. As a result, the suicide bombers detonated their bombs earlier than planned - before they could position their vehicles near the buildings, where the explosion could have caused many more casualties.

As the security threat evolves, we will need to ensure that we have a competent and professional private security industry to help safeguard our safety and security. This is the impetus for the key changes in the Bill that is being read a Second time today.

Introduction of licensing regimes for private investigators and security officers

Sir, let me now take the House through the key features of the Bill.

First and foremost, we have to strengthen our regulatory framework for private investigators and security officers - or what are commonly known as "security guards" -by putting in place separate licensing regimes for them.

Security officers guard many of our shopping malls, commercial buildings,

hotels and key installations. They should be alert in detecting and reporting potential threats. Their timely reports of any suspicious activity can bring about expeditious action by law enforcement agencies. At the same time, they are an additional resource in our response to security incidents.

Let me cite an example. About two months back, the Singapore Civil Defence Force (SCDF) received an anonymous call before noon, informing them that a bomb was going to explode at Raffles Place. Together with the security officers deployed in the vicinity, Police immediately checked the vicinity of Clifford Centre where the call was traced to. A security officer deployed at Clifford Centre assisted the Police in reviewing the CCTV recording and provided information that helped to identify the likely culprit.

That same afternoon, there was a second call to the SCDF informing them that bombs had been planted at Orchard Road and Tanjong Pagar. This time, the call was traced to International Plaza. Police responded immediately. Security officers deployed at the location again assisted Police in reviewing the CCTV recording. The likely culprit of the morning episode was again identified in this set of CCTV recording. A quick search was done in the vicinity and the culprit was arrested following his admission to making both the bomb hoax calls.

This example shows the value of well-trained and vigilant security officers who can complement our security forces. We are therefore introducing an enhanced regulatory regime, where all security officers, and private investigators as well, will be licensed personally, so that (a) it will enable the licensing authority to conduct the necessary background checks and prevent undesirable elements from operating as security officers or private investigators; and (b) it will enable the

licensing authority to specify the requisite skills and qualifications that private investigators and security officers should have. In time to come, the licensing authority may also require security officers who work at more sensitive installations, where the security threat is higher, to possess higher level qualifications and skills.

This licensing regime will apply to those security officers and private investigators in the direct employment of building owners and businesses, and who currently do not need Police's approval to work.

There will also be regulations governing the conduct of security officers and security agencies. The net result is that better training and conduct will raise standards and give the security officers a greater sense of pride and professionalism.

Should a private investigator or security officer be charged with or convicted of a prescribed offence which makes his continued employment as a private investigator or security officer undesirable, his licence can be suspended with immediate effect. This power is provided in clause 24(5) of the Bill.

With the introduction of the licensing schemes for security officers and private investigators, more than 500 private investigators and 30,000 security officers will need to apply for a licence.

We are aware that some security officers and private investigators are unable to attain a licence, despite their best efforts. If they work in places where the security threat is lower, we will consider exempting them from the licensing requirement under the Act. This will ease the level of displacement from the industry when the Act comes into force. But I foresee that many of them would be able to make the grade.

Clause 5(2) of the Bill currently provides that certain persons are not to be regarded as private investigators, such as in-house investigators employed by insurance companies, and those working as investigators in other business sectors, for example, those who obtain or give information on the financial standing of another person, or public accountants, which pose little threat to national security, and are of no concern to the police. The Act also allows the Minister to further exempt other categories of private investigators from licensing under the Act, should their work be of little security concern.

Approval for private investigators to take on certain security assignments

However, for those private investigators who need to be licensed, police will tighten up the regulatory regime to ensure that they do not conduct private investigation activities which may be prejudicial to the public interest or our national security. Clause 11 of the Bill, therefore, states that a private investigator has to seek the licensing officer's approval before accepting any assignment from a foreign government or its proxy agency.

Similarly, a private investigator has to seek the licensing officer's approval before he carries out any surveillance or activities which involve the gathering of information on certain persons or places of security concern. The licensing officer may subsequently revoke this approval if it is not in the public interest or if it poses a threat to national security.

Sir, key Government leaders and sensitive places are known to be targets of terrorists. Having such provisions in our laws will mark out clearly to the industry the boundaries they have to work within. At the same time, such a law

serves to alert the licensing authority to any activities of security concern, giving the licensing authority advance information, as well as the opportunity to investigate further if necessary.

Record-keeping of identities of private investigator's clients

Sir, other measures to strengthen the regulatory framework over the private investigation industry include clause 10, which requires a private investigation agency to obtain and verify the identity and address of the person engaging its services, before it can accept any assignment from such a person.

To complement this requirement, clause 12 of the Bill specifies the various records, including the identity of the clients, where a private investigation agency or employer of a private investigator has to keep and submit to the licensing authority.

Expansion of regulatory scope to include other activities in the private security industry

The Bill will also cover security service providers, other than private investigators and security officers. As defined in clause 18, those providing security surveillance services, and those installing security equipment like audio devices used for overhearing and recording a conversation in any premises, will be regulated under the new Act. This will allow controls to be imposed on other security service providers, to ensure that they meet certain standards of professionalism.

For example, clause 20 allows the licensing officer to levy a charge on a prescribed security service provider, being a Central Alarm Monitoring Station (CAMS) provider, if it indiscriminately alerts the police whenever an alarm is activated at premises that it is monitoring,

without first taking reasonable measures to verify whether it is a false alarm.

The Schedule of the Bill contains a list of security equipment that will fall under the ambit of the new Act.

Increase in fine quantum

Sir, the current Act was enacted in 1973, more than 30 years ago. The highest penalty provided for in the Act is a $10,000 fine or a two-year imprisonment term, or both. In the current context, where revenues of industry players are considerably higher, such penalties are no longer adequate, particularly the fines. If the fines are not increased, the Act will pose no deterrence and this will have adverse consequences for our security. Hence, to keep pace with the changes in the business environment and to ensure that there is adequate deterrence in today's context, the Bill will provide for a five-fold increase in the maximum quantum of fines.

Past initiatives to upgrade industry

Mr Speaker, Sir, let me put into context the current amendments in terms of what we are doing to upgrade the private security industry. At the end of 2004, police set up the Security Industry Regulatory Department (SIRD) to look into the regulation of the private security industry. A set of skills standards under the National Skills Recognition System or NSRS was introduced in 2005 for all private security officers employed by the security agencies.

At the beginning of last year, a buyer awareness exhibition and seminar was also held to allow major buyers in the business community to be more discerning in their engagement of security service providers. Last month, I launched the Security Workforce Skills Qualifications or Security WSQ.

In line with the effort to upgrade the quality of the security services, a pilot exercise was also conducted last year to grade all licensed security agencies according to prescribed professional standards. Part of the objectives of the exercise was also to provide an objective and authoritative assessment of existing security agencies and motivate them to raise their service standards and improve their operational processes. Police has recently completed the formal grading exercise for this year, after refining the criteria following last year's pilot exercise, and will be publishing the results on the Internet very soon.

Sir, much work has been done over the last few years to develop the private security industry into the effective partner of our security forces. Today's amendment to the law is part of this greater transformation of the industry which MHA is helping to facilitate. In the current security environment, this Act will be a key component in our efforts to enhance the capabilities of the private security industry, so that the Government and private sector partnership can work together to keep Singapore safe and secure.

Mr Speaker, Sir, I beg to move.

Question proposed.

3.24 pm

Mr Speaker, Sir, I rise in support of the Bill.

Sir, the 11th September terrorist attack in the United States has changed the security landscape and security industry in many countries. The governments of many countries have implemented various security measures and systems to further enhance the safety and security of their installations. In Singapore, our Home Team and various Government agencies have also developed security measures to safeguard strategic

installations, such as our airports, MRT system, Government buildings and certain public places. But we cannot solely depend on our Government agencies to provide security. There is a need to engage the private security industry to further enhance our safety and security. As such, the Bill is indeed timely in providing a comprehensive framework to regulate and enhance the professionalism of our private security industry.

Sir, at present, the private security industry lacks supervision and enforcement to ensure that they provide professional security services to their clients. Some security agencies do not provide much training to their security officers, while some employ ad hoc or temporary security guards to fulfill their contractual obligations. This has resulted in unethical business practices and unprofessional practices in the industry.

The private security industry also suffers from an image problem, as the majority of people who are keen to join the industry are senior citizens. Many regard these jobs as their retirement jobs, and do not have much motivation to upgrade their skills and knowledge. Furthermore, due to the intense business competition, some security agencies are tendering at prices which they cannot provide quality and professional services. Today, private security firms are faced with three key challenges:

Intense competition due to low entry barrier into the industry;

Shortage of qualified and well-trained security officers; and

Relatively high turnover of staff and low staff morale.

Sir, the present situation in the industry is indeed unhealthy and will not

enhance our safety and security. I wish to highlight four areas of the Bill which I hope the Minister will provide clarifications.

Impact on existing security officers

Sir, the Bill will affect the jobs and livelihoods of many security officers/guards, especially inhouse security guards. Many of these security guards are old and may not meet the new licensing requirements or pass the screening or training. The Bill will cause much displacement of jobs and retrenchment. How can we protect or help those affected by the new licensing requirements? Many of these old security guards will encounter difficulty in finding another job. I have received industry feedback that about 20%-30% of these inhouse security guards may not pass the security screening or Security Workforce Skills Qualifications (Security WSQ) training course. Thus, a few thousand security guards may lose their jobs. Some of these guards are relatives or trusted employees of building owners and have been working for many years as security guards. Sir, may I ask the Minister what are the plans of the Ministry to help these affected security guards?

Sir, as the number of existing inhouse security guards who will be affected by the Bill is about 5,000, I would propose to the Ministry to consider phasing the compliance of licensing of security officers in accordance with the different levels of security needs of clients or installations. We can instead issue personal licences for security officers who are trained in different levels of skills and knowledge, such as Class-1 Security Licence for low-security installations, Class-2 for medium security installations and Class-3 for high security installations.

A three-tier personal security licence scheme will facilitate the employment of security officers with the appropriate skills

and knowledge relevant to the security needs of the installations. It will also provide a career path for security officers who are keen to upgrade themselves to manage complex installations.

Sir, the Government is encouraging Singaporeans to work longer. The private security industry provides many job opportunities for older workers, and certain segments of our population would prefer such jobs. I fully agree that we must raise professional standards for the private security industry, but we must also strike a balance between providing job opportunities for older Singaporeans and ensuring safety and security.

Impact on private security industry

Sir, the implementation of the Private Security Industry Bill will also affect the security industry in a number of ways.

First of all, the stringent licensing requirements for security officers will result in a severe shortage of qualified security officers. At present, the security industry is unable to attract many good workers. Many security officers must work on a 12-hour rotating shift. The salary of security officers is not very attractive. It is between $1,000-$1,200. As such, not many job-seekers are keen to pursue a career in the industry.

Secondly, the buoyant property development market will further increase the demand for security officers of many new buildings, such as shopping centres, offices and integrated resorts. This will result in the poaching of qualified security guards amongst security service providers, thus causing more disruption to the security services of many buildings. The impact will be more severe in buildings managed by small or medium-sized security firms.

Thirdly, the new requirements of the Bill will add on much administrative burden on security and private

investigation firms. Many of these are small business outfits or one-man-operations.

Sir, I wish to ask the Minister the following questions:

First, what is the manpower forecast for security officers in the next three years?

Second, do we have adequate WDA-accredited training service providers for security officer courses?

Third, what are the measures in place to help small and medium security firms cope with the new compliances of the Bill?

Professional framework for security officers and private investigators

Sir, licensing alone will not enhance the professionalism of security officers and private investigators. We need to develop a comprehensive framework to set professional standards and key desired outcomes of our security services. This would entail quality and professional training by accredited training establishments, and close supervision by the Ministry to ensure professional standards. Due to the complexity of the private security industry and the importance of security, we cannot assume compliance of the Act automatically. Although the increased penalty will act as a deterrent for non-compliances, it is necessary for the Ministry to adopt a more proactive approach in conducting spot checks to ensure professional standards and achieve the desired outcomes of the Bill.

Sir, with regard to enhancing professional standards, I wish to seek the Minister's clarifications on the following. First, is there a professional framework by the Ministry to raise professional standards of the private security industry

such as a Singapore Standards for security services or Code of Practice (CP) for security services? Second, what are the key desired outcomes of professional standards? And third, is there any enforcement team in the Ministry to ensure compliance of the Act?

Cost of business

Sir, the new requirements of the Bill will pose a cost burden to businesses, especially small and medium enterprises. Clauses 8, 9, 16 and 17 of the Bill require the licensed private investigation agency or licensed security agency to inform the licensing officer within 14 days after the employment or termination of their employees. This is indeed a very stringent administrative requirement to comply with, especially for smaller security firms. I propose that the Ministry should consider liaising with the CPF Board which now requires all employers to submit the employer's statement of account (CPF Form 92) to indicate the status of their employees. The information provided by the CPF's Form 92 should be adequate for the licensing officers to conduct the necessary checks on the suitability of the candidates for employment in this security industry.

Sir, the cost of training for security officers is high (about $550 for training and $150 for assessment tests) and does increase the business cost of security firms. WDA only subsidises 80% to 90% of the course fee. The high turnover of security officers also serves as a disincentive for many firms to send their officers for training. To ensure that there is an adequate supply of trained security officers, we should consider lowering the cost of training for security officers, especially the basic security course. We should also provide more flexibility for individuals who are keen to join the security industry. Course subsidy could be

given directly to the individuals attending security courses. The Ministry should also consider granting personal security licences to individuals directly as in the case of driving licence. In this way, we will be able to encourage more personal accountability of individuals wanting to join the security industry and develop a more stable and committed workforce in the security industry.

Sir, the raising of professional standards as stipulated by the Bill will further complement the Government's efforts in making Singapore a safe and secure place. But we need both the Ministry and industry stakeholders to show commitment to achieve the desired outcomes of the Bill.

Sir, I support the Bill.

3.36 pm

Mr Speaker, Sir, I support the Bill in general and I also appreciate the rationale for professionalising the industry.

However, one provision which I believe is of considerable concern is clause 11 of the Bill. Clause 11 provides that no person may accept a security assignment unless the licensing officer has given prior written approval. What amounts to a security assignment is defined in that clause to encompass various situations. Although the Minister has explained that the concern is public interest and national security, my view is that the provision is too wide. The most politically sensitive aspect is that the security assignment includes any brief requiring the gathering of information or surveillance of a "political figure". A "political figure" is itself defined in clause 2 to mean four categories of office-holders - the President, the Prime Minister, a Minister or a Minister of State. In other words, the effect of this clause is that it will be illegal for any person to

accept a brief to conduct surveillance or to gather information on the President, Prime Minister, any Minister or Minister of State unless he applies to the licensing officer and gets prior written approval. Further, Sir, clause 11(2)(b)(v) makes it clear that the need to get prior approval extends to gathering information or doing surveillance on the political figure's household member as well.

Sir, let me elaborate on why I believe the provision is too wide. Singaporeans may have legitimate reasons to want to gather information or ask for surveillance on political figures or their families. To illustrate, let me play devil's advocate. For instance, a person may have reasons to suspect that a political figure is in a relationship with that person's spouse which will give grounds for divorce. That person will need a private investigator to gather evidence to see if there are grounds to start divorce proceedings. This has nothing to do with national security. Why should that person be required to seek Police's permission to monitor the political figure's movements?

Another example could be a case where a member of a political figure's family attempts to use his political connections for business gain, a case of suspected corruption. Due to the sensitivity of the case, the complainant may want to get a private investigator to produce a preliminary report before reporting the matter to the authorities. In this situation, some would in fact argue that it is in the public interest to allow the private investigation to carry on undisclosed. Sir, no matter what standards of personal integrity are imposed by any organisation, there will be some who fall short. History has taught us that even in Singapore, by enacting this clause, are we inadvertently erecting a firewall around our political office-holders?

The requirement for prior written approval will also generate doubts in

people's minds about the effectiveness of subsequent investigations, for example, (1), the issue of time. How long will the Police take to consider the application? Will it be a few days or a few weeks? What if a transaction is on-going and it is over by the time the approval comes? (2) The question of approval channels. When the Police are considering the application for approval, who should they inform or seek advice from? Would the Minister for Home Affairs be consulted? Who else will know about the application and is there any guarantee that the political figure will not come to know of it? Would leaks botch up the investigations? (3) The question of how much disclosure is required to get Police approval. Under clause 11(7), the applicant may be required to disclose to the licensing officer what evidence and information he already has in hand. Who would come to know of these details?

Sir, besides the issue of political office-holders, there are other categories of people which need prior approval to investigate but seem to have little to do with public interest or national security, for example, under clause 11(2)(c), it covers any person working in a Government building, or any person working in a private school which has mainly foreign students. This would seem to mean that we will need Police approval to tail even a cashier working in a food court in a Government building or a local security guard working at an international school. Is this not too wide? Sir, there are already laws in place prohibiting intrusions into protected places, laws against trespassing and so on. Why add this blanket requirement to inform the Police of such security assignments?

Lastly, Sir, clause 42 of the Bill amends the Miscellaneous Offences Act to include a new section 22(A). Section 22(A)(4) permits the licensing officer to allow certain private investigators or

private security personnel to carry truncheons and even handcuffs. Given that private security personnel do not have Police powers under the law and they do not have similar training requirements, are we not running a risk of excessive force being used by these private security personnel?

3.41 pm

Sir, I am the advisor to the Union of Security Employees (USE) and I would like to just raise two points.

Sir, I welcome the Bill as it is another significant move to upgrade the private security industry. Properly licensed with proper training and a better professional image, the salaries of security officers should also increase. Security officers who are members of the USE have seen their pay go up as their jobs get recreated and their skills upgraded and certified. On average, they now earn $1,300 to $1,500 per month, depending on assignments, compared to about $800 to $1,000 a few years ago. But not all security officers have enjoyed this improvement in wages and career prospects.

Nationally, the medium gross wages of private security guards have fallen from $1,403 a month in 2001 to $1,257 last year, according to the report on wages in Singapore which was recently released. Sir, some security agencies are still cutting corners and not paying their security officers decent wages or CPF. Other than professional criteria, can I ask the Minister if the Ministry will also look into upgrading security officers and also on their compliance in paying CPF to the security officers?

My second point is to urge the Ministry to also focus on education of

security agencies and not only on enforcement. We know that many low-skilled workers, especially older ones, as has been pointed out by my hon. colleague, Dr Teo Ho Pin, they have switched to working as security guards after they have been retrenched and some of them cannot find another job in the market. There is a worry that some will lose their jobs as a result of this Bill. As long as they are fit and able, they should be given the opportunity to be trained and licensed without compromising on professional standards. Sir, I understand that the image of the security industry needs to be upgraded but I hope that in the process, we will not discriminate against older workers who are fit and able, and are motivated to do the job.

Can I ask the Minister if the Ministry will also educate security agencies on the value of training such workers and to work with relevant agencies, such as NTUC and WDA, to upgrade their skills to license them so that they have prospects in this industry?

Another point I would like to make finally is to urge the Ministry to work with security agencies to see how they can pool their resources together, work on economies of scale, rather than work as different individual agencies with different competing interests and get stuck at a certain level of professionalism. If we can lift the entire industry up through education and enforcement as well as through grants, I think we will give better prospects to our workers for a job as security guards.

3.44 pm

Sir, I thank the three Members for supporting the Bill. In fact, they have made some very relevant points which are also of concern to me when we first decided to have a Bill like this to raise the standards of our security officers as well as to ensure that the

private investigators conduct their activities properly.

Let me assure the House that the existing security officers who have already qualified under the NSRS scheme - there are about 24,900-plus of them - do not need to retake the test. They have already qualified for licensing as they have passed the NSRS. The group that is currently left out and not yet covered and who will be covered under the new Act will be the in-house guards. The in-house guards are the ones that could be employed by hotels, building owners or condominiums.

I would also say that some of these buildings and condominiums also employ guards from the private security agencies. For these building managements, they should have no problems retaining the guards. But for other forms of in-house guards, they will have to undergo training. The basic training they need is not a security WSQ. This is of a different standard altogether. In fact, the WSQ training, whether it is certificate, advanced certificate or diploma in WSQ is for career advancement, for supervisory leadership and managerial positions. If the security officers wish to move up their career, then they should consider taking the WSQ. But for the rest, they only need to undergo the NSRS training, which is not difficult. From what I have seen in the last few years since we started the scheme, practically all of them passed. If they do not pass, they will be given opportunities to pass. For the existing in-house guards who are now not licensed, they will also be given time to pass. I do not think they need to worry about it.

Of course, there may be some who do not pass the security screening. All those in-house guards do not undergo security screening. Security officers employed by the security agencies will undergo security screening. For these guards who do not pass security screening, we will give them

time to find other jobs. They will have to look for other things to do since they should not remain as security officers or guards in the buildings.

On the manpower forecast for the security officers, I would say that there would be an increase in demand in the light of the new buildings and the IRs that are being set up. There will be adequate training facilities available. Right now, there are 36 training centres training people for NSRS qualification. I believe these 36 centres will be able to cope with the demand of the industry's needs.

For those which require higher levels of skills like the WSQ, the Temasek Polytechnic is running courses, and they also run parts of these courses together with 10 other training centres for WSQ qualification. I believe there ought to be adequate places for anyone who wants to be a security officer.

For the small and medium firms, I would say that they should have no problem complying with the new licensing requirement. But if they have, they will be given time to adjust.

The standards of professionalism and the skills required are set by the Police. The NSRS standard is also set by the Police. The WSQ standard is also set by the Police working with the industry. So there is already a professional framework required of the kind of skills that are needed to perform certain types of security services. Of course, for more sensitive installations and for higher profile types of establishments, then different skill sets may be required. For these, the Police will also set the standards. Most of the companies will be able to send their employees to undergo the training courses conducted by the respective agencies.

Mr Teo also asked that we give personalised licences. I have already

mentioned that we will do so. That will actually give the security officers a greater scope for mobility. Right now, whenever they change companies, the new company will apply for approval to hire them. Under the new licensing regime, the individual officer can just move along to another employer who can offer him better terms and better wages.

Sir, in terms of wages, from the information given to me by the Union of Security Employees, the wages have actually gone up. The gross salary has gone up between $880-$1,000 in 2003, to about $1,300-$1,800 in 2006. This is partly because of the increasing standards and training required of our security officers. I suppose when we talk of the average salary of the security officers and if we take into account also those who are not under the present NSRS scheme type of officers, then it could be dragged down by other kinds of unlicensed guards currently employed by other establishments, like condominiums and so on.

Let me now come to Ms Sylvia Lim's question on clause 11. The main rationale for this is to ensure that certain types of people - our key Government leaders, the foreign missions' officials, Ambassadors, Counsellors and officers who are targets for terrorists - are not easily put under surveillance by those who want to do harm to them. And that is the reason why we have this particular clause. It is not to go and track a contractor or a canteen operator going into a particular building. That is not of interest to the Police. And if there is indeed a reason to go and find out about the personal conduct of a person, then by all means do so, so long as there is no security implication for this.

There is no difficulty to get approval, because all one needs to do is to seek

approval from the licensing officer. The licensing officer will give the permission as quickly as possible, if there is a legitimate interest to do so. The licensing officer will therefore have cognisance of it and that if there is going to be any trip up, then the case is already known to the licensing officer and the Police. Otherwise, there could be a lot of problems. I have known of cases, not of a Government leader or whatever, but some other establishments engaging private investigators doing surveillance on others, and that has come to the Police's notice because some members of the public reported it to the Police who have to spend resources to look into the matter. Then we found that there was a reason why that particular surveillance was done. That is the main reason why this is done. It is not to screen off the political leaders from surveillance by people. Singapore Ministers are all open and they go to the constituencies and attend functions. Of course, people do observe. But if one has a specific assignment to go and "case" a Minister, then there must be a reason why he wants to do that. And if the reason is legitimate, there is no reason why the approval will not be given.

I will come back to Dr Teo Ho Pin's point about ensuring compliance. Indeed, the licensing officer, the SIRD, will have audit checks on the security guard agencies to ensure that they do the job well. And if they do not do the job well, then there is a demerit point system where they will be graded. If they do not pay CPF, for example - and this is also Ms Irene Ng's question - that will also count towards the grading system. And if the breach is serious, then the licence may be withdrawn. So there is indeed a serious business implication for companies that do not comply with the licensing conditions or the provisions in the Act.

Sir, I have dealt with most of the issues.

Sir, I would like to thank the Deputy Prime Minister for clarifying my question on clause 11. One point which he did not touch on is my point concerning the approval channels that the Police would need to use. Will they be consulting people outside the police organisation as such? Secondly, there was also the point on the amendment to the Miscellaneous Offences Act, which appears to now envisage that certain private security personnel will be allowed to carry truncheons and handcuffs. I have some concerns there because they only have citizen's powers and they are not as well trained as the police or auxiliary police. Are we running the risk of excessive force being used on the public?

Sir, I think there are certain categories who may be allowed to carry truncheons and handcuffs. Because it is not just security guards or private investigators or whichever category who are currently licensed to do so under this particular Act. There could be others who were given permission under other legislation. And that is why that particular provision is moved to the Miscellaneous Offences Act.

Every day, every month, we do see people bringing in such items from overseas, and it keeps our ICA very busy because as part of the security screening, ICA has to make sure that contrabands such as these are not brought in by unlicensed people. So, anyone who is caught carrying such items will be committing an offence and, therefore, he will be dealt with under the Miscellaneous Offences Act, rather than under the Private Security Industry Act.

On approval channels, the

licensing officer will have to decide on his own. He does not have to tell me. Why do I need to know what particular jobs individual investigators are being assigned? The licensing officer will decide on his own. It is only when the licensing officer decides that approval is not given to a particular agency or guard, then an appeal comes up. And the person being denied a permit or a licence can make an appeal to the Minister, and only then will the Ministry be informed.

Question put, and agreed to.

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

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

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

Order for Second Reading read.

3.58 pm

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

The Bill before the House seeks to establish the Accounting Standards Council in place of the Council on Corporate Disclosure and Governance (CCDG) to issue accounting standards applicable to companies, and other incorporated and unincorporated bodies. The Bill will also require certain statutory bodies to prepare their financial statements in accordance with accounting standards established by the Accountant-General.

Background

In August 2002, the CCDG was set up under the Companies Act as the authority to prescribe accounting standards, namely, the Singapore Financial Reporting Standards (SFRS), for all companies. It

also advises the Ministry of Finance on corporate governance issues pertaining to listed companies.

The CCDG has served its purpose well. In the area of corporate governance, it has laid down the foundation of a strong and robust corporate governance framework for listed companies. It is now timely for this function to be taken over by MAS and SGX, given the synergies with their role as market regulators of listed companies. This would help to ensure a consistent approach in prescribing mandatory requirements and best practices for listed companies.

Similarly, in the area of accounting standards, the CCDG has done much to improve the efficiency and rigour of the accounting standards setting process for companies. The CCDG, however, has no authority to issue accounting standards for non-corporate entities such as societies and co-operatives, as it derives its authority from the Companies Act. These non-corporate entities have often been adopting the SFRS, even though they are not legally required to do so.

This is not surprising as their auditors need to audit them against an acceptable accounting standards framework, which, by default, is the SFRS. This is not always satisfactory for these non-corporate entities as they find themselves having to comply with accounting standards that may not be suitable for their purposes since the SFRS were drawn up primarily for companies.

Consolidated accounting framework for private and people sector entities

Hence, to address this gap, the Accounting Standards Bill provides for the creation of a well-represented council, which would be known as the Accounting Standards Council, or ASC for short.

Parts I and II of the Bill establish the ASC and set out its functions, constitution, as well as the procedures for its meetings and proceedings. Clause 3 establishes the functions of the ASC, namely, to prescribe accounting standards for companies and for any other entities like societies, charities and co-operatives. With its functions on corporate governance issues and company accounting standards taken over by the SGX/MAS and the ASC respectively, the CCDG will be dissolved. I would like to, at this moment, thank the Chairman and members of the CCDG for their significant achievements and contributions.

Clause 4 of the Bill allows the Minister for Finance to appoint a Chairman and up to 15 members to the ASC. The ASC will comprise senior accounting professionals, regulators, preparers and users of financial information, among other stakeholders.

Part III sets out the manner the ASC would go about setting accounting standards. Clause 9 of the Bill provides the objectives behind the accounting standards formulated by the ASC. The ASC would ensure that the accounting standards set are relevant to the entities they are applicable to, are readily understandable by both the preparers and users of financial information and can facilitate comparability. In addition, to ensure that stakeholders are fully aware of the accounting standards issued, the ASC is required, under clause 10 of the Bill, to publish a notice of the making of that accounting standard. It will also have to make available copies of it, and with all prior amendments, for inspection by members of the public.

In formulating the accounting standards for non-corporate sector entities, the ASC will consider the suitability of the proposed accounting standard to the entities concerned and will, if necessary, apply different

accounting requirements to different types of entities. The ASC is empowered to propose suitable modifications to existing SFRS to make them more appropriate and relevant for these entities, but without compromising the quality of the standards. In areas where there is presently no SFRS, the ASC may consider either issuing its own standards or adopting an alternative set of standards.

This framework which consolidates the accounting standards setting authority for both corporate and non-corporate entities under one roof will ensure consistency in standards, facilitate comparison of accounts between different entities, and enhance the credibility and transparency of reporting. The ASC is responsible only for the formulation and promulgation of accounting standards. The monitoring and enforcement of compliance with accounting standards will remain the prerogative of the respective regulators, namely, ACRA for companies, Commissioner of Charities for charities, Registrar of Co-operatives for co-operatives and Registrar of Societies for societies.

Accounting standards for charities

Currently, a charitable organisation may be set up as a company, a society or a trust, before registering with the Commissioner of Charities as a charity. While charities incorporated as companies are required by the Companies Act to comply with the SFRS, there is no such requirement for charities that are registered as societies or trusts. This inconsistent treatment creates an uneven situation where certain charities are subject to a more stringent disclosure regime owing to the legal vehicle they have adopted. This also makes it difficult to compare the financial health of, say, two charities which may be pursuing the same charitable objects, but are set up using different legal vehicles.

To address this, the consequential amendments to the Companies Act and the Societies Act provide that once the accounting standards for charities have been formulated and promulgated, they will take precedence over accounting standards for companies and for societies. This means that in future, a charity, regardless of the legal vehicle it uses, will have to comply exclusively with the accounting standards for charities. This is in line with the policy objective of having accounting standards that are more appropriate and relevant to the purpose the entity is set up to pursue.

This practice of having a separate set of accounting standards for charities is consistent with the practice in the UK. Under the ASC, the accounting standards for charities would continue to take reference from the SFRS and would be supplemented with specific requirements to meet the special accounting needs of charities.

As the ASC would need some time to formulate the accounting standards for charities, the Ministry of Community Development, Youth and Sports would, in the meantime, conduct a holistic review of the Charities Act. Hence, the necessary consequential amendments to the Charities Act to make it mandatory for all charities to comply with the charities' accounting standards would be moved in Parliament at a later date.

Accounting standards for statutory boards

Sir, let me move on to the accounting standards for statutory boards. Clause 11 of the Bill empowers the Accountant-General (AG) to establish accounting standards for statutory boards. This is, in effect, a formalisation of the current arrangement whereby MOF, through the Accountant-General's Department, would issue finance circulars to prescribe the accounting standards to be complied with by statutory boards.

While statutory boards may share certain characteristics of corporations, there is a fundamental difference, which is that statutory boards do not have public shareholders and are directly accountable to Parliament. Hence, standards that are formulated based on the profit motive, which is of paramount concern to shareholders and creditors or donors, may not always be appropriate for statutory boards. Instead, the accounting standards for statutory boards would be driven by the three objectives of enhancing statutory boards' accountability to Parliament, strengthening transparency, and ensuring a better and more efficient stewardship of public assets.

Let me assure the House that this will not lead to a "cherry-picking" of accounting standards for statutory boards. Clause 11(2) of the Bill provides that the Accountant-General, in establishing the accounting standards, shall first take reference from the standards and interpretations issued by the ASC. The Accountant-General would modify or introduce new standards or guidelines only in areas where the SFRS is lacking or where the SFRS is providing insufficient guidance to statutory boards. An example of an area currently not clearly addressed by the SFRS, which might necessitate the intervention of the Accountant-General, is how assets of Public-Private Partnerships (PPP) should be accounted for in the books of public sector agencies. Conclusion

Sir, the creation of the ASC is a positive step towards ensuring that local accounting standards are of a consistent high quality. More importantly, the ASC will draw up standards that are customised to the circumstances of non-corporate entities, which would help them to provide a clearer link between their

objectives, activities and results to their stakeholders.

Sir, I beg to move.

Question proposed.

4.09 pm

Mr Speaker, Sir, thank you for giving me the opportunity to comment on the Accounting Standards Bill. I would like to declare my interest upfront. I am both a practising public accountant and also serve as a board member of a statutory body where I am presently the Chairman of the Audit Committee. Hence, my keen interest in the Bill.

I would like to begin by applauding the Government for seeking to establish through this Bill an Accounting Standards Council, or ASC, whose main function will be to formulate accounting standards for companies and non-profit making entities. This is an improvement on the present arrangement as the role of the current standard setting body, the Council on Corporate Disclosure and Governance, or CCDG, does not extend to non-profit making entities such as charities and co-operative societies.

However, the Bill also has the objective of requiring statutory bodies to prepare their accounts and financial statements in accordance with accounting standards set, not by the proposed ASC but by the Accountant-General. I have several reservations about this proposal.

Firstly, an accounting standard setting body must have some elements of independence, appropriate representation of different stakeholders' interests and be seen to follow due process. Can the office of the Accountant-General, no matter how conscientious and competent, meet these exacting criteria for a standard setting body?

Unlike the proposed ASC, which is likely to be made up of representatives from the private and public sectors, the accounting profession, academia and other stakeholder representatives, the Accountant-General is an arm of the Executive and would generally not be perceived as independent of statutory bodies. Indeed, some people would liken the Accountant-General to be the Government's CFO. Businesses do not set their own accounting rules for financial reporting to shareholders. Of course, their views are taken into consideration in the due process of issuance of new or amended accounting standards. However, they are never able to set their own rules. The governance and segregation of duties are paramount to public confidence and trust. So why should the practice in the public sector be any different?

One reason given in the explanatory statement to the Bill is that, unlike companies and other corporations, statutory bodies are accountable to Parliament, whose priorities and interests in the matter are distinctly different from ordinary stakeholders. While that may be so, when it comes to the adoption of appropriate accounting standards for statutory bodies, most MPs would, I am sure, be happy to rely on the judgment of an independent body of competent individuals following due process. A related point that I would like to make is that while statutory bodies are accountable to Parliament, they do have a number of other stakeholders such as their employees, customers, creditors and, in some cases, where they have tapped the financial markets, financial institutions. So, wherever possible, laws and regulations relating to statutory bodies should be transparent and consistent with the private sector. Secondly, I would like to deal with the issue of comparability. How do the proposals in this Bill compare with the practice in other countries?

Sir, in Australia and New Zealand, the same bodies set the accounting standards for both the private and public sectors. In the UK, it is different. The central government departments, agencies and other bodies prepare financial statements that are made available publicly in accordance with the Government Financial Reporting Manual issued by the Treasury. Although the standards are issued by the Treasury, which is part of the financial control function of the government, by law, the Financial Reporting Advisory Board, or FRAB, led by an independent Chairman, has a statutory role to ensure that any adaptations of, or departures from, the UK accounting standards for businesses and companies in the government accounting manual are justified and properly explained. Members of FRAB consist of preparers, auditors, academia, accounting standard board members and economists. The FRAB issues yearly reports on its activities and recommended departures from the UK accounting standards. These reports are read at Parliament hearings and are available publicly.

It should be noted that the UK government will adopt International Financial Reporting Standards(IFRS) for its public sector entities from financial year 2008-2009, including publicly-funded initiatives and public-private partnerships. They took the time just to make sure that they were comfortable with it but they would now adopt it for PPPs. The FRAB is in the process of evaluating the adaptations from IFRS that are required.

Hence, the international practice is very clear. Substantively, the same rules and due process apply to both the private and the public sectors.

Coming back to Singapore, if the Government entrusts accounting standards setting for statutory bodies to fall

outside the jurisdiction of the proposed ASC, then like in the UK, an independent and robust process should be put in place to approve changes to accounting standards, specifically for statutory bodies. In the UK, for example, although the Treasury has the power to issue its own accounting standards, it cannot depart from the established framework without endorsement from the FRAB, which is independent of the Treasury.

I am sure that, as Members of Parliament, we would feel more comfortable knowing that the accounts of our public entities are being prepared based on Financial Reporting Standards adopted by the ASC and, if and when there is a departure, they have been reviewed and approved by an independent body, not just another group within the Ministry of Finance. Mr Speaker, Sir, when it comes to governance, independence and due process must not only exist but also be seen to exist.

Thirdly, I would like to deal with the issue of due process and cost.

Let me explain to all of you the due process of setting IFRS, which I appreciate many non-accountants among you may not be familiar with.

The reason why I am making reference to IFRS is that Singapore Financial Reporting Standards are based on IFRS and, in almost all cases, word-for-word, identical to IFRS. The use of IFRS as the basis of Singapore Financial Reporting Standards allows our companies to be benchmarked against international companies easily and, among other benefits, gives them better access to key capital markets. In fact, more than 100 countries, including Hong Kong, Australia and those in the European Union, are in the same position as Singapore. In the near future, the Asian powerhouse economies, China and India, will also do the same.

The due process of setting accounting standards by the International Accounting Standards Board, or IASB, is fairly elaborate and requires considerable resources. The board members of the IASB have decorated financial reporting backgrounds, 12 out of 14 are full-time members. They are supported by a team of technical directors and managers. Before the issuance of a new or revised standard or interpretation, accounting issues are often discussed by the Board, their comments and decisions are recorded and reported publicly. Discussion papers and proposed draft standards are issued to all stakeholders for comments, roundtable discussions are held and, sometimes, field tests of the standards are conducted, all in the interest that the standards issued are of high quality and capable of practical implementation.

My point, Sir, is that the due process, which is necessary, is also costly.

The proposed ASC and its predecessor, the CCDG, in the past, had a form of due process in place for the adoption of IFRS as Singapore Financial Reporting Standards. Similarly, it is not unreasonable to expect some elements of independence and due process for setting accounting standards for statutory bodies if this is to be done by the Accountant-General and not the ASC. But how will the Accountant-General achieve this without considerable duplication and cost? Would it not be better to entrust all accounting standards setting to the ASC?

Mr Speaker, Sir, to recap, I have raised three main points regarding this Bill: the issue of governance and independence, comparability with other countries and cost.

In conclusion, I would now ask the Government to consider two proposals to address these issues within the parameters set out in this Bill. Firstly,

accounting standards for statutory bodies should be based on those issued by the ASC with any departures clearly explained. The ASC's views on these departures should be obtained and submitted to the Public Accounts Committee of Parliament. This proposal would help to address the governance and independence issue as well as bring us closer to the international best practice.

Secondly, in the longer term, I would propose that the ASC be responsible for the issuance of accounting standards for all entities, including statutory bodies, as I can see this achieving better confidence, consistency and cost efficiency. This would also be in line with best practice elsewhere. I am proposing this to be in the longer term to allow the ASC more time to develop its role for the not-for-profit sector. Let the ASC start with charities and societies and move to statutory bodies in the next phase.

Sir, with these proposals in mind, I support the Bill.

4.20 pm

Mr Speaker, Sir, first, I would like to thank Mr Gautam Banerjee for his support of the Bill and for his very well-argued comments.

Let me now respond specifically to his suggestions relating to the setting of accounting standards for the statutory boards. The Member has actually asked that departures from IFRS be clearly explained and submitted to the Public Accounts Committee of Parliament. This may not actually be appropriate as the Public Accounts Committee of Parliament is non-executive in nature and it does not actually have executive powers vested in it. Currently, the Public Accounts Committee has its remit revolving around the observations that are contained in the

Auditor-General's Report. But having said that, it does not stop the Public Accounts Committee from raising any issues or questions that they may have regarding accounting standards if it wants to or when it needs to. It is free to do so, to seek clarification on how an accounting standard is applied or why there is a deviation from international accounting standards. And for that matter, it does not stop any Member of Parliament in this House to raise any questions that he or she may have pertaining to not just accounting standards but also on any matter of statutory boards because that represents the greatest extent of the kind of check and balance that we have for the statutory boards.

On his suggestion and reservation about whether the ASC should be responsible for the issuance of accounting standards for all entities, including the statutory boards, let me just provide the following points by way of providing assurance regarding the need to benchmark against international standards as well as the due process. Firstly, if I may reiterate, clause 11(2) has very specifically stated that the Accountant-General will take reference from or have regard for the accounting standards that are established by the ASC. So, as a default, that will be the starting point. The IFRS will be the starting point. In other words, there will be no cherry picking. They begin with that set of accounting standards.

I also wish to inform the Member that the Accountant-General will be assisted and advised by a committee with independent members, with representatives from the Auditor-General's Office, the statutory boards, the academic community and the public accounting firms. So there is a broad representation of membership. This is actually in substance not very different from what the UK is practising where the Treasury

prepares the standards and submits it to the Advisory Committee for consultation.

The third point is that there are areas, as I have mentioned in my Second Reading speech, where the SFRS does not provide sufficient guidance for statutory boards, for example, how the assets of PPPs should be accounted for, and that is why there should be this special purview accorded to the Accountant-General.

Sir, if I may just summarise, in reference to the other comments that Mr Banerjee has also made. Ultimately, our goal is to enhance accountability, therefore, adopting standards that are appropriate to our circumstances, in a sustainable manner, is most crucial. The Government will continue to emphasise substance over form. We would have to choose the form that is appropriate to us, but the substance remains the same as that being practised in most of the other jurisdictions. Currently, we are also very much guided by the type of resources that we have for the ASC to carry out its mission. It is not appropriate to enlarge the ASC's ambit at this juncture to include statutory boards or other entities not specifically mentioned in clause 3. The Council, as it is, with 16 members, including the Chairman, is already quite big, and enlarging its ambit would require the inclusion of even more members. It will also cause the Council to lose its focus and, worse still, slow down the accounting setting process.

Nonetheless, the Government will review this arrangement two years down the road to see whether there are benefits to widening the ASC's mandate to include statutory boards and other entities as well as whether the ASC should be composed differently.

Question put, and agreed to.

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

The House immediately resolved itself into a Committee on the Bill. - [Mrs Lim Hwee Hua].

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

Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 4 .40 pm.

Sitting accordingly suspended

at 4.21 pm until 4.40 pm.

Sitting resumed at 4.40 pm

Order for Second Reading read.

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

Sir, the Bill before this House seeks to amend the CPF Act. There are four large groupings. Let me take the House through each of these broad categories.

Firstly, amendments are introduced to strengthen the administration of the Act to clarify certain existing policies, basically, housekeeping and tidying up various aspects.

Secondly, the Bill expands the CPF Minimum Sum Topping-Up Scheme. This will provide more ways for family members to support one another financially.

Thirdly, the amendments will facilitate a smooth and equitable distribution of CPF monies pursuant to a Court Order division of matrimonial assets in a divorce.

Finally, amendments are introduced to deter manipulative transactions under the CPF Investment Scheme.

Measures to strengthen the administration of the Act and to clarify certain existing policies

Clause 3 extends the powers of CPF inspectors to inspect and to take possession of documents in all mediums, including digital and electronic forms.

Clause 4 gives the Board the exclusive right to use any symbol or representation device by the Board and makes it an offence for any person to use the symbol or representation that resembles the CPF symbol or representation in a manner that is likely to be deceptive or cause confusion. It provides for a fine not exceeding $10,000 or to imprisonment for a term not exceeding six months, or to both.

Clause 5 makes clear that transfers from a member's savings in the Ordinary Account (OA) and Savings Account (SA) to the Medisave account, and deductions for Home Protection Scheme (HPS) premiums are permitted withdrawals.

Clause 7(c)(d) and (e) extends the pledging of HDB flats in lieu of retaining the full Minimum Sum to properties sold by approved developers which include Design, Build and Sell Scheme flats.

Clause 10 makes clear that the amount of Ordinary Account savings that a member can transfer to his Special Account is the difference between the prescribed amount and the sum of the cash amount in his Special Account and any amount he may have withdrawn under the CPF Investment Scheme - SA.

Clause 17 empowers the Board to make rules regarding nominations.

Expansion of Minimum Sum Topping-Up Scheme

Sir, as our Prime Minister has said, our population is fast ageing. The proportion of Singaporeans aged 65 and above is expected to grow from 8% in 2005 to 19% in 2030. Correspondingly, retirement and healthcare needs will also increase. As the family unit remains the primary social support structure for Singaporeans, the amendments to expand the Minimum Sum Topping-Up Scheme will provide more ways for family members to take care of and help one another financially.

To facilitate this, firstly, we will increase the top-up limit to the prevailing Minimum Sum. At present, under the current Act, top-ups are limited to the Minimum Sum specific to the cohort of the recipient. For example, if the member had turned 55 in 1987, this would only be $30,000. If someone wanted to top up his account, he could only top up to $30,000. What we are doing now is to change that so that the top-up can be to the prevailing Minimum Sum which is $99,600 today. Thus, members can increase top-ups to recipients so that their family members will receive a regular income over a longer period.

Secondly, we will expand the list of recipients. Currently, members can only top up their grandparents' Retirement Accounts using cash but not CPF funds. We will now allow grandchildren to transfer funds from their CPF Ordinary Account to their grandparents' Retirement Accounts, subject to both meeting the top-up criteria. There are instances, because people are growing older, where the grandchildren are financially well-off and they can help support their grandparents.

To help those who are single and who do not have children to build up their

retirement savings, we will also now allow, as a new initiative, members to top up their siblings' Retirement Accounts with savings from their own CPF accounts, or in cash. As announced by the Ministry of Finance previously, a tax relief for cash top-ups of up to $7,000 a year will be given if the sibling receiving the top-up earns not more than $2,000 a year and is 55 years old or above.

In addition, we will allow top-ups to spouses and siblings below the age of 55 using CPF or cash. Previously, it was only above 55. We are now allowing below the age of 55. The top-ups can be made into members' Special Accounts (SA). In keeping with the intent of the scheme to build up the CPF of recipients for long term needs, the top-up monies can only be used to provide a steady income stream during the recipients' retirement, and cannot be withdrawn as a lump sum. In other words, since we allow them to top-up below 55, at 55, they may be able to withdraw some. But because this is meant to provide a steady stream of income, you cannot remove it or take it out at age 55 as a lump sum. In the event of the recipient's demise, any remaining balance from the top-up sum will revert to the donor. This is an existing clause and I am just reiterating it as an existing practice so that it actually goes back to the donor rather than to the estate.

Clause 8 in the Bill will enable the topping-up for grandparents using CPF funds as well as the expansion of the list of recipients to siblings above and below age 55, and spouses below age 55. The increase in the top-up limit from the cohort Minimum Sum to the prevailing Minimum Sum will be done by way of an amendment to the CPF regulations.

Clauses 6, 7, 9, 11 and 12 make consequential amendments to the Act

arising from this policy. Clause 6 of the Bill sets the limit of cash top-ups to a recipient's SA at the recipient's Voluntary Contribution (VC) limit. Consistent with top-up limits for family members, clause 9 makes it possible to allow members to top up their own Retirement Account with their Ordinary Account or Special Account monies up to the prevailing Minimum Sum. As in the current Act, clauses 7, 11 and 12 enable the transfer of the balance of any unused top-up monies to the donor's CPF account on the death of the recipient.

Other related amendments are clauses 2, 5 and 25. Clause 2 makes technical amendments to the definitions of "minimum sum" and "retirement account", while clause 5 facilitates the transfer of top-ups received before age 55 from the recipient's Special Account to his Retirement Account when he reaches 55. Clause 25 of the Bill enables the making of Regulations for top-ups to the SA for siblings and spouses who are below the age of 55.

The changes to the top-up scheme will take effect from 1st October 2007, except for top-ups to members below the age of 55, which will take effect from 1st January 2008. These are just some technical adjustments and software changes that we have to make.

Smooth and equitable division of CPF monies in matrimonial proceedings

Sir, this set of amendments is intended to help divorcing couples achieve a smooth and equitable division of CPF assets acquired during a marriage. Subsequent changes that I have described will be effected in terms of a male CPF member and a female ex-spouse. But the law is quite gender-neutral and the laws also equally apply to a female CPF member and if the male was an ex-spouse.

CPF savings form part of matrimonial assets that are governed by the Women's Charter which provides powers to the courts to divide matrimonial assets. But under the existing laws, the current CPF Act, a court order to divide a member's CPF money between him and his ex-spouse is enforced only when the member is eligible to withdraw his CPF and has set aside his Minimum Sum (MS) and Medisave Minimum Sum (MMS). So there are two conditions under the current Act. You can only withdraw when you are allowed to withdraw and only after you have set aside the Minimum Sum and Medisave Minimum Sum.

4.55 pm

The current practice may be inequitable to the ex-spouse for two reasons.

Firstly, the ex-spouse's access to these monies is delayed till the member is eligible to withdraw his CPF. In other words, even if the court makes a division and the member is, say, 40 years old, the ex-spouse can only take the money when that member reaches 55.

Secondly, the member's retirement needs take priority over that of the ex-spouse, as only the balance of funds after the member has set aside the prevailing CPF Minimum Sum and the Medisave Minimum Sum when he turns 55 is available for distribution to the ex-spouse. The Minimum Sum and Medisave Minimum Sum at the point of withdrawal in the future may also be substantially different from that when the court order was made.

Therefore, the new principle underlying these amendments is that the CPF Act should facilitate the division of

matrimonial assets under the Women's Charter, provided there is no leakage from the CPF system. But between members, if both members are within the CPF system, I consider it no leakage, and we can facilitate the rules under the Women's Charter. Hence, amendments will be made to, firstly, allow an immediate transfer of CPF monies to the ex-spouse's CPF account, if the ex-spouse is a citizen or Permanent Resident (PR). This shall be done without the Minimum Sum or Medisave Minimum Sum first having to be set aside once the court has ordered a distribution of CPF monies in a divorce. The CPF money to be distributed will be channelled to the ex-spouses' CPF accounts according to the accounts they originally resided in.

If the ex-spouse is not a citizen or a PR, immediate transfer of CPF monies is not allowed. Instead, the court can order the Board to pay the spouse when the member becomes eligible to withdraw his CPF monies. The member will not be required to set aside the Minimum Sum and Medisave Minimum Sum before the ex-spouse can receive her entitled share.

Secondly, the amendments will also facilitate the immediate transfer of immovable property to the ex-spouse, if the ex-spouse is a citizen or a PR. Transfer in this context would refer to a transaction where there is no cash consideration at fair market value other than the refund of CPF monies withdrawn for the purchase of the property. In such an instance, the CPF Act currently requires the requisite CPF refunds to be made to the member's CPF account before the transfer can take place so that there is no leakage of CPF monies.

In other words, with these amendments, the court will have the option of ordering the member to transfer the property to the ex-spouse without all or even any of the refunds being made to the CPF member's CPF account first,

provided that a charge is placed to secure the refund of such CPF monies into the ex-spouse's CPF account should she sell the property later. In other words, even if the member who is a male now wants the property to be transferred to the ex-spouse, the current CPF Act does not allow that. The court does not have the ability. It says, "You will have to refund all the money that you have used to buy this house even if you have agreed to." What we are doing now is to amend it to say you can transfer the house, but we place a charge on the amount that was used to buy that house so that when she sells it later, that money is refunded back into the member's account. In effect, the CPF used by the member, and the accrued interest on that CPF, will be refunded to the ex-spouse's account in the event the property is sold.

Finally, the amendments will also enable the member's CPF investments to be transferred to or be liquidated to allow the ex-spouse immediate access to CPF assets which she is entitled to. The transfer of CPF investments is only allowed for an ex-spouse who is a citizen or a PR.

Clause 18 of the Bill inserts new sections 27A to 27I to facilitate the smooth and equitable distribution of CPF monies arising from the division of matrimonial assets. In particular, section 27B provides for the immediate transfer of CPF monies to the CPF account of the ex-spouse. Sections 27C to 27F provide for the immediate transfer of property to the ex-spouse. Section 27G provides for the immediate transfer of CPF investments to the ex-spouse.

Other related amendments are clauses 5, 6, 16 and 19. Clause 5 facilitates the transfers made under section 27B. Clause 6 exempts contributions to the ex-spouse's CPF account made under

sections 27B to 27H as a result of division of matrimonial assets from counting towards the Voluntary Contribution limit. Clause 16 amends section 24, which provides for the protection of CPF monies and investments from member's creditors, to make it subject to sections 27B to 27H. Clause 19 makes consequential amendments to give priority to transfers of CPF monies in relation to matrimonial division under section 27B over the deduction of Home Protection Scheme premium from the member's CPF account.

The changes that I have announced pertaining to the division of matrimonial assets will apply to court orders made on and after 1st October 2007. It is not retrospective.

Deter manipulative transactions under CPF Investment Scheme

The last set of amendments, Sir, is to deter manipulative transactions under the CPF Investment Scheme. The intent of the CPF Investment Scheme is to provide members investment options to enhance their savings for retirement. But, sometimes, manipulative transactions that lead to the leakage of CPF savings have been reported and indeed should be prohibited. So these amendments will strengthen the CPF Act to deter such manipulative transactions.

Clause 20 of the Bill creates a new offence for any person to manipulate any CPF Investment Scheme transactions. Clause 21 enables the courts, upon a member's conviction in connection with the investment, to order the refund or transfer of any shortfall to the member's CPF account caused by manipulated trades.

These changes will take effect from 1st October 2007.

Sir, I beg to move.

Question proposed.

5.01 pm

Mr Deputy Speaker, Sir, any amendment to the CPF Act which seeks to help Singaporeans increase their retirement savings is timely and should be supported. At a time when we are facing challenges from an ageing society, increased life expectancy and rising cost of living, ensuring that Singaporeans have adequate savings for retirement is a critical challenge that we must overcome.

The amendment in this Bill that will, amongst others, allow more Singaporeans to top up the CPF accounts of their family members, is therefore particularly welcome. This area will be the focus of my speech. I will leave the proposed amendments relating to matrimonial assets to Mdm Halimah and other female counterparts to respond.

While I support the amendments, I have some concerns to raise. Sir, statistics have shown that many Singaporeans are facing problems accumulating the Minimum Sum in their CPF accounts. While the expansion of the CPF topping-up scheme will open the doors for more family members to make contributions to the CPF accounts of their loved ones, I am especially concerned about low-income elderly workers who are destitute or are being taken care of by people who are or may not be their immediate family members. While I agree that the family unit is the primary social support structure for Singaporeans, I feel that the definition of "family" should be broadened to include caretakers of the elderly member as this may, at times, not be someone from the member's immediate family.

As healthcare costs continue to rise, I would also like to suggest that the top-up

scheme be extended to the Medisave accounts of parents, grandparents and siblings of the contributor. This will ensure that CPF members have sufficient amounts in their Medisave accounts for hospitalisation and healthcare needs.

Let me now turn to broader issues related to the CPF.

Sir, the Prime Minister recently announced some initiatives to help Singaporeans save more and stretch their retirement savings longer. These changes are welcome as they will help boost Singaporeans' CPF savings. We have to move quickly and introduce changes that will help our society face the challenges of an ageing population before it is too late. I feel that there is a general understanding on the need for these changes but, at the same time, there is a feeling of an overcast sky as many are worried that they will have to work longer and, yet, at the end of the day, not have a high quality of life towards the end of their lives. Gone are the romantic illusions of the golden years of retirement.

The situation is even bleaker for lower-income families who may be living hand-to-mouth and may be so caught up in making ends meet day-to-day that thinking about the future and planning for retirement is something that is totally beyond them. There is therefore an urgent need to think of more ways of helping Singaporeans boost their CPF savings. A Straits Times' survey recently reported that seven out of 10 Singaporeans feel that they will not have enough retirement savings. With half of those who are still working, having $45,000 or less in their CPF accounts, I still feel that the changes are not enough to ensure that Singaporeans will have sufficient savings for their retirement needs.

Bigger changes must be thought through and made and new ways have to be explored to help Singaporeans build

stronger retirement nests. The 1% increase in CPF rates announced by the Prime Minister brings much cheer to Singaporeans but, at the same time, many are worried that pegging the interest rates to bonds may mean volatility as it follows the economic cycles, even though the risks are lower compared to the stock market.

Sir, we should find ways to help Singaporeans make more informed choices when they invest their CPF savings. Statistics tell us that about 45% of members who sold their investments or CPFIS made losses. 32% made equal to or less than the 2.5% returns for the Ordinary Account and only 23% made gains. Perhaps, the CPF Board could team up with appropriate partners to have public education campaigns to educate Singaporeans on investing an investment judiciously or, at least, to make better calculated risks.

Moving on, some Singaporeans have suggested that the CPF Board buy shares of Temasek Holdings which will fetch higher returns for CPF members. I believe this suggestion is worth looking into, considering that Temasek Holdings is after all not only a Government investment arm, but has also proven to bring about attractive returns on its diversified investments.

One other way of boosting Singaporeans' savings is to enhance the Supplementary Retirement Scheme (SRS). This is an area that I have proposed several times to be looked into but, so far, the Government has been non-committal in reviewing the current Scheme. In addition to proposals I had made in past speeches, I would like to also propose the following changes to make the SRS more attractive to CPF members.

Sir, currently, members can make contributions to the SRS only up to age

62. But with policy changes to make more Singaporeans remain employable beyond 62, this age cap should be reviewed. This review can, in fact, be done without having to have legislative changes for the retirement age to be pushed further beyond 62 years old. Apart from this, the CPF Board should also consider reducing the tax on 50% of the withdrawn amount of savings upon retirement, especially if the withdrawn sums are used for critical needs, such as medical expenditure. At the same time, the contribution cap of 15% could also be increased to encourage more Singaporeans to save and accumulate higher retirement savings.

Beyond making SRS attractive to CPF members, employers could also be given an option to contribute to their workers' SRS accounts, like what is being done in the United States for the US individual retirement arrangement, or the IRA.

To encourage employers to do so, corporate tax benefits could be offered based on the amount they contribute. The CPF Board should have joint efforts with financial institutions to educate the public on the SRS to generate greater public awareness of this Scheme.

On the issue of annuities, increasing life expectancy makes it necessary for Singaporeans to look beyond their CPF pay-outs which can only last 20 years. While there is a general understanding on the need of having lifelong funds due to an increase in life expectancy, there is this worry at the back of some people's minds that if they die young, the money invested in the tail-end annuity will not be returned to the family. Sir, rather than making buying annuities compulsory, the CPF Board could consider offering another option to those who prefer to extend their CPF pay-out period from 20 to, perhaps, 30 years. This will cater to Singaporeans who do not mind getting less after spreading their savings over a longer

period of time, but wish to have the balance returned to their accounts or families upon death.

Another factor to consider is to extend an opt-out scheme for people with serious illnesses from having to take up an annuity as they may need the higher regular monthly pay-outs for their immediate needs and may not live beyond 85.

Finally, Sir, I believe there is still a lack of understanding amongst Singaporeans on how critical it is for them to have adequate savings for retirement. Some may not understand the rationale for delaying the drawdown period and many more may not be able to appreciate the need of annuities. There is a critical and urgent need to step up public education efforts and outreach has to be done in different languages to ensure that no one gets left out.

5.11 pm

Mr Deputy Speaker, Sir, I rise in support of the Bill. I would like to single out two particular amendments, which are pro-family and which also strengthen support for our ageing population, for mention.

Under the first set of amendments, CPF members can now use their CPF funds to top up not only the retirement accounts of their parents and spouses, but also that of their grandparents and siblings. The old law is restrictive as it allows a member to transfer money from his account only if he is topping up the retirement accounts of his parents or spouse but not if he is topping up the retirement account of a grandparent or sibling. To top up the retirement account of a grandparent, he has to use cash which is rather prohibitive. The old law also does not allow a CPF member to top up the retirement account of a sibling.

This had made it difficult for those who want to provide for the needs of older siblings, particularly women who have little retirement savings of their own and who may not have any family or children to support them. So, I applaud this change which is pro-family and which will help to enhance the retirement security of older Singaporeans who are unable to provide for themselves.

I also applaud the change under Part IIIA on division of fund-related assets in matrimonial proceedings. This amendment is progressive and will provide better protection for our women and children in divorce proceedings. This amendment was the result of a court decision in the 1995 case of CPF Board v Lau Eng Mui where the court ruled that CPF forms part of the matrimonial assets that are available for distribution in divorce proceedings. But there was no provision in the CPF Act which allows the Board to allow for an immediate transfer of the CPF funds of the CPF member to the CPF account of his ex-wife and she has to wait until he reaches 55 years old and even then, she will only get the amount ordered by the court after the Board has set aside the Minimum Sums for retirement and Medisave accounts of the member. In the end, there may be very little that the ex-wife receives despite the court order and the ex-wife and her children suffer grave hardship. In the event that the court orders the transfer of the matrimonial property to the ex-wife, there is also a problem. The ex-wife has to refund the ex-husband's CPF monies first before the property can be transferred to her as the Board has no powers to allow a transfer if this is not done. Again, this causes hardship, as the ex-wife usually does not have the means to reimburse her ex-husband's CPF monies. Hence, the amendment to the Act will allow the CPF Board, upon the order of the court, to transfer the funds immediately and the ex-wife does not have to refund the member's CPF monies

before the flat can be transferred to her, provided that if she sells the flat, then she has to transfer the amount to her own CPF account. Again, this is a pro-family policy and will help to alleviate the hardship caused to many women and children in divorces who would otherwise be deprived of a roof over their heads.

However, Sir, I have three issues to raise and seek the Minister's response to them.

First, currently, a member is not allowed to transfer his CPF savings to top up the Medisave account of his family members. This is a point referred to by Dr Ahmad Magad. In view of the greater flexibility allowed to CPF members to top up the retirement accounts of their family members such as the grandparents, parents, spouse or siblings, allowing them to also top up the Medisave accounts of their family members should be a logical and necessary extension.

Many older Singaporeans, especially women, do not have sufficient Medisave savings to last them for life, which is even more critical now since our life expectancy is about 80 years old. So, I would like to ask the Minister whether the Ministry could consider allowing CPF members to top up the Medisave accounts of their grandparents, parents, spouses and siblings. This is also one way for us to address the problem of many Singaporeans who are not covered under MediShield, a large number of whom are women. If there are no Medisave savings for them, then they will not have MediShield coverage, because MediShield coverage is automatic so long as there is Medisave savings. So there are compelling reasons why we should allow CPF members to use their CPF funds to top up the Medisave accounts of their family members.

My second point is on the current age restriction for coverage under the Home

Protection Insurance Scheme. Only those who are below 65 years of age are covered under the Home Protection Insurance Scheme, which discharges a member from liability to pay for his housing loan upon the death or incapacity of the member during the insured period. This is an important scheme that protects the homes of CPF members in the event of the death of a breadwinner or major contributor to the family income. But the protection accorded only to those below 65 years of age is unrealistic, as people are now marrying later and living longer and therefore take a longer time to pay off their housing loan. I have seen residents who are in their 50s with young children, and if the coverage stops at 65, their family would suffer if they are incapacitated or die and they do not have a roof over their heads, especially if they are the sole breadwinners. As the Prime Minister had pointed out in his National Day Rally speech, we can now expect to live up to 80 years old and therefore need to provide for all our needs longer. It is opportune, in my view, in view of the current discussion of raising the CPF Minimum Sum draw-down age and the need to work longer to remove this restriction. The 65 years age limit was set when our retirement age was 62 years. Now that we are setting a higher retirement age, the Ministry should seriously consider raising this age limit, and I urge the Minister to look into this.

My third point is on the need to educate CPF members on the intricate details of the CPF Act and the various schemes available to them. For example, with this amendment, CPF members can now top up the retirement accounts of their family members. If there is no campaign to educate them and raise their awareness, I fear that the take up rate for this scheme will be very low and we will not achieve our objective, which is to enhance the retirement security of those who are unable to provide for themselves. I would therefore like to suggest that the

CPF Board launch a campaign to educate CPF members on the various schemes that are now available and how they or their family can benefit from them.

Finally, Sir, although this is not the subject of the amendments that we are discussing today, I agree that the recent changes announced by the Prime Minister at the National Day Rally will, to some extent, address the concerns of Singaporeans. The 1% increase in the CPF return is greatly welcomed. But most Singaporeans also feel that the most important consideration is whether or not they are able to continue working, particularly for those who have reached the age of 62 years. If they can continue to work, the 1% increase is certainly a great boost, and the higher Minimum Sum draw-down age is not a major concern. Hence, I think we need to work together very closely to address this concern of Singaporeans, particularly those of 62 years and above, over availability and access to jobs. In the NTUC, we have been working very closely with our social partners and we have worked with more than 200 companies to place 3,080 workers above the age of 62 in jobs. But we certainly need to do a lot more, as we can see that the numbers of those who are reaching this age is rapidly increasing.

On this note, Sir, I support the Bill and I look forward to the debate in September on the other amendments.

5.20 pm

Mr Deputy Speaker, Sir, I wish to acknowledge a few observations and highlight a few issues in relation to the amendments tabled.

First, I applaud the amendment to section 18. This amendment will add greater flexibility to CPF members who wish to support their aged parents,

grandparents and siblings, and provide greater voluntary support for the aged.

Sir, as mentioned by the Minister, our population is fast greying. In fact, according to a Straits Times' report last Friday, the dependency ratio will grow from nine economically active persons supporting one older person over 65 years old today to 3:1 by 2030.

Sir, this amendment will help Singaporeans take personal responsibility for caring for their loved ones in their sunset years. It is not unnecessarily onerous, as the member will have any outstanding funds credited back to his account upon the death of those loved ones to whom he has made contributions.

It also provides greater flexibility for CPF members to transfer part of their savings to the Special Accounts of those who have not yet reached 55 years of age. Like my colleague, Mdm Halimah, before me, I would also like to ask whether top-ups for Medisave account of family members are included.

Sir, the Government has always championed the development of the family as our basic social unit. This amendment will go a long way towards strengthening of the institution of the family.

I also applaud amendments to sections 18A and 18B, which allow a member to transfer funds from his Ordinary Account to his retirement account. These new provisions will enable a CPF member to plan and manage his retirement financing needs more proactively and at an earlier stage.

Sir, with reference to Part IIIA, section 27B, on order of court for transfer or payment of money standing to the credit of a member, I applaud the amendment to facilitate transfer of property to the ex-spouse. At the meet-the-people sessions,

MPs often have to grapple with the plight of ex-spouses who have no immediate means to take over or sell the property because of the need to refund the CPF used for the purchase of common property before the divorce.

Sir, I am informed through the briefing notes from the Ministry of Manpower relating to these amendments that the new amendments will allow a court order to effect an immediate transfer of a member's CPF monies to the CPF account of his or her ex-spouse. This, according to the notes, will be done without the Minimum Sum and Medisave Minimum Sum first having to be set aside. Unfortunately, I cannot find mention of this in the amendments tabled. I therefore seek confirmation that this is indeed the intent of the new Part IIIA of this Bill. If this were so, then I fear we are getting into dangerous waters.

Let me first reiterate that I am all in support of the Women's Charter, and for the protection of the rights of all parties in divorce proceedings. By all means, we must give ex-spouses what is due to them from the members' Ordinary Accounts. However, we must constantly remind ourselves of the intent of the CPF Act. The CPF is intended as a form of savings for its members, and especially to create a nest egg to sustain members through their retirement years. As the Prime Minister's National Day Rally speech underlines, retirement and ageing will become major issues in the years to come.

The CPF Act has relentlessly protected this right all these years, some would say more aggressively than is necessary. But such protection of the Minimum Sum and Medisave Minimum Sum will become all the more critical as members reach retirement age.

I would therefore caution against any attempt, even by a court of law, to have

funds in these accounts touched for purposes other than which they were designed for.

Sir, with reference to section 58A on offences relating to investment, the inclusion of this new section will give the CPF Board more teeth to prosecute any member and/or third parties who willfully defraud the Board into releasing members' funds through the manipulation of the CPF Investment Scheme (CPFIS).

I see this amendment as both proactive and preventive. Given the tight conditions on the use of CPF funds today, and the extended withdrawal age and withdrawal limits to come, there will no doubt be creative attempts to effect premature withdrawals illegally.

The CPF Investment Scheme is a convenient conduit for such attempts. I would like to ask the Minister whether there are comprehensive measures in place to ensure we plug any loopholes and provide punitive measures against any attempt to defraud the Board.

Sir, like my colleague before me, I am also in agreement that CPF can be very complex for the layman to understand. Even the CPF website does not provide easy access to the basics of CPF. The concern is how are the less educated and those who are unable to read be able to understand the intricacies of CPF. Perhaps, we could organise more roadshows in the heartlands to educate the people, at least, inform them about the exact workings of the CPF and their benefits and rights, especially with regard to situations where they can withdraw their CPF savings and what CPF can be used for. In fact, most complaints relate to having money being locked up in the CPF, making it tough to make ends meet in times of severe illnesses or not being able to access the money despite having a terminal illness. But we know that this is not true. The current CPF Act provides

for withdrawal in such circumstances. Therefore, more support for CPF policies can be garnered if people truly understand what CPF is about and how it benefits them. How can the Minister look into ways to better reach out to the general public?

On this note, I support the amendments in the Bill.

5.25 pm

Sir, I rise to support the Bill.

First, I would like to address the issue of expanding the Minimum Sum topping-up scheme. I support the idea of allowing CPF members to top up the accounts of their grandparents and siblings. This is consistent with the value system that we have been promoting where family is the next line of support. This amendment is also timely, as the CPF Minimum Sum will be increased from $99,600 in 2007 to $120,000 in 2013. This is clearly a significant increase, especially for members from the lower income group. But truth be told, how many CPF members or their families will do that? Most of us help our family members by giving them cash outright. Neither the giver nor the recipient would be keen to put that money away in a CPF account. It is far more convenient and accessible in a bank account. For those who plan ahead, they will purchase insurance policies for their loved ones.

Sir, while the revised CPF rates are looking more attractive for some amounts and still unsure for the balance, I think we need to offer greater incentives, either in the form of tax benefits or higher interest returns, for this scheme to be utilised more widely. I have a few suggestions.

Firstly, the tax benefit for cash top-ups. Like it or not, tax can be the most

direct and effective way to shape behaviour. Currently, members making cash top-ups under the CPF Minimum Sum topping-up scheme will enjoy tax relief of up to $7,000 per calendar year. In view of the increase in the Minimum Sum as well as to further encourage such cash top-ups, may I suggest to the Minister to not only extend this tax relief to the expanded scheme but also increase the tax relief beyond the $7,000 cap.

One way the Ministry can look at is to use the contribution cap for the Supplementary Retirement Scheme (SRS) as a reference. The SRS contributions cap is determined by multiplying the appropriate SRS contribution rate and the absolute income base. For members who have not made contributions to SRS and hence have not yet enjoyed the tax relief, we should extend this full quantum of tax benefit to them as well when they top up their family member's Retirement Account or Special Account. These top-ups are in line with SRS' objective, which is to encourage Singaporeans to save more for their old age by means of voluntary contribution, even though it is not for themselves.

I understand that the number of such CPF top-ups is low. Perhaps, the current tax reliefs are just not attractive enough to get members to use the CPF as a vehicle to render support to one another.

Secondly, I also urge the Ministry to explore additional forms of benefits or incentives for members to use funds from their CPF accounts to top up their family members' Retirement Accounts or Special Accounts. I understand that members

already enjoy tax relief from their individual CPF contribution. However, to get members to take the next step of topping up their family members' accounts so as to strengthen their financial security during retirement, we not only need education but also direct incentives. I like the D-bonus and V-bonus

announced by PM during the National Day Rally. Perhaps, we could consider a T-bonus, which is a Top-Up bonus, to encourage family members to help their less well-off relatives to enhance their retirement savings. It may work.

Thirdly, I hope that the Ministry can also look at lowering the 1.5 times prevailing Minimum Sum amount before such top-ups are allowed. Currently, to top up your family members' CPF Minimum Sum using CPF, your net balances in both the Ordinary and Special Accounts must be more than 1.5 times the prevailing Minimum Sum. The balance above that can then be used for the top-ups.