Hansard, 2008-02-15

Under the provisions of clause 2(d) of Article 46 of the Constitution of the Republic of Singapore, the following Members have been granted permission to be or to remain absent from sittings of Parliament (or any Committee of Parliament to which they have been appointed) for the periods stated: Name From (2008) To (2008) Mr Teo Ser Luck 24 Jan 25 Jan 27 Jan 28 Jan Dr Mohamad Maliki Bin Osman 28 Jan 30 Jan 08 Mar 17 Mar Er Lee Bee Wah 29 Jan 12 Feb Mr Cedric Foo Chee Keng 31 Jan 02 Feb Assoc. Prof. Ho Peng Kee 07 Feb 09 Feb Dr Lily Neo 07 Feb 13 Feb Dr Ong Chit Chung 12 Feb 13 Feb Mr Chan Soo Sen 13 Feb 19 Feb Mr Inderjit Singh 13 Feb 15 Feb Mr Chiam See Tong 15 Feb 15 Feb Dr Ahmad Mohd Magad 18 Feb 22 Feb 15 Mar 27 Mar Mr Ang Mong Seng 19 Feb 21 Feb Mr Goh Chok Tong 20 Feb 23 Feb Mdm Halimah Yacob 21 Feb 24 Feb 10 Mar 20 Mar Dr Muhammad Faishal Ibrahim 24 Feb 28 Feb Dr Lam Pin Min 25 Feb 29 Feb Mr Lee Yi Shyan 25 Feb 29 Feb Mr Sin Boon Ann 25 Feb 26 Feb Mr Wee Siew Kim 25 Feb 29 Feb 09 Mar 11 Mar Mdm Cynthia Phua 26 Feb 28 Feb

ABDULLAH TARMUGI Speaker Parliament of Singapore

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

6th February,2008 (1) Housing and Development (Amendment) Bill (2) Human Organ Transplant (Amendment) Bill (3) Customs (Amendment) Bill (4) Statutes (Miscellaneous Amendments) Bill (5) Workmen's Compensation (Amendment) Bill ABDULLAH TARMUGI Speaker Parliament of Singapore

[Mr Speaker in the Chair]

1. Mr Seah Kian Peng asked the Minister for Trade and Industry (a) given that the CPI for 2007 was 2.1%, but showing significant increases in the last few months, what is the projected CPI for 2008; and (b) in light of the recent turmoil in the equity markets and the possible recession in the USA, what is the latest projected growth rate for Singapore for 2008.

Mr Speaker, Sir, the revised CPI and GDP forecasts for 2008 were released by my Ministry yesterday. The Minister for Finance will also cover these two issues in his Budget speech later.

Based on MAS’ latest projection, the revised CPI forecast range for 2008 is 4.5%-5.5%. This latest forecast takes into account the sustained increases in global energy and food prices in recent months, and the stronger pass-through of higher global energy and food prices to domestic retail prices.

The current GDP forecast range for 2008 is 4.0%-6.0%. The lower growth forecast reflects the higher downside risks stemming from a US economic downturn. Compared to three months ago, there is broad consensus now that the US economy is entering a slowdown. The key uncertainty is over the length and severity of this slowdown. This will influence how the rest of the world, including Singapore, will be affected.

We will continue to monitor the situation closely and update the growth forecast where necessary.

Mr Speaker, Sir, given that the prospect of a US recession is quite high, can I assume that, based on that projection, the worst case scenario is for us to grow by 4% this year?

Mr Speaker, Sir, as we explained at the press conference yesterday, the baseline forecast assumes the US economy entering a recession in the early part of this year and recovering because of the actions done by the Federal Reserves and the fiscal stimulus that the US government has introduced. That is the baseline forecast. If the US economy slows down further and the recession is deeper and longer, then, of course, we will go to the lower end of our forecast range.

2. Mdm Cynthia Phua asked the Minister for Finance in view of the high oil prices whether his Ministry will review its tax policy on (i) petroleum and diesel to help reduce cost to commuters and transport operators; and (ii) fuel oil and natural gas to lower the cost of power supply to households and businesses.

Mr Speaker, Sir, the excise duty on petroleum is imposed on a volumetric basis – $0.41 per litre for 92- and 95-octane petrol, and $0.44 per litre for petrol rated 97-octane and above. The excise duty is therefore a fixed sum per litre of petrol. Government does not collect more petrol duties when pump prices go up.

We have no plan to lower the rate of petrol duty. The petrol duty is essentially a vehicular usage tax aimed at discouraging the excessive use of cars, and promoting greater use of public transport. These objectives remain relevant today.

There is currently no excise duty on diesel, fuel oil and natural gas used for generating power.

3. Mdm Cynthia Phua asked the Minister for Transport whether there is a shift in the use of the Electronic Road Pricing from an instrument of controlling road congestion to one of controlling car usage on the roads.

Mr Speaker, Sir, Electronic Road Pricing (ERP) was introduced in 1998 to help us manage congestion on our roads, and there has been no change in our position on this. ERP is introduced or ERP rates adjusted only when congestion is experienced on our roads and expressways. This occurs when traffic speeds fall below their optimal speed ranges. The levy of ERP charges is to bring traffic speeds back within the optimal speed ranges, so that traffic flows smoothly, and we optimise the capacity of the road network.

The ERP changes that I have recently announced as part of the Land Transport Review will not shift ERP away from congestion management, but rather enhance it, so that congestion can be more effectively managed. The changes serve to better ensure that motorists will experience smooth travel on ERP-priced roads.

However, given the more pervasive congestion today and correspondingly more extensive ERP coverage, the emphasis in our transport planning must be on encouraging motorists to shift to public transport rather than to drive on alternative roads to their destination. We have therefore taken a holistic approach to tackle road congestion in our Land Transport Review and will invest heavily to improve our public transport system to make it a viable alternative to the car.

Sir, can I ask the Minister to paint us the picture for the ERP in 2010? Would it be an ERP entry or would there be no gantries in one of the expressways, as what we have seen in one of the photographs that has been sent round?

Yes, I have seen the photograph too. She is referring to the ERP gantries. Let us put it in perspective. Increasingly, because of the size of our vehicle population - 850,000 vehicles - we will not be able to do what we did in 1998.

In 1998, it was easier. We put up ERP on the expressway when there is congestion. Drivers could then take alternative arterial roads.

We did a survey from 1997 to 2004. In that time, our car population went up 10%, but usage went up more than two times. Car trips increased by 23%. We have this dubious distinction of using our cars more intensively than most of the other major capital cities. On average, a car here clocks 21,000 km a year; London, 9,100 km; Los Angeles, 19,800 km. If you have been to Los Angeles, you will know that it is a sprawling metropolis, and we beat them! So what happens? The 850,000 vehicles are growing and the cars are used intensively. Increasingly, it is not possible to simply put an ERP gantry onto an expressway and allow drivers to take the alternative roads. All these roads would be congested and have to be priced. If someone does not want to pay ERP for that particular half an hour, because the value of the money to him, say, $2 is valued more than the time he would have saved, it is a decision that he has to make. The alternative must be public transport. We need to understand that this is the scenario going ahead. This is part of our challenge and we have to manage this.

Mr Speaker, Sir, I would like to ask the Minister what is the purpose of evening ERP along the CTE. To many residents who live in Ang Mo Kio and Yishun, the CTE is the shortest way to go home and they feel that speed is no longer a critical issue when going home. Can we abolish the evening ERP along the CTE?

Like all feedback, there are different points of view. What the Member has said is one point of view - "Why have it in the evening? I do not mind getting myself caught in a traffic jam." But we have feedback from others who feel strongly that they would like to get home on time in the evening. I have received emails arguing, on the contrary, to what the Member said.

So what is the purpose of congestion pricing? Let us be clear what is the cost to us here. Congestion exacts an economic cost and an environmental cost on society. At any time of the day, this is the cost we have to pay - be it morning or evening. Similarly, we hear some people asking, "Why is it necessary to have congestion pricing in the residential estates?" If we exempt the residential estates, it means that as far as we are concerned, all that matters is that there is no congestion in the Central Business District (CBD) and expressways leading to the CBD. It does not matter whether there is gridlock or pollution in the residential estates. But there is a cost to that. Do residents want gridlock in their residential estate?

When we did our study, we visited many cities in Europe. Going ahead, the key thing here is to have a liveable city and a quality urban living environment. For many of these European cities, the residential estate is also a key priority. They put in measures there to reduce the vehicular traffic going into residential estates. In Zurich and many German cities, that is the key priority. The environment is important - where you live and where your children live. So Members have to understand why we are doing congestion pricing. It is because congestion pricing exacts a cost to the economy and to the environment - where you work and where you live.

Sir, many Singaporeans would like to take public transport if it were more accessible. How does the pace of improvement of public transport compare against the pace of implementation of ERP gantries?

From now until 2020, we have major plans to transform our public transport system. We would invest very heavily in rail. We have already committed $20 billion to expand our rail network with the Downtown line, the Circle Line and the extension at Boon Lay. Going forward, we will invest another $20 billion in the Thomson Line and the Eastern Regional Line, from the north all the way down to the city, and from the city all the way to the east respectively. We would also extend the North-South and East-West lines and we would look at how best we can make infrastructural improvements so that we can run more trains on these existing lines. What it means to Singaporeans is that they will see either a new extension or a new stage of a new line every other year, all the way to 2020.

We will also effect immediate public transport improvements before we roll out the ERP changes from July 2008. As some Members are aware, we have already put in an extra 93 train trips into the existing East-West, North-South and North-East lines this month. We will increase the frequency of the basic bus system in the areas that are affected by the ERP. Right now, the headway is 15 minutes. The PTC last year had set a higher standard of 10 minutes by August 2009. But for the ERP-affected areas, we are working with the public transport operators and we will raise it to 12 minutes by June 2008. The buses will come more frequently. We will also kick up the premium bus services which, for many motorists, is an important alternative to driving. We have 40-odd premium bus services now. We are looking at increasing it to about 72. All those in the affected corridors will be given priority. These are the immediate measures that we will take.

On top of that, for the mature rail lines - the East-West and North-South lines - where the scope to increase capacity immediately is limited, we will also allow the bus services to duplicate certain segments of these lines. This is to increase capacity immediately. Again, people will have a choice.

All these will come before July 2008. LTA, based on their modelling, thinks that with the ERP changes, about 6,000-odd car passenger trips will be affected. The amount of extra public transport trips through all these public transport improvements will be three times that amount to cater for this possible displacement.

Mr Speaker, Sir, I would like to ask the Minister what is the number of visitors to the housing estates. Is the number so large that we need to put up ERP in the evening? To the residents, as far as they are concerned, they are already paying ERP charges in the morning when they go to work.

Some of them are actually residents going back and some of them would be through-traffic. I do not have the numbers off the top of my head and we may not have such data.

4. Mdm Ho Geok Choo asked the Minister for Transport how the $168 million in ERP revenues are going to be accounted for following the ERP rate hikes, since the upgrading of road infrastructure is planned to slow down and the increase in revenue will not be expended on it as quickly.

Mr Speaker, Sir, Electronic Road Pricing (ERP) revenue goes into the Government’s Consolidated Fund, which then goes to fund various Government programmes, including public transport and road projects, for the benefit of all Singaporeans.

Mdm Ho is of the view that the increase in ERP revenue will not be expended as quickly because of the slowdown in road growth. This is not so.

Despite the slower road growth in the years ahead, the Government will be spending more, not less, on road infrastructure going forward. From now till 2020, the Government will be investing some $14 billion on road developments, or an average of about $1 billion a year, twice the current expenditure of about $500 million a year and much more than what we are likely to collect through ERP. And this does not include the huge amounts we are investing in our public transport system.

I would also like to highlight that the Government is giving back to the motoring public more than the projected increase in ERP revenue, and this underlines the point that ERP is to address congestion and is not a revenue measure. While we expect the additional revenue from the upcoming ERP changes to be about $70 million annually, the reduction in road tax will cost the Government about $110 million every year. The Government will also collect $200 million less annually due to the reduction in Additional Registration Fee (ARF) for cars.

Three supplementary questions:

Could the Minister kindly highlight where are the current road infrastructure upgrades and when will they begin operation?

Are there plans to widen busy roads that have become immune to ERP?; and

Are there plans to improve the safety of known dangerous roads, eg, the well-known stretch of road along Thomson, often used for racing, where recently four undergraduates crashed?

On the first question, where are the major road improvements, going forward? We have opened Phase 1 of the Kallang Paya Lebar Expressway or KPE. We intend to complete the rest of the KPE by September this year. The KPE costs us about $1.7 billion. It is 12 kilometres long and will be the longest underground road in Southeast Asia. The other major expressway that we are building is the Marina Coastal Expressway (MCE), at a cost of $2.5 billion. We expect this to be completed by 2013. The third major expressway is the North-South Expressway, which will cost about $7 billion to $8 billion. It is 21 kilometres long, from the north, down to the south. We expect this to be completed by about 2020.

On the second question, I am not sure whether there is such a thing as an ERP-immune road. If there is, she should let me know. We will continue to widen roads. For example, we will make improvements to the CTE from June 2008 onwards. We are also looking at widening the Tampines Expressway, and some interchanges like Woodsville.

All these road improvements will continue. I think it is worthwhile for us to realise that when we are dealing with congestion, we cannot rely on any single measure. You need a whole suite of measures. Of course, every now and then, you read of some pundits who tell you that they have found the panacea. This is it - one single solution - why do you not use it? Why are you so daft? Why do you not use this particular one, and this will solve all your problems? There is no such thing. If anybody tells you that - that there is a single solution - he is selling you snake oil - ignore the medicine man, as it does not work that way. You need all the different measures.

So, this is what we have been doing. We are spending close to $40 billion in expanding our MRT system. We are putting a lot of emphasis on public transport as it is important. Road improvements, which I just mentioned, will be about $14 billion. We are using technology to help us optimise traffic flow, in terms of intelligent traffic management systems. Some of you are familiar with them - EMAS, J-Eyes - these are all using technology to allow the free flow of traffic at traffic junctions. And, of course, you need to manage vehicle usage. All will be used.

The final question is on road safety in Thomson. This is something that we can look at. I will get the LTA to look into this, to see how we can address it.

5. Mr Siew Kum Hong asked the Minister for Information, Communications and the Arts (a) why was the conditional permit to the Complaints Choir prohibiting participation of foreigners in public performances granted only one day before the scheduled event; and (b) what was the reason for imposing conditions on the permit given that the Media Development Authority had already approved the lyrics.

Mr Speaker, Sir, the Complaints Choir Project was started by two Finns to teach people all over the world to sing out their displeasures about the situation in their own countries. The Necessary Stage had applied to the Media Development Authority (MDA) for an arts entertainment licence to hold public performances of the Project throughout Singapore as part of the M1 Festival.

While we recognise this is an arts entertainment event, it is nevertheless an exposition about Singapore's domestic situation. For this reason, we decided to approve the application but on the condition that only Singapore citizens participate in the performances.

This is consistent with our position that Singapore laws and policies are an expression and a reflection of the values of our society and any public discourse in such matters should be reserved for Singaporeans alone. Foreigners, even if they are permanent residents, should not interfere.

On the licence application, MDA had received the full application from the organiser on 17th January 2008 for the choir performance to be held on 26th and 27th January 2008. As is publicised in MDA's website, such licence application should be made six weeks in advance of the hosting of an event. However, despite the late application, MDA accepted the application and tried to process it, as we recognised that the organiser could not furnish the lyrics of the song early enough. MDA only took slightly more than a week to process the application. Where applications for the other M1 Festival events were made early, MDA had cleared and given approval well ahead of their performance dates.

Sir, I have four supplementary questions:

Last September, the Senior Minister of State for Home Affairs said, when responding to a Question that I had filed, "It is not as though that foreigners cannot make their comments or views known on Singapore's policies and laws." But he drew a distinction where it constituted interference in our domestic political scene. Does the Ministry have a different position from Home Affairs and, if not, in what way does MICA consider foreign members of the Complaints Choir Project to be interfering in our domestic political scene?

Secondly, we ourselves frequently comment on matters in other countries. For example, this House debated the situation in Myanmar. Foreigners also write in the Forum pages, and we invite foreigners like Mr Peter Schwartz to speak publicly about the future of Singapore. How does that all reconcile with this case where foreigners were completely banned from singing in public about generic local affairs, with lyrics that have been approved by MDA no less?

Third, I would like to ask the Minister whether in this age of Internet and YouTube, enforcing the policy in this manner still serves any purpose. After all, probably many more people saw the video online, than otherwise the case; and

My last question relates to the timing of the approval that was given by MDA. I am told that initially the organisers were aware of the prohibition of foreigners participating in the Project only in relation to a planned performance at the Speakers' Corner. This obviously turned out to be different from the final situation where they were told that foreigners could not participate at all locations. So, I would just like to ask the Minister to clarify what exactly happened there.

Mr Speaker, Sir, I do not think I need to comment on MHA's response to the Member in Parliament last September, other than to reiterate that it has been a consistent policy that we do not welcome or encourage foreigners to participate in domestic politics. Whether an event - be it an arts event, a forum or a dialogue - is construed as something that is interfering or participating in domestic politics, it is a matter of judgement in each and every case. It is up to the licensing authority, whether it is MHA (through the Public Entertainment and Licensing Unit) or MDA (through the Arts Licensing Unit) to consider whether this particular event should be allowed or not.

On our comments on other people's domestic affairs, I believe that we have a strong ground for making comments in those instances or in the rare instances where we made comments in line with what were international sentiments. We are, I would say, in very good company when we made such comments.

On the age of Internet, our effort is only to ensure that within Singapore, any such participation by foreigners in commenting on our domestic issues should be prevented, if possible. If they want to circulate materials on the Internet, we have always adopted a very light touch approach to anything that is on the Internet. It is not our intention to screen or to prevent Singaporeans from accessing any particular information. If they want to watch the Complaints Choir performance on the Internet, let it be so.

On the timing of the approval, as I have explained in my main answer, we tried to accommodate the Complaints Choir as soon as they were able to submit their entire lyrics. The lyrics themselves were not a problem or concern. It was more the participation of the foreigners. While it was also true that initially the reaction or the response of the licensing authority was that foreigners should not participate in such an event at the Speakers' Corner - because there is already an existing prohibition against any foreigners taking part in any activities at the Speakers' Corner - subsequent assessment resulted in the licence being issued on the basis that other performances in public places should also not be allowed. And we took some time over that because we had to consult other agencies. Unfortunately, the licence was then issued rather late in the day, but that was unavoidable. In the first instance, if they had submitted their full application with all the lyrics well ahead of time, we would have been able to advise them accordingly and they could have made alternative arrangement. That they submitted the full application with the lyrics late was a matter that was beyond MDA's control.

Sir, I understand that the lyrics of this song were created through workshops with mainly Singaporeans, facilitated by the foreigners. I would like to ask whether the Ministry took into consideration this genesis process, the substance, tone and intention of the lyrics in this case, and how have all these factors influenced the decision.

The second question: are we extrapolating that in programmes on our national TV and radio, articles in local newspapers and content in the mass media, foreigners are prohibited from making comments regarding domestic policies?

Mr Speaker, Sir, yes, we were aware that, apart from the foreigners, Singaporeans were involved through a series of workshops and discussions to come up with the lyrics. But our objection is not with the lyrics at all. In fact, Singaporeans are welcome and they are entitled to complain about anything and everything, and they regularly do and we have no objection, and they do not need a licence from MDA to make such complaints at all. So, our objection was really whether we should encourage foreigners to come in to lead Singaporeans, to organise Singaporeans to conduct such complaints in public. And we believe that that is not wise and not prudent over the long term. Although in this particular case the lyrics were not particularly objectionable, we felt that it ran contrary to our established principles that comments on domestic matters ought to be reserved for Singaporeans.

On other comments in the mass media, I think we have to be specific about the comments. Journalists do write comments about other situations. Journalists in Singapore and both outside do comment about us. But I do not think we can exercise that control over what journalists outside Singapore want to write about our domestic situation. Also, we should

not prevent anyone who wants to give a view about Singapore from doing so. But whether that particular view results in interference in the domestic politics or not is something that we have to judge on a case-by-case basis.

6. Ms Sylvia Lim asked the Minister for National Development (a) what checks does the Ministry or the National Environment Agency have in place to prevent mistaken payments to hawkers who cease operations due to upgrading works at hawker centers; (b) how did the mistaken payment of $18,000 to Mdm Lee Ah Muey come about; and (c) what will the Ministry do to take responsibility for this mistake.

7. Mr Siew Kum Hong asked the Minister for National Development (a) if he will provide an update on the erroneous payment of $18,000 by HDB to hawker Mdm Lee Ah Muey in 2003; (b) how did the HDB make the error in the first place; (c) why did the HDB and NEA fail to contact Mdm Lee earlier; and (d) how many cases of such mistaken payments by the HDB or NEA were there in the past five years.

Mr Speaker, I would like to take Question Nos. 6 and 7 together.

Yes.

Mdm Lee Ah Muey was previously a temporary permit holder selling clothes in the vicinity of Lim Tua Tow Market, near Upper Serangoon Road. She was relocated to the market at Block 105, Hougang Avenue 1, in 1993 and assigned a stall to operate her business. However, given her former status as a temporary permit holder, she was informed that she would not be entitled to ex-gratia payments if the market were to be affected by redevelopment. Mdm Lee signed a letter of undertaking to acknowledge this.

The market at Hougang Avenue 1 underwent the Hawker Centres' Upgrading Programme (HUP) in 2003. The staff handling Mdm Lee's case offered her the option to resume business at the upgraded centre or to receive an ex-gratia payment upon giving up her stall. The latter option was wrongly offered as the staff had missed her written undertaking. Following the staff's mistake, Mdm Lee decided to quit hawking and was given the ex-gratia payment of $18,000.

The error was detected in April 2004. Subsequently, many attempts were made to contact Mdm Lee in writing and through personal home visits over a three-year period. When Mdm Lee was finally contacted in September 2007, she agreed to return the amount, and requested that a stall at Block 105, Hougang Avenue 1, be allocated to her so that she could resume her business. As there were no vacant stalls at Block 105, Hougang Avenue 1, Mdm Lee was offered a stall in other locations, but she rejected them.

Despite her agreement to make repayment, HDB heard nothing from Mdm Lee over the next three months. HDB then decided to make an official claim, serving a letter requesting Mdm Lee to return the money. HDB also extended the time for her to return the ex-gratia amount. The matter has now been amicably resolved. HDB has accepted her proposed instalment plan. She is also considering to take up a stall being offered to her.

In the past five years, out of more than 1,000 cases of ex-gratia payments handled, there have been three cases of wrong payments, including Mdm Lee's case. HDB is in discussion with the other stallholders on the repayment of the ex-gratia payment.

The management functions of HDB-owned markets and hawkers have been transferred to NEA since 2004. To avoid a re-occurrence of such incidents, NEA has tightened the checking procedures of ex-gratia payments. The manager-in-charge of the market/hawker centre will check on the stallholders' eligibility for ex-gratia payment and another senior officer will verify the eligibility before payment is made.

Sir, I have one supplementary question for the Minister of State. Given that four years had passed between the time of payment and the claim for repayment, was it reasonable for HDB to demand that Mdm Lee returned the $18,000 in 21 day's time? Could HDB have contacted her again before sending the letter of demand, despite not having heard from her for the preceding three months?

Mr Speaker, as I have explained, HDB had actually sent many letters as well as personal visits to Mdm Lee and, in fact, had met up with her three months before the letter of demand was sent out. So, there was a meeting and there was an agreement to repay, but HDB did not hear from her ever since. After the letter of demand had been sent, we sat down with her again and had basically reached an amicable solution with her on an instalment plan.

8. Mrs Jessie Phua asked the Minister for Community Development, Youth and Sports (a) what is the number of foreign athletes recruited to date under the Foreign Sports Talents (FST) Scheme; (b) what is the number of FST recruits who have obtained Singapore citizenship; and (c) how many of these athletes are currently still in active training and representing Singapore.

Mr Speaker, Sir, the Foreign Sports Talent (FST) scheme was started in 1993 as a means to raise the standard of our sporting performance at major competitions, and also to encourage more Singaporeans to support and participate in sports.

Some of Singapore's recent sporting successes were achieved with the contributions of foreign-born athletes who committed their sporting careers to represent Singapore. This includes our record-breaking performances at Major Games, such as the 2005 South East Asian Games, the 2006 Commonwealth Games and the 2006 Asian Games, and our consecutive victory at the ASEAN Football Championships in January this year, last year and, more recently, a world record in billiards. So we will continue to keep our doors open for the foreign sporting talents who have the sporting skills and the commitment to become a Singaporean and to be a part of Team Singapore.

The Singapore Sports Council (SSC) administers the FST scheme and will only support applications from the National Sports Associations that have comprehensive training, competition and integration plans for the foreign athletes.

To date, we have 97 athletes who have been recruited under the FST scheme. Of these, 54 athletes have obtained Singapore Citizenship, and 37 of these 54 Singaporean athletes are still active in training and in representing Singapore in major competitions.

Mr Speaker, Sir, I would like to ask the Parliamentary Secretary what happens to the remaining FSTs who are not actively representing Singapore. Is he satisfied with the current level of management of the FSTs? And is the FST scheme here to stay? Will he be looking at modifying it?

For those who are not active, some have gone into different professions like administration. I know of some who do clerical work. There are those who are still doing sports-related profession like coaching and youth development. I think there will still be room for improvement for the integration plan. I believe that we are planning out several different measures for the Singapore Sports Council to work with the National Sports Associations. Very importantly is to understand how the process of selecting these FSTs started. It starts with the National Sports Associations scouting and recruiting those sports talents that would help in their sports, and they have to answer these three questions. First, what gaps are they trying to close in their sports? Why do they need the foreign talents? Second, how would these foreign talents help them? So they need to come up with a development plan; they need to come up with a training plan for them. Third, when their sports careers are over, what kind of career plans are there for them? Would they give them long-term skills training?

When all these questions are answered, they will present a plan to the Singapore Sports Council which will then discuss it under a Review Committee. Once the Review Committee approves it, it goes into an approval process, through MCYS. Once that is satisfied, then it goes into an application for either a PR or a citizenship with the Immigration authority. So that is the whole process, and we must make sure that the whole process is tedious and transparent enough, and is also factual enough in order to make those decisions. When they are selected and their citizenship or PR status has been approved, that is where the integration process starts and we need the National Sports Associations to help us and to support this whole process.

9. Dr Fatimah Lateef asked the Minister for Community Development, Youth and Sports (a) for the past two years, what is the annual number of reported cases of children not supporting their parents; (b) what were the outcomes in general and how were these cases resolved; and (c) what are the common root causes for these cases seen and how many of them require legal intervention.

Mr Speaker, Sir, for the past two years, the Tribunal for the Maintenance of Parents (TMP) received a total of 870 reports of children not supporting their parents.

To preserve family ties, parties involved in a case are advised to first consider resolving their differences through counselling and mediation. The family is encouraged to first approach community resources like the Community Mediation Centres and Family Service Centres for help and advice. Filing for maintenance at TMP is the last resort.

Through this approach, the majority of the cases were resolved without the need for legal intervention. Of the 870 reports, 78% of cases opted for community mediation and counselling. These cases were able to resolve their issues amicably. Only 188, or 22%, went on to file applications for maintenance at TMP. 68% of these applications heard at TMP to-date received a maintenance order. The remaining 32% of the cases which did not receive a maintenance order were either dismissed or withdrawn. Some of the reasons for dismissing the applications include: parents having not discharged their duties, children unable to pay any maintenance despite their best abilities, and parents being already adequately maintained.

From the reported cases, truly "unfilial" children are a minority. Many cases arise from the breakdown of family relationships by divorce or separation of the parents, complaints of undesirable behaviours of either parent, and sibling rivalry over the maintenance or care managements for the parents. There are also some cases where the children are incarcerated, or simply do not have the financial ability to maintain their parents.

I thank the Minister of State for her response. The number of cases that she mentioned will probably be the tip of the iceberg. Are there any steps that the Ministry is undertaking to ensure that the numbers received will decrease and whether we can actually have some kind of campaigns or steps to help address this issue which is certainly of a concern to us? Certainly, counselling is the mainstay of managing issues like this. I was wondering whether there is any plan to recruit and also train more social workers in this area.

Maybe I will take the last point first. The number of social workers in Singapore today is 600. I am sure the Member knows that more and more social services require social workers. As she knows, now the market is very good. Even after graduation from NUS, half of them do not even enter into this field of social work. I think my Minister had mentioned last year that he had reviewed the pay and working conditions, and we tried to peg the salaries of social workers with the social workers in the health service area. We are going to look into the full spectrum on how to help the social workers. I think the Minister is going to speak on this in the COS.

The other area is the Inter-Ministerial Committee on Ageing, under Minister Lim Boon Heng, which is also looking into the issues of the aged, how to have a total approach. So we need to educate the individual on how to be active, how to plan for the aged, the financial aspects and CPF, and so on. The other area is that we also try to revive the relationship between the family and the siblings, how to have not just the family, the neighbour and also the community, how to help each other. Therefore, I should say that we are quite lucky that over 90% of the old people are still active and they can go to the CC, the karaoke and the social line dance. We do not want to paint a very pessimistic picture. Actually, as a whole, I think aged Singaporeans

are quite lucky. Their children are still quite filial. But we do agree that we do have a small percentage who do not manage their finances very well. Some of them also do not work, especially older women.

Therefore, the family, community and all of us need to put in the effort to help the family to take care of each other. We will definitely work with the Family Service Centres, the CDCs, NCSS and the volunteer groups to enhance and help them to have a cordial relationship. All of us are learning. When the society is ageing, the behaviour of the aged is quite different. So public education is the in-thing on how to make sure that we have the knowledge and the skills to communicate with our older people. My Minister will be elaborating more on this during the COS debate.

Sir, the Minister of State said that the unfilial children are a minority. But at our MPS, we see that there is an increasing number of parents who come forward to seek help to pay for their medical bills and day-care centres because their children are not willing to support them. Can I ask the Minister of State whether she sees an increasing trend of children not willing to support their parents even though they could afford to do so and what programmes can the Ministry put in place to encourage family responsibility towards parents and to promote filial piety?

Sir, as a whole, we still maintain our traditional values quite well. Based on the previous survey, 70% of our old people actually depend on their children financially for, say, maybe from about $100 to more than $1,000. The number of cases under the Parents' Maintenance Act for the last few years has been quite stable. It is about 400 cases a year. After mediation and counselling, only about 100 applications were actually filed under the Parents' Maintenance Act. So if we look at the previous family survey, as a whole, the family structure is still quite intact. However, I do agree that it is very challenging; it is actually moving towards a not very desirable situation.

The other area of concern is that, if Members had read the papers yesterday, the income gap is also an issue. How do we help this lower income group? In 2004, the Prime Minister set up ComCare. Previously, we only had public assistance. Now, the Government has even taken over the role of helping those in the low-income families. We are also having a big chunk of these cases because the children themselves cannot afford to take care of their own families. Therefore, we are now encouraging the older people to carry on working for as long as possible. It is not so much the children are unfilial as their inability to take care of their parents. We would therefore like to urge our healthy older people to continue to work, say, part-time, to make some money to support themselves. Therefore, financial and CPF planning is very important to support ourselves. It is not that the children do not want to take care of their parents. Actually, some of them also cannot afford to take care of their aged parents.

Again, I am sure the Minister will be talking more about how to help the lower income group. But the Ministry will definitely do more public education, even through the media, to promote stronger family ties and work closely with the community to develop this type of programme. All of us must show the example and be involved in this programme through the people we know. That is very important.

We will take note of this. I would just like to tell Members that we should not be too over-conscious, because the number is quite stable. But we do know how to help the lower income group to help their families. The key word is that it is still "working".

10. Mdm Ho Geok Choo asked the Minister for Manpower in view of the Integrated Resort, the spin-off industries as well as the facelift and construction work to be carried out along Orchard Road (a) will there be enough Singaporeans to take up careers in the construction, hospitality and leisure sectors; and (b) what programmes are in place to ensure that there are enough Singaporeans to work in these sectors.

Mr Speaker, Sir, tourism employment grew by an average of 6.6% per year, from 157,000 in 2004 to 180,000 in 2007. Some 50,000 to 60,000 new jobs are expected to be created in the tourism industry over the next three years. There will be many good job opportunities, ranging from rank-and-file workers to chefs to executives and managers, for Singaporeans who wish to work in the tourism industry. Our first priority will be to help Singaporeans take advantage of these opportunities in the tourism industry and, where there is still insufficient manpower for the industry's needs, we will then supplement with foreign workers.

Thus, the Singapore Workforce Development Agency (WDA) and Singapore Tourism Board (STB) have rolled out the TOurism TALent (TOTAL) Plan which aims to train and upgrade 74,000 Singaporeans and enhance the professionalism of the tourism industry at a cost of over $360 million.

There are various initiatives under the TOTAL Plan to build up the pipeline of Singaporeans to take on jobs in the tourism industry. One example is the Certified Service Professional Programme (CSP). The programme prepares workers to enter a broad range of service-related jobs, such as retail assistants, tour hosts, etc. CSP will be launched later this year, to train 36,000 non-tourism workers to facilitate them entering the tourism industry in the next three years.

WDA also targets to train 15,000 workers with specialised skills through its Workforce Skills Qualifications (WSQ) framework and other training programmes for jobs, such as chefs, ride technicians and tour hosts. For existing tourism workers, WDA aims to train and upgrade 11,000 workers, with special focus on training at the managerial and supervisory levels.

To build up the competencies of senior executives in the industry, STB launched its Training Industry Professionals in Tourism (TIP-iT) scheme last year. The scheme aims to train 3,000 senior executives over the next three years.

Another strategy is to recruit from fresh school leavers. To facilitate this, STB has been working with post-secondary education institutions to introduce new courses and increase the student intake in tourism-related disciplines. About 6,000 students will be trained in these disciplines and primed to join the tourism industry in the next three years. STB and WDA also extend various scholarship programmes for tourism-related courses.

To make tourism jobs more attractive to Singaporeans, we will also work with the industry to re-design existing jobs, improve HR/workplace practices and enhance industry image. About 3,000 tourism jobs are targeted to be re-designed. In October 2007, STB launched a three-year campaign aimed at enhancing the attractiveness of tourism careers.

As for the construction sector, although many of the jobs at the worker level will be filled by foreign workers, there are available pathways for locals to take on higher skilled jobs in the sector. One such programme is the Construction Re-Skilling for Employment (CORE) programme which helps to re-skill job seekers with no prior work experience in the construction industry to take up trade foreman or crane operator jobs.

Thank you, Minister of State, for the very encouraging response.

Sir, I would like to ask two supplementary questions. These relate to today's papers which reported that there were only about 9,000 persons graduating to fill the potential job openings in the tourism sector. Given the fact that we still have to build up the pipeline of Singaporeans and that we may eventually have to look to the foreigners to bring in the service staff, especially for the IR sector, I would like to check with MOS:

How would that process of bringing in the foreign service staff be carried out?

How do we ensure the quality control, given the experience of the less than desired quality standard of foreign construction workers that have been brought in recently by foreign contractors?

Mr Speaker, Sir, as I mentioned in my answer, while we look at foreign sources of workers, at the same time we also encourage Singaporeans to take on tourism-related service jobs, and we have put in place quite extensive programmes to train and upgrade them as well as to encourage existing tourism-related workers to take on bigger and better jobs and upgrade themselves.

As for foreign workers, we have a fairly comprehensive system of work passes and control systems in place to ensure quality foreign workers are admitted. We are also working very closely with the key players in the industry to try to understand their needs better and to work with them to look at how to fulfill their manpower needs. So I would assure the Member that we are working very proactively with the industry to address the manpower needs of the industry, going forward.

Mr Speaker, Sir, I would like to ask MOS what is the take-up rate of the Skills Retraining Scheme that he mentioned just now for the construction industry. Based on the feedback from contractors, engineers and architects, there is an acute shortage of manpower in the construction industry. Does MOM intend to do more to help to ease the manpower shortage problem? Would MOM consider relaxing the S-Pass requirements and reducing the processing time? Would MOM also help to bring in more construction-related professionals from overseas?

Mr Speaker, Sir, some of the programmes I mentioned earlier, such as the tourism-related programmes, were just started last year. So it will take time for some of the programmes to take off, for enrolments to increase. Specifically, on the construction sector, the CORE programme that I mentioned in my answer earlier, in 2007, a total of 245 workers were trained through the CORE programme. We recognise that this is a very tight labour market at the moment and there is a great demand for workers. This is a problem and a challenge that we recognise. But it is a good challenge and problem to address. As I mentioned, we will continue to work with various industry players, including the developers and the construction sector, to address and look at how we could be more flexible in our manpower policy. Flexibility in our manpower policy has been one key strategy and strength of our economy to allow us to respond to the changing landscape in our economy and the ups and downs in the demand as well as the economic cycle.

So, I agree with the Member that we will address this issue and try our level best to improve our processing time for Work-Pass applications which at the moment is already quite efficient. We will continue to improve our efficiency and look at how to remain flexible and responsive to industry needs.

Sir, there is actually a need for us to have foreign manpower to supplement our manpower here in Singapore. Would the Minister of State assure us that we will not just freely accede to the employers' requests whenever they use the reason "no takers" as an excuse, that we then free up the market so much that they just take in all the foreign manpower to take away the jobs of Singaporeans?

Mr Speaker, Sir, I am glad that the Member recognises that foreign workers play an important role in our economy. In fact, they provide the engine for us to continue to fuel our economic growth, particularly so as we approach a very high employment rate already. Our employment rate exceeded 75% in 2007. As we reach the limit, there will be fewer and fewer Singaporeans who are not yet working and are ready to enter the workforce. Therefore, looking at the foreign worker supply is an important issue for us to address. Of course, in admitting foreign workers, we are very mindful to strike a very delicate balance to ensure that these foreign workers will help us to continue to raise our economic growth and at the same time to also create new and better jobs for Singaporeans.

11. Mr Lim Biow Chuan asked the Minister for Manpower whether his Ministry will consider waiving the requirement for passing the English Entry Test for a foreign domestic worker (FDW) if the employer is able to communicate with the FDW in a language common to both of them.

Mr Speaker, Sir, overall, 95% of foreign domestic workers (FDWs) are able to pass the entry test conducted in basic English. The test does not assess proficiency in English but allows us to gauge the ability of FDWs to understand simple safety instructions. English is used in the entry test because it is the language of administration. Public signs and labels on household items are also generally in English. Therefore, first-time FDWs who can understand basic instruction and have some numeracy and literacy skills in English are expected to face fewer problems working in an urban environment like Singapore.

Since the introduction of the entry test, together with other measures to raise standards of

FDWs, the number of deaths has fallen by about a third, from an annual average of 35 over the past six years to 25 in 2007. The annual number of substantiated abuse cases has also fallen by almost 75%, from 157 cases in 1997 to 46 in the third quarter of 2007.

I would like to ask the Senior Parliamentary Secretary, if the domestic help is specifically employed to assist an elderly person who can only speak in a common language with the employer, should the Government interfere to deny the employer the convenience of having a domestic worker whom they can communicate freely with.

Sir, employers have a lot of choices to employ foreign domestic workers from the sources that they like. As I have said, 95% of the first-time foreign domestic workers who took the entry test passed the test. So, there is no problem in getting alternative workers.

Secondly, we must always remember that the foreign domestic workers may not stick with the first employer that they encountered. They may not be able to work with the employer, or the employer may not like the foreign domestic worker, and the next employer may not necessarily be one who speaks the language of the domestic worker. So, it is necessary, in the overall interest of the foreign domestic workers, as well as the employers, that we require the foreign domestic workers to pass an entry test which will allow them to understand simple instructions, which basically is in English language.

12. Ms Sylvia Lim asked the Deputy Prime Minister and Minister for Law (a) whether there are cases where prisoners have been inflicted with more than the limit of 24 strokes of the cane; and (b) if so, how did this come about.

Mr Speaker, Sir, the Member has asked whether there are cases where prisoners have been inflicted with more than the limit of 24 strokes of the cane and how this came about.

To answer her question, we must first address the question as to what the legal limit is for the number of strokes that may be imposed by a court. This is governed by section 230 of the Criminal Procedure Code, formerly section 220, as interpreted by the courts. Section 230 reads:

"When a person is convicted at one trial of any two or more distinct offences any two or more of which are legally punishable by caning the combined sentence of caning awarded by the court for any such offences shall not, anything in any Act to the contrary notwithstanding, exceed a total number of 24 strokes in the case of adults or 10 strokes in the case of youthful offenders."

I have been advised by the Attorney-General that this provision was dealt with in a 1976 Magistrate's Appeal by then Chief Justice Wee Chong Jin (PP v Suhaymi b Harith & ors, MA 153/1976, the so-called "Swimming Trunks Gang case"). In interpreting this provision, the Chief Justice took the position that where an offender is convicted upon several charges, each charge constitutes a separate trial. Hence, legally, an accused person could be caned more than 24 strokes. That decision has not been overruled and therefore was - and still is - binding upon all subordinate courts.

Subsequent to the decision in the Swimming Trunks Gang case, there have been at least three appeals to the Court of Criminal Appeal in cases where more than 24 strokes were imposed on an offender. The Court of Criminal Appeal affirmed the sentences imposed by the High Court in each of the appeals. In one case, the Court of Criminal Appeal enhanced the sentence from eight years' imprisonment and 16 strokes to 16 years' imprisonment and 30 strokes. There was also a petition for revision filed in 1989 by an offender who had been guilty of a series of armed robberies and had been sentenced to more than 24 strokes. The issue of excessive punishment was raised. The then Chief Justice, having considered the issues, declined to exercise his power of revision.

Arising from those precedents, Sir, I would expect that there would have been cases where offenders were sentenced to more than 24 strokes. But it will require some research into old records to establish the actual number of such cases.

Mr Speaker, Sir, maybe this question has been prompted by recent media publicity about one Qwek Kee Chong, who filed a civil suit against the Government in 1991. Qwek was a member of a four-man gang that was responsible for a spate of armed robberies between January and August 1987. The gang was armed with parangs and several people were hurt. Qwek faced 17 counts of gang robbery, 15 counts of armed robbery and one count of house-breaking. He was convicted in 1987 of four charges of armed robbery and sentenced to 10 years' imprisonment and 48 strokes of the cane, the other charges being taken into consideration in sentencing.

When he came forward with his claim, in view of the long line of authorities that I have mentioned, the Attorney-General advised that Qwek did not have a chance of succeeding in his suit. Furthermore, he had not appealed against his sentence.

However, in the previous year, the Attorney-General had reviewed the whole issue of section 230 of the Criminal Procedure Code and decided that, as a general rule for future cases, he would exercise his prosecutorial discretion to proceed only on a limited number of charges upon each occasion where an accused faces multiple charges, such that the total number of strokes which would be imposed by the court would not exceed 24. The Attorney-General did so because he assessed that 24 strokes, together with the custodial sentences which are usually meted out in cases of this nature, would be sufficient to meet the purposes of deterrence in sentencing.

When Qwek's case finally came up for pre-trial hearing, the then Attorney-General advised making a token ex gratia payment to Qwek after he discontinued his case for compensation. Anyway, the previous Attorney-General had already changed the practice, in any event.

Finally, Sir, the Government has also decided, as part of its process of reviewing the Criminal Procedure Code, that the provision would be amended to reflect the practice which has been adopted.

Sir, I think one of the safeguards in the Criminal Procedure Code, as far as caning is concerned, is that the prisoner should be certified medically fit to be able to handle the number of strokes that are being inflicted. I would like the Minister to inform the House as to whether there have indeed been cases, which have been reported on the Internet, that some prisoners actually needed to be hospitalised after being inflicted with certain number of strokes because of the physical injury that had been caused to them in the course of the caning session.

Mr Speaker, Sir, the information that I have is that there is always medical advice present when caning is administered and that if the medical opinion is that caning cannot proceed beyond a certain point, that medical opinion will be observed and the caning will not proceed. Whether in some cases, because of the caning, certain injuries are suffered and, if so, will there be hospitalisation, I do not know of specific cases. But I am sure that if caning results in injuries, the due medical treatment will be accorded. And if it requires hospitalisation, I have no doubt that hospitalisation services will be provided.

I would like to ask the Minister to clarify a certain portion of his answer. I would like to know whether it means that in all situations, a person will never receive more than 24 strokes. Let me explain what I mean by this.

The Attorney-General has said that in the exercise of his prosecutorial discretion, he would proceed only on a limited number of charges in case of multiple charges, such that the total number of strokes will not exceed 24 strokes. If you have a situation, for example, where there is one trial, three offences and the sentence is 24 strokes, and let us say that the same person is charged in a separate trial for a different offence and gets 10 strokes, does that mean that, at the end of the day, he gets 24 only for the two trials? Or does it mean that he gets 24 plus 10, ie, 34?

Mr Speaker, that is a good question because when I said that no offender is caned for more than 24 strokes at one session, that does not mean that no offender will ever be caned beyond 24 strokes. Why do I say that? Because there can be very good reasons when an offender may, over a period of offending, receive over a course of time, caning of more than 24 strokes. Let me elaborate.

Take the case of a serial offender who, say, over a period of weeks or months, is tried on several occasions for several different offences. The first set of offences, say, maybe this week, could involve rape; in the following week, he may commit armed robbery; and in the third week, he may commit rioting with a deadly weapon. These are all serious offences. So if we say that in any such case there is an absolute cap of 24 strokes, then we are, in fact, giving such a serial offender permanent immunity from further caning. We cannot treat such a multiple offender who has committed, say, 50, 60 or 100 offences the same way as an offender who has committed, say, two offences. So there may be a limit of 24 strokes of the cane in any one caning session but that does not mean that if he has been tried for different offences, that when he is sent to prison, he may not be receiving different sessions of caning.

Sir, the DPM mentioned that the Attorney-General had made an ex gratia payment to Qwek. But if it is ex gratia, it actually means that no payment needs to be paid at all. Why was payment made?

In view of such confusion, is the Ministry of Law considering amending the relevant portion of the CPC to state this more clearly?

The payment was made to Qwek not because his claim was meritorious, or he deserved it, or had any legal right to it, but rather the Attorney-General made the decision on ex gratia payment, among other things, in order to save time and cost involved in arguing the case before the High Court and probably even before the Court of Appeal. It was assessed that the effort and resources committed to the case would be disproportionate, considering that the previous Attorney-General had already decided to exercise his prosecutorial decision in a manner that I outlined. But let me stress that had Qwek insisted on proceeding with the court action, the Attorney-General, at that time, had no doubt that he would robustly contest the case in the court. So, it was not a case where there was a mistake or there was an error of law. It was just an ex gratia payment.

13. Mdm Ho Geok Choo asked the Minister for Transport (a) whether the decision to allow more bus companies to operate on public routes will result in more congested roads with the higher number of buses plying the roads; and (b) if this will worsen the current traffic situation especially when car drivers are unwilling to switch over to public transport.

14. Mdm Cynthia Phua asked the Minister for Transport (a) whether the announced 10-minute waiting time for bus services is also applicable to the feeder bus services; (b) when is the review of the trunk and feeder bus services targeted to be completed; and (c) when and how will other bus operators be allowed and encouraged to participate in the reviewed bus network.

15. Mr Liang Eng Hwa asked the Minister for Transport in view of the recent announcement to make immediate improvements to the public transport system (a) whether the Ministry has set a timeline for the increase in frequency of feeder bus services; and (b) whether the Ministry can immediately target such services that are currently running at intervals of 30 minutes or longer.

Mr Speaker, Sir, with your permission, may I take Question Nos. 13, 14 and 15 together as they are related?

Yes.

Mdm Ho, Mdm Phua and Mr Liang have asked about the changes to the basic bus services that were announced recently in the Land Transport Review.

First, let me address concerns about the frequency of feeder bus services. Feeder bus services are important in our hub and spoke system, for they provide the connectivity to the MRT and bus interchanges. More than 80% of our feeder bus services currently run at frequencies of 15 minutes or less during peak hours. However, this can be improved.

The Public Transport Council (PTC) has already set stringent Quality of Service (QoS) standards where the basic bus service operators must have at least 80% of all their services (ie, trunk and feeder) running at peak hour headways of 10 minutes or less, by August 2009. Recognising the importance of feeder bus services, the PTC and the LTA are now looking at setting a higher QoS standard specifically for feeder bus services. This will be finalised by June 2008, in consultation with the bus operators.

Next, the opening up of the basic bus service market for more competition will be implemented gradually and carefully to minimise any inconvenience and disruption to commuters.

LTA will take a year or so to complete its study of how our existing bus network can be better optimised to meet commuters' needs. In 2009, LTA will take on the centralised planning of the bus network and it will gradually open up the bus market to more competition after that.

Mdm Ho is concerned that because of greater bus competition, there would be more buses on our roads and, as a result, congestion would worsen. I would like to clarify that what LTA will be introducing is competition for the market and not competition in the market. With the former, the number of bus services on the roads will be specified by LTA and not left to competing bus operators to flood the roads with their bus services, causing a deterioration in traffic conditions.

Sir, I have two supplementary questions. First, I would like to ask the Minister to also set a target for feeder bus services for non-peak hours. These feeder services are really basic bus services for the residents and children to move around.

Second, I would like to ask the Minister to consider hastening the review of bus routes as, presently, there are many areas that are really lacking in feeder bus services to connect the residents to the various MRT stations as well as bus interchanges.

Sir, may I clarify that the PTC sets standards not just for peak hours. They also do so for non-peak hours.

In terms of bus routes, I have set out the time table on how we are going to do this. LTA needs to study this carefully. This is something that is new to them. I think the primary concern here is really commuter convenience. We do not want to do it such that it is disruptive to them. For 2008, we need to study how best to do this. They are going to hire consultants to help. We need to work very closely with the bus operators.

When we did our study trips to various cities, in most major cities that have a first-class public transport system, there is always a central planner looking at both the rail and bus systems to see how they are integrated and coordinated. One advice they gave us is that when we do this, we should do it in a graduated manner and work closely with the existing public transport operators, because we do not want a disruption in routes. That is the reason why we have rolled it out this way; study how to do it and build up the capabilities in 2008. In 2009, they will start the central planning of bus routes. And 2010 onwards, open it up to competition.

This does not mean that during this whole period, there are no on-going changes. There will be a continual process that takes place. The PTC continues to have oversight over the bus routes.

Sir, supplementary questions. Can the Minister enlighten whether the fares will be consistent across the different bus operators, and whether the fares will remain comparable to the current fares or will there be hikes? My last question: what incentives, instead of disincentives, will be given to car drivers to switch over to public transport?

Sir, I will answer the second question first. She asked what will happen to the fares with all these changes. Because of all these changes, will there be an increase in public transport fares? The way our system works is that we have a fare cap formula. This formula prevents the bus and rail operators' costs to be passed through directly to the commuters. That is how the commuters' interests are being safeguarded. With all these changes, the onus is really on the public transport operators to increase their efficiency and productivity to meet these changes.

On her first question whether the fares will be consistent across all the bus operators in terms of coordination, this is something that we are going to look at. Besides the coordination of fares, LTA is also working on a season pass, which we do not have now. The season pass would cut across operators and across modes. If we want to promote public transport, it is important to have such a pass.

Her third question is whether or not there is going to be any incentive for car drivers. Well, there is a $40 billion incentive. That is how much we are spending on public transport. It is a lot of money. And $14 billion on road improvements. If we put the whole lot together, it is more than $50 billion. It is $4 billion a year up to 2020. That is $4 billion a year incentive for car drivers.

Mr Liang, last supplementary question.

): Sir, I would like to ask the Minister whether the current approach of bundling the profitable and non-profitable routes for the bus operators is the best way to go, given that we are still seeing feeder bus services running at intervals of 30 minutes or more. Contrary to what the Minister has said earlier, we do have feeder bus services that are running at intervals of 30 minutes or more in Bukit Panjang Town, for example. I do not know whether it is a case of the bus operators just doing the bare minimum for some of the unprofitable routes. If that is the case, then it is going against the key thrust of the transport review, which is to make public transport the choice mode of travel.

Sir, I have been to Bukit Panjang because I get all this feedback. On the quality of service standards and basic bus services for the whole day, no basic bus service can run beyond a 30 minutes headway unless the PTC gives an exemption. Mr Liang Eng Hwa says there is a service in Bukit Panjang that is running at intervals of more than 30 minutes. That is because for that particular service 922, it is to complement the Bukit Panjang LRT. I think Dr Teo Ho Pin knows that. We already have the LRT system there and it runs at a frequency of 4-5 minutes. There was a request and I think SMRT said, "Well, we will see what we can do about it", and they put in a feeder bus. That is the background to the matter.

For all basic bus services, it should not be more than 30 minutes. If Members know of any bus service that is more than 30 minutes, they should make a representation to the Public Transport Council and say that there is now a breach of quality of service standard 5.4, and cite that provision to them.

The Member's other question is on how do we do this bundling, going forward. Let us be clear on what we are doing. The LTA, as central planner, is not going to dispense with this fundamental principle that we have in our transport planning, which is that it must still be financially viable. So, when they bundle the routes - some are unprofitable and some are profitable - the package as a whole must be financially viable. This is important.

When we had our consultants looking into this, they said that we are one of the few cities - Hong Kong is the other one - that have this financial discipline in the system. And if we take away this discipline, it would be at a cost to the country as a whole. Other countries have done this sort of big public transport reviews. Seoul did a similar review of their bus system a few years ago. One of the changes they made was to take this financial discipline away. I met a Professor who was involved in this. He is part of our international advisory panel. He said that once they took that away, the deficit shot up. Because once we say that it is quite all right that the bundle does not have to be financially viable, that we can run a deficit on it, then we lose the discipline and the deficit starts to grow. So financial discipline will still be in place.

What LTA will do is that when they look at the bundle, they will see how best to optimise the whole bus network from the viewpoint of the commuters, which is quite different from the present situation where the bus planning is done by the public transport operators. They have a different viewpoint. That is the key difference.

The following Question stood in the name of Mr Chiam See Tong -

16. To ask the Minister for Education (a) what is the importance of early childhood education; (b) whether his Ministry can pour in the equivalent effort to build a stronger infrastructure system for early childhood education that is comparable to other educational levels; and (c) in light of many different private schools offering diploma and degree courses in pre-school education, who is responsible to ensure quality control over their curricula.

Question No. 16, Sir.

Mr Speaker, Sir, understanding about the importance of early childhood education is still evolving. Some recent international research suggests that the early childhood years are a sensitive period in which a child's future development can be influenced. MOE's own data indicates that pre-school education is particularly helpful in allowing children from low-income and non-English speaking families to be more school-ready.

MOE has done much to help children from diverse pre-school experiences to transit to formal education in Primary One. In this way, all children will have the opportunity to benefit from the quality education in our schools, regardless of starting points. Some examples include the reduction in Primary One and Two class sizes from 40 to 30 for smoother transition from kindergarten, enhancement to the Learning Support Programme to build literacy skills, and the introduction of a similar programme in Mathematics.

MOE's support for early childhood education has been targeted at areas which would have the greatest leverage. These areas include:

Delineating the Desired Outcomes for Pre-School Education which are aligned to the desired outcomes of primary education;

Developing a curriculum framework;

Raising the minimum professional qualifications of teachers;

Developing a professional development framework to encourage continuous professional development of pre-school practitioners;

Organising workshops, courses, seminars and sharing sessions for kindergarten leaders and teachers; and

Promoting kindergarten self-appraisal to encourage a culture of continual improvement among pre-schools.

MOE is currently looking at whether there is a need to further enhance measures in some of these areas, to help our pre-school operators level up.

The Pre-school Qualification Accreditation Committee (PQAC) was set up jointly by MOE and MCYS in 2001 to ascertain that the courses conducted by teacher training agencies meet the prescribed standards. Its role is to assess and accredit the pre-school teacher training courses in Singapore up to Diploma level.

The course content is regularly reviewed with input obtained from the stakeholders, such as the practitioners and trainers, to ensure that it is in line with recent developments in the ECE field. The latest review of the pre-school teacher training courses is underway and is expected to be completed some time in 2008.

The following Question stood in the name of Mr Chiam See Tong -

17. To ask the Minister for National Development whether Potong Pasir will be selected for the Lift Upgrading Programme before 2014 and whether he is aware that 63 lifts in the area are more than 20 years old and should definitely meet HDB’s criteria for the selection.

Question No. 17, Sir.

(for the Minister for National Development): Mr Speaker, Sir, as Mr Chiam is aware, the Government has made a commitment to complete the Lift Upgrading Programme (LUP) for all eligible blocks by 2014.

The LUP is a massive, nation-wide programme. There are still about 1,500 HDB blocks eligible for LUP that remain to be selected, including those in Potong Pasir. Given the limited upgrading resources and capacity constraint of the construction industry, it is not possible to offer LUP to all of these blocks at the same time. HDB needs to prioritise amongst the many eligible precincts and spread out the works over a few years. Residents of the eligible blocks will be informed when their blocks are selected for LUP.

The Town Councils Act was amended in 2005 to allow Town Councils to carry out the Town Council Lift Upgrading Programme (TC-LUP). Many TCs have carried out or intend to carry out TC-LUP using their sinking funds. Potong Pasir Town Council has not yet nominated any blocks for TC-LUP. The Town Council should do its part to carry out TC-LUP for its eligible blocks, to speed up lift upgrading for the benefit of its residents.

Sir, I would like to ask the Minister of State whether Potong Pasir will be given lift upgrading before 2014. I do not think she has answered that question.

Sir, the Government has basically given a commitment to provide lift upgrading for all eligible blocks before 2014, including Opposition wards.

3.00 pm

Order. End of Question time.

[Pursuant to Standing Order No. 22(3), Written Answers to Question Nos. 18 and 21-23 on the Order Paper are reproduced in the Appendix*. Question Nos. 19-20 have been postponed to the sitting of Parliament on 25th February 2008.]

*Cols. 417-422.

"to amend the Workplace Safety and Health Act (Chapter 354A of the 2007 Revised Edition)",

presented by the Minister of State for Manpower (Mr Gan Kim Yong); read the First time; to be read a Second time after the conclusion of proceedings on the Estimates of Expenditure for FY 2008/2009, and to be printed.

Resolved,

That, notwithstanding the Standing Orders, the debate on the Budget Statement shall resume on Monday, 25th February 2008. - [Mr Mah Bow Tan]

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

First Supplementary Estimates of Expenditure for the financial year 1st April 2007 to 31st March 2008, contained in Paper Cmd. 1 of 2008.

As there are no amendments, I propose to take the Heads of Expenditure en bloc. I will first take Heads B, C, D, E, F, K, P, R, S, T, V and W of the First Supplementary Main Estimates.

Question, "That the sums stated for the Heads of Expenditure which appear in the Total Supplementary Main Estimates of Expenditure shown on page 6 of Paper Cmd. 1 of 2008 stand part of the First Supplementary Main Estimates", put and agreed to.

Question, "That the sum of $912,630,070 shall be supplied to the Government under the Heads of Expenditure for the public services shown in the First Supplementary Main Estimates of Expenditure for the financial year 1st April 2007 to 31st March 2008 contained in Paper Cmd. 1 of 2008", put and agreed to.

Resolution to be reported.

Question, "That the sums stated for Heads I, K and W as shown on page 8 of Paper Cmd. 1 of 2008 stand part of the First Supplementary Development Estimates", put and agreed to.

Question, "That the sum of $171,123,900 shall be supplied to the Government under the Heads of Expenditure for the public services shown in the First Supplementary Development Estimates of Expenditure for the financial year 1st April 2007 to 31st March 2008", put and agreed to.

Resolution to be reported.

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

Mr Speaker, Sir, I beg to report that the Committee of Supply have come to certain resolutions.

First Resolution reported -

"That the sum of $912,630,070 shall be supplied to the Government under the Heads of Expenditure for the public services shown in the First Supplementary Main Estimates of Expenditure for the financial year 1st April 2007 to 31st March 2008 contained in Paper Cmd. 1 of 2008".

Second Resolution reported -

"That the sum of $171,123,900 shall be supplied to the Government under the Heads of Expenditure for the public services shown in the First Supplementary Development Estimates of Expenditure for the financial year 1st April 2007 to 31st March 2008 contained in Paper Cmd. 1 of 2008".

Mr Speaker, Sir, I beg to move, "That Parliament doth agree with the Committee on the said resolutions."

Question put, and agreed to.

Resolutions accordingly agreed to.

Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 3.26 pm.

Sitting accordingly suspended

at 3.05 pm until 3.26 pm.

Sitting resumed at 3.26 pm

Mr Speaker, Sir, I beg to move,

That this Parliament, pursuant to section 7 of the Civil List and Pension Act (Chapter 44), resolves that the Schedule to that Act be varied by deleting the figures "$3,913,600", "$177,000", "$4,700", "$3,547,700", "$1,282,400" and "$74,400" in the second column and substituting for them the figures "$3,717,500", "$312,000", "$3,600", "$4,040,000", "$1,414,000" and "$89,000" respectively.

I propose a provision of $4,033,100 for Class I expenditure which is a reduction of $62,200 over the FY 2007 expenditure. This is mainly due to a decrease in the Privy Purse.

For Class II expenditure, I propose a provision of $4,040,000. This is an increase of $492,300 over the FY 2007 expenditure due to higher payment of staff's salaries and other staff-related expenses.

For Class III expenditure, I propose a provision of $1,414,000 or an increase of $131,600 over the FY 2007 expenditure and for Class IV expenditure, a provision of $89,000 or an increase of $14,600 over the FY 2007 expenditure. The higher provisions are mostly due to the development and maintenance of a new computer system. It is therefore necessary to vary the provisions in the Schedule to the Civil List and Pension Act (Chapter 44), as indicated in the motion before the House.

Sir, I beg to move.

Question put, and agreed to.

Resolved,

That this Parliament, pursuant to section 7 of the Civil List and Pension Act (Chapter 44), resolves that the Schedule to that Act be varied by deleting the figures "$3,913,600", "$177,000", "$4,700", "$3,547,700", "$1,282,400" and "$74,400" in the second column and substituting for them the figures "$3,717,500", "$312,000", "$3,600", "$4,040,000", "$1,414,000" and "$89,000" respectively.

3.30 pm

Mr Speaker, Sir, I beg to move,

That Parliament approves the financial policy of the Government for the financial year 1st April 2008 to 31st March 2009.

Our economy has done well over the past year. We had real growth of 7.7% in 2007, much higher than we had expected at the start of 2007. This was exceptional growth, and more so because it came after three previous years of strong growth.

The strong economy also brought unemployment down to 1.6% at the end of last year. Resident unemployment also fell sharply to 2.3%, the lowest level in a decade.

We have been aided by a favourable global environment. But Singapore’s strong growth in recent years has mainly been the result of our broad-ranging efforts to restructure our economy, labour market and fiscal system. This is not a story of an old economy growing quickly, but of a new economy emerging out of the old. It is about how we are attracting new and cutting edge investments, capitalising on opportunities in new growth industries and markets abroad, upgrading our workers’ skills and competing at an advantage. Indeed this is why we have been growing much faster than other developed countries – faster than any other country with the same standard of living as us. Our policies are working well, the economy is restructuring, and we are delivering superior performance.

With stronger than expected economic growth in 2007, the projected Budget outturn improved significantly. We expect the Overall Budget Balance to be a surplus of $6.4 billion for Financial Year (FY) 2007, compared to the deficit of $0.7 billion that was originally projected.

We started the year expecting a growth rate of 4.5% to 6.5%, which was also in line with market forecasts. With actual growth at 7.7%, Corporate and Personal Income Taxes came in some $1.0 billion higher than projected. GST revenues also exceeded our projection by about $1.2 billion, mostly from higher consumption.

GST collection arising from the 2 percentage point hike in July is estimated at about $1.4 billion in total, which now just matches the size of the GST Offset Package and Workfare Income Supplement tranches that were distributed in FY2007.

However, the largest boost to revenues came from the exceptionally buoyant property market last year. Prices of private residential units rose by over 30%, much higher than industry forecasts of around 10% to 15% at the beginning of the year. The volume of property transactions went up by over 60%. Stamp duties consequently rose to an unprecedented $3.8 billion, $2.3 billion higher than expected. Other property related revenues were around $1.1 billion above projections. These were large gains, out of the ordinary, and which we cannot expect to see very often.

The overall budget surplus of $6.4 billion was therefore the result of a strong economy and property market. The surplus was also an appropriate fiscal stance to adopt, as it avoided adding further liquidity and stimulus to an already rapidly growing economy.

The key factor that will shape the growth of the Singapore economy in 2008 is the global economy, especially the state of the US economy. Many private forecasters now expect the US economy to enter into a recession in the first half of the year, although it may be mild. If this happens, Asian exports will be affected. However, the IMF and other global forecasters still expect growth in Asia on the whole to remain healthy. China and India are expected to slow down, but still grow at 10% and 8% respectively on the back of strong domestic demand.

Overall, on all current indications of global conditions, we expect growth of 4.0% to 6.0% in the Singapore economy this year. This is lower than last year, but well in line with the economy’s potential over the medium term. Our economic fundamentals remain strong. Our pipeline of manufacturing investments remains robust with EDB expecting $16 billion worth of investment commitments this year, on top of the same volume last year. Our services sector too is well-positioned for growth. While demand for services will depend on the growth of the region and the rest of Asia, we have gained significant mindshare as a global financial and business centre.

However, there are major downside risks to this year’s forecast of growth. A sharper than expected decline in US growth could add to the turmoil in the financial markets, and deepen the credit crunch that is still unfolding. This will inevitably spill over to the Asian economies and markets, and our own growth will be impacted. The outcomes cannot be predicted, but we must be watchful of the risks and be ready to respond to them. DEALING WITH INFLATION

Inflation is the other major uncertainty in the global economy, and a concern for us. After a period of very low inflation over the last 10 years, it has re-emerged and is now an economic problem everywhere in the world.[1]

[1] Average inflation in industrial countries was about 9% in the early 1980s, but dropped to between 2% to 3% in the early 1990s and to a low of 1.8% in the early 2000s.

Oil prices have risen by 50% over the last year. Raw food prices at the end of January 2008 had risen by 55% globally, compared to a year ago. Commodity prices in general have risen by 31%.[2] All these increases in raw material prices have cascaded down into higher transport costs, more expensive manufactured goods, and costlier consumer foods.

[2] The Economist commodity-price index, February 5th, 2008.

The basic factors which have led to these price increases are not expected to go away soon. The demand for food especially has continued to rise globally, especially with the rapid growth of the middle classes in China and India. This is part and parcel of expanding global prosperity, but it is happening at a time when food supply is constrained because of bad weather, and more agricultural land is converted from producing food crops to producing bio-fuels.

We therefore have to brace ourselves for a period of relatively higher inflation globally, which will affect the prices of the goods we import. We cannot say how long it will last, but we have to expect that it will remain high, in the first half of this year especially. For example, China’s worst winter in 50 years will likely add pressure to prices of certain foods in the next six months.

Singapore has already been affected by this recent rise in global inflation. Inflation was about 2% for 2007 as a whole, but it was much higher towards the end of the year than it was at the start. Consumer price inflation reached 4.4% for December 2007. Overall, we currently expect inflation at 4.5% to 5.5% in 2008, but with inflation being higher in the first half of the year than the second.

The relatively high ‘headline’ Consumer Price Index (CPI) numbers that we are now seeing, like in December, are partly due to the GST increase in July last year. The CPI inflation figure continues to show the impact of the GST change, because it is comparing prices this month with prices twelve months ago, ie, before the GST increase in July 2007. But if we compare prices today with prices, say, in September last year, there has been little further increase due to the GST change. The GST change has caused only a one-off increase in prices, and not continuing price inflation.

Singaporeans have also not been materially affected by the GST increase, because the Government has provided the majority of citizens with substantial offsets, which more than make up for the increased spending on GST by most families. Lower-income families are in fact receiving offsets which are several times larger than their higher GST payments.

There is also a technical reason, due to the rising values of homes, that is leading to high headline CPI numbers. The increase in the assessed Annual Values of homes will contribute significantly to inflation this year [more than 1.0% of the expected 4.5% to 5.5% inflation]. However, here too, most Singaporeans are not materially affected, as 95% of citizens own their own homes and do not pay rentals.

Nevertheless, even if we exclude this technical factor due to home values, and the one-off effect of the GST increase, inflation today is higher than what we have been used to in Singapore for many years.

The rising cost of living that Singaporeans face is a major concern for the Government. Prices of certain essential items like cooking oil, bread, milk and other dairy products have gone up significantly over the past year.

We must start by recognising that the key problem we face going forward is that of imported inflation caused by high global prices, especially of food and oil. Some of our inflation does reflect domestic factors. I have just mentioned the GST increase, which has been compensated for, and the Annual Values of homes, which have no material impact on Singaporeans. The rapid growth of our economy has also pushed up wages and rental costs. However, our CPI inflation is not due to domestic inflationary expectations, causing wages to go up to compensate not only for inflation experienced, but even for future inflation expected, resulting in higher costs for businesses, higher prices for consumers, and an upward spiral of wages and prices. We must not let domestic inflationary expectations set in, because it will entrench inflation in Singapore even after external inflationary pressures have subsided.

Our strategies will ensure that Singapore continues to have lower inflation than the rest of the world over the medium term. We have achieved that for many years now, and will keep it that way in future. The Government is also helping lower-income Singaporeans and those in need directly with the immediate problems they face.

Our strategies to help Singaporeans cope with inflation essentially comprise five planks.

First, we seek to moderate imported inflation through our Singapore dollar exchange rate policy. This has been MAS’s consistent policy objective. For several years, MAS’s policy has been a modest and gradual appreciation of the Singapore dollar. In October last year, MAS increased slightly the slope of the currency band, meaning that it allowed a slightly faster appreciation of the Singapore dollar. Our exchange rate policy has helped to keep inflation down. Had the MAS not allowed the Singapore dollar to appreciate over the last two years, our CPI inflation in the last quarter would have averaged 6.5%, instead of the 4.1% that was actually recorded (MAS estimates).

However, there is a limit to how fast the Singapore dollar can appreciate without hurting our economic performance and growth, and eventually causing wages to fall. An overly strong Singapore dollar can bring inflation down, but at the cost of lower growth and higher unemployment. This is why, while we can mitigate imported inflation through MAS’s exchange rate policy, we cannot insulate ourselves completely from the effects of global inflation passing through to the Singapore economy.

Second, we are stepping up diversification of food sources so as to minimise spikes in the prices of foods we import which would otherwise happen when there is a disruption in supply from any one country. The Agri-Food and Veterinary Authority of Singapore (AVA) is facilitating private importers buying from new sources overseas, where the foodstuffs meet our standards. For food products that are already imported from well-diversified sources, the Government will continue to work with retailers to increase public awareness of cheaper food choices and substitutes.

These policies of mitigating imported inflation, through exchange rate policy and source diversification, have helped to lower food inflation in Singapore.

The third way in which Government policies help Singaporeans cope with inflation has been our support of home ownership as a key pillar of society, and especially the heavy subsidies that we provide for lower-income Singaporeans to own a home. Even lower-income Singaporeans therefore have substantial equity in their homes which rises over time and is generally protected against inflation. We have become used to this in Singapore. But it in fact insulates Singaporeans, especially our retirees, from increases in rental costs which are a significant long-term concern in other countries. In the US for example, about a fifth of older Americans rent their homes. The rental costs make up close to one-third of their expenditures each month.

Fourth, the Government provides assistance directly to Singaporeans who face problems coping with the cost of living. This approach of helping those in need directly is better, and more sustainable than taking reflex actions such as imposing price controls on essential goods. Everything we see in the countries that have tried price controls, even today, tells us that these are not real solutions, and will only lead to hoarding, black markets, and even more problems for ordinary people over time.

Our fundamental approach to helping Singaporeans in need is to help them to get a good income for themselves. The best way to do so has been and remains to help needy Singaporeans get a job, and to encourage them to stay at it, upgrade themselves, and support their family members.

Last year we introduced the Workfare Income Supplement (WIS) scheme, to add to the income and savings of Singaporeans at the lower end of the wage ladder. It is a significant incentive to work. For a worker above 45 and earning a wage of $1,000 or below, the scheme will supplement his wages by 10% to 20% each year. 287,000 workers have received their first payouts in January this year, receiving a total of $150 million from the Government. For those who are truly unable to work, for example because of disability, we have the Public Assistance (PA) Scheme.

We will continue to complement these institutionalised schemes, by providing discretionary assistance to those in need. This is why we have boosted the ComCare Fund, which now stands at $600 million, and Medifund which has reached $1.4 billion.

Further, where we make good surpluses on the budget, we have redistributed benefits back to Singaporeans, with more going towards the elderly and the needy. For example, the GST Offset Package last year provides benefits spread out over four years. For a lower-income household, what they will receive this year alone from the GST Offset Package, together with the WIS, will be substantial.

HDB two-room households will this year receive, on average, continuing benefits from the GST Offset Package and the WIS that will in fact be equal to 12% of their annual incomes. Even if we exclude the benefits that they cannot use to meet their immediate expenses – in other words exclude the Post-Secondary Education Account top-ups for their children who are still in school, and the CPF component of WIS - the benefits add up to an average of 8% of their incomes. 8% exceeds any increase in their overall cost of living that might be expected this year[3], and this is before counting any additional benefits that this year's Budget will provide them, and any growth in wages that they may get in 2008.

[3] No significant difference is expected in the rate of increase of the cost of living for lower-income households compared to middle- and higher-income households in 2008. Although the lower-income group will be more affected by rising food prices, they will be less affected by the higher cost of fuel.

Even four-room and five-room households will receive significant benefits this year as a result of what was announced last year, which will offset at least a good part of the increase in costs of living they experience this year.

Later in the speech, I will lay out additional benefits to Singaporeans that this year's Budget will provide as part of our sharing of last year's Budget surplus.

The fifth plank of the Government’s strategy is the most fundamental to how we cope with rising global inflation. Our strategy is to keep our economy competitive and build up our capabilities so that we can enjoy good economic growth. This is the best offset to global inflation, which will be with us not just for a few months but possibly a few years - to educate and train up our people, attract new investments, create jobs, and sustain good growth of incomes for our whole population.

This is indeed why most Singaporeans experienced good growth in real incomes last year, even as inflation went up. Even lower-income households - if we look at the non-retiree households, ie, those that do not solely comprise retirees - those in the bottom 20%, they saw significant real growth of 5% in their total incomes (7.1% in nominal terms). The main reason was that more members of these households obtained jobs.

If global inflation stays high, all countries will be affected by it and we will not be able to totally insulate ourselves. But there is no reason why we cannot keep growing, and keep outperforming. And because our economy has done well and we have healthy surpluses, we now stand from a position of strength. We have the resources and the capacity not just to deal with our immediate problems, but to look ahead and position ourselves to deliver more years of good growth and quality jobs for our people.

This Budget is about how we are looking ahead to create new advantages and fresh opportunities for Singapore in a competitive world. The way we will do it is to be a top quality economy. This means top quality people and top quality enterprises. The Budget is also about keeping all our people together as we grow and ensuring that no one is left behind.

The Budget this year is centred on four key thrusts:

We will provide a full range of education and training opportunities for people to find and stretch their potential, in school and in their post-secondary education, as well as throughout their working years. We will enhance assistance for needy students to ensure that a top-rate tertiary education is affordable to all.

We will spur the growth of innovative enterprises. We will significantly enhance the incentives for enterprises big and small to create new ideas and products.

We will also adjust our tax policies so that we stay competitive, support the growth of our SMEs, encourage risk-taking as well as strengthen our role as a financial and business hub.

We will continue to build a resilient community. We will strengthen financial security for retirement and help the less well-off members in our society. We will also share surpluses with Singaporeans, with particular focus on the lower and middle-income groups who are more affected by rising prices.

We are competing in a league of both established leaders and newly-emerging cities with an edge in knowledge-based industries. They are not standing still, even in the developed world.

Munich in Germany, previously dependent on the automobile industry, is now a high-tech, knowledge-based city. Today, Munich is home to not only leading biotechnology research centres like the Max Planck Institute of Biochemistry and corporate giants such as BMW and Siemens, but also vibrant SMEs with world-beating technologies. Last year, Munich was also cited in the International Herald Tribune as the most liveable city in the world.

In the US, the city of Austin in Texas is fast establishing itself as a centre of innovation for clean technology. It was recently named by Moody’s as the best place for business in the US. Austin has the third-highest number of patents among US cities in 2005, and over 44% of the population hold a college degree.

Asian cities, including even lower-cost cities, are joining in the high-value game. Hyderabad, now dubbed the second Silicon Valley in India after Bangalore, has invested heavily in education, research and digital infrastructure. It is home to Satyam, a leading IT company, and has attracted large global investors such as Microsoft, IBM and Novartis. In China, besides Beijing and Shanghai, second- and third-tier cities like Hangzhou, Qingdao and Yantai are emerging as centres for highly competitive clusters of innovative enterprises.

Kyoto in Japan has also emerged over the last decade as a major hub for innovation, home not only to leading global companies that started out there like Murata, Kyocera and Nintendo but also a large number of small, dynamic firms often with world-leading technologies. Kyoto has one of the highest concentrations of high-tech start-ups in Japan. It also hosts top-notch academic institutions like Kyoto University, which has produced five of Japan's nine Nobel prizes in science; and an assortment of incubator facilities. And all this happening in a city endowed with centuries-old traditions, beautiful temples and gardens.

We have what it takes to compete in the top league.

We already have a first-class infrastructure and one of the most attractive living environments in Asia. But we will invest in a total upgrade of our business, transport and IT infrastructure to enable new growth in the decades to come. The development of Marina Bay will eventually double the size of our financial district. Minister Raymond Lim has set out our plans to ensure that our roads are free-flowing, and to make a quantum leap in our public transport infrastructure. We will double our rail network by 2020. Our expenditure on Land Transport alone from now till 2020 will add up to $50 billion or about $4 billion a year, which is about two-and-a-half times what we have spent on all transport infrastructure - land, air and sea - over the last 20 years.

We have also embarked on a transformation of our HDB heartlands that will take place over the next 20 to 30 years, beginning with the rejuvenation of our older estates and the building of new generation public housing in estates like Punggol and Dawson. Together with the ongoing upgrading programmes in all our estates, and the green corridors and waterways that we are now developing all over the island, we will provide a vibrant and distinctive living environment for our people.

These large investments will position Singapore for its next phase of development as a global city, open up many new opportunities for growth, and help transform the quality of life for all Singaporeans.

However, our infrastructure is only the enabler. The key to our success will be our people and our enterprises. Whether we make the most of our opportunities, whether we grow, and whether we hold our place in the top league will ultimately depend on whether our people and enterprises are top quality, in every job and business they do.

At all levels of our education system, we are investing more and moving up in quality.

We will commit more resources to achieve higher standards in the pre-school sector, which will especially benefit children from lower-income backgrounds. We will also enhance our financial assistance schemes, KiFAS and CFAC, to help more families with their children’s fees in kindergartens and childcare centres. More details of these initiatives will be announced by MOE and MCYS later.

We will continue to invest in higher quality education in every school. We are paying our teachers competitively to ensure that we keep good and dedicated people, and have improved the pupil-teacher ratio in every school to enhance the learning experience for all our pupils. Indoor sports halls will be coming to all our schools. We are also putting more resources into overseas immersion for a broad base of students and new boarding school programmes that will enhance opportunities for bonding and a rigorous all-round education. Tertiary Education

Our university sector is entering a new phase.

NUS, NTU and SMU are stepping up to a new level of excellence that will put them decisively ahead. We will grow the number of subsidised university places from 25% to 30% of each cohort by 2015, with four publicly-funded universities. Government spending on the universities will increase by one quarter, or by $500 million annually. Besides the four universities, we will have a range of other programmes that will enable students to earn degrees in specialised fields, like early childhood education and naval architecture. We will stand out, even among developed countries, in the way we provide a top quality range of publicly-subsidised university options to a sizeable proportion of Singaporeans to aspire toward and take advantage of.

Our young Singaporeans are taking advantage of this and they keep surprising the world with what they are capable of. Last year, a team of first-year students from the NUS won an award given to the top 10 teams in the Mondialogo Engineering Competition - the largest competition for young engineers with ideas that can change the world, organised by Daimler-Chrysler and UNESCO. They were up against 800 teams, including many with PhD students. Their project focused on how solar processing can be used to help farmers preserve fruit so as to raise their incomes. These were first-year students from NUS - three Singaporeans and two Malaysians who had done JC education in Singapore. They made up for the fact that they were only in their first year, by doing their own research, and teamed up with two senior undergraduate students from the Mumbai University Institute of Chemical Technology - using the connections between faculty of the two universities.

We will also provide enhanced assistance to needy students to make sure that financial status remains no obstacle to pursuing studies at our publicly-funded universities.

Our universities must be able to charge realistic and sustainable fees, so that they can recruit good faculty, improve their faculty-student ratios over time and provide a top quality education. This is the only way we can build a world-class university system for Singaporeans.

The Government provides very significant subsidies for university education, at 75% of costs. Students also have easy access to loans to fund a large part of their fees. This system is fair, since university graduates can expect to earn a significant premium in the employment market and can afford to pay back their loans gradually after they start work.

However, taking into account the higher costs of university education today, with the improvements in quality that we are making, we have decided to significantly enhance the bursaries given to students from the lower-income group. We will also provide more assistance to those in the middle-income brackets. This will ensure that no student needs to face an excessive burden of loans at the start of his working life. Further, through a combination of bursaries and loans, students within the bottom two-thirds of the population will not need to expend cash for either their fees or living expenses during their university years.

University Bursaries

First, for students in the lowest 20% of households who enter our universities, we will increase the CDC/CCC-University Bursary Scheme for students, from $1,000 to $1,600 per annum. The universities will themselves also provide further bursaries to low-income students in need.

Second, for the middle-income group, the MOE Bursary Scheme for students up to the 50th percentile of households will be increased from $800 to $1,200 per annum. Further, we will extend the bursaries to students above the 50th percentile but within the lower two-thirds of households by income, who will receive a lower amount of $800. To provide greater access to credit for students in middle-income households, the Study Loan Scheme will be extended to students up to the 80th percentile of households.

Polytechnic Bursaries

We will similarly increase the bursary quantums for polytechnic students. For the CDC/CCC-Polytechnic Bursary Scheme, we will increase it from $1,000 to $1,200 per annum. We will also be introducing a new MOE Bursary Scheme for polytechnic students from the bottom 50% of households, as we have done at the universities. The new bursary will be set at $800 per annum. We will also extend the MOE and CDC bursaries to students enrolled in MOE-funded diploma programmes in the arts institutions – LaSalle and Nanyang Academy of Fine Arts. Similar to the study loans for university students, the Study Loan Scheme for diploma students will be extended to students up to the 80th percentile of households.

All new and existing students can take advantage of these schemes starting from this coming academic year.

Last year we introduced Post-Secondary Education Accounts (PSEAs) for all students. I announced a top-up of $100 to $400 for each of 2008 and 2009. I had also said that we would top up students’ accounts from time to time when our surpluses allow. Given the good surplus that we had last year, I will now make a further top-up later this year. We will provide the majority of students, which includes those from all HDB homes, $300 for those still in primary school and $600 for those in secondary schools. Including what was announced previously, this means that secondary school students would have up to $1,400 in their accounts by March next year to use for their post-secondary education. The additional top-up this year will cost us $300 million. Table 1 - Structure of New PSEA Top-ups

$300

$150

$600

$300

Details on financial assistance schemes for post-secondary education are at Annex A*.

Continuing Education and Training (CET)

From kindergarten up to universities, we are investing more and enhancing financial support for students. However, a key focus going forward will now be continuous education for adults. This is going to be absolutely essential for us to retain the competitiveness of our workforce, in a world where we are competing on skills, quality and productivity, and not on costs alone.

Two weeks ago, PM launched the National CET Masterplan, which sets out our strategy to invest in our people over the next 10 years. We expect to spend, on recurrent expenditure alone, $400 million per year on CET by 2010. To support this long term engagement, I will top-up the Lifelong Learning Endowment Fund (LLEF) by $800 million this year, bringing it to $3.0 billion.

As the Government ramps up its spending on CET, employers will remain key players in the training of workers. Currently, they contribute a Skills Development Levy (SDL) on workers earning $2,000 and below. As we move to provide CET to workers across all levels, we should broaden the base for the SDL. Employers will now contribute the SDL on all workers they employ, up to the first $4,500 of gross remuneration. The wider base will allow us to reduce the levy rate from 1% currently to 0.25%. This will be broadly neutral in terms of levy collections, but will reduce the overall burden on smaller companies and employers of lower-wage workers. The change will take effect from 1st October 2008.

We will also help Singaporeans who take the initiative to upgrade themselves, by extending subsidies beyond vocational CET. Currently, we do not subsidise part-time degree programmes. We will now provide subsidies for part-time degree programmes at the three publicly-funded universities and UniSIM for those who have not previously benefited from a government-subsidised undergraduate education. Singapore citizens will be able to pay subsidised fees, with the Government meeting 40% of the cost of these programmes.

We will also make further refinements to the existing tax relief for course fees to help individuals claim the relief more easily when they take up academic, professional or vocational courses. Details on this are at Annex B-1*.

We must make innovation pervasive in our economy.

Singapore is already host to a good share of global companies, the HPs, Novartises and Mitsuis of the world. They are moving their activities up the value chain and increasingly investing in R&D in Singapore. We now also have a few home grown companies like Venture Corp, which has some six hundred R&D engineers worldwide, and about half of them in Singapore. Our strategy is to spread innovation across the corporate sector, enhance incentives for enterprises small and big to do R&D and push for greater commercialisation of research generated in our institutions of higher learning.

Investing in World Class R&D Capabilities

We will increase our overall research spending to $7.5 billion per annum by 2010, or 3% of the GDP, with one-third of this being publicly funded research. Through the National Research Foundation (NRF), A*STAR and our academic institutions, we are developing deep capabilities in research fields which have a clear value proposition for Singapore. This year, I will top up the National Research Fund by $800 million, bringing it to a total of $1.8 billion.

Top international scientists are coming here because they see Singapore as a place where high impact research can be done. But we are also attracting and nurturing young, up and coming researchers. Just two weeks ago, the NRF awarded research fellowships to 10 outstanding young researchers from eight different countries to conduct cutting edge research in Singapore. Four of them had studied in Singapore or have been teaching at our universities. One of them was Dr Yeo Yee Chia, who at age 36, has been granted some 150 patents. The NRF fellowship will allow Dr Yeo to lead research efforts on advanced transistor technology, an area that could create new advantages for Singapore’s semiconductor industry.

Pushing for Commercialisation of Research

Having the facilities and talent for top-class research is not enough, however. As our research entities develop our R&D capabilities, we will also do more to create value out of R&D so that we benefit our enterprises and our economy over the long term. We will facilitate incubation of early-stage ideas that are developed in our universities and research institutions, and partner with venture capital funds to help the institutions spin off companies.

Polytechnics and ITEs too will be encouraged to commercialise their innovations. MOE has established an Innovation Fund of $10 million to help seed their ideas and products, and to bring their innovations to the point that could attract industry funding.

The push to create knowledge in our universities and polytechnics and to find ways to commercialise it will over time benefit many enterprises, and in many ways. We already have several examples, including in traditional industries. Like Lee Hwa Jewellery, a company founded over 30 years ago by Mdm Tan Su Lan. Lee Hwa created something entirely new, 'purple gold' jewellery. Not many people know this, but purple gold has something to do with Singapore Polytechnic. The technology was first developed by Dr Loh Peng Chum, who was then at Singapore Polytechnic. He took it to Lee Hwa, which then spent a few million dollars to perfect the technology. Purple gold is now sold in several cities around the world, from London and Dubai, to Tokyo and Seoul.

Incentivising Enterprise and Innovation

We will help all our companies move up the innovation ladder. Last year's Budget enhanced our tax competitiveness for all businesses. We made Singapore one of the lowest tax locations in the world to start and grow an enterprise. In this year's Budget, we will make Singapore one of the most competitive places for companies, big and small, to do R&D.

Firstly, I will increase the tax deductions allowed for R&D done in Singapore from 100% to 150%. This enhanced deduction means that for every $100,000 of local R&D spending, a company will be able to deduct $150,000 from its taxable income. I will also lift the requirement that the R&D done in Singapore must be related to a company's existing business, so as to allow it to qualify for the deduction even if it is doing research in new areas unrelated to its current activity.

Secondly, I will introduce a new broad-based tax allowance which will provide a further push for innovation amongst companies in Singapore, and especially the SMEs. Companies will be granted R&D tax allowances each year, up to an amount of 50% of the first $300,000 of their chargeable income. This allowance can be used to defray incremental expenditure on R&D done in Singapore in subsequent years. This will provide additional resources for SMEs to invest in innovation, whatever their field of business. It is extra funds that they will lose if they do not use them for R&D.

Thirdly, I will also introduce an incentive to help our high-tech start-ups. Turning R&D into marketable products usually takes time, during which the new company may have no taxable income. Currently, they carry forward their losses for tax purpose. The new incentive, called R&D Incentive for Start-Up Enterprises (or RISE), will allow them to convert immediately these losses into a cash grant of up to about $20,000. They will get this as long as they incur at least $150,000 during the year for doing R&D in Singapore. This scheme will be available for enterprises in their first three years of assessment. As with the other incentives I have mentioned, we will review the scheme after five years.

The three schemes will provide a significant incentive for all companies, small and big, to do R&D. Start-ups which have not yet turned a profit, will benefit from reduced costs when they do R&D. A small company that is around the 80th percentile of taxpaying companies, and which spends an additional $150,000 on R&D, would find its effective tax rate being reduced from around 9% currently, to almost zero. For a medium-sized company, around the 90th percentile of our taxpaying companies, its effective tax rate will come down from about 15% to 10%. The three schemes together will cost about $250 million a year.

Details of these R&D initiatives are at Annex B-2*.

Catalysing Innovation in Public Services

The public sector itself will be more active in innovation. A new Public Service Innovation Framework will serve to promote public-private collaborations that will bring about breakthrough public services.

The Government will set aside $90 million over three years as a seed fund for experimentation, test-bedding and building capabilities. Each Ministry will have a Chief Innovation Officer to drive and coordinate this process. The Public Service is always looking for solutions to problems, big and small, that innovative enterprises could participate in. Private companies with new ideas for technologies and services can offer them for joint development prior to the procurement stage.

Some examples are well known, like how our companies have taken advantage of NEWater and TradeXchange to develop whole new capabilities, grow and expand overseas. There are other lesser known examples. One of them is Cadi Scientific, founded by four Singaporeans, just five years ago. They approached Singapore General Hospital with a prototype device and offered to work together with the hospital to develop a thermal sensor that could automatically transmit body temperature readings wirelessly to a central system. It freed up time for the nurses, and also meant that patients need not be disturbed from their rest.

Today, their device has been developed further, into a system that measures many vital signs - blood pressure, respiratory rate and so on - known as SmartSense. SmartSense has been adopted by Tan Tock Seng Hospital, and is now being trialled in hospitals in Thailand and Taiwan.

We are stepping up our focus on R&D and innovation on all fronts, through our universities and public sector institutions, by incentivising R&D in our enterprises including SMEs and start-ups, and through closer interaction between the public sector and private enterprises. We cannot expect quick results from the investments we are making today and the incentives we are providing. We may have to do more in future years. But what we do now to make innovation more pervasive in the economy, and to grow new enterprises that are driven by R&D, will eventually pay off.

We have to keep our business costs competitive, and not let them run ahead of the cities we are competing with.

Office Space Constraints

In the short term, we face tightness in office space capacity, caused by the surge in business growth, especially in the business and financial sector. Office rentals have risen sharply. Although office space still costs 30% to 50% less in Singapore on average, compared to Hong Kong and Tokyo, the pace of cost increases has been rapid and unsettling for businesses.

The tightness in office space should ease over the medium term, with the completion of major projects currently under construction, such as Phases 1 and 2 of the Marina Bay Financial Centre, the Marina View sites and South Beach. By 2012, we will have an additional 1.4 million sq m of office space.

But we are addressing the short term problem. The Government has released 15 transitional office sites and vacant state properties, which will yield 150,000 sq m of additional office space. Companies are already relocating to some of these sites, and to our new regional centres.

Further, the Government has decided to relocate several agencies out of the Central Area. We will now free up 20,000 sqm or more by first quarter 2009 for use by the private sector. This is equivalent to twenty floors or more of an Office Tower Block in Suntec City.

Construction costs are another short term problem. The combination of higher raw material prices and work on major new projects such as the two integrated resorts and petrochemical complexes has caused costs to spike up. To ease the pressure, the Government has earlier announced the deferment of some $2 billion worth of Government projects. We have now decided to defer another close to $1 billion of projects. This deferment will only affect projects which are less urgent. Key investments such as the expressways, the Downtown Line and the NUS University Town will not be affected.

Tax Competitiveness

We will continue to keep our taxes competitive so as to provide every incentive for work and enterprise, and generate economic growth for the future.

With our 18% Corporate Tax rate - we brought it down last year by 2% - and the enhancements we have made to our Partial Tax Exemption scheme last year, our corporate tax regime is competitive. The R&D incentives I have announced will provide further reductions in effective tax rates for companies over time. I will make additional refinements this year to give a further boost to entrepreneurial companies and SMEs.

Start-Up Tax Exemption Scheme

First, I will liberalise our start-up tax exemption scheme. Currently, all shareholders must be individuals before the company is eligible for the scheme. This is too restrictive. I will therefore allow the tax exemption for start-ups as long as there is at least one individual shareholder with at least a 10% shareholding.

Equity Remuneration Incentive Scheme

Many companies are seeking to use equity-based remuneration to attract and retain talent. Several years after the dotcom bubble, equity in the form of stock options or share awards remains a relevant tool for young and fast-growing companies.

There are currently two tiers of tax incentives for equity-based remuneration - one for employees of SMEs and another for those in larger companies. Some of our larger companies would like to use equity remuneration for key employees to encourage them to take risks and grow the company. However, they are currently restricted from doing so as the existing incentive requires them to offer share awards or stock options to at least 50% of their employees. So it has not been very practical for companies, especially our large companies. I have decided to adjust this condition so that they are only required to issue stock options or shares awards to at least 25% of the company's employees.

I will also introduce a new and more attractive tier for start-up companies besides the two current tiers targeted at SMEs and larger companies. As the risks involved in start-ups are naturally higher, it is reasonable to grant their employees a larger exemption from personal income tax on the gains they make on their stock options or share awards.

Fixtures and Fittings Incentive

A regular bugbear concerns the expenses that companies incur on fixtures, fittings and installations in their premises. Some renovation expenses are currently not eligible for capital allowances. Typically, if the fixture or furniture is movable, it qualifies; if it is not movable or does not look movable, it does not qualify. For example, if a restaurant wants its bar counter to qualify for capital allowances, the surest way is to put it on wheels. I have decided to introduce a new incentive to help businesses, and especially SMEs, keep their costs down. Businesses will be granted a special allowance for the costs of fixtures, fittings and installations incurred, to be written down over three years. The allowance will be limited to expenses of $150,000 every three years. This new allowance will be particularly helpful for SMEs in the services industries. Whether it is a fashion or F&B outlet, the upgrading they make to the interior design of their premises is integral to the experience they offer to their customers. So we should allow this to be deducted. Overall, this measure will save our businesses about $130 million a year in tax. The cap at $150,000 of expenses is essential because, if we allowed all businesses to deduct all expenses involved in renovating their premises, we would face significant revenue loss.

Promoting New Financial Activities

Singapore's financial centre has seen good growth and has significant new opportunities ahead, particularly in Asian markets. Islamic finance is a promising area and we will ensure that Singapore's financial markets are conducive for its growth. To encourage more Shariah-compliant financial activities to be done out of Singapore, I will introduce a 5% concessionary tax rate for income derived from qualifying Shariah-compliant activities, specifically in the areas of lending, fund management, insurance and reinsurance. I will also extend the tax exemption currently granted to non-residents and resident individuals on income from Qualifying Debt Securities to all investors of qualifying sukuks (Islamic bonds), including resident non-individual investors.

To strengthen Singapore as a wealth management hub, I will introduce a tax incentive scheme for family-owned investment holding companies. The scheme will allow these companies to enjoy the same scope of exemptions that individuals currently enjoy on Singapore and foreign-sourced investment income.

To further develop Singapore as a premier insurance centre, I will introduce a tax incentive scheme for licensed insurance and reinsurance brokers. They will be taxed at a concessionary rate of 10% on the income they derive from offering insurance broking and advisory services to offshore clients.

I will also enhance other financial sector tax incentives comprising those related to project finance, Qualifying Debt Securities and asset securitisation transactions, as well as extend the Financial Sector Incentive scheme for another five years.

Developing the Maritime Hub

To deepen our maritime financing capabilities and to tap on new business opportunities created by the buoyant shipping market, I have decided to provide a concessionary tax rate of 5% or 10% on income from leasing of containers under the Maritime Finance Incentive. I will also allow partners to enjoy the incentive.

Tax Credit for Foreign-Sourced Income

We will also make other specific tax changes. To eliminate the possibility of double taxation for our companies that venture abroad, I will extend unilateral tax credit to all foreign-sourced income that they earn in countries with which Singapore does not yet have an Avoidance of Double Taxation Agreement.

Overseas Talent Recruitment Scheme and Not-Ordinarily-Resident Scheme

To help businesses continue to attract talent from around the world, I will extend the Further Tax Deduction scheme, which allows for further tax deduction for relocation and recruitment expenses for another five years till 2013. I will also refine the Not-Ordinarily-Resident scheme, which is relevant to individuals with regional work responsibilities, so that it covers not only salary but also benefits in kind.

Details on these tax changes are at Annex B-3*.

Estate Duty

I mentioned last year that we would review Estate Duty, and we have done so. We collect about $75 million per year on average from estate duty.

We inherited estate duty from the British. The rates we originally had were high - until 1984, the top rate was 60%. (Today’s inheritance tax in the UK is in fact still 40%.) Our current rates are much lower; 5% for the first $12 million of dutiable assets and 10% thereafter.

Estate duty is a means to rebalance opportunities with each new generation and prevent wealth from being concentrated in fewer and fewer hands over time. It was especially relevant at the time when the bulk of wealth comprised land that was passed down through the family. Today, however, wealth is being created in many more ways and by a wider group of entrepreneurs, many of whom start off with little.

Wealth is also being managed today on a global basis. Proponents of removing estate duty have therefore argued that removing it would encourage wealthy individuals from all over Asia to bring their assets into Singapore, thus supporting the growth of the wealth management industry. Ordinary Singaporeans have also argued that having worked, paid taxes on their income and property, and built up their savings, they want to be able to pass it on to their families. Some are in fact liable for Estate Duty when their estates receive large life insurance payouts.

The current low exemption limit for non-residential assets, set at $600,000, compared to the higher limit of $9 million for residential properties in fact tends to affect our middle and upper-middle-income estates disproportionately compared to wealthier ones. We have considered raising the $600,000 limit for non-residential assets so as to correct for this. However, this would further shrink what is already a narrow tax base and render the tax less effective.

I have therefore decided to remove Estate Duty from our tax regime, with effect from deaths from today. It is not just a practical or expedient measure, but one that on balance will be in our collective interest. If we make Singapore an attractive place for wealth to be invested and built up, whether by Singaporeans or foreigners who bring their assets here, it will benefit our whole economy and society, not just the individuals who build up their wealth. It is not a zero sum game.

I would however encourage individuals who have accumulated wealth to think of how they can use it to make a contribution to society, and make full use of the enhanced incentives we introduced last year to promote philanthropy. This will benefit our schools, universities and hospitals, and the growing range of charitable causes in Singapore.

With the removal of Estate Duty, our remaining tax on wealth would be the tax on property. We should retain this tax. It is an efficient tax, set at a low rate in relation to the full value of the property, especially for owner-occupied homes. You cannot tax-plan it away. It also does not affect our middle and upper-middle-income estates disproportionately compared to wealthier ones. This is why most countries have some form of tax on property – including even Hong Kong, which like us does not have capital gains tax and has already done away with Estate Duty. Only Ireland does not have a tax on residential property, but the Irish have capital gains tax, inheritance tax and gift tax.

Details on Estate Duty are at Annex B-4*.

Personal Income Tax

For most taxpayers, Singapore's personal income tax regime is already one of the most competitive in the world, because our marginal tax rate schedule is highly progressive. We will not be making any further move on personal income tax rates this year. But we will continue to watch this and ensure that we are always able to attract and keep talent in Singapore, including those at the top end. After we amend the Constitution to revise the framework for drawing investment income from our reserves, we will reassess our options on corporate and personal income tax and lower rates further should it become necessary.

As the Government had a strong surplus last year, however, we will give something back to taxpayers this year. I will give an income tax rebate of 20% for all resident taxpayers for Year of Assessment 2008. The rebate will be capped at $2,000. Having this cap allows us to target the rebate at those below the top income brackets. The income tax rebates will cost the Government $380 million.

Miscellaneous Tax Changes

Last year, I announced that we would progressively move towards taxing liquors on the basis of alcoholic content, rather than on the basis of volume. We are now already taxing many liquors, including beer and stout, on the basis of their alcoholic strength. However, other liquors like wine, whisky and brandy are still taxed based on volume. With effect from today, all alcoholic beverages will be taxed on the basis of their alcoholic content. Most liquors will see a slight reduction in duty rates. The rationalisation of the duty rates will be broadly revenue neutral.

Having covered liquor, I now move to driving. The Government has already announced the reductions in the Additional Registration Fee of vehicles and the 15% cut in road taxes that will accompany the expansion of the Electronic Road Pricing system.

We will also introduce changes to the tax levied on private diesel cars. The current special tax on private diesel cars is too punitive, and explains why we only have one such car on the road today. I am informed that there are another two on Pulau Ubin, but they do not pay special tax on Pulau Ubin. The changes will narrow the difference in the cost of fuel consumption that a motorist faces, between a Euro-IV car and a petrol car.

Details of the special tax and liquor duties are at Annex B-5*.

With the Speaker's permission, I will continue later with the changes we will make to build a resilient community.

*Cols. 437-498.

Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 4.55 pm.

Sitting accordingly suspended

at 4.35 pm until 4.55 pm.

Sitting resumed at 4.55 pm

As we develop as a global city, we must build up our resilience as a community and help every Singaporean make the best of the opportunities that will come. Our big advantage is that our economy is growing, we are attracting investments, and more jobs are being created. Our education system provides opportunities for all to develop their potential. All Singaporeans therefore have the chance to further their learning, to upgrade themselves, to earn a good living, and to provide for their families.

This desire to learn, work and do well and look after our families has been, and must remain, the foundation for our success. We will only have a resilient community if each of us strives to be self-reliant.

However, even as our economy grows and does well, we have to address two key challenges that we face together as a community. First, we must help our lower-income workers cope with the continued pressures on their wages in a globalised world. This is a collective challenge, not just a challenge for the individuals concerned. Second, we have to help Singaporeans save more for their retirement and prepare for healthcare needs that come with ageing, so that they can look forward to the happy prospect of longer lives.

Last year, we made significant moves to address these challenges. The new Workfare Income Supplement scheme is a major social intervention, using public resources to boost the incomes of those at the lower end of the wage ladder. We also reduced both the employer and employee CPF contribution rates for our lower-income workers, to help them stay employed and increase their take-home pay.

We made further changes to the CPF system last year to enable Singaporeans to save more for retirement. Singaporeans can now expect to receive higher interest rates on their CPF savings, especially those with smaller balances. We also committed to providing the older cohorts of CPF members with bonuses, the V- and D-bonuses, for deferring the draw-down of their savings.

I will outline, in the next part of the speech, further measures that the Government will take to help Singaporeans prepare for old age as well as measures to help the most needy and vulnerable in our society. I will also set out measures by which we will share part of the surpluses from last year with Singaporeans.

This year, we are moving on four further initiatives to help ensure adequate savings for retirement.

Voluntary Savings

Firstly, we will encourage Singaporeans to voluntarily put aside more savings whenever they can. We will make it easier for Singaporeans to top up CPF accounts for themselves and their family members in order to meet the Minimum Sum, and we will provide more tax incentives for them to do so.

The Ministry of Manpower will now allow members below 55 to top up their CPF savings up to the Minimum Sum. Further, employers will now be allowed to make top-ups to their employees’ Minimum Sum.

To encourage this topping-up of CPF accounts, I will broaden the tax reliefs currently available. Today, there is a single $7,000 tax relief available for qualifying Minimum Sum top-ups either for oneself or for one's family members, provided the beneficiary is 55 and above. I will allow two separate tax reliefs - up to $7,000 for top-ups by the member or his employer to his own Minimum Sum, and up to another $7,000 for top-ups to other family members' Minimum Sum. Both reliefs will apply regardless of the age of the recipient when the top-ups are made. We therefore have a single $7,000 relief that is now being changed to two $7,000 reliefs, for top-ups to the member himself and to his family members respectively. Employers will also enjoy a full tax deduction for top-ups to their employees’ accounts.

To encourage savings to meet medical needs, I will also provide tax relief for voluntary contributions that CPF members specifically direct to the Medisave Account. This will help more CPF members meet the Medisave Minimum Sum.

The Supplementary Retirement Scheme (SRS) provides a tax incentive for Singaporeans as well as foreigners to save for retirement outside of the CPF system. Today, only employees are allowed to contribute to the SRS. To enable employers to play a part towards the retirement savings of their employees, we will allow them to directly contribute to the SRS on behalf of their employees. This will provide an inexpensive method for employers to provide retirement benefits without the need to set up company pension funds, which may have high overheads. With more Singaporeans now working beyond the retirement age, we will also remove the age limit on contributions to the SRS.

LIFE Bonus

As Minister Ng Eng Hen has recently stated, the Government has accepted the recommendations of the National Longevity Insurance Committee on the CPF LIFE scheme. It puts in place a major new plank to ensure Singaporeans a stream of income for as long as they live.

From 2013, CPF members will join CPF LIFE automatically when they turn 55 as long as they have at least $40,000 in their Minimum Sum. The first cohort to do this will be those aged 50 this year, or 55 in 2013. We also want to encourage those with less than $40,000 as well as members who are older than 50 this year to join the scheme when they turn 55.

We have decided to provide a special bonus to the first few cohorts of CPF members who will participate in CPF LIFE. These older cohorts generally earned less over their working years compared to what younger Singaporeans currently have and can look forward to. By the time these older cohorts join CPF LIFE, they would also have had less time to benefit from the extra 1% interest that CPF members now receive on the first $60,000 of their CPF balances. Further, younger cohorts will also be able to benefit from more years under the WIS scheme, which provides significant top-ups into their CPF accounts, plus cash payments.

The Government will provide a sign-on bonus for the first five cohorts of CPF members who join CPF LIFE, in other words, those aged 46 to 50 this year. We call this the LIFE Bonus, or the L-Bonus. It will be given to members when they enrol in the scheme at age 55.

The L-Bonus is targeted at the lower and middle-income CPF members. It will be given to members whose annual income when they sign on to the LIFE scheme is $54,000 or less, and whose annual assessed property value is $11,000 or less, which will include all HDB flats. These make up about 80% of the cohort aged 50 today, including those whose Minimum Sums are too low for them to be automatically enrolled in the LIFE scheme.

The amount of the L-Bonus will vary such that older and less well-off members will receive more. For members aged 50 this year, they can expect to receive between $2,200 and $4,000. A 50-year-old who lives in a five-room flat and earns between $24,000 and $54,000, in other words, a middle-income 50-year-old, will receive $2,200. However, a 50-year-old who lives in a three-room flat and earns less than $24,000 annually will receive $4,000 when he joins the LIFE scheme. If he has $40,000 in his Minimum Sum, $4,000 amounts to 10% of his retirement savings.

The youngest eligible cohort, those aged 46 today, will get around 30% of what the 50-year-olds receive.

Table 2 - Structure of L-Bonus for those 55 and older in 2013

$4,000

$3,200

$3,200

$2,200

Prof. Lim Pin's committee had recommended that the Government provide a one-off incentive to facilitate greater participation and opt-in by members who are not automatically included in the scheme. The Government agrees with the committee’s recommendation and will extend the L-Bonus to this group of members.

Therefore, if members have less than $40,000 in their Minimum Sum, but want to participate in the LIFE scheme, we will help them to do so and give them the L-Bonus as long as they are willing to make a reasonable contribution to their balances and accept lower monthly payouts. This is particularly important for many of the women, who may have been housewives or stopped working early and do not have enough in their accounts. The L-Bonus will encourage their husbands or other family members to top up their accounts so that they can join the scheme.

We will also extend the L-Bonus to older members above the age of 50 this year who choose to opt into the scheme. They can opt in when they reach 55. But if they have already passed 55 when the scheme is introduced, they will have to opt in within a year from that time. All these older members who choose to opt in will receive the same amount of L-Bonuses as those aged 50 this year.

The Government will set aside $770 million over three years for the L-Bonuses, including $260 million out of this year's budget.

Details on L-Bonus are at Annex C*.

We are investing heavily in healthcare. The Government is spending $900 million over the next five years to upgrade and expand facilities at NUH, SGH, and the National Heart Centre, and to build the new Khoo Teck Puat Hospital in Yishun. We will also spend another $1 billion over the next five years to recruit and train more healthcare professionals, including not only doctors, but also pharmacists, physiotherapists and other allied health professionals in the public sector. This is on top of the additional 40% more nurses that we had previously committed to bring into the public sector. It will mean more well-qualified staff to take care of each patient - more nurses, more allied health professionals of various specialisations.

But as we spend more on healthcare, we must ensure that our commitment can be sustained not just for a few years, but over the long term. Means-testing has had a thorough debate over the past several weeks. It is the only realistic way to ensure that high quality healthcare can be delivered to all, including lower-income patients, without placing an unsustainable burden on taxpayers as a whole. Minister Khaw Boon Wan has assured Singaporeans that he is sensitive to the concerns of the middle-income group, who will continue to be subsidised at Class C and B2 wards, though at a reduced rate as compared to the low-income patients.

To protect retirement savings from being depleted by heavy expenses due to catastrophic illnesses, we must also ensure that our people are adequately covered by medical insurance.

MOH will be enhancing MediShield to provide better coverage for patients with large hospital bills, with some adjustment to MediShield premiums in tandem with this. To help older Singaporeans pay for their medical bills and their increased MediShield premiums, we will top up the Medisave accounts of all those aged 51 and above by up to $450 this year. This will cost the Government $220 million.

Table 3 -Structure of Medisave Top-ups

$150

$250

$350

$450

*Cols. 507-508.

To encourage employers to provide portable medical benefits through Medisave and MediShield, we will also relax the criteria for them to enjoy tax deductions up to the higher cap of 2% of their wage bill. Beyond regular Medisave contributions, employers will now be allowed tax deductions up to the higher cap if they make ad-hoc contributions to their employees' Medisave accounts, or if they purchase MediShield or Medisave-approved private integrated plans for their employees. Details of this are in Annex B-6*.

We are also setting aside more funds to help the elderly and needy. The ElderCare Fund is already being fully utilised to support older Singaporeans who need long-term care in nursing homes and other step-down care facilities. We will top up the ElderCare Fund by $400 million this year, bringing its size to $1.5 billion. Medifund, which supports the needy, is also being well utilised. We will top it up by $200 million this year, bringing the fund size to $1.6 billion.

We will continue to refine the safety nets to help the most vulnerable in the community. We have to do this in a calibrated fashion because the last thing we should do is to weaken the incentive for individuals to find a job and stay in one, or undermine the responsibility that family members have towards each other. These twin values have underpinned our programmes for social assistance and will continue to do so.

The Public Assistance (PA) Scheme applies to needy Singaporeans who are unable to work and have no other means of support. In addition to their PA allowance, they are given a PA card which makes them eligible for free healthcare and many other subsidies, as well as extensive community support. Last year, we raised the monthly PA rates to $290.

Many, including our MPs, have asked that the PA rates be reviewed again. MCYS has done so. Following this review, the Government has decided to increase the monthly PA rate for a single-person household further to $330. This will give households on Public Assistance more assurance that they can meet their basic needs. Minister Vivian Balakrishnan will provide more details in the MCYS COS, including other changes to the Public Assistance Scheme.

I will also top up the ComCare Fund by $200 million this year, bringing it to $800 million. This will support our efforts to help the needy to obtain jobs, look after their children’s needs and integrate into the community.

2007 was a good year for Singapore. Our fiscal position is strong. We can therefore afford to share some of the budget surplus with Singaporeans. I will distribute the surplus to all Singaporeans, but with particular focus on the lower and middle-income groups and older Singaporeans. Their needs are greater, and they are more affected than better-off Singaporeans in the current climate of rising prices.

I had earlier in the speech announced top-ups to the Post-Secondary Education Accounts and Medisave accounts, as well as Personal Income Tax rebates, as part of this surplus sharing exercise.

I have also decided to give Growth Dividends to all adult Singaporeans, to be paid out in two instalments in April and October this year. Those who have already signed up for their GST Credits will automatically receive their Growth Dividends.

We will give the needy more, using the same framework that has been used for GST Credits. A lower-income Singaporean living in a three-room HDB flat or smaller will receive a Growth Dividend of $400. This is on top of the $250 in GST Credits that he will be getting this year. The majority of Singaporeans, who live in other HDB flats and do not have high incomes, will receive a Growth Dividend of $300, which will be on top of $200 in GST Credits that he will get this year. This is the same framework that we used for the GST Credits - looking at the Annual Value of the home and Annual Income of the individual to determine how much credits he gets.

I will give older Singaporeans, those aged 60 and above, more. Most older Singaporeans will receive one-and-a-half times what other Singaporeans will receive.

As with the GST Credits, we will include everyone. Those with Annual Incomes more than $100,000 will receive a Growth Dividend of $100.

Table 4 - Growth Dividends

(1-3R HDB flats)

(4R, 5R HDB flats, exec flats and some less expensive private properties)

(more expensive private properties)

*Cols. 499-506.

As before, we will provide the option for Singaporeans to donate their Growth Dividends to charity, so that those who wish to can conveniently contribute to a cause of their choice.

We will give an additional dividend to those who have served and are currently serving national service. NSmen, ex-NSmen and NSFs including those below 21, will get an additional $100 of Growth Dividends, to recognise their contributions to our nation.

The Growth Dividends will cost the Government $865 million this year.

For Government pensioners, the Government has decided to increase the Singapore Allowance further by $20 per month, and raise the gross pension ceiling from $1,150 to $1,170. This will give an additional $3 million a year to pensioners residing in Singapore.

There are some families who may need additional support, in meeting rising costs, beyond the significant sums they would receive in the GST Offset Package and the Growth Dividends that we are providing this year, as well as beyond the existing Government assistance schemes. Last year, as part of the GST Offset Package, we provided CCCs, self-help groups and VWOs with extra funds to help needy families. We gave these groups $10 million over five years. This year, we will give these groups an additional $10 million. This would give them an extra $20 million on top of regular funding over the five-year period. They are best placed to decide on which families need additional assistance. Over the last year alone, about 8,000 low-income families have been helped by the CCC ComCare Fund.

Taking together all the measures in this year's surplus sharing package, a retiree household in a two-room flat will receive $2,100, comprising their Growth Dividends and Medisave Top-ups. This is on top of the $1,300 that they will also be receiving this year as part of the GST Offset Package introduced last year.

Take a middle-income family living in a five-room flat, which is also typically a larger family. Two working parents with two children, one in primary school and one in secondary school, and one grandparent. They will receive a total of $2,500. $1,150 in Growth Dividends, $900 in PSEA top-ups, $450 Medisave top-up. This $2,500 is on top of the $1,900 that they will also be receiving this year as part of last year's GST Offset Package.

Overall, the rebates and dividends are weighted towards middle and lower-income households. Higher-income households will receive more in absolute dollars, because of the rebate on the higher personal income taxes that they are paying. However, lower and middle-income households will get more as a percentage of their incomes from the 2008 surplus sharing exercise. This is even more so if we include what they will receive this year as part of the GST Offset Package that was introduced last year and the WIS. When you put the two together - what they will receive this year in benefits from last year’s package plus this year's package - it will be a very substantial proportion of incomes at the lower end. The distribution is also highly progressive.

In total, we will be giving out $1.8 billion worth of benefits to Singaporeans as part of this surplus sharing package. This is our approach. When we have higher than expected economic growth and strong surpluses, we will share the benefits with Singaporeans while setting aside sufficient resources to meet future needs and challenges.

Mr Speaker, Sir, let me now summarise the FY2008 budget position. Before taking into account Net Investment Income Contributions, Special Transfers and the tax changes introduced in this year's Budget, we expect a surplus of $3.2 billion for FY2008. The various tax changes I have introduced will reduce FY2008 operating revenue by $0.5 billion. Further, the special transfers and tax rebates provided as part of the surplus sharing package this year, as well as the special transfers for FY2008 that were committed in the GST Offset Package last year, will cost an additional $2.8 billion. Together, these tax and transfer initiatives will bring the budget balance down to close to zero.

This is before adding Net Investment Income Contributions to our revenues, and setting aside funds to top up our various endowment funds and the National Research Fund, as well as the provisions we are making for other long-term needs such as V- and D-Bonuses and the L-Bonus. The net effect of these additions is to bring the Overall Budget Balance for FY2008 to a deficit of $0.8 billion.

The Government will not need to draw on past reserves as the deficit can be fully financed by funds accumulated since the new Government took office in May 2006. Details of the revised fiscal positions for FY2007 and FY2008 can be found in Annex D*.

Mr Speaker, Sir, this year’s Budget takes place amidst a time of increasing uncertainty in the global economy. Around the world, growth is slowing and inflation is picking up, especially for food prices. It is a concern for us all in Singapore.

We are able to deal with the immediate problems and weather any short-term difficulties that Singapore might face. This is because our fundamentals are strong, we continue to attract major new investments, and we expect employment to remain high. Our low-income households in particular are seeing more members getting jobs.

This Budget is about developing the capabilities of our people and enterprises, so that we stay in the top league of global cities for years to come. The Budget is also about our social resilience - holding together as a community, and providing assurance for Singaporeans as we age.

This Budget will enhance the breadth of opportunities available for Singaporeans to discover and stretch their potential, from young and right through their lives. Our schools are unique in the extent of social mobility that they make possible, in each new generation, providing every child the best chance to do well and move up. Take Mumtaz d/o Mohamed Yusoff, 17 this year. She lives with her mother, who is the family's sole breadwinner, and two older brothers in a one-room flat. She receives financial assistance from MOE. In last year's GCE 'O' Level exams, Mumtaz scored distinctions in all her nine subjects. On top of that, she was also given the Tanjong Katong Girls' School's Outstanding Service Award 2007, for being a role-model of leadership through service to others. Mumtaz is now at Meridian Junior College, where she continues to strive to do well, and to aspire, knowing that family circumstance will never hold her back.

We are enhancing the bursaries for lower and middle-income students at our polytechnics and universities, to give them further assurance that they can advance their learning to the full, without having to incur excessive financial burdens at the start of their working careers. We are also investing in a whole range of continuing education opportunities, from certificates to diplomas to degrees, to encourage Singaporeans to keep upgrading and re-skilling once they are in the workforce.

This Budget seeks to make innovation pervasive in our economy. In every industry, we have to raise our game, and differentiate ourselves in quality and value. Chew's Agriculture, a local farm, has been experimenting with "designer eggs" over the last decade. They produce eggs enriched with Omega-3 and Vitamin E, and now the latest - eggs enriched with cordyceps (often cited for properties similar to ginseng). Together with home-grown biotech firm, AP Nutripharm, they created "cordyceps eggs" by raising chickens on specially formulated feed. I hesitated to raise the example at this time because these are not the cheapest eggs in the market. But I am told that with the price of cordyceps having increased sixfold in the past six years, the eggs represent excellent value for those who believe in its many stated benefits.

The Budget provides more favourable tax treatment for our SMEs and further encourages wealth creation. After we have amended the Constitutional framework for drawing Investment Income from our reserves, we will be able to consider further improvements to our competitiveness. We are finalising the details, and will present a Constitutional Amendment Bill to Parliament later this year.

The Government has taken major steps to help lower-income households benefit from our economic progress. This is why we introduced Workfare, and why we have made major changes to the CPF system, including the higher interest rates that benefit those with smaller balances. This year's Budget provides special support for the older Singaporeans, who will be among the first to join the CPF LIFE scheme, including those who are not automatically included as they have limited CPF monies but who want to participate in LIFE.

We have also focused on the needs of the lower-income group especially, when we are able to distribute surpluses. Last year's GST Offset Package which Singaporeans will continue to receive this year and over the next two years, plus this Budget's surplus sharing package, provides a significant boost to their incomes. Both these exercises also give the middle-income group support at a time when they too face higher costs of living.

Whether we succeed as an economy, and whether we remain a resilient society, however, will not depend on how much we hand out, how much we top-up each year, or how large the bonuses are. We will ultimately succeed and remain a country that all Singaporeans feel proud of, if we continue to be a place where every Singaporean can aspire, where there is opportunity to develop every skill and talent, and where everyone does his utmost to do better and surprise with his abilities. That is how together, we will stay ahead, keep amazing the world and achieve a better quality of life for all Singaporeans.

Mr Speaker, Sir, I beg to move. [Applause.]

*Cols. 509-512.

The Question is, "That Parliament approves the financial policy of the Government for the financial year 1st April 2008 to 31st March 2009." In accordance with paragraph (1) of Standing Order No. 89, the debate now stands adjourned.

As by Resolution of the House this afternoon, the debate shall resume on Monday, 25th February 2008.

Resolved,

"That Parliament do now adjourn to Monday, 25th February, 2008." - [Mr Mah Bow Tan].

Adjourned accordingly at

Half-past Five o'clock pm

to Monday, 25th February 2008.

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

asked the Minister for Manpower what is the basis for not allowing CPF members to use their CPF savings to pay for their part-time courses and postgraduate courses.

With our rapidly ageing population and corresponding increase in retirement and healthcare needs, the priority must be to ensure that members have enough CPF savings for their old age. Because of the smaller size of families, many CPF members would have to be self-sufficient for their retirement needs.

The CPF Education Scheme was a concession introduced in 1989. Its usage was deliberately limited to only full-time local tertiary education courses at approved publicly funded tertiary institutions. We should not extend the use of CPF for other purposes. This will reduce retirement savings and go against our primary efforts in enhancing retirement adequacy.

asked the Minister for Transport in light of the recent land transport review (a) whether the Ministry has reviewed on the effectiveness of Light Rail Transit (LRT) as a mode of public transport and, in particular, if it has served the commuter needs well so far; and (b) whether there are any plans to make up for the shortcomings of the existing LRT system, if any.

The LRT system is intended to provide commuters with an alternative feeder service from major transport nodes such as MRT stations and bus interchanges to their estates. Compared to buses, the LRT is a more efficient form of transport in densely populated towns or areas with high activity levels. The train is also more reliable in its time schedules, and unlike buses, is not subject to delays from congestion on the road.

Currently, we have three LRT systems each serving Bukit Panjang, Sengkang and Punggol, with a service availability of more than 99.5%. The Bukit Panjang LRT was put in place in a built-up HDB town as a feeder system to the MRT network. As for the relatively newer Sengkang and Punggol LRTs, they are integrated with the developments of the towns to enhance their convenience and accessibility to the residents.

One feedback on the LRT is that the stations are spaced relatively further apart than bus stops. In determining where LRT stations are located, LTA takes into consideration the need to maximise accessibility and connectivity for residents in the estates while making sure that the entire system operates optimally and resources are used efficiently. To maximise catchment and accessibility to residents, LRT stations are located at activity centres such as neighbourhood centres where possible. An LRT system with stations too close to each other will compromise the operational speed of the system, thereby reducing its efficiency and the benefits of its services to passengers. A careful balance therefore has to be struck for each LRT system.

The LRT remains a possible transport option in densely populated towns or areas with high activity levels. LTA will continue to keep all options open when it plans the public transport network of any town. Whether it is buses, LRT or a combination of both, LTA will select the most suitable local transport system to support the town, taking into the consideration the land use and ridership in the area.

asked the Minister for Transport in view that more people are cycling for transport as well as for leisure in Singapore, what are the Ministry's plans to integrate the use of bicycles into urban transport planning as part of the land transport policy review.

We recognise that there is a growing interest in cycling, with more people cycling for recreation, or to get around the neighbourhood. Hence cycling was very much a part of the Land Transport Review.

In the review, we recognise that cycling is a transport option that can link commuters to major transport nodes such as our train stations and bus interchanges, making it easier for people to take public transport. Hence LTA will provide more and better bicycle parking facilities around MRT stations and bus interchanges in the housing estates. This initiative will be progressively implemented, starting with towns where demand for bicycle parking facilities outstrips supply. LTA will carry out a one-year pilot in 2009 in Pasir Ris, Tampines and Yishun, to gather feedback and better understand the needs of the cyclists, before extending it to other MRT stations/bus interchanges.

From March 2008, cyclists will also be allowed to carry their foldable bicycles on-board our buses and trains on a trial basis during off-peak periods. LTA will impose size restrictions and other conditions to ensure that the safety and comfort of other commuters are not compromised.

Given our land constraints, we will not be able to provide a comprehensive network of dedicated cycling tracks. Instead, we will leverage upon NParks' nation-wide Park Connectors Network to bring cyclists to transport nodes. Where there are short gaps between the park connectors and transport nodes, LTA will work with the other agencies to close these gaps.

In May 2007, the Traffic Police and LTA, together with the Tampines Grassroot Organisations, started a one-year trial to allow cycling on pedestrian footways in Tampines. The outcome of the trial and the feedback gathered will also help us to determine how best to meet the needs of cyclists and pedestrians within our land constraints.

asked the Minister for National Development (a) whether there are plans to review the mixed residential/commercial zoning in the Geylang area, in particular Lorongs 22 to 44; (b) whether there are concrete strategies to help ring-fence Geylang Lorongs 22 to 44 which are mainly residential areas; and (c) what are the KPIs and results that we can expect to see in a concerted multi-agency effort in the area.

In Master Plan 2003, the majority of the sites in the area between Lorong 22 and Lorong 44 Geylang is zoned "Residential". Many of the sites are either zoned "Residential" or "Residential/Institution", with a number of sites fronting Geylang Road zoned "Commercial". (Note: 60% of the sites in the area are zoned pure "Residential".) The URA has no intention of reviewing the land use zoning for this area. For sites zoned "Residential" in the MP03, change of use to non-residential uses, such as for public entertainment uses, would in principle not be supported. This is to retain the residential nature of these areas and helps in "ring-fencing" the area.

The "ring-fencing" of the area is also achieved through vigilant enforcement to control vice activities. The Police has and will continue to undertake regular enforcement action in both the odd and even lorongs in Geylang. The Anti-Vice Branch (AVB) conducts frequent checks at the red-light areas and regular enforcement against vice. The Police imposes stringent licensing conditions for entertainment outlets and massage establishments in the area, and also conducts regular checks on the public entertainment outlets to ensure that they operate within the licensing conditions. Although there has not been any serious problem associated with these outlets, Police will continue to monitor these outlets and would not hesitate to suspend or revoke the licence of errant operators. MHA and Police also work closely with agencies such as the Hotel Licensing Board and URA to regulate the operations and development of budget hotels and lodging houses there.

In addition, a multi-agency effort has been set up, led by Dr Fatimah Lateef, to coordinate efforts by Government agencies (such as LTA, SLA, NEA and PUB) as well as the grassroots, to improve the conditions in Geylang. New initiatives, such as enhanced street lightings and installation of CCTVs, have been implemented. The key objectives of these multi-agency efforts are three-fold. Firstly, to reduce conditions that could facilitate crime and vice through better lighting and monitoring. Secondly, to enhance the sense of security among residents by reducing the number of streetwalkers venturing into the residential areas. Thirdly, to reduce dis-amenity to residents arising from public entertainment outlets in the area.

asked the Deputy Prime Minister and Minister for Home Affairs how many cases of road hogging were there in each of the last five years.

The number of summonses issued for breaches of Rule 5 of the Road Traffic Rules in each of the last five years is set out in the table below:

Year

No. summons issued

Road hogging is proscribed under Rule 5 of the Road Traffic Rules, which states that (a) every vehicle which is moving at a slow rate of speed shall be driven as close to the left-hand side of the roadway as possible, and (b) every vehicle shall at all times be driven in such manner as not to obstruct vehicles moving at a faster speed. Breach of that Rule is an offence under section 131 of the Road Traffic Act, which attracts a maximum penalty of a $1,000 fine or three months' imprisonment for the first offence, and a $2,000 fine or six months' imprisonment for a second or subsequent offence. Where a person is convicted of the offence, four demerit points will also be awarded under the Driver Improvement Points System.

asked the Minister for National Development (a) what is the number of rental flats available under the Public Rental Scheme each year over the last 10 years; (b) what is the number of eligible applicants for public rental flats each year over the last 10 years; (c) what is the average number of public rental flat tenants per year who do not renew their leases for the last 10 years and their main reasons for not doing so; and (d) in addition to the 2,194 new rental flats announced recently, what plans does the Ministry have to address the increasing demand for public rental flats.

The number of rental flats available under the Public Rental Scheme decreased from 4,600 in 1998 to 1,070 in 2007. This is due in part to the low turnover of tenants. From 1998 to 2007, the number of flats returned to HDB dropped from 4,700 in 1998 to 1,600 in 2007. The flats were returned to HDB mainly because the tenants had purchased homeownership flats, passed away or infringed tenancy conditions.

The number of eligible applicants for public rental flats has increased from about 2,300 per year (before 2003) to 4,700 in 2007. The increase is due mainly to the raising of the income ceiling for applicants from $800 to $1,500 in 2003. There has also been an increase in the number of divorcees, elderly households and second-timer households (ie, those who have previously enjoyed housing subsidy through purchase of HDB flats) applying for rental flats in recent years.

To address the increasing demand for rental flats, HDB has adopted a two-pronged approach:

Increase Supply. HDB has earlier announced plans to provide an additional 2,200 new rental flats. It will continue to review the rental flat supply to meet the housing needs of low-income families without other housing options.

Manage demand. Even as we increase the supply of rental flats, we cannot provide a rental flat for every person who wants it. Given the heavy subsidy involved, demand for HDB rental flats will invariably exceed the supply. HDB will therefore be reviewing the Public Rental Scheme eligibility criteria to ensure that our heavily subsidised rental flats are targeted at those who are genuinely poor and without other housing options. More details will be announced when ready.

asked the Minister for Trade and Industry for each of the last 15 years up to and including 2007 (a) what was Singapore's Gross National Product; (b) what was the percentage of wages as a component of Gross Domestic Product and Gross National Product; and (c) what were the proportions of wages going to Singapore residents and non-residents respectively.

Singapore's Gross National Income (GNI)

As Gross National Product, or GNP, is essentially the net income accruing to a country from both domestic and overseas economic activities, we can also refer to it as Gross National Income or GNI. From 1993 to 2007, GNI grew at a compounded annual growth rate of 6.7%. As a result, GNI in 2007 was S$235 billion, about 2.5 times the level of S$94 billion in 1993 [Figure 1: Nominal Gross National Income, 1993-2007 - please refer to Appendix. ].

Percentage of wages as a component of Gross Domestic Product (GDP) and Gross National Income (GNI)

Wages as a component of GDP

Wages as a component of GDP has been fairly stable, averaging 43% in the period 1993-2007. Wage share of GDP tends to be slightly higher during periods of slower economic growth, for example, during 1998-2003. This is because profits tend to fall faster than wages during periods of economic slump. The wage share of GDP in 2007 was 41% [Figure 2: Compensation of Employees as a share of GDP, 1993-2007 - please refer to Appendix. ].

Wages as a component of GNI

We do not publish statistics on wages as a component of GNI [1 ] . (c) Proportion of wages going to Singapore residents and non-residents

There are no available statistics on the resident and non-resident share of wages. While data is available on the numbers of Singapore resident and non-resident workers, employee compensation is not broken down by Singapore resident and non-resident workers.

[1] "Wage share of GNI" is not a commonly published statistic. GNI is defined as GDP plus net factor income from abroad (FIFA). FIFA comprises largely investment income, the estimates of which are derived from our Surveys on Overseas Investment and other administrative data sources. In addition, there is also a wage component in FIFA, which should be taken into account if we consider a wage-to-GNI ratio. Such a ratio would be sensitive to changes in investment income to/from abroad.

asked the Minister for Defence (a) how many former civil servants are currently receiving pensions below $300 per month; and (b) what other retirement benefits are they entitled to.

As at 10th January 2008, there were 827 Civil Service resident pensioners receiving gross monthly pensions of below $300. Civil Service pensioners also receive post-retirement medical benefits. Eligible dependants of Civil Service pensioners, such as the wife of a male pensioner and children below 18 years of age, also receive medical benefits.

asked the Minister for the Environment and Water Resources (a) what is our total carbon emissions for the last three years; and (b) have our national efforts such as the promotion of recycling and energy efficient products, useful harnessing of natural gas and regular energy audits made any difference in reducing our carbon footprint.

Singapore's carbon dioxide (CO2) emissions in 2004, 2005 and 2006 were 39.6 megatonnes (Mt), 40.4Mt and 41.6Mt respectively. This accounts for less than 0.2% of global CO2 emissions. The relatively low CO2 emission growth (5% from 2004 to 2006) compared to our economic growth (15% from 2004 to 2006) came about through a conscious effort to improve our energy efficiency and switch to less carbon-intensive energy sources. As a result, our carbon intensity (CO2 emissions per dollar GDP) has improved from 0.28 kt/$m in 1990, to 0.22 kt/$m in 2004 and to 0.20 kt/$m in 2006, a 30% improvement from the 1990 level.

Energy efficiency reduces our CO2 emissions, improves our economic competitiveness and enhances our energy security. NEA has launched the "Energy Efficient Singapore" (E2 Singapore) plan to improve the energy efficiency in five key sectors: power generation, industry, buildings, transport and households. The Energy Efficiency Programme Office (E2 PO), chaired by NEA and comprising members from EMA, EDB, LTA, BCA and A*STAR, will continue to develop and refine the E2 Singapore plan.

Some measures are already in place. The proportion of electricity generated by natural gas-fired combined cycle generation technology, the most energy efficient technology currently available, grew from 19% in 2000 to 78% in 2006, leading to an estimated CO2 emission reduction of 4,700 kt [2]. As of 28th January 2008, some 87 companies have obtained grants under the Energy Efficiency Improvement Assistance Scheme which co-funds energy audits. When implemented, the recommended energy efficiency measures could lead to annual energy savings of almost 300,000 MWh (or about $23 million), and a CO2 emission reduction of 150 kt per year.

In the transport sector, the Green Vehicle Rebate (GVR) promotes cleaner and more fuel-efficient vehicles. Since the GVR was revised in December 2005, the number of hybrid and compressed natural gas vehicles registered in Singapore has increased from about 140 to more than 1,500 by end 2007. In the buildings sector, BCA introduced the Green Mark scheme in 2005 to encourage more energy efficient and environmentally friendly buildings. NEA has also introduced the Energy Smart scheme for office buildings and hotels.

To promote energy efficiency among households, mandatory energy labelling was introduced this year for household refrigerators and air-conditioners. The energy labels allow consumers to factor in the potential energy cost savings they will enjoy by buying more energy efficient appliances.

Recycling can also reduce energy consumption, CO2 emissions and landfill space needed. The recycling of aluminium and other metals can reduce energy consumption by as much as 95%, while the recycling of glass, paper, steel and plastics can reduce energy consumption by 30% to 70%. Singapore's overall recycling rate has increased over the years, to about 54% today.

In spite of these achievements, there is a need for more concerted long-term energy efficiency policies. We do not expect further significant energy intensity improvements through increased power generation efficiency or a major shift of our economy towards service industries. Market signals are sometimes too weak to promote energy saving practices even though the latter may be cost-effective over the project life cycle. This may be due to misaligned incentives and higher upfront costs. In addition, many do not realise the potential of energy efficiency and conservation. Practices such as overcooling and poorly-designed industrial facilities are still common.

As part of the E2 Singapore plan, my Ministry, together with E2 PO, will implement new measures to address these gaps. More details will be given at the coming Committee of Supply.

[2] Reduction in CO2 emissions in 2006, compared to if the fuel mix remained at the 2000 levels.

asked the Minister for Health (a) what is the average total arrears incurred by restructured hospitals annually over the last two years; and (b) on average, how much of these does the Ministry have to write-off, and whether they are usually related to financial difficulties, regular attendees with social problems or other causes.

The vast majority (more than 96%) of restructured hospital patients settle their bills promptly, within two months of discharge. Over the past two years (2005 and 2006), hospital arrears that exceeded two months averaged about $73 million per year.

The hospitals provide various forms of financial assistance for patients who have difficulties paying their medical bills, including payment through instalments. Those who are needy are assisted through Medifund.

Some arrears become bad debts after many repeated attempts to recover them and have to be written off. Not all such cases are due to financial difficulty as hospitals have schemes to assist the needy. Some are foreign workers involved in industrial accidents. Some are employees of companies, some of which have wound up. As bad debts are eventually borne by Singaporeans, the hospitals do their best to minimise them.

In 2006, the write-offs amounted to $11 million.

asked the Minister for Health following the implementation of ElderShield Supplements (a) how many more eligible Singaporeans have signed up; and (b) how much will it cost the Government in terms of expected payout.

The ElderShield severe disability insurance scheme underwent two major changes in October 2007. First, the basic ElderShield was upgraded to provide a higher payout from $300 to $400 per month and a longer maximum payout period from five to six years. Second, ElderShield policyholders who prefer additional severe disability coverage can now purchase ElderShield Supplements, on top of the basic ElderShield.

Basic ElderShield and its Supplements are insurance schemes run by three private insurers (namely, Aviva, Great Eastern Life and NTUC Income). They are actuarially- and commercially-structured and have to be fully funded by the premiums paid by the policyholders.

As at end-December 2007, there were about 790,000 ElderShield policyholders. 38,000 policyholders upgraded from the former basic ElderShield to the new basic ElderShield. There are nine ElderShield Supplements and thus far, 14,000 policyholders have bought additional coverage through these Supplements.

asked the Minister for Community Development, Youth and Sports (a) for each of the years 2004, 2005 and 2006, what is the proportion of children and young persons released from The Singapore Boys' Home and Singapore Girls' Home who have continued their studies in public sector schools or educational institutions; and (b) for each of the years 2003, 2004 and 2005, what is the rate of children and young persons released from these institutions who have become repeat offenders within two years of their release.

For the years 2004-2006, an average of 69.9% of the residents who were discharged from the juvenile homes continued their studies in educational or vocational schools. Those who did not continue with their education upon release were employed, waiting for enlistment into National Service, or had not yet decided whether to continue studying or find employment.

For each cohort of juvenile offenders who completed their Orders and were released from the Homes in 2003 and 2004, 38.5% of them re-offended within the two years of their release. The recidivism rate is not available yet for those released in 2005.

The Singapore Boys' Home and Singapore Girls' Home provide rehabilitation for young offenders. The rehabilitation programmes are three-pronged. Firstly, we provide specialised treatment programmes that target specific offending behaviours. Secondly, offenders attend educational, vocational and life skills training to prepare them for the future. Thirdly, we work closely with the offenders' families to improve their family relationship. The primary aim is to reintegrate these offenders into the community to lead productive lives.