Hansard, 2008-09-16

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 Hri Kumar Nair 16 Sep 16 Sep Miss Penny Low 23 Sep 01 Oct

ABDULLAH TARMUGI Speaker Parliament of Singapore

1. Er Lee Bee Wah asked the Minister for Education in light of the Government's call for families to have more children, whether the Ministry will review its existing policy on Primary One registration to give priority to those with three children or more as an incentive for parents.

Mr Speaker, Sir, up to the late

1980s, priority admissions into schools for Primary One (P1) were used to support population policies. Following a review, the Government decided in 1992 to de-link P1 registration from population policies, even though they were an effective measure for some schools.

The reason to de-link registration into schools with population policies was guided by this principle that primary school admissions should be determined by educational goals, wherever possible. So if you look at the current criteria, proximity to home is a key criterion for admission so that a young child does not have to travel a long distance to go to school. Having siblings studying in the same school is another criterion as this is convenient for parents; allows the older sibling to help the younger child and builds school ties. We give priority to key stakeholders, such as the children of old boys or girls, members of the school advisory committees and parent volunteers as it strengthens community and parental support for the schools.

So the criteria I have listed are primarily driven to meet educational goals and the current scheme reflects a careful balance of the various factors that serve the educational interest of the child and the school.

Thank you, Mr Minister, for the answer. The Minister mentioned just now that it was effective for the population growth and based on the feedback from my residents, they are asking for this to be re-introduced. I hope that the Minister will consider this.

Sir, as I have mentioned, MOE is not keen to link population policies and school admissions. I think this is a better way of doing it. We have done it before where we have linked

it and you get different outcomes. I think our schools should serve primarily the educational goals of the child, and this is what explains our reluctance.

2. Mr Zainudin Nordin asked the Minister for Education since research has been identified as a key pillar of our economic advancement (a) what is the progress of our efforts to promote more research work in our universities; (b) how do the universities measure the success of research work; (c) whether the quality of research and the processes that are used to measure it are comparable to world standards; and (d) as research is a knowledge-intensive and time-demanding process, what is the maximum number of research groups that research fund recipients can belong to.

The Government announced its plan to increase its Research and Development (R&D) expenditure from 2.25% of GDP in 2004 to 3% by 2010. As part of this plan, MOE's Academic Research Fund (AcRF) to support research in our universities was nearly tripled to a total sum of about $1.4 billion for five years starting from FY2006 when compared to the preceding same period. From this, MOE sets aside $250 million for the establishment of Research Centres of Excellence (RCEs) at our universities to fund programmes that will generate research of global impact. RCEs are co-funded by the National Research Foundation (NRF), which provides another $500 million, making a total of $750 million. Our universities have geared up their research activities and quality, in tandem with the increased funding. We have already seen some promising indicators of progress. Let me cite some:

Number of postgraduate research students funded by the AcRF currently

stands at 4,676. This is a 13% increase from 2006 and 65% increase compared to 2001;

Number of projects funded increased from 30 in 2006 to 53 in 2007, representing an increase in funding from $24 million to $42 million;

Three RCEs have been approved over the past two years. One such RCE is the Centre for Quantum Technology at NUS, where a team of three researchers recently won the prestigious 2008 National Science Award for their outstanding theoretical and experimental studies in the field of quantum cryptography; and

NUS and NTU have improved their performance on the research indicators. This was asked by Mr Zainudin. One such indicator is published by the Times Higher Education Supplement (THES). In terms of citations per faculty member, NUS has moved up in rank from the 115th-122nd band in 2006, to the 61st-67th rank band in 2007. NTU too has moved up about 40 places.

With these efforts, our universities are gradually climbing up in terms of international research benchmarks.

Our universities adopt internationally-used indicators like those employed by the THES and the Shanghai Jiao Tong University's Academic Ranking of World Universities. Besides the number of citations per faculty, other indicators, like the number of high quality publications and the number of patents filed and granted, are used to measure their progress.

Beyond quantitative measures, the MOE and the universities rely on qualitative assessments by experts and international academic leaders. For example, the Academic Research Council (ARC) was formed in June 2006 and is

chaired now by Dr Robert Brown who is President of Boston University and former Provost of MIT.

MOE does not cap the number of research groups that research fund recipients can belong to. This was the specific question asked by the Member. However, when assessing research proposals for funding, expert and evaluation panels do take into account the ability of the researcher to provide the level of commitment needed for the success of the project.

Thank you, Mr Minister, for the comprehensive reply. May I know the success of NUS and NTU and the other universities to encourage our local talents and students to take up research? What is the progress so far?

Sir, the overall view for the universities, the NRF, the Research Innovation and Enterprise Council (RIEC) chaired by the Prime Minister is to build an environment where there are avenues and opportunities for researchers. At the same time, we also recognise that if you want to jump-start the system, if you want to climb ahead, you will have to bring in people who have already been investing their time and energy into research. Otherwise, you have to re-learn the cycle and you are not very steep in your learning curve.

I think that would be the major thrust of our efforts. I think we have succeeded. Members would have read of luminaries and very strong academics who have been persuaded by our environment to re-locate here and many of them, for example, are in the prime of their research careers. Recently, NTU started another Research Centre of Excellence (RCE) on earth observatory, and a whole team of expert volcanologists who are experts in earth quakes, chose to site here from Stamford. Even though, we are near the

ring of fire, we do not have volcanoes in Singapore, but yet they chose to site here. So that is one indication of the success that we have.

This will create the environment where Singaporean researchers will benefit. They will be exposed to scientists and researchers of high calibre, whose work is at the cutting edge, and they will, in turn, also take on many of the roles. Many of our own local scientists have indeed gained world recognition.

3. Mr Christopher de Souza asked the Minister for Information, Communications and the Arts (a) why was Grand Theft Auto IV, a computer game that allows players to simulate driving drunk, stealing cars, dealing in drugs, visiting strip clubs, robbing ladies and knocking down pedestrians, allowed by the Media Development Authority (MDA) to be sold in Singapore; and (b) how does MDA's approval for the sale of the game align with the concerted efforts of Ministry of Home Affairs to encourage Singaporeans of all ages to stay clear of crime, drugs and gangsterism.

Mr Speaker, Sir, Media Development Authority (MDA) launched Video Games Classification in April this year to allow more choice for adult gamers while according the appropriate level of protection for the young. The ratings and content advisory allow parents to make informed choices about the video games available in the market. At the same time, MDA has put in place enforcement measures and has also

embarked on public education initiatives to promote the broader theme of gaming wellness while raising awareness of the classification system.

Under the Video Games Classification system, the game Grand Theft Auto IV was released with an M18 rating, that is, it is restricted for sale to those who are 18 years and above. When rating the game, the MDA took careful consideration of the content, themes and storyline found in the game, recognising that adults are better equipped to discern fact from fiction.

The rating given to the game is in line with that in other countries which have similar rating systems. In the US, the game was rated "Mature", indicating that the game is meant for those 17 and above. The UK and Europe gave the game an 18 rating, while in Australia the game was given their highest rating of MA15+. It is also rated 18 in Japan.

Local retailers are required to check the age of customers at the point of sale. The MDA has ensured that video game retailers comply with the age restriction by conducting checks on the retailers and distributing the classification guidelines to the retailers.

With regard to public education, MDA has been reaching out to gamers, children, parents and game retailers through publicity materials and the media to educate the public about the classification system, and to address parents' concerns about video games. They are also working with industry and community to reach out to the public through major events such as the World Cyber Championships that were held here in August.

In summary, recognising that game contents do at times contain mature themes, MDA has put in place a classification system, enforcement mea

sures and public education initiatives to encourage responsible and healthy gaming in Singapore. Parents with young children should also exercise judgment when they purchase games for their children.

Thank you, Minister, for the reply. Does the Minister appreciate that the M18 rating is largely artificial, given that students or children under 18 can easily access the voluminous number of copies already in the market? If so, the question ought really to be whether this game should enter the market in the first place?

I think what we have in place is an enforcement measure to try and prevent retailers from, first of all, selling games to those who are underaged. I recognise that the games that are already available may be passed from friend to friend. But part of the process, I think, is in educating gamers as well as the general public of the need to take appropriate measures, including parents, so that they are mindful of the activities that their children are into, as well as a cyber wellness programme to help educate our children about the overall impact of playing such games.

Sir, it says on the MDA website that the feedback mechanism includes interested parties like gaming industry key players and gamers themselves. Would not a more objective feedback mechanism include, say, people who deal with youth crime, like Deputy Public Prosecutors and Community Court Judges, to see the real effect, if any, of the game on offenders' propensity to commit crime?

We certainly welcome feedback from all interested parties. We have been monitoring the reaction to Grand Auto Theft IV. So far, there has been no reaction from our gaming community, as well as from the

larger public, to the introduction of this game into Singapore.

4. Miss Penny Low asked the Minister for Information, Communications and the Arts in view of the upcoming Youth Olympic Games and our national agenda to cultivate the spirit of a sporting nation (a) whether he will consider having free-to-air sports channels; (b) if so, whether they will cover a wide spectrum of sports; and (c) if not, why.

Mr Speaker, Sir, I thank the Member for her interest in a Free-to-Air (or FTA) sports channel as a means of cultivating the spirit of a sporting nation.

In January 2000, MediaCorp (or TCS as it was known then) had launched an FTA sports channel called Sportscity. Members may not have remembered this, it is almost eight years ago, but actually they did launch a sports channel. This sports channel offered a range of sports content from local to international to instructional sports programmes. However, the channel was not commercially viable and incurred substantial losses due to low viewership, high content acquisition fees and the focus by advertisers on selected major sporting events rather than generic sports programming. The channel was revamped into City TV in 2001, with sports contents reduced to 60%. That also did not survive beyond a year.

Sir, the cost of operating a free-to-air sports channel is substantial and the bulk of the cost goes towards content acquisition and production costs. In particular, the cost of sports content has increased sharply. According to MDA, for major popular sports content such as football, the acquisition cost can go up to several hundred million dollars. For an FTA channel, such costs would have to

be met in one of two ways or both: first, advertising and sponsorship revenues, and secondly, radio and television licence fees.

Sportscity has shown that commercial viability of an FTA sports channel based on advertising and sponsorship alone is difficult to achieve. To sustain an FTA channel that covers a wide range of sporting programmes, radio and TV licence fee would have to be increased significantly. This increase in radio and television licence fee would impact on all consumers, regardless of their individual viewing preference, in fact, regardless of whether they watch sports or not. This approach is not in the best interests of viewers and the general public.

Sir, instead, the sporting interests of consumers are being met on two fronts. First, for key sporting events of national significance, the Media Development Authority (MDA) ensures that all Singaporeans' and all consumers' interests are served by requiring these events to be made available for free-to-air television, so that everyone can watch these programmes. These include the recent Olympic Games and Southeast Asian Games. I would like to take the opportunity to assure Ms Low that the 2010 Youth Olympics will be a sports event that will receive free-to-air television coverage.

Secondly, for other sporting events, the needs of the consumers are better met with commercially viable, dedicated pay-TV channels so that consumers need only pay for what they want to watch and not be burdened with the high cost of a general free-to-air sports channel.

5. Mdm Ho Geok Choo asked the Acting Minister for Manpower whether

workplace harassment laws can be put in place to prevent employers from discriminating against mothers-to-be in the workplace as part of measures encouraging more women to work.

Sir, workplace laws are already in place to protect pregnant employees. Under the Employment Act, dismissal on the grounds of pregnancy is an offence. It is also an offence to terminate the employment of an employee when she is on maternity leave.

As part of the enhanced Marriage and Parenthood package, we have strengthened the protection for pregnant employees. After October 2008, when the legislative amendments take effect, employers will be required to pay employees their maternity leave benefits if the employees are dismissed without sufficient cause within the last six months of pregnancy or retrenched within the last three months.

Should employees feel harassed or discriminated against at the workplace, they should take up their complaints directly with their management, or through their unions if they are union members. Employees may also lodge a complaint directly with MOM and we will investigate the complaint and provide advice on the appropriate courses of action. However, we cannot rely on legislation alone to address workplace harassment and discrimination effectively. We must also positively shape employers' mindsets so that they recognise the importance of fair treatment of all employees, including mothers-to-be. This would also benefit employers in attracting and retaining valued employees. In this regard, the Tripartite Alliance on Fair Employment Practices (or TAFEP) has been actively

promoting the adoption of fair employment practices among employers and working closely with them to put in place progressive and non-discriminatory HR practices.

It seems that the MOM defines some mothers-to-be as pregnant for more than six months and above. Would the MOM consider putting in an anti-harassment law for prospective mothers – young, married women, for example – who are applying for jobs or are working and are being asked by employers if they are planning to start a family or having more children? I think this should also be considered as potential harassment tactics by employers.

Sir, hiring and firing is subject to agreement of both the employer and employee in general.

In the case of hiring pregnant women, again, it is subject to the needs of the employers. However, if employees have reason to believe that they are not employed because they are pregnant, they can lodge a complaint to MOM so that MOM can give appropriate advice to the prospective employee on the course of action to be taken. But, what is important is to change the mindsets of employers, in general, of the importance of treating not just their workers but potential workers well. In an environment of shortage of Singaporean workers, it makes sense for the employers to be the employers of choice and to do that they must be willing to take good care of their employees, including pregnant women and potential employees who are pregnant.

Just to clarify my comment. When I said "prospective mothers-to-be" I meant young mothers who are thinking of either having children or have children and planning to have

more, rather than prospective employees of a company.

Sir, I thought I answered that question. Prospective employees who are pregnant.

Young mothers who are planning to have children, for example, and today you find that some are complaining that employers are asking them, "Are you planning to have a family?" I think that is quite discriminatory.

I said that if they believe that this is discriminatory and they do not like it, they can come to MOM to lodge a complaint and we will give them appropriate advice. But, generally, it is really up to the employees. In the first place, they are already called for interviews. For someone who has applied for a job and called for interview, there must be a good chance to be considered for the job. Whether or not there is a law to prevent employers from picking those who are not likely to be planning to be pregnant or to have a baby, or whether or not they want to practise fair employment practices, they may not even call this prospective employee for interview. So, no laws can actually protect any potential employee, whether or not they want to plan to have a baby or not in future.

6. Mr Lim Biow Chuan asked the Acting Minister for Manpower (a) what is the average time taken to complete an investigation into a complaint lodged by a foreign domestic worker against her employer; and (b) whether the employer under investigation can employ another foreign domestic worker in the meantime.

Sir, when a complaint is lodged by a foreign domestic

worker (FDW) against her employer, MOM will first assess the case to see if an investigation is warranted.

In some cases, the complaint arises from a misunderstanding between the employer and the foreign domestic worker. In these situations, MOM would assist to clarify and mediate between the two parties. There would then be no need for an investigation. In 2007, about 35% of the nearly 2,100 complaints made were resolved at this stage.

Where the facts reveal that an offence may have been committed, MOM will proceed to carry out an investigation. The duration of investigation into each case depends on its complexity and the level of cooperation given by the various parties involved. It is important to ensure investigations are carried out thoroughly. For the cases investigated in 2007, about 81% were completed within 90 days or three months.

If investigations reveal evidence that the employer is likely to have committed an offence, he will be blacklisted from employing another FDW. This is necessary to protect other FDWs from falling victim to errant employers.

Sir, I just want to clarify with the Senior Parliamentary Secretary. In the meantime, whilst investigations are being carried out, is the employer allowed to employ another foreign domestic worker?

Sir, that depends on the nature of the complaint. If the complaint involves abuses and rather serious, we will not allow the foreign domestic worker's employer to employ another domestic worker while investigations are still ongoing. But in some

cases where it involves possible misunderstanding, we may consider.

Sir, again just to clarify. Last month, the Law Minister had reiterated the principle that all are innocent until proven guilty. By taking such administrative action to prohibit an employer from employing a foreign domestic worker whilst the case is being investigated, would this not go against the principle that the employer should be deemed innocent until he is proven guilty? Has MOM considered that the administrative action in prohibiting the employer would be unfair to employers with young children or with elderly parents who may need a foreign domestic worker urgently and who may be innocent of the complaint by the foreign domestic worker?

Sir, I do remember the Minister for Law saying that, but I also remember him saying that those who are not charged or have not been found guilty may not necessarily be innocent.

Generally, Sir, the Ministry looks into all cases of FDW's complaints and where the complaints suggest there are breaches of the work permit conditions by the employer, a thorough investigation would be undertaken. All complaints by FDWs are dealt with objectively and when a prima facie case has been established for serious breaches, such as physical abuses, ill treatment, non payment of salaries or illegal deployment of foreign domestic worker, the employer will not be allowed to employ a new foreign domestic worker pending the outcome of MOM's investigations. This is a precautionary measure to prevent another FDW from being subject to the same abuse while investigations are ongoing.

Similarly, when an FDW is under investigation for complaints against her, she will not be placed with another employer while investigations are ongoing.

7. Mr Gautam Banerjee asked the Minister for Finance in view of the increased focus on corporate governance and transparency (a) whether it is sufficient for large statutory boards to be audited by the Auditor-General only once in every five years; and (b) how does this practice compare with other countries such as the UK, Australia, Canada and New Zealand.

8. Mr Gautam Banerjee asked the Minister for Finance which statutory boards is the Auditor-General unable to audit under the current legal framework and whether this framework will be amended to allow the Auditor-General to audit all statutory boards.

Mr Speaker, Sir, may I have your permission to take Question Nos. 7 and 8 together?

Yes.

Sir, let me inform the House that statutory boards are audited annually, whether by the Auditor-General or a public accounting firm. Since last year, the Auditor-General's plan has been to audit the larger statutory boards at least once in five years. This does not mean that the larger statutory boards cannot be audited by the AG more frequently. For example, the AG audits IRAS every year. Likewise, the Monetary Authority of Singapore is audited by the AG every year as the MAS Act requires it. My Ministry has supported a higher manpower budget to enable his office to increase the frequency of his audit of statutory boards.

Mr Banerjee asked about the practice in other countries such as Australia, New Zealand, Canada and UK with regard to

the audit of statutory boards. In these four countries, the accounts of the bodies equivalent to our statutory boards are by law required to be audited by their national audit institutions annually.

The current system of the Auditor-General coming in periodically to audit a statutory board, in between audits by a public accounting firm appointed in consultation with the AG, has served us well. As I mentioned, the AG will subject a statutory board to more frequent audits where necessary. This is a more focused and practical approach as it allows him to direct resources towards areas which are of greater significance.

As regards Mr Banerjee's other question, under the current legal framework, the Auditor-General is empowered to initiate and carry out an audit of a statutory board only if the Act creating that statutory board so provides. This framework, Sir, was introduced at a time when there were very few statutory boards. Out of the 53 statutory boards listed in the Accounting Standards Act, all but seven have provisions in their Acts which accord such power to the Auditor-General.

Nevertheless, we recognise that the current legal framework governing the audits of statutory boards is unwittingly incomplete and should be updated to reflect the larger number of statutory boards that we have today. Except where there are national security reasons, the Auditor-General should be able to initiate audits in statutory boards.

In his Annual Report tabled in Parliament in July, the Auditor-General stated that he had embarked on a review of the Audit Act, which has not been substantively updated since it was passed in 1966. His review, which takes into account the legislation and practices of other countries, will include the audit of statutory boards. My Ministry will

consider the AG's review report and recommendations when they are ready.

9. Ms Irene Ng Phek Hoong asked the Minister for Transport whether his Ministry has conducted a study to assess the wider social and economic impact of increasing the ERP gantries and hours on (i) work patterns; (ii) businesses affected within ERP zones; and (iii) family life and bonding.

Sir, there are many factors affecting businesses, people’s work patterns and family life, and it is not possible to separate them, and determine conclusively to what extent each one of them has played a part. For example, businesses could be affected by economic conditions, consumer confidence and even the weather. So while retailers within ERP zones have given feedback that ERP is one of the reasons their businesses have been affected, they also recognise that their business outside ERP hours has also been poor. Retailers elsewhere outside the ERP zones have also reported reduced business in recent months.

However, from time to time, LTA does gather trend data to see if it is possible to draw inferences from them. One example is its study of the impact on retail sales in Orchard Road, where we implemented ERP on Saturdays and extended ERP to 8 pm on weekdays in October 2005. The study showed that growth of retail sales in Orchard Road was in fact faster after ERP expansion than before. Retail sales had grown by about 4% in the year before ERP was expanded. In the year after ERP expansion, retail sales grew by

9%, more than twice the growth a year ago. This compares more favourably with businesses outside of the CBD, where the growth in retail sales had remained more or less the same over the period in question. So the findings in this particular study of the impact of ERP on retail sales would suggest that ERP, contrary to popular belief, has a positive effect on businesses. These findings mirror the experience in London, where a similar study on the congestion pricing system there, showed that business became better after congestion pricing was introduced compared to before.

As with business, there are also many factors affecting work patterns and family life. However, even where ERP affects travel patterns in that some choose to avoid, say, the evening ERP on the CTE, there is also a flip side to the story. Others who were previously unable to get home early at all because of traffic jams are now able to do so if they wish, and can plan ahead with a much higher degree of certainty because of ERP. For example, after the gantry on the CTE before the PIE exit was implemented in November 2007, traffic volume between 6 and 7 pm fell by about 700 vehicles. But traffic speeds for the remaining 7,000 vehicles that continued to use the CTE increased from 34 kph to 50 kph. So 7,000 drivers now enjoy the benefit of a smoother and more predictable commute home. If we do not have ERP to deal with congestion, then motorists, and even large numbers of bus commuters, will get stuck in traffic jams, spend a long time on the road getting to work, and not be able to get home on time. This is hardly conducive to work and family life. By having ERP, we can be assured that commuters will get to their destinations on time, and give commuters a choice, rather than leaving everyone with no choice but to endure the daily grind of gridlocked traffic.

I thank the Minister for a very capable

answer. I just want to ask the Minister, despite the Government's explanation on the need for ERP, there are some people who continue to believe that ERP is a revenue generating exercise of the Government. It causes hardship for motorists, rather than to reduce congestion in some locations. Can I ask the Minister how he arrived at the optimal speed level of 20 kph to 30 kph before ERP is imposed? Would the Minister consider allowing congestion to be a major problem and a significant inconvenience to motorists before ERP gantries are erected? This would help to persuade motorists that there is indeed a major congestion problem rather than pre-empting the problem by putting up gantries that are below 20 kph.

ERP is not a revenue measure. I said that many times in this House, and we have got to just look at the facts. Since we implemented ERP in 1998, we have bought down vehicle ownership taxes. If you look at it before the latest round, the forgone revenue for the Government is about $1.2 billion every year and against that, the ERP collected was a hundred million dollars. As I said, if motorists were to drive less, the Government would be happy to collect less. It is really a congestion measure.

The 20 kph to 30 kph optimal speed range that she is talking about is based on empirical study. We had a team from NTU study the speed-flow curve, where below a certain threshold level, we start to get stop-start conditions. We determine the threshold level based on the road capacity and the travel patterns. It was not a number that we just plucked out from the air and said, "This is the number that we are going to put in.". This study was done 10 years ago. At that time, the team ascertained that the 20 kph was the threshold level, and if we went to, say, 19 or 18 kph, we started getting stop-start traffic. When we did the current

review for the Land Transport Master Plan in January this year, we got the same team to study it again. They looked at it and they felt that 20 kph was still the threshold level.

We do not install ERP gantries pre-emptively. We actually study the traffic over a sustained period of time. So if you travel around Singapore, there are some roads which are not congested, there is no ERP gantry there. Only if the fall in speed is sustained over a period of time, we would put up the ERP. So it is not a pre-emptive measure.

Ms Ng, last question from you.

Can I ask the Minister to clarify what he means by "sustained period of time" because, sometimes, the traffic will fluctuate as well, especially the Singapore River Line where motorists complained that actually there was no real congestion?

We studied over several consecutive quarters, two/three quarters, to see whether or not this is sustained. In the case of the review that we did in January, we studied the travel patterns for over close to two years. So if you were to look back, before we did put up the gantries, there were a lot of complaints that the traffic in the CBD area, the Singapore River Line and also in the Bugis/Marina area was getting bad. So it was not something that was done pre-emptively, but rather studied over a long period of time.

10. Mr Zaqy Mohamad asked the Minister for Transport whether his Ministry will consider removing the restricted hours for off-peak cars on

Saturdays in view of the Ministry's efforts to regulate traffic on Saturdays using ERP and greater adoption of the five-day work week.

Mr Speaker, Sir, the Off-Peak Car (OPC) scheme was designed to provide car owners with the option to own cars at significantly lower costs if they are prepared to use them sparingly. Owners of OPCs enjoy substantial upfront tax rebate and road tax discount. In return, the use of OPCs is restricted to certain time periods.

The usage restriction timings for OPCs are not set based on the normal working hours or the extent of ERP coverage, but instead, they are tied to the quantum of tax incentives given to the owners. If we were to make any change to the usage restrictions for OPCs, then we would also have to consider adjusting the tax concessions for OPCs. However, not all OPC owners may agree to a reduction in tax concession in exchange for such additional benefits. By continuing with the present scheme, OPC owners will continue to benefit from higher tax rebates and those who want to use their OPCs during the restricted periods have the flexibility to do so by displaying a Supplementary Licence.

I understand the OPC scheme and the ERP scheme are probably serving different interests. Will the LTA consider making a study on the impact of the actual number of weekend cars on the road on Saturday mornings? If it is not huge, I suppose the concession will be more than enough to cover without increasing the road tax, for example, and also let ERP regulate the traffic on Saturday mornings, since we

are all moving to a five-day week for most industries.

I think it is important to note the relationship between the restricted hours and the tax concession because, as I have mentioned before, the restricted hours are tied to the tax concession, and they are enjoying that benefit. But LTA will continue to monitor OPCs and see if it is necessary for the scheme to be reviewed again.

11. Ms Eunice Elizabeth Olsen asked the Minister for Community Development, Youth and Sports whether there is a difference in per capita funding between a Team Singapore able and disabled athlete and, if so, how is the funding prioritised.

Mr Speaker, Sir, the Singapore Sports Council funds High Performance Programmes so as to achieve top 10 placing in the 2010 Asian Games Medal Standings and win medals at the Olympic Games 2008 and 2012. Singapore sent a contingent of 25 athletes to the recently completed Beijing Olympics and the women's table tennis team won a silver medal. We have six athletes now at the Beijing Paralympics which has held since 6th September and will close on 17th September.

SSC "cards" athletes according to their medal winning potential. The minimal level of carding is the potential for a medal at the SEA Games. In FY08, there are a total of 810 carded athletes of which 794 are able athletes under the various National Sports Associations (NSAs) and 16 are disabled athletes under the Singapore Disability Sports Council (SDSC).

SSC provides direct funding to the NSAs and SDSC to support high performance and developmental programmes as well as indirect subsidies in the form of usage of facilities, sports medicine, sports science and all other support services. The high performance budgets are for coaching, overseas training, competition, career development, equipment and facilities primarily directed towards carded athletes, while the developmental programmes and indirect subsidies benefit all athletes under the NSAs and SDSC.

SSC's total FY08 direct funding for the NSAs and SDSC was $43.2 million for NSAs and $1.7 million of which the high performance budgets were $21.5 million and $0.6 million respectively. This translates to a total of $54,000 per carded able athlete and $106,000 per carded disabled athlete. In terms of per capita high performance budget, the figure for an able athlete is $27,000, while that for a disabled athlete is $40,000. Per capita funding per disabled athlete is higher mainly because there are fewer of them and also there is less economy of scale and their special needs.

I thank the Senior Parliamentary Secretary for his reply. Sir, I would like to ask, with regard to allocation of resources, why is our reward for the Singapore Paralympians not on par with the able athletes. The total prize money that our Paralympians will receive for four medals is in fact still less than that of an individual bronze medal at the Olympics. I am sure the SPS does not value our Paralympians any lesser. Can I just ask why there is a disparity in the reward system?

I have been to both the Olympics and I have just came back from the Paralympics. I can say that the Paralympians competition is intense as

well. I think they have overcome the odds, I would say a lot more odds, just to get there and to be able to compete. So we accord them with the respect and we accord them, in a way, the type of reward that they should be accorded with. One of the things that we have to look at is that the Olympics competition level is actually quite different. The Olympics competition is a free world competition. Paralympians can join Olympics. Olympians cannot join Paralympics. That is one thing you look at – the level of competition.

Secondly, the base of competition within the Olympics is a lot broader and the base of competition for Paralympics is smaller and is segmentised because Paralympics is based on the disabilities which are classified differently. So that is a different scale of competition.

Thirdly, I wanted to explain that the cash award given to the Olympians is not Government funded. It is the private sector. It is from the Tote Board. For Olympians, they have that cash award for several years already, and for Paralympians, it is only recently. They have managed to get the cash reward by soliciting or getting the support from the private sector and the Tote Board. So they have started somewhere. It is a good first step compared to previously, when there were not any cash awards as well. I think we will continue to monitor and review, and see what is necessary to give them more support.

Most important to the Paralympians, if you ask them, would always be able to continue training and developing themselves in that sport, as well as being recognised as sportsmen and not just as disabled persons. For their recognition, we should try to do more. We should continue to support them if they want to continue with their sports.

Thank you, Senior Parliamentary Secretary, once again. I understand that you will review the system from time to time. I was

wondering whether the Government will think about topping up the cash reward. After all, one of the Paralympic values is equality. We talk about meritocracy with regard to scholarships, among other aspects of our society. Why does it not apply in terms of equality of recognition for disabled athletes?

My second question is whether the current system for sports for the disabled is playing catch-up in Singapore. Will the Ministry use the remarkable achievements of our Paralympians to improve on what we can do for our disabled athletes? Is it possible that we can have a plan on what can be done for them?

Sir, I will address the Member's second question first. For the longer-term plan, there is a need to look at how we develop a system for Paralympians or disabled athletes. Yes, all the while, there was a lot more focus on able athletes, maybe because of the educational process and the understanding of what needs to be done. Previously, maybe we did not understand enough of the disabled athletes' needs. But now we know that there is a lot more that the disabled athletes can achieve and they actually also bring glory to Singapore and the nation. So we do consider that and we are reviewing whether the future plans will also include an Olympic project that will include both able and disabled athletes and look at how we can develop a system to accommodate all athletes who are representing Singapore. But we must also be aware that able athletes' training and development can somehow be substantially different from the disabled athletes. Even though they can be training for the same sport, their needs are quite different. So, in terms of customising programmes, we will have to do that. In terms of providing support, we will have to treat them as equals, as

far as development and training are concerned.

As for Government funding of cash awards, all this while, the system is that we will get the support from the private sector, eg, Tote Board, and solicit support from the community to support our Olympians and national athletes. We should continue to educate the public that our Paralympians are as important as our Olympians, and that disabled athletes should be treated as sportsmen as well, in order to encourage them to come forward and contribute to a good cause. That we will have to do.

In the light of the last two answers from the Senior Parliamentary Secretary, would the SPS consider moving the SDSC out, from under the auspices of the SSC to a separate stand-alone council? Secondly, given the sterling results of our Paralympians, would he consider increasing the funding correspondingly?

In fact, in reality, SDSC operates independently. It is a council by itself, supporting the different athletes, sponsoring them, providing training and coaching services. For example, this time, we have swimmers, equestrian riders and sailors. So the SDSC manages these athletes, giving them the support. SSC's relationship with SDSC is that of the funding lever. They fund them every single year, and the funding continues to increase. In fact, there was quite a substantial increase for this year as well because of Paralympics and we want them to be able to prepare the athletes.

Recently, the SDSC management committee decided to set up the Singapore National Paralympic Council (SNPC) in order to look at how they could prepare the athletes for major competitions, eg, ASEAN Para-Games and the Paralympics, as well as to nominate and

select them for these major games. So we now actually have SDSC and SNPC, which very much mirror what we have for able-bodied athletes, which are the Singapore Sports Council (SSC) and the Singapore National Olympic Council (SNOC).

So there is a segregation of duties and there is clarity in the scope of the work. With that, they can place better focus. With the Paralympics success and a greater awareness that our disabled athletes can achieve more and we can also help these disabled sports people to achieve and realise their dreams as they realise ours, we should consider giving them more support.

12. Ms Sylvia Lim asked the Minister for Community Development, Youth and Sports what sporting or other milestones that Singapore can reach at the Youth Olympic Games in 2010.

Singapore has achieved a significant milestone in winning the bid to host the inaugural Youth Olympic Games (YOG) in 2010.

Hosting the YOG not only provides the opportunity for Singapore to contribute to the Olympic movement, but also provides an opportunity where Singapore can benefit as a nation. The YOG will be a good platform through which we can engage and develop our youth, promote sports and a sporting culture, and profile Singapore to a global audience. It can also serve as a platform for nation-building.

For our athletes, while it is difficult to predict the performances in our youth, we can expect to do well and return with medals in some sports. Currently, they

have also shown some promising prospects, such as sailing, shooting, swimming, table tennis and badminton. Our young sailors have consistently won medals at World Optimist, Byte and Laser 4.7 events recently. A number of our young shooters have consistently recorded near perfect scores in training and who are gaining increased international competition exposure and show great promise. We also have a number of very talented young swimmers, table tennis and badminton players, all of whom can challenge the best young athletes in the world in their respective events.

For our youth, YOG will provide a platform over the next two years to nurture the young people with a greater global awareness. It will allow them to better appreciate what it means to be Singaporeans, as they play an active role in helping to host youths from all over the world. To achieve this, the YOG Organising Committee is planning several programmes, together with the Ministry of Education (MOE).

These include the School-National Olympic Committee twinning programme and the Olympic Education programme. Our youth will be taught the Olympic values of excellence, friendship and respect. They will also have the opportunity to interact with young athletes from all over the world, and play hosts to them when they arrive for the YOG. Together, they will learn about one another's culture, and celebrate the ideals of the Olympic movement.

Sir, as the host country, we will be in a good position to expose our aspiring young athletes to competition at the highest level of sports. The YOG will serve as a platform in our ongoing effort to promote sports and develop our sporting culture. And we hope that the YOG will also allow us to build up our local expertise amongst our sports

officials and volunteers in order to organise and conduct international competitions. There will also be areas of business collaboration, economic spin-offs and development of expertise in various sports industry related sectors, such as sports media broadcasting, sports event management and service provision.

As part of the efforts to promote the YOG, we will also be able to profile and market Singapore to a global audience. Aside from promoting Singapore as a tourist destination, the YOG, with its strong culture and education component, will allow us to showcase our youth development efforts and our diverse and vibrant culture.

Hosting the YOG will provide an excellent platform to rally Singaporeans to a common cause and, through this, generate national pride. Singaporeans will have a wonderful opportunity to enrol in this national effort to make the event a success, by being gracious hosts and volunteering to help organise the games. I hope that many will respond to this invitation and play a part in making the YOG a success and making Olympic history.

Sir, I would like to ask the Senior Parliamentary Secretary some supplementary questions.

Firstly, he mentioned earlier that in the recent Olympic Games in Beijing, we sent 25 athletes. I am wondering if the Government has an estimate of how many more athletes we will be sending for the Youth Olympics since we are the host.

Secondly, are we venturing into other sports which we did not go to at the Olympic Games itself?

Thirdly, as the host country, I suppose there will be some interests in our

performance. Does the Government have an idea of what would be a good medal tally at the end of the Youth Olympics?

When we won the bid for the YOG, we started some thoughts into youth development planning for the young athletes, not just the young elite athletes but really increasing participation in different sports as well. Our target is the best we can field athletes and national representation for all 26 sports. But we know that that is a challenge, because there are some sports where we have just set up the national sports associations, namely, wrestling, handball and pentathlon.

For example, pentathlon is a sport of five sports. So, we need to get one athlete who is well-versed in five sports, which is not easy. Nevertheless, since we have set up the national sports association, we are setting the target that each of the associations would at least need to have one representation. For some sports, we need to qualify to get into the Olympics. For some sports, we get wild-card slots which are allocated to the host country. So we may have national representation. But if they do not qualify for the Olympics, finally, at the YOG in Singapore, we may not even have a national representation. Nevertheless, our main objective is to encourage participation, for young people to step forward, be interested in sports, willing to commit their time and effort to train, and we are willing to give the support.

For the medal tally, I would say that it is very hard to make a prediction or even a forecast. As I mentioned, we do have some promising athletes in different sports. But I believe that we will not return empty-handed. Looking at how we have done for the Olympics and even for the Paralympics, I think Singapore does have a system that can produce promising international young athletes who can be world beaters, and I truly have confidence

and faith in them that they will return with at least one medal, whatever the colour.

13. Mr Siew Kum Hong asked the Deputy Prime Minister and Minister for Home Affairs whether there has been any change in the rules and considerations governing the organisation of outdoor events by political parties and organisations affiliated with political parties.

14. Ms Sylvia Lim asked the Deputy Prime Minister and Minister for Home Affairs what is the basis upon which a permit was given to enable the Prime Minister to participate in a cycling activity in West Coast Park on 31st August 2008.

Sir, may I take Question Nos. 13 and 14 together, please?

Yes.

Sir, the issue of political parties organising outdoor activities has been raised several times before in this House. The position remains unchanged. Police will not grant permits for outdoor political events.

The Police's position on outdoor political events is due to the assessed potential for public disorder which politically-driven events can lead to, even when this is not intended by the organiser. We have seen ample evidence of this in countries where peaceful gatherings and marches have led to street fights and even riots.

Apart from this restriction, political events can be freely held indoors. Indeed, since 2004, there is no need to apply for a Police permit for indoor political speeches if the event involves only Singaporeans. In addition, as all of us know, with effect from 1st September this year, political parties may now organise outdoor political events and demonstrations at the Speakers' Corner without a permit. Citizens, too, may organise demonstrations, including political ones at the Speakers' Corner without having to obtain a Police permit.

Ms Sylvia Lim asks for the basis for Police to grant a permit that enabled the Prime Minister to participate in a cycling event in West Coast Park on 31st August 2008. Sir, let me first clarify that it was not a cycling event but a Family Day Carnival. The only cycling was when the Prime Minister and the other special guests made their entrance by cycling a short distance from where the Prime Minister had alighted from his car to the stage. Secondly, it was not organised by a political party but by a registered charity.

The Carnival was organised by the PAP Community Foundation (PCF) for the children and families of PCF kindergartens and childcare centres. The PCF is a registered charity with a social mission. While it is affiliated to the PAP, the PCF has remained completely non-political since its setup in 1986, running kindergartens, child care, student care and aged care centres, charging very reasonable fees. It also offers community health screening with other providers, and raises funds for charitable causes. Indeed, I understand that at the PCF Carnival, a sum of $664,000 was distributed to 17 welfare organisations by PM.

Sir, in short, the authorities considered the family day setting and community service focus of the event as well as the status of PCF as a registered charity and

did not object to the event as the policy of disallowing outdoor political events did not apply in this situation.

Sir, I have two supplementary questions on behalf of Mr Siew.

Last August, the Senior Minister of State for Home Affairs told this House that people may stop politicians or may want to debate with politicians and then attract a crowd which will result in problems. So, other events by political parties are not allowed because of law and order concerns. Do such risks also not apply to outdoor events organised by the PCF, which is a charity that explicitly declares on its website, that it is an arm of the PAP and that it is well attended by PAP Members?

Secondly, the PCF logo incorporates the PAP's logo which all Singaporeans will be familiar with. In fact, many Singaporeans will probably not be able to make that distinction. So, if we are concerned about Singaporeans causing a scene and confronting politicians, then, is it not artificial to draw that distinction between the PAP and the PCF?

Sir, it is quite different for a political party under its own banner to organise an event where it espouses a political cause, talking about issues that are close to the heart. Some Singaporeans would agree or disagree. And indeed, as we have seen in other countries, when you do this, as we have said in this House many times, politics can create emotive feelings, passion, and you may not intend it to be such, but there may be bystanders who may stir up the situation. I think that is very clear.

But for the PCF event, as I have explained, not just in terms of the status

of the organiser, which is PCF – its track record shows very clearly that it does not engage in politics and it does not discuss political issues; it is on the ground running kindergartens and doing good for senior citizens and other Singaporeans who are less fortunate – but the event itself was really like any other family day event that voluntary welfare organisations organise. A day in the sun; in fact, monies were given out to 17 charitable causes; there were music and performances. I think in that setting, the likelihood of public disorder arising is definitely not of the same order as, for example, the earlier event by the Workers' Party cycling in the East Coast.

Sir, the Senior Minister of State mentioned repeatedly that the PCF is a registered charitable organisation and he just mentioned that the track record shows that the PCF does not engage in politics. Can he recall that the PCF, after the election of Opposition Members in 1991, threatened to withdraw and close down kindergartens in opposition wards? Is that not political? Is PCF really non-political in nature and what is the track record that he is talking about?

Sir, there is no denying that, in terms of affiliation, the PCF is affiliated to the PAP. But in terms of the focus of its activities, it is non-political. When a ward goes to the opposition, I think it is quite natural, therefore, that in terms of services offered to the people of Hougang who had made a decision, there was withdrawal of the services. But the services themselves, surely Mr Low cannot say are political in nature.

15. Er Edwin Khew Teck Fook asked the Minister for the Environment and Water Resources what is his Ministry's

position on compressed natural gas vehicles in Singapore.

Sir, a key air pollutant of concern in Singapore is fine particulate matter, or PM2.

5. Our ambient PM2.5 level for 2007 was 19 μg/m3, which is higher than the standard of 15 μg/m3 set by the US Environmental Protection Agency. This is of concern as PM2.5 has been linked by many studies to respiratory diseases, such as bronchitis and asthma, and to heart disease.

As diesel vehicles contribute about half of the PM2.5 in the air, a key strategy to improve our air quality is to reduce particulate emissions from these vehicles. To this end, my Ministry has introduced the more stringent Euro IV emission standards for new diesel vehicles from 1st October 2006.

To reduce PM2.5 emissions, we have also facilitated the adoption of CNG vehicles as a cleaner alternative to diesel vehicles through the Green Vehicle Rebate, or GVR, scheme since 2001. The scheme aims to narrow the cost differential between green vehicles and conventional ones. Currently, the rebate applies to hybrid and electric vehicles as well. In addition to providing incentives for green vehicles, the National Environment Agency has also supported private sector efforts to develop CNG refuelling infrastructure through providing co-funding for the start-up costs through its Innovation for Environmental Sustainability Fund. The feasibility of more CNG refuelling stations is being looked into now by the industry.

We are heartened by the recent strong market interest. Improving our environmental quality requires the joint efforts of the public, private and people sectors. Government plays an important role in facilitating industry efforts. In turn, industry players would take commercially

viable decisions that respond to customer demand. We hope to see over time a much larger population of environmentally friendly vehicles on our roads.

Thank you, Minister, for clarifying the Ministry's position on CNG vehicles.

I think very clearly CNG and hybrids are desirable for the Singapore environment and, particularly, our carbon footprint, as such. It is a little bit of a concern for me because of some negative reports from the press regarding these rebates that past 2009 they may be taken away. But this whole industry regarding clean-fuel vehicles is suffering. What I hear is that CNG vehicle sales and conversions have also come down, and this affects very much the people who are actually prepared to invest in putting up these refuelling stations. I think it is a chicken-and-egg situation as we know before that without the cars, the people who are in the refuelling business or providing the fuel will not invest –

Mr Khew, ask your question, please.

Can the Minister basically clarify how we can encourage this, as we know it is good for Singapore?

Sir, as rightly pointed out by the Member, the current rebate scheme will end by end-2009. But MOF, together with MOT and MEWR, will review the scheme. We have not arrived at a decision yet, but before end 2009, we will arrive at a decision and make it public.

I agree with the Member that it is in our interest to encourage more environmentally-friendly vehicles but, at some point, we must also allow the market to take its own course. What the

Government has done – in order to encourage the adoption of environmentally-friendly vehicles – is to provide the rebate for the vehicles and funding for the start-up cost for the refuelling stations. We have two stations at the moment and I understand that a third one is coming up in Serangoon and, hopefully, more industry players will see that by providing the stations and more people will see that it is convenient to have CNG vehicles. I agree with him that it is a chicken-and-egg situation but no matter where it is, we have to start somewhere. With the rebate and the start-up cost, we think that is quite the right level to allow the industry to then take over. I agree with him that we need to be very clear about what happens after end 2009. The matter is being reviewed and we will report in due course.

16. Mdm Ho Geok Choo asked the Minister for the Environment and Water Resources in view of PM's call in his National Day Rally speech for Singaporeans to be more considerate in clearing used crockery at food courts, what plans does NEA have to facilitate such considerate behaviour in hawker centres under its purview.

Sir, as we become a more mature society, it is indeed timely that this issue has been highlighted for attention recently.

The Member may be aware that NEA had introduced the "Tray Return System" at the Zion Riverside Food Centre on a trial basis back in 2003, where patrons

were then reminded to return their trays with used crockery to the Tray Return Counter or racks provided. However, the trial was subsequently discontinued as it was found that most patrons would prefer to leave it to the cleaners to clear the tables.

I agree that we need to do more to promote this habit as part of the larger picture of sustaining the cleanliness in our hawker centres. The "Litter-free Hawker Centres" campaign launched two years ago was intended to promote ownership of the cleanliness in the hawker centres by everyone, including the patrons.

Moving forward, NEA is now exploring with the Singapore Kindness Movement and relevant stakeholders the feasibility of re-introducing the "Tray Return System" at some of our hawker centres. My Ministry would welcome fresh ideas that may help to promote the adoption of this good habit.

Two supplementary questions, Sir. Can the Senior Parliamentary Secretary enlighten the House on how other countries are dealing with this challenge of inculcating consideration for others in their citizens at food centres? Secondly, in what way is the NEA making it conducive for diners at food centres to clear up or dispose their crockeries, especially when there is no provision for holding used crockeries?

Sir, regarding the first question, to the best of my knowledge, for countries with food centres similar to our hawker centres such as Malaysia, Thailand and Hong Kong, there are no tray-return facilities provided at the food centres in these countries. Similar to Singapore, the cleaners or stallholders will clear the crockeries and clean the tables after their customers finish their meals. For western countries and Japan, patrons return their food trays

after their meal to tray-return facilities at fast-food outlets and other eating establishments. Many of them practise this good habit out of consideration for others, with or without any conscious intervention by the authorities. It is generally their culture to do so. While the authorities can help to improve the design of the premises and put in place the necessary infrastructure to facilitate tray-return, it is ultimately the behaviour of the patrons that will determine whether a positive and reinforcing culture could be formed.

Regarding the second question, as I have noted in my reply earlier, NEA is now exploring with the Singapore Kindness Movement to look into the feasibility of re-introducing the tray-return system at some of our centres. Tray racks will be provided at these centres, if we decide to re-introduce this tray-return system at convenient and strategic locations to make it easy for the patrons to return the trays. In addition, we will be providing posters, signages and table-top decals to advise patrons to clear the tables and return the trays. In the initial phase, we would be putting officers to politely advise the patrons to return the trays after their meals.

Providing adequate facilities for holding these used crockeries is certainly important because we want to encourage the formation of such good habits, but due to space constraints and other physical limitations in some of our hawker centres, it may not be possible to provide facilities for holding crockeries in all our hawker centres. So, we will be implementing the system at selected hawker centres for a start. If we were to eventually introduce this in all our hawker centres, we will, as far as possible, be working around these limitations and revise the workflow of the table cleaners to create an environment that will make it easier for them to return the trays.

I would also like to add that the Government can only do so much. Ultimately, this involves changing behaviour, changing mindset, it will take time. We will facilitate such good behaviour through providing the necessary infrastructure but we need Singaporeans to take ownership and to desire that they want to see a more gracious society and, therefore, lead by example.

Sir, while we encourage a gracious behaviour on the part of Singaporeans, can I ask the Senior Parliamentary Secretary whether she can assure us that it will not mean that our older workers are deprived of jobs as cleaners because many of them turn to these jobs for a living?

When we re-introduce the tray-return system, cleaners will still be needed. In fact, when we first introduced this on a pilot basis at the Zion Riverside Food Centre, besides providing for the tray-return system and also the other necessary infrastructure, we also had the cleaners going around the hawker centres to ensure that the tables are actually cleared, because not all patrons participated in this initiative.

The following Question stood in the name of Mdm Ho Geok Choo –

17. To ask the Minister for Trade and Industry in view of the easing of oil prices and food price hikes (a) whether Singapore's annual growth rate needs to be revised; and (b) whether Singapore's inflation rate is falling.

Question No. 17, Sir.

Mr Speaker, Sir, global commodity prices have eased in

recent weeks. Amidst weakening demand, global oil prices have declined from a high of US$147 per barrel in mid-July to less than US$110 per barrel in early September. Global food prices remain quite high, but the pace of the price increases has slowed down.

This moderation in global prices has had a positive impact on our domestic prices. The effect of the GST increase last year has also started to wear off. As a result, Singapore's headline inflation rate has started to ease. CPI inflation moderated to 6.5% in July, after staying at 7.5% in April, May and June. We expect to see a gradual easing of inflationary pressures in the second half of the year. For the whole year, we expect inflation to average between 6% and 7%.

As for economic growth, the external economic outlook remains poor, and we do not expect to see a pickup in the major economies anytime soon. The US economy remains sluggish, weighed down by deleveraging and falling house prices. Europe is facing an imminent recession. Many Asian economies have reported a slowdown or decline in GDP growth in the second quarter of 2008. Some of our export-oriented manufacturing industries have been affected, such as electronics and pharmaceuticals. These sectors will dampen our economic growth.

Last month, when MTI revised the growth forecast for this year to between 4% and 5%, it took into account these existing factors. However, the dramatic developments in the US financial industry over the past few days have created new uncertainties. We are closely monitoring these latest developments in the external environment, and assessing their impact on our economy.

18. Mr Zaqy Mohamad asked the Minister for Trade and Industry (a) whether there has been an assessment of the affordability of local tourist attractions for the average Singaporean; and (b) whether the Ministry will consider providing more concessions to make our tourist attractions more affordable to students and families during school holidays, especially for those from the lower-income households.

Mr Speaker, Sir, Singapore has a wide range of tourism offerings that cater to both foreign and local visitors, from paid-access themed attractions to free access heritage sites and parks.

The admission charges for paid-access attractions are determined by market forces and are dependent on the individual attractions' costs, marketing goals and target audience. Each must find its own balance between price, attendance and financial objectives. For instance, the Science Centre and National Museum charge $6 and $10 respectively per adult, whereas the Singapore Zoo and Singapore Flyer charge about $20 and $30 respectively. Generally, the attractions impose a lower admission fee for children and students and special rates are also available for family admission for some attractions. So, we have the Friends of the Zoo membership card which allows two adults and three children admission all year round for an annual fee of $150.

Some also offer promotions over the holidays. Some examples are the Singapore Underwater World as well as the Singapore Discovery Centre and the Escape Theme Park.

In addition, there are many attractions that require minimal or no admission charges. Specifically, there are no admission charges for key tourist attractions like Botanic Gardens, Singapore River, Merlion Park, Mount Faber, Orchard Road and Chinatown.

STB has compared Singapore's admission rates for themed attractions against comparable quality attractions in other global cities. By and large, our rates remain competitive. For a family of four, a visit to the Singapore Zoo costs S$50, whereas it costs £49 (S$125) in London, or A$155 (S$185) in Queensland, Australia, for a similar visit.

Going forward, STB will continue to work towards growing our suite of tourist attractions. As part of their overall business and marketing plan, all our tourist attractions will have to continue to pay close attention to their affordability and accessibility to local visitors who are key to ensuring their continued viability.

Would the Ministry consider tiering the entry fees for lower-income Singaporeans, or even Singaporeans for that matter, and the tourists? In that sense, I know that is being done in some countries. We pride ourselves as a nation of equal opportunities, but it is hard for the lower-income families earning, say, below $1,500 or even $1,000 a month, to enjoy the attractions or to have their kids exposed to the Singapore Flyer or even the Zoo.

Mr Speaker, Sir, as I said, there are different categories of tourist attractions in Singapore. We have quite a variety of free or very low cost attractions which all of us can participate in and enjoy. For the themed attractions which are run as businesses, it would be inappropriate for the Government to mandate that the operators offer specific discounts or tiered fees, as the Member suggests, in order to facilitate affordability.

Having said that, most of them on their own accord already offer various pricing packages in response to their assessment of the market. So, let me take the Singapore Flyer as an example, because I know that in recent times some talk about that as being expensive. But even for the Singapore Flyer, while they have certain rates, they offer significantly discounted rates for students and the elderly. They also have family packages. I think for about $150, you get quite a good deal for unlimited visits, and so on. In general, they also price for off-peaks, in order to try and maximise utilisation. So, I think we should leave it to the private operators of these themed attractions because they have made the investments on the basis that they are going to be free to price and run their business according to the market. It would be inappropriate for us as a Government, notwithstanding a noble social objective, to mandate such a requirement. I think we leave it to the market and, if necessary, the community organisations and grassroots organisations can run various excursions and visits on a subsidised basis.

19. Mr Lim Biow Chuan asked the Prime Minister (a) whether the Government keeps track of the number of cases where civil servants are verbally or otherwise abused by members of the public; (b) whether this has contributed to the increase in work stress for civil servants or more resignations by civil servants; and (c) what plans does the Government have to ensure that civil servants are protected from unreasonable abuse by members of the public.

I thank Mr Lim for his concern for the well-being of our public officers.

Sir, cases of abuse of public officers by members of the public do occur. Some members of the public become unreasonable or abusive, especially when they perceive that they do not get what they want. Some threaten harm, and on occasion use physical force.

There are provisions protecting public officers from verbal and physical abuse under the Miscellaneous Offences (Public Order and Nuisance) Act and various sections of the Penal Code. There have been a few instances where legal action have been taken, and abusive members of the public charged and sentenced in court. Fortunately, such cases are infrequent.

While we do not track cases of abuse by members of the public centrally, our public agencies, especially those which often have to deal with many members of the public, monitor these cases at their level through various mechanisms, including case logs, incident reports and discussions with staff.

These agencies also brief their staff, especially those who serve the public directly, on the guidelines to adopt when serving abusive members of the public. Staff are also trained to manage and defuse difficult situations. In cases where members of the public continue to be abusive, we will protect our staff from further abuse, including disengaging and ceasing to serve the person who has been abusive, and when necessary calling the Police and taking legal action.

Mr Lim asked if such abuses have contributed to an increase in work stress or more resignations among civil servants. While such incidents certainly contribute to work stress among the affected officers, we do not have any direct evidence to suggest that such cases of abuse have led to more resignations.

Members of the public should know that it is wrong for them to intimidate, threaten or abuse our public officers. The Public Service will continue to endeavour to create a conducive environment where public officers can continue to provide courteous and good service to the public, and members of the public can return that courtesy. Good mutual understanding and courtesy between public officers and members of the public will go a long way in helping our public officers serve all of us better.

20. Miss Penny Low asked the Minister for National Development (a) whether his Ministry will consider building heavy vehicle parking lots in Punggol and Sengkang to cater to increased demand; and (b) if not, whether there are plans to tackle the lack of such lots in Punggol and Sengkang.

Mr Speaker, Sir, as a general principle, heavy vehicles should not be parked at housing estates as they pose traffic hazard and noise and smoke nuisance to residents. These vehicles have to be parked at designated heavy vehicle parks located at the fringe of the housing estates or near to industrial areas.

Nonetheless, my Ministry has provided a temporary heavy vehicle park at Anchorvale Crescent to meet some of the needs of residents in Sengkang and Punggol. The temporary heavy vehicle park with close to 300 parking lots was completed in November 2006. It is now fully occupied and there are about 60 residents waiting for vacancies. While it is understandable that heavy vehicle drivers prefer to park near their

residences, we need to balance this against the disamenity and nuisance that would be created for the majority of the residents if too many heavy vehicles are allowed to park in or near residential estates. It is not sustainable to keep building more heavy vehicle parks in or near HDB estates to cater to increased demand.

There is presently an island-wide supply of more than 41,000 parking lots to meet the overnight parking needs of 30,899 registered heavy vehicles. Residents of Sengkang and Punggol who are unable to secure heavy vehicle parking lots at Anchorvale Crescent can or would have already secured parking lots at their workplaces like factories and at designated parking places outside HDB estates. They can continue to park at these locations where heavy vehicles are supposed to be parked in the first place.

Sir, does the Parliamentary Secretary recognise that there has been quite a bit of changes in terms of the ownership of these vehicles – shifting from usually that of the company to the owners who now own the vehicles and rent or lease them out to the companies which require them? Also, many of these vehicles need to be started up early in the morning or come back very late at night and there is often no public transport available at that point in time. Therefore, it is going to be very difficult to require them to either fork out extra amount of money from their very meagre income to foot the taxi fares at those times or to park very far away and thereby –

There is not very much time left, Miss Low.

I will round it up. Therefore, it makes it extremely inconvenient or even inaccessible for them to even get to work.

Your reply within one minute, Dr Maliki.

Sir, as mentioned earlier, regardless of ownership, I think we have to also bear in mind the disamenity created by heavy vehicles. The principles and philosophy behind it are that heavy vehicles should not be allowed to park in housing estates. They should not be used as personal transport and drivers should park at places designated outside of HDB housing estates.

3.00 pm

Order. End of Question Time.

[Pursuant to Standing Order No. 22(3), Written Answers to Question Nos. 21, 23 and 24 on the Order Paper are reproduced in the Appendix*. Question No. 22 has been postponed to a date to be fixed.]

*Cols. 291-296

Order for Second Reading read.

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

This Bill seeks to give effect to the International Convention on Civil Liability for Bunker Oil Pollution Damage 2001, or the Bunker Convention in short. This Convention was adopted by the International Conference on Liability and Compensation for Bunker Oil Pollution Damage in London on 23rd March 2001. Singapore acceded to the Bunker Convention in 2006. The Bunker Convention

The Bunker Convention is an international treaty that provides a liability

and compensation regime for losses and damages arising from bunker oil pollution from ships that are not tankers. Claimants will be guaranteed compensation for pollution damage arising from bunker oil spills from ships such as container and passenger ships as well as bulk carriers. This is significant as some large container and passenger ships carry bunker oil in much larger quantities than small oil tankers. Current compensation regimes covering oil spills do not include bunker oil spills from vessels other than tankers.

Giving effect to the Bunker Convention

In accordance with the Bunker Convention, this Bill seeks to enact the Merchant Shipping (Civil Liability and Compensation for Bunker Oil Pollution) Act with the following key provisions. First, shipowners are strictly liable for pollution damage resulting from the escape or discharge of bunker oil from ships covered by the Bunker Convention. Second, persons suffering pollution damage have a right of "direct action" against the ship's insurers. This means that they can seek compensation directly from the insurers rather than the shipowner who, in some cases, may have no assets other than the ship. Third, shipowners can limit their liability, contingent on the size of the ship. Finally, ships over 1,000 gross tonnes that wish to enter the Singapore port will be required to have a contract of insurance or other forms of financial security to cover liabilities arising from pollution damage. They will also be required to carry certificates of evidence of that insurance. These certificates will be issued by the Maritime and Port Authority of Singapore (or MPA) for all qualifying Singapore-registered ships. MPA will also issue the required certificates to qualifying foreign-flagged ships of States not party to the Bunker Convention calling at the port of

Singapore. The shipping community will be notified of the detailed administrative procedures on how to obtain these certificates through MPA's Shipping Circulars.

Amendments to the Prevention of Pollution of the Sea Act (Chapter 243) and the Merchant Shipping (Civil Liability and Compensation for Oil Pollution) Act (Chapter 180)

Sir, the Bill also makes related amendments to the Prevention of Pollution of the Sea Act (Chapter 243) and the Merchant Shipping (Civil Liability and Compensation for Oil Pollution) Act (Chapter 180) for consistency.

Mr Speaker, Sir, as Singapore has acceded to the Bunker Convention, the Convention will apply to Singapore when it enters into force on 21st November 2008. As a State party to the Bunker Convention, it is necessary for us to pass this Bill so that Singapore can comply with her international treaty obligations under the Bunker Convention when it enters into force.

Sir, I beg to move.

Question put, and agreed to.

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

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

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

Order for Second Reading read.

3.04 pm

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

Sir, this Bill will amend the Environmental Public Health Act (EPHA) for the National Environment Agency (NEA) to empower the Director-General of Public Health to require, by notice in writing, the owner or occupier of any premises to provide recycling receptacles. In order to facilitate the set up of recycling receptacles in condominiums and private apartments, the Director-General will be issuing notices to the management councils and managing agents of condominiums and private apartments requiring them to provide recycling receptacles.

Impetus to mandate provision of recycling receptacles in condominiums and private apartments

Sir, the amount of solid waste generated in Singapore increased six-fold between 1970 and 2000. Since 2001, the Ministry of the Environment and Water Resources (MEWR) and NEA have embarked on various waste minimisation and recycling programmes to reduce the amount of waste sent to our incineration plants and landfill for disposal. These measures, such as the National Recycling Programme (NRP) for households and recycling programmes for schools and industrial estates, have contributed towards reducing the total amount of waste disposed of from about 7,700 tonnes per day in 2001 to about 7,000 tonnes per day last year. This has helped to prolong the lifespan of our landfill and reduce our demand for incineration capacity.

To encourage recycling among households, the NEA's strategy is to provide households with easy access to recycling receptacles. Under the NRP for

HDB and private landed houses, residents are provided with recycling bags or bins by the Public Waste Collectors, or PWCs, to store their recyclables. These recyclables are then collected door-to-door by the PWCs every fortnight on scheduled days. The provision of such recycling services is a requirement under the public waste collection contracts.

To complement the fortnightly collection of recyclables, about 1,600 sets of centralised recycling receptacles have been installed in all HDB estates as of 2007. Residents who do not wish to wait for the fortnightly collection can deposit their recyclables into these receptacles at their own convenience.

Sir, the NRP has provided 87% of households in Singapore with convenient access to recycling receptacles. The remaining 13%, comprising condominiums and private apartments (about 150,000 households) are not covered by the NRP. This is because condominiums and private apartments, as strata-titled properties, can choose their own waste collectors and decide whether they require their appointed waste collectors to provide recycling services in addition to the refuse collection services.

So, in order to facilitate the set up of recycling receptacles in these strata-titled properties, NEA has been working closely since 2002 with the condominium management councils, managing agents and their associations, such as the Singapore Institute of Surveyors and Valuers (SISV) and the Association of Property and Facility Managers (APFM).

Despite these efforts, Sir, the participation rate has been low. Currently, only 38% of households in condominiums and private apartments have access to recycling receptacles within their estate ground. At the same

time, NEA has been receiving an increasing number of requests for recycling receptacles from condominium and private apartment residents.

The NEA, therefore, proposes to mandate the provision of recycling receptacles in condominiums and private apartments. This would provide condominium and private apartment residents with convenient access to recycling depositories similar to the residents in HDB and private landed property estates. Feedback from major stakeholders such as the Association of Property and Facility Managers, Association of Management Corporations in Singapore (AMCIS), Singapore Institute of Surveyors and Valuers and waste collectors indicates that they are generally supportive of the mandatory provision of recycling receptacles as this would allow them to more easily cater to residents' demand for recycling facilities.

Sir, the cost of providing the recycling receptacles is assessed to be manageable. The cost impact to each household depends on whether the management councils passed down the costs of providing the receptacles to residents, the number of dwelling units as well as other considerations such as the design and infrastructure within the estate.

The EPHA currently empowers the Director-General of Public Health to require, by notice in writing, the owner or occupier of any premises to provide refuse bin centres and receptacles within the designated premise. This Bill will insert a new subsection into the EPHA to empower the Director-General to also require the owners or occupiers to provide recycling receptacles on their premises. Concurrently, the Environment Public Health (General Waste Collection) Regulations will be amended to allow NEA to regulate licensed general waste

collectors for the collection of recyclables within their designated premises. Sir, the amendments to the Act and Regulations will come into effect by 1st November 2008. Subsequently, NEA will notify the management councils and managing agents of the condominiums and private apartments regarding the requirement to provide recycling receptacles within their estate premises. The implementation, Sir, will be carried out in phases, starting with the condominiums and private apartments with more than 50 units. All condominiums and private apartments will be given a six-month period from the date of notification to comply with the requirements. NEA expects the implementation to be completed by the last quarter of 2009.

Sir, I beg to move.

Question proposed.

3.10 pm

Mr Speaker, Sir, I would like to state my support for the amendments to be made to the sections stated in the Bill.

To me, the significance in amending this Act is the direction that Singapore must take as it charts its path towards a first world society. As we progress further towards this path, there is a greater need for us to change our mindsets to be more gracious and conscious to the environment to make Singapore a better place to live in.

This change in mindset would include how we manage our environment and the amendments proposed support this endeavour. The amendments would ensure that we take our efforts a step higher beyond just placing bins and participating in the recycling programme. It will ensure that creating a green and sustainable

environment will be inculcated as part of our lifestyle; a habit of mind of Singaporeans.

Mr Speaker, Sir, as such, I would like to call on the House to continue promoting the message of adopting an environmental friendly mindset for all. Singaporeans should note that the Government could legislate and place receptacles at various locations in the country but we must change our mindset on how we manage our wastes, our efforts towards making Singapore clean, green and sustainable.

I would like support and thank the MEWR for its 3Rs (reduce, reuse, recycle) initiatives. We should continue to promote this habit of the 3Rs and increase our recycling waste rates. I must confess that my wife and I are very much influenced by our children, aged 8 and 12, who are great supporters of recycling where they learnt these values and practices from their school. I have a special corner at my home where we will put aside items for recycling and my children will take charge of the recycling programme in our home. We need to ensure that this sustainable practice within the family continues to be developed and spread to more families, and ultimately to the nation.

I understand that developed nations such as Japan, Germany, Sweden and Switzerland have achieved high level of recycling rates, some as high as above 70% for the different categories of recyclable products. Where do Singapore stand now and what is our current target rate?

Mr Speaker, Sir, I would like to propose that we press on with our efforts in this area. I would like to add further that we could also provide incentives for Singaporeans who make the conscious effort to recycle their wastes. This, I believe, would motivate Singaporeans

from all walks of life to make a more conscious effort towards turning Singapore into a more environmental friendly city with a more sustainable development.

In relation to the amendment to section 10 of the Act, it seems to indicate that the Director-General will decide on the specifications of the receptacles and its location to be placed in the development. I would like to ask the Minister to clarify on some of the general guidelines in the proposed amendments, particularly on the location and the size of these receptacles.

Firstly, what is the estimated cost to residents to have recyling receptacles within their condominiums and private apartments? Will the Ministry be working to produce standardised receptacles so that it will be easier for the community to procure and help to reduce the implementation costs. If the Ministry is to require different premises to have different sized receptacles, then it has to bear in mind that under the current high cost of spaces, most businesses and residences would have maximised their spaces on their premises.

Further, I would like to ask the Minister what is the penalty for non-compliance with the Ministry's directive. Who will be deployed to police the premises to ensure compliance and what is the manpower required? Would the Government increase the provision of recycling bin to every HDB block instead of the current one bin to five blocks of flats as more than 80% of our population stays in HDB flats?

Finally, I would like to urge the Ministry to apply a consultative approach in its practices on the above as the owners or occupants of the development would be in a better position to advise and work with the Ministry on matters such as the best location to place the

receptacles. In addition, it is better for such efforts to be co-driven by the occupants and owners to enhance the sense of ownership of the recycling programme among them.

Sir, on that note, I support the Bill.

3.15 pm

Sir, I would like to thank Dr Faishal for his comments. Dr Faishal has enquired about the factors which determine the specifications of the receptacles, given the size and activities of factories, offices and residences vary widely.

Sir, firstly, I would like to clarify that the EPH amendment only covers condominiums and private apartments. Dr Faishal has also sought clarifications on the general guidelines of the proposed amendments, such as on the size and location of the receptacles. I would like to share with the House that the recycling receptacles can either be in the form of bins or bags, as long as a sufficient number of receptacles with the necessary capacity is provided to prevent the overflowing of the recyclables at any point in time.

Secondly, Sir, the management councils and managing agents of condominiums and private apartments also have the flexibility to determine the location of receptacles as long as the receptacles are placed at common areas within the premises where residents find it convenient to access them.

On the cost impact, as explained earlier, our intention is to allow for flexibility in implementation of the new requirements, and we will not be working towards any standardised receptacles. The cost increase for mandating the provision of recycling receptacles is

estimated to be about 1% to 5% of existing management fees or about $1.20 to $5 more per unit each month. The exact amount, Sir, would depend on whether the management council would pass down the cost increase to the residents, the size of the apartment blocks, the number of dwelling units as well as the design and infrastructure within the estate. The upfront cost of providing the recycling receptacles also depends on the quantity, size and material of the receptacles.

Just to give an example, Sir, a typical 660-litre recycling bin would cost about $300. However, some licensed general waste collectors may price the cost of providing receptacles into the recurring collection cost charged to the residents instead of charging for the receptacles upfront.

On the issue of enforcement, as enquired by Dr Faishal, NEA will be the enforcement authority and we are tentatively looking at a team of about three officers. After the initial phases of implementation, we are looking at reducing the manpower requirements for enforcement. Condominiums and private apartments which contravene the Act shall be liable on conviction to a fine of not exceeding $5,000, and we are looking into compounding the offence.

Sir, Dr Faishal also noted that the recycling rate in some developing countries is as high as 70%. In our case, with our limited land for landfills and incineration plants, recycling is an important component for a sustainable waste management system for Singapore. In 2007, our recycling rate was 54%. Our target is to achieve a recycling rate of 60% by 2012, as spelt out in our Green Plan.

As to the provision of recycling bins, Dr Faishal also pointed out that, at the moment, we provide centralised recycling

depositories for every five blocks of HDB flats. He wants us to increase this. We are monitoring the results of this initiative to determine if we should further extend the provision. Since the installation in August last year, the centralised bins have been well used by our residents and, over the past month, the quantity of recyclables received at these depositories has gone up and is still on a rising trend. It rose from about 65 kilograms per depository per month in August 2007 to 98 kilograms per depository per month in June 2008. So we are on track and we will continue to monitor as to whether we need to increase the number of bins in the HDB blocks.

Sir, I think I have answered most of Dr Faishal's questions.

Question put, and agreed to.

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

The House immediately resolved itself into a Committee on the Bill. – [Assoc. Prof. Dr Yaacob Ibrahim].

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

Order for Second Reading read.

3.21 pm

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

Encouraging voluntary savings

Sir, as our population ages, we need to refine the CPF system to help Singaporeans prepare for a more secure retirement. Even as we help individual

CPF members to better grow their retirement nest eggs through higher CPF interest rate and to provide their lifelong income through CPF LIFE, we also recognise the important role of the family unit as a primary social support structure. For this reason, we have been progressively liberalising the rules for CPF Minimum Sum top-ups by family members. Last year, we increased the top-up limit to the prevailing Minimum Sum and expanded the list of recipients, including allowing top-ups to be made to spouses and siblings below the age of 55 using CPF or cash.

Earlier this year, the Government announced that the rules for CPF Minimum Sum top-ups would be further relaxed. Firstly, the annual cap of $26,393 which is imposed on all mandatory and voluntary contributions, will no longer apply on Minimum Sum cash top-ups for recipients below age 55. Minimum Sum cash top-ups would be allowed up to the prevailing Minimum Sum, like Minimum Sum CPF top-ups. Clause 4 of the Bill amends section 13B to effect this change. The clause also removes the need for CPF Board to refund top-ups in excess of the annual cap.

Secondly, CPF members will be allowed to receive cash top-ups to his Special or Retirement Account from all parties, including extended family members and employers. This will encourage family support and provide another route for employers to make voluntary contributions to employees' CPF. Clause 6 of the Bill amends section 18 to remove the restrictions on the recipient-member's age and the relationship with the giver for cash top-ups.

Sir, we would also like to re-align the treatment of top-ups when the recipient dies, or in the case of a non-citizen recipient, when he withdraws his CPF upon leaving Singapore permanently, so that cash top-ups would be treated as if

they were gifts to the recipient. Currently, top-ups via cash or CPF would be returned to the giver. However, cash top-ups made after the new rules take effect would no longer be returned to the giver. In the case of the recipient's death, the cash top-ups will be distributed by way of CPF nomination or intestacy laws. To effect these changes, clause 7 repeals and re-enacts sections 19 and 19A. Clause 3 and clause 5(a) of the Bill make consequential amendments to sections 13 and 15(2) respectively arising from this re-enactment.

The new Minimum Sum topping-up rules will take effect on 1st November 2008. This will allow time for givers to take advantage of the new tax exemption of up to $7,000 of top-up announced earlier at Budget when they make cash top-ups to other CPF members before the end of the year. This exemption will be in addition to the $7,000 exemption for making cash top-ups to their own CPF accounts.

Prescribed age for Minimum Sum schemes

Sir, the Bill also seeks to clarify and refine certain existing policies.

Clause 2 amends section 2(1) to introduce a new definition of "prescribed age". The new definition replaces the phrase "age of 60 years or such other age as the Minister may prescribe". These amendments will enable the Minister to specify in the Regulations different ages for the purposes specified in sections 15(7), 15(7A) and 77(1)(o)(iii), and in respect of different classes of members. In addition, the age for the withdrawal of the Minimum Sum is currently specified using the CPF (Prescribed Age to Withdraw Minimum Sum) Notification. Following the amendment, this will be done by way of Regulations and the Notification will be cancelled.

Clarifying the protection of CPFIS investments

Sir, let me now move on to the amendment relating to the protection of investments under the CPF Investment Scheme (CPFIS).

The CPFIS was introduced in 1986 to give CPF members more choices in investing and enhancing their savings. The intention of section 24(2) of the CPF Act has been to give members the assurance that their CPFIS investments would be protected from creditors so long as they remain within the CPFIS and are not withdrawn.

Section 24(2) was amended on 1st January 2004 to clarify that insurance policies and investment-linked insurance policies bought under the CPFIS would also be protected under the Act.

However, in making the amendment, a sub-clause which appeared in the earlier legislation was omitted unintentionally. This sub-clause qualified that only investments "which the member is obliged to repay into the Fund" are protected.

Sir, the policy with regard to the protection of CPFIS investments, namely, to protect only investments within the CPFIS, has not changed. Thus, section 24(2) should be restored.

Clause 9 of the Bill, therefore, adds the sub-clause "which the member is obliged to repay into the Fund" to sections 24(2) as well as 24(3). This amendment, together with supporting amendments to the CPFIS Regulations, will make it clear that the investments, proceeds or benefits thereof are protected from creditors, and from the Official Assignee on the member's bankruptcy, as long as the investments remain within the CPFIS, and the proceeds or benefits remain in the CPF Investment Account, Ordinary Account or Special Account,

even for members who have reached the age of 55.

Refinements to CPF Education Scheme

Sir, the last set of changes in the Bill deals with the use of CPF savings for tertiary education. The CPF Education Scheme was introduced in 1989 as a concession to allow members to use their Ordinary Account savings to pay for their children's or their own education. However, we need to balance the use of CPF savings for education with the need to ensure the retirement adequacy of members. For this reason, the scheme currently restricts the use of CPF savings to full-time courses where the degrees and diplomas are conferred by an "approved tertiary institution". These approved tertiary institutions consist of publicly-funded local universities and polytechnics which offer courses that are heavily subsidised by the Government. This restriction ensures that CPF savings are used prudently and for courses where quality is assured.

Sir, as part of the Government's effort to widen the opportunities for Singaporeans to upgrade themselves, there are now Government-subsidised degree and diploma courses offered by local institutions where the qualification is conferred by a reputable foreign institution. These include degree courses under the Polytechnic-Foreign Specialised Institution (Poly-FSI) framework and ITE's Technical Engineering Diploma (TED) courses.

We have decided to allow CPF savings to be used for such courses as they are similar to those offered by the approved local tertiary institutions except that the qualifications are conferred by foreign institutions.

Clause 8(a) of the Bill amends section 22 to allow CPF monies to be used for

courses conducted at an "approved educational institution" in Singapore. The approved educational institution need not be a tertiary institution, and the course of study conducted may lead to a degree or diploma conferred by another educational institution (including a foreign educational institution).

The other sub-clauses in clause 8 amend the Act to facilitate administration of the scheme. Clause 8(b) allows for the recovery of sums not returned to the member by the student or guarantor to benefit from the Government Proceedings Act (section 65). Clause 8(c) inserts new sections 22(5A) and (5B) to enable the CPF Board to recover monies paid to an educational institution in error, and where the educational institution had caused or contributed to the error, to be reimbursed for reasonable expenses incurred in rectifying the error, and to be indemnified against

any liability incurred. It also allows CPF Board to refuse permission for withdrawal unless the approved educational institution complies with reasonable informational, administrative or operational requirements.

Sir, I beg to move.

Question proposed.

3.31 pm

Mr Speaker, Sir, I would like to begin my speech by stating that the Government's proposal to amend sections of the CPF Act, as stated in the Bill, is a timely effort to meet the needs of the ever changing and ever evolving Singapore society as it forges ahead to become a First World economy. The changes would also prepare us for the challenges of the 21st century and also the ageing issues that Singapore will face soon.

Sir, the CPF is a traditional bedrock of our savings structure and should be

continuously reviewed to meet the needs of Singaporeans. This is so as the fund is connected to the people's housing, medical and retirement needs and with it, lay the aspirations of the people, a whole generation now and a whole generation in the years to come.

However, as our nation evolves and globalisation continues to impact us further, challenges to the system would become a common denominator. During my meet-the-people sessions and block visits, I have had many requests from my residents to appeal to the Government to provide further refinements to the CPF system on the way they could spend their CPF savings. I am also aware that there are people who would like to contribute to the well-being of others through the CPF. This, we must encourage and facilitate, wherever necessary and possible. As such, this is even more imperative as we need to tweak the structures to enable others to support the less well-off and, most importantly, in my view, the elderly.

Sir, I am pleased to note the amendments made to section 22 to refine the CPF Education Scheme. The amendments seem to admit more courses on the CPF Education Scheme, such as degree and diploma programmes under the polytechnic-ITE foreign specialised institutional framework. The proposed amendments make the CPF Education Scheme more relevant as there are now diploma and degree courses subsidised by the Government and offered by local institutions, which include the polytechnics and ITE, where the qualification is conferred by a reputable foreign institution.

Sir, I have received many calls from my constituents and Singaporeans who sincerely wish that they could use the CPF to finance courses at other institutions besides those offered under

the newly defined "approved educational institution" in Singapore. With the Lifelong Learning agenda seeping through the minds of many Singaporeans, many still hope to be able to use their CPF savings to realise their aspirations, as well as their children, to have higher qualifications and upgrade their skills in this ever changing global economic environment. This is even so as Singapore aims to be the Education Hub of the World and Singaporeans would never want to be left behind just because of the lack of financial resources. They hope that the CPF Education Scheme could be further refined to include more educational institutions in Singapore and overseas to help them achieve their aspirations in their pursuit for higher qualifications and skills.

Sir, allow me to continue the rest of my speech in Malay.

(In Malay): [For vernacular speech, please refer to Appendix A*.] Sir, the proposed amendments are a timely effort to meet the needs of an ever changing and ever evolving Singapore society as it forges ahead to become a First World economy. I am heartened to note that the amendment to the Act is heeding calls for a greater refinement of the CPF system which will ensure that the CPF stays relevant to our current context. These changes would prepare us for the challenges of the 21st Century and also the issues of ageing that Singapore will be facing soon. It is imperative to develop and maximise the potential of our people to meet these challenges.

The proposed amendments will provide the statutory framework to allow those not related to the CPF member to top up the member's CPF savings with voluntary contributions for retirement needs. This will be useful to the elderly, especially those with no families, and will enable other good Singaporean Samaritans to also contribute to the less well-off.

The changes may also provide a boost for a more philanthropic culture to develop in Singapore. During the Global UBS Philanthropy Forum, via a video link, MM Lee called for the promotion of philanthropy in Asia. He said that the successful ones must care for the less well-off to ensure a cohesive society. As we extend the avenues for people to contribute voluntarily to CPF accounts, either their own or others, I believe it is important that we also extend the incentives for them to do so. I believe this will certainly provide a boost to such an important effort.

I would like to suggest that the Ministry further increase the tax incentive in order to encourage more people to participate. While I agree that this act should come from the heart, sometimes, any incentive will certainly help develop this noble culture.

Mr Speaker, Sir, my key concern is the elderly who constitute a large and significant part of my constituents. Are we doing enough to meet the retirement needs of Singaporeans and encourage as well as facilitate Singaporeans to prepare for their retirement?

In a recent survey by the Tsao Foundation which polled 300 Singaporeans aged from 21 to 55 years old, it was found that only about 58% felt confident and were prepared for their old age. As such, these changes are a timely reminder for us of the ever changing needs of our society. We need to continue to encourage Singaporeans to prepare for old age and be confident about it. I believe the CPF system plays an important role in this effort.

In addition, we should see that every effort we take as part of the holistic process involving all Singaporeans and our nation's resources. The CPF changes should not be seen as a lone effort but as a package along with the other schemes

that promote a secure retirement for all Singaporeans. The challenge is to align these changes with the current initiatives as a whole package to address the needs of Singaporeans, especially the elderly in the long run, without leaving anyone behind. Publicising the current schemes and changes, by communicating messages such as "Start Early, Think Early For Your Future" that could be cultivated as a habit, will keep Singaporeans away from a welfare dependency attitude.

Sir, the amendments to the CPF Act are necessary and timely, as they send a key message to the people that the Government will ensure that the mission of the CPF, which is to enable Singaporeans save for a secure retirement, is realised.

Mr Speaker, Sir, I would like to state again my support so that we could continue to provide for our future generation and make Singapore the best place to live in.

On that note, I support the Bill.

*Cols. 299-302.

3.40 pm

Mr Speaker, Sir, before I begin my speech, may I take this opportunity, on behalf of the House, to wish Minister Mentor Happy Birthday and Good Health. [Applause.]

Mr Speaker, Sir, the CPF (Amendment) Bill aims to address several fundamental policy issues which, amongst others, include ensuring that the elderly stay physically healthy and financially better off and able. In this regard, I am particularly concerned about two groups of people:

The elderly females; and

The stay-at-home mums, also commonly called "housewives" or "homemakers".

As we are facing a rapidly ageing population, there is a greater need to provide support for the elderly to meet the rising costs of living and the increasing demand for healthcare brought about by old age. This problem is particularly acute with the female populace as the life expectancy of women is much higher than that of men. While older men and women generally need support from their families, older women in particular, who live longer, possibly endure more years of widowhood and perhaps disability, with little or no income will undoubtedly have to depend more heavily on their children for their livelihood and healthcare.

In Singapore, with more men and women staying single or if married but not having children or having fewer children, the problem of support in old age will be further exacerbated. In the same vein, there are also women who have to leave the workforce early in their lives or choose to stay at home because they are married, have children or need to look after their aged or disabled parents or parents-in-law. These housewives are a group of people which warrants our attention as they may face similar challenges in their old age.

With these two groups of vulnerable people, there is now an even greater need to reach out to them to ensure that they stay financially and physically able through the CPF retirement account monies, CPF LIFE, Medisave and MediShield. It is an economic and social imperative to provide this basic social safety net for them to ensure their financial independence and sustainability for the long term.

In view of this, I therefore urge the Government to consider the following in rolling out the new Bill and its policy execution:

To have a concrete and sustained 'national' campaign to educate Singaporeans, PRs and their family members, who still do not have a CPF account or MediShield coverage, the advantage of possessing either of these and how to go about doing so;

To further motivate and incentivise, the Government should seriously consider allowing even more generous tax reliefs for members for topping up the CPF accounts of non-earning/non-working family members (ie, the spouse, parents, grandparents, older siblings or immediate relatives) and with the maximum limit further increased;

Besides cash contributions which can be tax deductible, the Government should also consider further easing contribution through a CPF mechanism that allows deduction from CPF accounts to top up family members' MediShield and CPF accounts and grant consequential incentives for doing so. There should be greater impetus to encourage active CPF members to enroll their medically uncovered older family members in MediShield in order to provide medical insurance for their acute care needs;

Currently, the minimum age for the recipient of CPF top-ups is set at 55 years old. If this can be lowered to, say, 40 years old, it would allow the build-up of a more significant nest egg for the non-earning spouse or parent;

CPF members making cash top-ups to relatives under the CPF Minimum Sum Topping-Up Scheme at present, will enjoy tax relief of up to $7,000 per calendar year. This $7,000 ceiling can be raised further as an incentive to encourage such contributions. In order for the contributor to qualify for tax relief for cash top-ups to their family members, recipients must earn $2,000 or less in the preceding year. This criterion should be reviewed as it does not incentivise members to top-up

accounts for relatives who have some income; and

Last, but not least and most importantly, the law must also ensure that the CPF savings and the MediShield coverage – once contributed – should belong solely to the recipient member and not form part of the matrimonial assets that can be ordered for division between spouses upon divorce.

Sir, with that, I support the Bill.

Mr Speaker, Sir, first, I would like to thank Dr Faishal and Ms Ellen Lee for their support of the Bill. I will now try to address some of the issues raised by both Members.

Sir, Dr Faishal suggested expanding the CPF Education Scheme to include more educational institutions in Singapore and overseas. I understand the desire of Singaporeans to pursue higher education, both locally as well as overseas. However, we need to bear in mind the primary objective of the CPF, which is to help members save for their retirement, housing and healthcare needs. In contrast with heavily subsidised local courses, overseas education and private education are generally more costly. It is also not easy to ascertain the quality of many of these programmes. CPF members should also consider other avenues, such as scholarships and loans, to finance their education as well as the education of their children. Therefore, we should always be careful and cautious in considering expanding the CPF Education Scheme further.

Sir, I agree with Ms Ellen Lee that we should continue to support the broad objectives regarding the promotion of family support. The family unit should remain the primary social support structure. The CPF Board can incorporate the message through existing campaigns

that there are now a number of pathways that Singaporeans can help their family members through the CPF.

Sir, both Dr Faishal and Ms Lee have asked for more tax reliefs and incentives for top-ups. To encourage top-ups, members are aware that givers will from this year receive up to $7,000 of tax relief on cash top-ups to their own CPF account and an addition of $7,000 tax relief for cash top-ups to family members. This effectively doubles the tax relief for Minimum Sum top-ups. This is a new incentive which we have just introduced. So, let us give it a bit more time to take effect and monitor the outcome before we finetune it further.

On MediShield, CPF members can already use their Medisave to pay for MediShield premiums of their immediate family members. Alternatively, members can also make voluntary contributions to their family members' Medisave accounts to support their payment of MediShield premiums.

Ms Lee also asked if the minimum age for CPF top-ups could be reduced. Sir, there is no minimum age for a recipient to receive CPF top-ups from siblings or spouses. If the recipient is below 55 years, the top-up goes into his Special Account. If the recipient is 55 years and above, the top-up goes into his Retirement Account.

Finally, I would like to clarify that there is no issue of MediShield coverage being divided between a member and his or her spouse or ex-spouse after divorce because MediShield is an insurance policy and cannot be transferred to another individual. However, on the other hand, a recipient's top-up amounts can be subjected to division under a Court order. This is because this forms part of the recipient's CPF savings and I think it is best left to the Court to decide what is fair for a divorcing couple.

Question put, and agreed to.

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

The House immediately resolved itself into a Committee on the Bill. – [Mr Gan Kim Yong].

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

Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 4.20 pm.

Sitting accordingly suspended at

3.51 pm until 4.20 pm.

Sitting resumed at 4.20 pm

Order for Second Reading read.

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

The co-operatives, or co-ops, of the early days were mostly formed by members with close affiliations to one another. For example, the earliest co-ops in Singapore were established in the 1920s as thrift and loan societies where groups of public sector employees came together to help their members save and take out loans when in need. These co-ops were one of the earliest community self-help organisations in Singapore.

The co-op sector has since grown and now serves many aspects of our economy and society. Today, there are 87 registered co-ops. Forty-one co-ops provide thrift and loan services and they

are known as "credit co-ops". The largest co-ops, such as NTUC FairPrice and NTUC Income, are household names. Total co-op individual membership is now about 1.7 million.

Co-op role and relevance

A co-op is more than just a business entity. It is a business with a social cause. A co-op pursues financial viability not as an end in itself but to serve its members and social cause. The House will be familiar with the social role that the NTUC co-operatives play in moderating the prices of food, insurance, dental and medical care, childcare and eldercare. Less familiar perhaps but still relevant are the many ways in which various other co-ops serve their members and contribute to our community. For instance, the Industrial Services Co-operative Society (ISCOS) helps ex-offenders re-integrate into the community. Many school co-ops contribute to their schools’ welfare funds. Clearly, co-ops play an important role in our society.

Need for legislative change

Co-ops are regulated through the Co-operative Societies Act and the Co-operative Societies Rules. This piece of legislation has been largely unchanged since the last major amendment in 1980.

The co-op legislation needs to be updated in view of the larger membership, and the more sophisticated and competitive business environment that they operate in. In the past, most co-ops were small, and depended on the mutual trust and peer pressure among members who usually knew each other. Today, many co-ops have enlarged their memberships significantly. Some of the largest co-ops have more than 400,000 members. The ability for members to watch out for one another can no longer be assumed. Of particular concern are the credit co-ops. These co-ops take in

deposits from members and give out loans, functioning like finance companies. We need to ensure that such co-ops have higher levels of prudence, and put in place the necessary systems for institutional self-regulation.

Many of the early co-ops were not run by full-time professionals. To ensure proper governance of the co-ops, the Act previously required certain business decisions to be referred to the Registrar of Co-operatives. For example, co-ops are required to seek the Registrar’s permission to purchase property. The law even prescribes for the Registrar to set limits on the amount of honoraria that can be paid to members of the committee of management. Today, these provisions sound outdated. Many of these decisions should be made by the co-op committee of management, which is the equivalent of the board of directors of companies. Some co-ops have complained that the law is too restrictive, especially when they compete with companies as the Companies Act does not have these restrictions. As a result, co-ops are not able to respond fast enough in today’s rapidly changing business environment.

Hence, I am introducing the Co-operative Societies (Amendment) Bill to update the co-op legislation and make it more relevant to today’s environment. The changes in legislation will create a more robust co-op movement and increase the confidence of members and the public in co-ops.

Guiding principles

Mr Speaker, Sir, in developing the provisions of the Bill, we were guided by the following principles:

First, the co-op regulatory framework should help co-ops operate on a level playing field with other entities that

operate similar businesses or fulfil similar roles. That being said, some statutory recognition should be given to co-ops for their social and community roles.

Second, there should be risk-focused supervision where more regulatory attention is concentrated on co-ops with higher risk profiles.

Third, a disclosure-based regime is preferred over the existing prescriptive approach where regulatory approval is required for a range of items. A disclosure-based approach allows members and other stakeholders of co-ops to make more informed decisions concerning co-ops. The primary responsibility for the co-op lies with the co-op committee of management and its management.

Fourth, in the spirit of self-help and self-reliance, the co-op sector should take the lead to raise the level of accountability and governance among co-ops. The Government can provide the necessary support but the sector should level up through self-regulation as far as possible.

I would now like to draw the attention of the House to the main features of the Bill.

Key features of the Bill

The Bill will bring the level of co-op accountability in line with that of other sectors. The Bill clearly spells out the duties and accountability of co-op board members. Members of the co-op committee of management will be required to act in good faith, use information for proper purposes and declare their interests. As with companies and societies, co-ops will have to comply with accounting standards formulated by the Accounting Standards Council. Individuals who have been convicted of offences involving fraud or dishonesty will

be disqualified from serving on the co-op board.

In line with the risk-based regulatory approach, the Act will be amended to subject credit co-ops to more stringent registration criteria compared to non-credit co-ops. Under the new regulatory regime, credit co-ops will be required to have clearly-defined membership criteria. As credit co-ops are not subject to the same stringent regulatory requirements generally applicable to financial institutions, they should not open their membership to the general public. Credit co-ops should confine their membership to those who share a pre-existing affiliation with each other. For example, credit co-op members could have a common employer, share membership in an association or they could belong to the same community. To minimise the disruption to credit co-ops, the Bill allows the co-ops to retain existing credit co-op members, even if they are outside the co-op’s defined membership affiliation.

Credit co-ops will also be subjected to higher levels of governance at board and management levels. Credit co-ops will be required to have Audit Committees which will review the internal controls and audit plan of the credit society. Individuals convicted of offences involving fraud and dishonesty will be disqualified from serving as board members or key employees of credit co-ops. As credit co-ops should not open up their services to the general public, only members and their immediate families can make deposits in credit co-ops. Credit co-ops can give out loans only to their employees, members and their immediate families.

Credit co-ops should concentrate on their core thrift and loan operations and not use depositor funds to establish other

lines of business. Existing credit co-ops with other lines of business will be allowed to retain their non-core businesses. However, they will need to seek their members’ approval to use depositor funds for these other businesses.

The Bill will remove some outdated prescriptive requirements of the existing co-op legislation and provide co-ops more flexibility to manage their operations and compete in the marketplace. Co-op leaders should be empowered to take decisions for their co-ops without being encumbered by unnecessary rules. With the liberalisation, co-ops will no longer need the Registrar’s approval for investments in property and other co-ops. Other liberalisation measures include removing the need for a co-op to set aside a portion of its surpluses as a statutory reserve fund in its balance sheet. As separate prudential requirements for credit co-ops will be prescribed under the Bill, it is not necessary for the law to require that reserve funds be kept for all co-ops. Further, the Registrar will no longer set honoraria limits for co-ops. The payment of honoraria, allowances and benefits to a member of the co-op committee of management is to be approved at a general meeting of the co-op.

To facilitate the registration of more co-ops, the Bill will allow the Registrar to accept declarations from application that they have complied with the registration requirements. This will free up the Registrar from having to review each application in great detail, and is similar to the registration process for companies and societies. We plan to allow such declarations for non-credit co-op applications. Through the Bill, the offence provisions will be updated to more accurately reflect the severity and level of offences. We have benchmarked against comparable provisions in the Companies Act, Banking Act and other legislation.

The maximum fine will be raised to $50,000 for the more serious offences, such as providing financial services without being registered as a credit society. The maximum jail term will be five years for fraudulently inducing persons to invest or deposit money in a co-op. This is in line with the Companies Act. The regulator will have a range of options including the composition of offences to more adequately deal with co-op non-compliance.

Transitional arrangements

The Bill makes provision for co-ops to transition into the new legislative regime. Co-ops have at least one year from the commencement of the amended Act to make the necessary changes to their by-laws. Existing credit co-ops will be deemed as registered credit co-ops for one year during which they will need to apply to the Registrar to continue providing financial services. They will also use this one year to meet with regulatory provisions that apply specifically to them, such as the establishment of an Audit Committee. These transitional arrangements allow credit co-ops to build up their capabilities to meet the enhanced capital and other prudential requirements.

Public and industry consultation

Sir, we have consulted the key stakeholders of the co-op movement, all of the co-ops and the public to arrive at the various legislative changes introduced in the Bill. The Bill is based on the recommendations of an inter-agency team that reviewed co-op regulation.

The apex co-op body, the Singapore National Co-operative Federation (SNCF) supports the guiding principles applied to develop the recommendations for the co-op legislation review. Co-ops generally agree that it is not sustainable for the Registrar to continue to make business decisions, such as the maximum honoraria

to be paid, on behalf of co-ops. Going forward, co-op leaders should have greater autonomy in managing co-ops and co-op members should take a deeper interest in the running of their co-ops.

The co-ops that are most affected will be credit co-ops, as they will need to adjust to prudential and other regulatory requirements consistent with their greater custodial responsibilities. While there will be some adjustments required of co-ops, the co-op movement understands that these legislative changes are necessary for the long-term development of co-ops in Singapore.

The SNCF has already implemented various initiatives to raise the governance and professional capabilities of co-ops. My Ministry will continue to work with SNCF to put in place measures to facilitate the transition of co-ops to the new regulatory framework. We are also promoting the formation of more co-ops, particularly those that benefit disadvantaged groups in our community.

Mr Speaker, Sir, co-ops have played an integral part in the growth and development of Singapore. Co-ops are part of the self-help movement where groups of individuals come together as corporate entities to uplift themselves and the broader community. The Bill will introduce a risk-focused regulatory framework that gives co-ops greater operating flexibility while elevating their levels of governance and accountability. It will facilitate the further development of the co-op sector in Singapore.

Sir, I beg to move.

Question proposed.

4.35 pm

Sir, co-operative societies are not new. Its movement began modestly towards the

end of the 18th century and has since then grown into a myriad of business entities across the globe covering various interests such as consumers, producers, housing, insurance, thrift and loans, amongst others. Compared to other business entities, the early pioneers of cooperatives believed that certain cornerstone values, known as the Rochdale principles, must remain rooted in the organisation. These are inter alia an open and democratic membership, income distribution on the basis of refund on patronage, political and religious neutrality, exchange of goods and services at market prices, and limited returns on equity.

As a business platform, co-operative societies allow individuals to come together through the pooling of their resources to promote common interest. To a large extent, co-operatives have been fairly successful in many societies where there are well defined business models and proper management. This is perhaps most evident at home when one looks at NTUC Income and FairPrice. Over the years, NTUC FairPrice has become the face of a successful co-operative that continues to lead the people’s fight against inflation, and a shining example of how the community can come together to deal with their own needs in an independent manner.

Indeed, the co-operative movement has come to represent the values of social self-help and provides an excellent platform for social enterprises and initiatives.

While the ideals of a co-operative movement may be noble, there is no guarantee that a co-operative will always be successful or that it will serve the needs of its members. The legislation governing co-operative societies only provides the framework. Much, and I

have alluded to this earlier, will have to depend on the viability of the business and, of course, the quality of management in relation to running the business.

I welcome the Bill as it seeks to streamline the current legislation to the extent that it tightens the Registrar’s control on credit societies, and strengthens the framework of co-operative societies by introducing, among others, the requirement of having an audit committee comprising independent members to perform an oversight function on the business of the society. Broadly, the present amendment seeks to bring the present Act in line with the governance framework of the Companies Act and the amendments that one would say are long overdue.

However, although I welcome the changes that the present Bill introduces, there are a number of observations that I would like to make.

First, and as a general principle, the Companies Act and co-operative societies presuppose that there is an underpinning of democracy and accountability to the shareholders or members of the society. This explains why under the Companies Act and the present Amendment Bill, accounts have to be laid before the general body of members and certain expenses such as officers' fees or honorarium have to be approved at general meetings. The principle is based on accountability and members vote to elect the people they want to lead them.

Unfortunately, the reality on the ground is far from ideal. Those who attend shareholder meetings will attest to the fact that there is a great deal of shareholder apathy generally; and I suspect that this is the case with co-operative societies as well. Usually, the bulk of the shareholders or members do not attend these meetings; the ones who do are often associated with the

management or controlling shareholders; with the result that there is often a rubber stamping of the recommendations of the management. What it means is that management or the controlling member may wield very tight control on the company or society. The question for co-operative societies really is: can members be counted on to provide the supervision that the current framework envisages?

Secondly, even though the present Bill seeks to mirror the provisions of the Companies Act, it does not go far enough to address the present weakness of the current framework. I note that with the amendment to the present Act, members of the management committee are required to act honestly and with reasonable diligence. The big question here is, as with the Companies Act, what is the standard of honesty and reasonable diligence of the members? Is it enough if a member of the management committee were to merely declare his interest in the contract with the society and proceeds to transact in the contract? In the case of listed companies, the Audit Committee has oversight of such contracts as interested person transactions, especially between those of the directors and the company they look after, and this comes within the scrutiny of the Audit Committee. In the present case, I note that the Audit Committee provided for in the Bill does not have to look at interested party transactions. I would like to ask the Minister why this has been left out of the scope of responsibility of the committee. Why should the management committee also not include the nomination committee or the remuneration committee as is the case of listed companies? Presently, the remuneration committees of listed companies determine and recommend the remuneration of directors and senior executives of the company to the shareholders. In the present case, I note that the amendment gives the society the freedom to determine the remuneration packages of the management committee

members without the oversight of the Registrar before. With this arrangement, I do appreciate the flexibility. However, I am not sure if, in so doing, we may be creating vulnerability here, particularly if members' control is weak.

Further, if the intention with the amendment is to bring the Act in line with the Companies Act, then there is potentially an important omission in the Bill. Currently, under the Companies Act, there is a general prohibition against loans to directors or financial assistance to directors, directly or indirectly, in acquiring shares or units of shares in the company. Presently, there does not appear to be any specific prohibition against these acts in the Bill. Does it mean that it is acceptable for the society to lend management committee members money? Or that it is acceptable for the management committee member to borrow money from the society to acquire further voting rights of up to 20% of the total voting rights in the society? It would be inconceivable that the officers of the society can do all of those things that are currently proscribed by the Companies Act.

Thirdly, co-operative societies by its very nature contemplate a sizeable membership. This is particularly true with respect to co-operatives that require substantial capital to start a business; particularly in the context of a credit society. I do appreciate that the present Bill seeks to tighten control over such societies. Nonetheless, credit societies are allowed to raise capital either by way of fresh subscription or deposits from its members amongst other means. If the credit society were to go out and aggressively sign up members of the public for this purpose, how robust will the office of the Registrar be in supervising the business activities of these unions? Should the MAS be involved at some stage? How can we be sure that the interests of the members will

be sufficiently safeguarded by the current legislation? Besides, I am not sure if the very business model of co-operatives is anti-competitive. Would there be issues under our Competition Act with regard to issues of competition?

Finally, in some ways, the present Bill does not go far enough to address some of the other issues in the current Act. I shall just mention two.

Currently, the Act envisages that minors as young as those who are 12 years of age as in the case of school co-operatives may join as members. The present Bill has lowered the age of membership of the non-school co-operatives to 16. It does seem rather odd to me that what the law deems as a minor and thus not of sufficient age to enter into legally binding contracts is now able to accept minors joining co-operatives as full voting members who can vote potentially and take part in management as a key member within the society. To the extent that members are now allowed to join co-operatives because of certain policy consideration, then I think that the law should perhaps differentiate and treat them differently from the adults under the current legislation.

Additionally, I note that section 87 of the Act presently provides that no civil court shall have any jurisdiction in respect of a matter concerned with the dissolution of a society and no appeal shall lie to a civil court from an order of the liquidator.

Sir, legislation taking away the right of the courts to review the acts of the state or any individual for that matter should be sparingly used. In this case, I cannot see why the court should not be in a position to review the decision of the liquidator with respect to the dissolution of the society. On the contrary, such provisions

limit access of the aggrieved to justice, and weakens the rights of society, not least of which are the members. I do not see why in this current age we need to keep such a provision in the Act. I would urge the Government to consider repealing it.

With that, Sir, I support the Amendment Bill.

4.44 pm

Mr Speaker, Sir, thank you, for allowing me to speak on this Bill.

First, I need to declare my interest as the Chairman of the Singapore National Co-operatives Federation (SNCF), and I also work for NTUC FairPrice Co-operative Ltd.

I applaud the proposed amendments. It has been some 23 years since the Co-operative Societies Act was first passed in 1985. Having these measures in place will reinforce corporate governance and accountability. It would strengthen the co-operative movement and improve public confidence towards co-operatives.

Co-operatives are governed by laws.

But, day to day, we need a strong culture of self-regulation. SNCF has, in recent years, operated a slew of initiatives to strengthen awareness of corporate governance way before legislation. In 2001, we promoted the idea of co-operative having independent directors. A year later, we renewed our strategic direction. One of the key areas was to promote and enhance Co-operative Governance among co-operatives. In 2004, we launched the Co-operative Governance course, to equip board members and senior managers of co-operatives with a clear understanding of their roles and responsibilities in managing their co-operatives and the key elements of good corporate governance. Some 18

such courses have been conducted, training about 450 co-operative leaders from 53 co-operatives. We continue to collaborate with the Ministry of Community Development, Youth and Sports in carrying out operational audits and follow ups.

More importantly, in 2006, we launched the Code of Governance for Co-operatives at the Annual Co-operative Leaders' Conference. The Code encapsulates the best governance practices of the industry and aims to help co-operative boards and management better fulfil their roles. It is meant to assist all co-operatives (including non-affiliates of SNCF) in examining and raising their governance standards. It aims to complement the minimum standards set forth in co-operative legislation.

In this regard, I wish to assure my colleague, Mr Sin Boon Ann, that many of the bigger co-operatives, especially those in the NTUC group, all have nomination committees, remuneration committees, on top of Audit Committees.

However, Mr Speaker, Sir, I need to emphasise that we must strike a balance between ensuring safeguards and being practical, so that we do not inadvertently render the co-operatives uncompetitive, given the small scale in operations for some of them. This is the approach that is advocated by SNCF.

Since early last year, MCYS has engaged SNCF and its affiliates in a few dialogue sessions to obtain our inputs. Some of them have been incorporated in the proposed amendments in this Bill, but some remain unanswered. So I have a few queries and suggestions.

On section 9, Registration, I propose that, as part of this process, the applicant should also attach their business plan. This is not to suggest that the regulator must assess the viability of the

business plan but rather that the regulator's role is to ensure that such a plan exists and provides some safeguards for members who have invested in the co-operative.

On section 16B, Control of Credit Societies, I seek clarifications on:

The interpretation of "financial service";

Whether institutions that are regulated under the Banking and Finance Companies Act are subject to similar requirements; and

The Regulator's benchmark when authorising applications for new financial services. (3) On section 60, Eligibility for Membership of Committee of Management (CoM) or to be Key Employee of Credit Society, I want to:

ask whether there should be a stipulation to restrict either the number of non-members on the Committee, because the Act is silent on this matter. In principle, we support having non-members on the Committee of Management. As it is, NTUC co-operatives are a model where they consciously appoint independent directors to their boards so as to strengthen the boardroom with expertise and experience. On the other side of the coin, it should also be pointed out that we are already seeing the Committee of Management of some school co-operatives, comprising non-members, such as parents, instead of teacher advisers, and student co-operators. Therefore, if left unchecked, it could result in the admission of more of such non-members in the future.

I also appeal for a minimum period of debarment instead of indefinitely for persons convicted of fraud or dishonesty to be eligible to become members of the

Committee of Management or Key Employees of the credit society. This appeal is consistent with and in support of the Yellow Ribbon project, that everyone deserves a second chance. The onus will be on the respective board or Committee of Management to conduct their own assessment whether these people should be appointed to their boards or Committee of Management. Next, on section 95, Powers of Minister to make Rules, I would like to seek clarifications on the authority that is vested in SNCF to carry out its responsibilities as both an Apex organisation and a reporting body to the Registrar, ie, specifically, should such an authority be extended to non-affiliates of the Apex organisation? With the onset of new legislation, section 76 of the Banking Act and section 53 of the Finance Companies Act will be amended to remove credit co-operatives from being granted exemptions they have been enjoying until now, except that they will not be required to apply for a licence. Bearing in mind that credit co-operatives will be subject to certain restrictions, my question is: would it be fair for them to be subject to the same requirements of other financial institutions when they are not competing on a level playing field? Sir, the key thrust of these changes, as the Minister of State has elaborated, is a tightening of the regulation of credit co-operatives.

First, there is the removal from exemptions of sections 73 and 53 of the Banking Act. Can the Minister elaborate on the impact on co-operatives?

Second, on the restriction of membership of credit co-operatives, the Act spells out clear and stringent guidelines on the admission criteria of

membership for credit co-operatives. This, in effect, puts a cap on the ability of credit co-operatives to grow, let alone sustain their current base.

Third, on the restrictions on operating branches and ATMs, the Act is silent on whether credit co-operatives will be allowed to operate branches and ATMs. I understand that the Registrar's approval is required for the setting up of branches and ATMs. I believe that MCYS's rationale is that the recommendation ensures that there is no proliferation of branches and ATMs by credit co-operatives. But if the consequential amendments to the Banking Act (Cap 19) and Finance Companies Act (Cap 108) are passed, would that not mean that credit co-operatives would now be required to obtain the necessary banking licences to operate branches, as required under section 12 of the Banking Act (Cap 19)? Also, with the passing of the consequential amendments to these two Acts, the restriction to operate branches and ATMs will certainly create an uneven playing field for the credit co-operatives.

Fourth, on the restriction on advertising, the Act is silent on whether credit co-operatives will be allowed to advertise their products and services. Given that the Act is silent, does it mean that credit co-operatives will be allowed to engage in all forms of advertising? If restrictions are subsequently placed to restrict them from advertising, again it creates an uneven playing field for the credit co-operatives. And if we raise the bar on the regulation of credit co-operatives to standards that are on par with other financial institutions, what is the rationale for imposing the additional, more stringent membership criteria? Can the Minister explain?

Jeffrey Sachs, a renowned development economist, had in his book, Common Wealth – Economics for a Crowded Planet, asserted that market mechanisms and government policies

alone cannot sustain economic growth. And that public, private and the not-for-profit sectors need to work co-operatively to address social concerns and achieve sustainable outcomes. Co-operatives are indeed well placed to play a key role in achieving sustainable outcomes for the local and broader community. Co-operatives give members a sense of ownership in the organisation while serving their own economic and other needs. It also helps build social networks among members and closer links between the co-operative and the broader community.

When the International Co-operatives Alliance held its global general assembly here in Singapore in October last year, Minister Vivian Balakrishnan at the Opening Ceremony said:

"Co-operatives have a distinct and valuable role to play in helping create a strong, sustainable, prosperous and inclusive society".

The standing of Singapore co-operatives is held in high regard by the co-operative fraternity throughout the world. The social impact created by some of the co-operatives here has brought immense benefits, both economically and socially, to all its members and the community at large.

Sir, as we embark on this round of legislative changes, I see it as a step towards the anchoring and strengthening of the role of the co-operative movement in Singapore. Having these measures in place will reinforce corporate governance and accountability. They will certainly improve public confidence towards co-operatives.

I hope the Ministry can consider my comments and suggestions. I also ask that the regulators adopt a light approach by extending some time, flexibility and help, if necessary, to co-operatives, especially the smaller ones, to adjust to

these new changes. On our part, the Singapore National Co-operatives Federation will do whatever possible within its means to help all co-operatives make these adjustments.

Sir, I support the Bill.

4.55 pm

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

The last major amendments to the Co-operative Societies Act were done in 1980. Since then, there have been many new developments that have an impact on co-operatives. These amendments are, therefore, not only timely but also necessary.

The first co-operative was registered in Singapore in 1925. Singapore has one of the more successful examples of co-operation in the world today. Indeed, with 1.7 million individual members, their impact and significance on the lives of ordinary Singaporeans cannot be under-estimated. The NTUC co-operatives became part of this movement in the early 70s, soon after the milestone 1969 Modernisation Seminar was held. Union leaders then decided to form co-operatives as a way of advancing our workers' welfare, particularly for our low-income workers. Since then, the NTUC co-operatives have helped in a major way to advance the agenda of co-operation in Singapore. The reach of the NTUC co-operatives today has gone far beyond that of its members, as evidenced by recent events. NTUC FairPrice, one of NTUC's co-operatives, plays an active role in helping Singaporeans deal with inflation. As we move ahead, co-operatives will continue to play a major role in helping people to improve their lives. It provides a vehicle for people to collectively combine their individual resources to benefit from economies of scale. But to do so, co-operatives cannot remain static

but have to progress and expand its role to meet the needs of its members and to benefit from our economic growth.

Sir, although co-operatives are fundamentally social enterprises with a strong mission to advance the interests of its members, to survive and sustain its operations, every co-operative has to operate on the basis of modern business principles. One key requirement of good modern business practices is good corporate governance. Hence, the key thrust of these amendments, which is to help co-operatives raise the level of their accountability and governance, as well as to set a more risk-focused co-operative regulatory regime, particularly for the credit co-operatives, is a move in the right direction. It is necessary to maintain a right balance. If the law is too stringent, then it would kill the initiative for credit co-operatives which are essentially akin to the poor man's bank, saving many workers from the clutches of loan sharks, as the banks or financial companies are not interested in the small borrowers. But, if it is too liberal, then it may run the risk of exposing small depositors in these credit co-operatives to unwarranted losses.

Sir, there are a number of clarifications that I wish to seek from the Minister of State over this Bill.

First, could the Minister of State clarify whether there are measures in place to assist and address the needs of the smaller, less established co-operatives to grow and develop so that they can be more effective in taking care of their members' needs? There is a great disparity today in terms of the growth and development of co-operatives in Singapore and smaller co-operatives could benefit from a sustained programme that they can rely on for expertise, skills, marketing or any other form of help. Due to their

small size, they may not be able to have access to such capabilities.

Second, could the Minister of State update this House on the number of new co-operatives that have been established over the last five years and what resources have been allocated and initiatives put in place to promote the development of new co-operatives? Although co-operatives have existed since 1925, there are now only 87 co-operatives, a relatively small number compared to the potential for this sector to grow. Is the Ministry satisfied with this number? How many more new co-operatives does it expect to see established over the next few years?

Third, could the Minister of State clarify on the meaning of "financial services" under section 16B(1), something which Mr Seah Kian Peng has also already touched upon. This provision prohibits credit societies from entering into partnerships, joint ventures or other arrangements with any person to provide any financial service other than the financial service or services which it is registered to provide. Does the restriction apply to all types of financial services, such as taking deposits, giving personal loans or hire purchase? Or does it refer to specific products, such as fixed deposits, housing loans, car loans or study loans? If the process of seeking approval is too onerous, it might stifle positive initiatives from co-operatives and prevent them from providing timely products or services that cater to the needs of their members. Could the Minister of State also clarify

whether there will be guidelines issued to inform co-operatives on the criteria that will be used to approve such applications? This would ensure greater transparency and would ensure that credit co-operatives are better able to comply with the requirements. At the same time, clarity as to the definition of financial service is important as the fine for

violating the registration provision is quite punitive.

Fourth, could the Minister of State clarify whether it is possible to exempt existing credit co-operatives from the requirement of section 39(3A) which imposes an additional criterion for individuals to qualify for membership in a credit society? Members of credit co-operatives must now belong to a field of membership consisting of a pre-existing common bond of association or community of interest. The concern of credit co-ops is that if this requirement is adhered to stringently they will suffer a membership decline. Is there any flexibility to exempt existing credit co-operatives or to give them longer time to comply with this requirement?

Finally, could the Minister of State also clarify how the Ministry would be working with the co-operatives to assist them to comply with the new requirements, especially the smaller co-operatives with few or no full time staff? Many are already struggling to comply with the existing law and the requirements would add additional compliance obligations on them. What assistance would be rendered to them to enable them to comply with the new law?

On this note, Sir, I support the Bill.

5.02 pm

Mr Speaker, Sir, I would to thank the hon. Members, Mdm Halimah Yacob, Mr Sin Boon Ann and Mr Seah Kian Peng for their support and comments. Let me address the points they have raised.

Mr Sin Boon Ann had cited the genesis of the co-op movement of Rochdale and asked whether these principles will be required of co-cops through the Bill. The co-op movement worldwide subscribes to the co-op principles that have been developed by the International Co-

operative Alliance. The existing Act already requires co-op principles to be incorporated into the objects of co-ops.

Mr Sin had suggested that co-ops are not much different from other business entities. Co-operatives are businesses with a social mission. As there are limits to the return on co-op capital, the primary motivation for co-ops is not the maximisation of investor capital, unlike companies which maximise returns to shareholders. For example, the subsidiary co-op legislation limits the amount of dividends that can be paid to members to 10% of the net surplus of the co-op. Co-ops also need to serve their social purpose, be it providing employment to vulnerable groups or products and services to members at cheaper prices.

As an illustration of the social role of co-ops, I would like to draw the attention of the House to some examples of their contributions to the community. The NTUC co-ops play a key role in moderating the prices of food, insurance, dental and medical care, childcare and eldercare. The social charter of the NTUC co-ops benefits not only their members but the larger community as well. For example, NTUC FairPrice has extended a 5% discount on 500 of its house brand items to its customers since December last year. This discount is estimated to save consumers up to $1.5 million over three months.

Mr Sin had asked how the Bill will strengthen co-op governance. Co-ops are member-based entities with the general meeting of members as the supreme decision making authority for the co-op. The authority of the general meeting will continue to be enshrined in co-op legislation. This is in line with the co-operative principle on democratic member control. Through the general meeting, members have a direct say in the constitution and resolutions of the co-op. Like shareholders in private limited

companies, co-op members should be very involved in the management of co-ops.

The co-op Committee of Management is similar to the Board of Directors of companies. The Bill will strengthen the Committee of Management by tightening the disqualification criteria for the members of the committee. The duties of these members will also be brought in line with those applicable to company directors. Due to their higher stewardship responsibilities, credit co-op committee of management will be subject to independence requirements and credit co-ops will need to form Audit Committees.

However, the Bill will not require non-credit co-ops to be subject to similar independence and Audit Committee requirements. These are best practice measures which are already included in the Code of Co-op Governance which has been implemented by the co-op apex body, the Singapore National Co-operative Federation (SNCF). Best practice governance requirements are best handled outside legislation and should be led by the co-op movement itself, in line with the principle of self-regulation.

Mr Speaker, Sir, Mr Sin Boon Ann had suggested that co-op governance be levelled up to that of public-listed companies. In contrast, Mr Seah Kian Peng had questioned whether it was fair to subject credit co-ops to a level of regulation on par or even higher than that applicable to financial institutions. Mdm Halimah requested us to have a more balanced approach. I agree with her. Mdm Halimah also asked whether it is possible to exempt existing credit co-ops from the requirement under section 39(3A) that individual membership be limited to those with a pre-existing common bond or affiliation.

Financial institutions play an integral role in Singapore's financial system and offers financial services to the public. MAS licenses financial institutions and subjects them to a rigorous regulatory framework. This framework includes complex and comprehensive rules to maintain a minimum level of capital in proportion to the risks taken, rules on maintaining minimum liquid assets, various prudential limits that limit their exposures and concentration risks, rules on classifying loans and maintaining adequate loan loss provisions. Financial institutions are also subject to a supervisory regime, both onsite and offsite, that continually assesses their governance, risk management practices and controls and processes. My Ministry appreciates the concern raised by Mr Seah Kian Peng and Mdm Halimah Yacob on the impact the Amendment Bill will have on credit co-ops.

Credit co-ops are not subject to MAS's direct licensing and regulatory oversight. As they are not subject to the same licensing and regulatory standards as banks and finance companies, credit co-ops are not allowed to serve all members of the public. Hence, we have proposed to require credit co-ops to have clearly defined membership bases. As credit co-ops should not be reaching out to the general public, there should be no need for them to engage in public advertising. They are free to advertise directly to their members. Similarly, as credit co-ops do not serve the general public, there should not be an unregulated growth of branches and ATMs. Without these restrictions, it is possible that credit co-ops will continue to reach out and recruit new members from the public who are unaffiliated to the co-op.

While they are not subject to the same licensing and regulatory standards as banks and finance companies, each credit co-op will nevertheless need to be subject to stringent governance and prudential

requirements to protect the interests of their depositors. Credit co-op members are generally from the working class, many of which can ill-afford to lose their savings through improper stewardship of their deposits. The average size of each deposit account in credit co-ops is about $5,000. However, the total amount of deposits in all the credit co-ops is about $1 billion. This is not a small sum. The Bill will authorise the Minister to set prudential and financial requirements for credit co-ops. This will better protect the interests of credit co-op members and increase the confidence of these members in the credit co-op movement. It will help protect the sanctity of the depositor funds in credit co-ops and ensure good governance. The level of prudential regulation of credit co-ops will take into account the much smaller size of the entities and the role that they play in society.

Mr Seah Kian Peng and Mdm Halimah had expressed concerns that the restrictions on credit co-op membership will put a cap on the ability of credit co-ops to grow and adversely impact the credit co-op movement. I would like to assure Members of the House that this will not be the case. Under the Bill, credit co-ops are also allowed to 'grandfather' or retain existing members, even if they are outside the co-ops' defined membership affiliations. So, credit co-ops will not need to lose existing members as a result of the new section 39(3A) requirements.

Mr Speaker, Sir, there are 41 credit co-ops and only 11 currently have clauses in their by-laws that allow any member of the public to be their members. So, credit co-ops with clearly defined memberships have been able to sustain their operations. Through our consultations with the credit co-ops, we know of two credit co-ops that may have difficulties redefining their membership. For these credit co-ops, we can apply total membership limits that will provide flexibility for these co-ops to grow at a measured pace. The Bill includes an

exemption provision that allows co-ops to apply for exemption from any of the requirements of the Act. For exemptions from section 39(3A), credit co-ops will need to provide justifications why they are unable to meet the requirements. The credit co-op should also be able to show how it will still contain its membership such that it will not be able to take in all members of the general public. Under the Bill, credit co-ops will be given a one-year transitional period to meet with new requirements applicable to them.

Mr Seah had asked whether credit co-ops will be allowed to operate branches and ATMs. The Registry may issue written directions to require credit co-ops to inform the regulator of new ATMs and branches. The Registrar may prohibit the credit co-op from further expansion of its branch and/or ATM network, taking into account specific circumstances surrounding the co-op. It will not be necessary to obtain licences to operate branches under the Banking Act.

The Bill allows advertising restrictions to be prescribed. As I had mentioned above, credit co-ops serve their members and not the general public. There is little reason for the credit co-op to advertise its products and services widely to the general public. However, co-ops are free to advertise directly to their members. We will consult the apex co-operative body, the Singapore National Co-operative Federation (SNCF) and other key stakeholders to ensure that these provisions of subsidiary legislation are workable.

Both Mdm Halimah and Mr Seah had sought clarifications on the interpretation of "financial service" under the Bill. "Financial service" includes "receiving deposits" and "granting loans". Mdm Halimah further enquired on the application of section 16B(1) of the Act which will prohibit a credit society from providing financial services other than the

financial services which it is registered to provide without the approval of the Registrar. Mdm Halimah had asked whether credit co-ops that are registered under the new regulatory regime will subsequently need to seek the Registrar's approval to introduce new financial services. Under the new Act, credit societies will be registered to provide financial services which, as explained earlier, includes "receiving deposits" and "granting loans". If a credit society is already registered to provide deposits, it will not need to seek further regulatory approval to provide new deposit products. Similarly, if a credit society is registered to provide loans, further approval is not required for it to introduce housing loans or new types of loan products.

Mr Seah had sought clarifications on the consequential amendments to other Acts. In the usual course of co-op business, the provisions of the Banking and Finance Companies Acts will not be applicable to co-ops.

However, should co-ops extend financial services to the public and engage in "financing business", as defined in the Finance Companies legislation or banking business, the relevant provisions of these two Acts will apply. So, this is in line with the level playing field principle as mentioned by Mr Sin.

Mr Seah had asked for the impact of sections 73 and 52 of the Banking Act on co-ops as a result of the consequential amendments. The former section relates to the Public Prosecutor's consent for prosecution, the latter about certain responsibilities when a bank is taken over by MAS or a statutory manager. As long as co-ops do not conduct banking business and do not breach the provisions of the Banking Act, these provisions will not apply to co-ops. The House may be wondering whether we should only

subject co-ops to the specific applicable provisions of the Banking Act then. The consequential amendments proposed by the Bill is the approach used for other such amendments.

Mr Seah had proposed that as part of the registration process, the applicant should attach their business plans. This is a good practice and we can work with SNCF to implement this. Mr Seah would like to know the definition of "residents of Singapore" under the Bill. Generally, "residents in Singapore" refers to permanent residents in the context of the relevant provision of the Bill. Mr Seah asked if co-ops can appoint non-members to their Committees of Management. Existing co-op legislation does not require only members to be on the Committee of Management. There is no limit to the number of non-members that can be elected to the Committee of Management. This will not be changed through the Bill.

Mr Seah suggested that a minimum debarment period should be set for persons convicted of any offence involving fraud or dishonesty. The debarment period for non credit co-ops has been set at five years. This is in line with the Companies Act. Credit co-ops have higher risk. They take in deposits from members and give out loans. There is a greater possibility of fraud or dishonesty taking place in credit co-ops as compared to non credit co-ops. Hence, we have not set a minimum debarment period for credit co-ops. However, the Bill allows the Registrar's approval to be sought to allow persons disqualified of relevant offences to be appointed to the Committee of Management.

Mr Seah had asked if SNCF will be designated as a reporting body for non-affiliates. Under subsidiary legislation, SNCF may be delegated to be the reporting body for submission of documents from its affiliates. SNCF can be designated as the reporting body for

non-affiliates, but this will be determined after discussions with SNCF.

Mdm Halimah asked whether there were measures in place to help smaller co-ops grow and develop. In line with the co-operative principle, the SNCF helps develop all co-ops, especially the smaller co-ops. Under existing co-op legislation, co-ops are required to contribute to the Central Co-operative Fund (CCF). The CCF is used to promote the development of the co-op movement. The SNCF taps on the CCF to carry out promotional and developmental programmes for the co-op movement. For financial year 2008 to 2009, CCF allocated a budget of $5.2 million for SNCF to implement these programmes.

SNCF assists co-ops to build up their operational and manpower capabilities in various ways. Co-ops may apply for a "Special Project Grant", to implement projects like IT improvements and consultancy services. Since 2006, 18 projects with grants of more than $340,000 were approved. In addition, SNCF has introduced shared corporate services. Smaller co-ops with limited resources are encouraged to outsource certain functions like accounting and membership management. Since 2007, SNCF has assisted five co-ops to outsource their accounting management to an external vendor.

We note the concern that some co-ops may have initial difficulties in coping with the regulatory changes. Mr Seah has suggested a light and human touch in the regulation of co-ops. We agree, and will do so. We are extremely conscious of the role of co-ops in our community. We assure the House that MCYS will work with SNCF to provide the necessary assistance and training to all co-ops. There will be seminars and information packages to explain the changes and provide answers to questions from co-ops. We will also formulate and provide model by-laws to credit and non-credit co-

ops so that they can use them for reference when considering the necessary amendments to their own by-laws.

Mdm Halimah and Mr Sin Boon Ann had enquired on the number of co-ops formed. In the past five years, eight co-ops were registered. This represents a 10% increase in the number of co-ops.

We recognise that more can be done to promote and facilitate the formation of co-ops. Co-ops legislation sets the framework for the formation and development of co-ops. The promotional and development agency for co-ops is SNCF. As mentioned earlier, SNCF is funded by the Central Co-op Fund. The Central Co-op Fund Committee is led by a representative of the co-op sector. The Central Co-op Fund Committee has recently implemented measures to encourage the formation of new co-ops, particularly those that benefit disadvantaged groups. SNCF has employed new staff to actively seek out those interested in forming new co-ops, assist them in setting up the co-ops and provide funding support where necessary. This approach has shown encouraging results. In this year alone, two new co-ops have been registered and three applications are currently being processed. One of the new co-ops is WeWorkz for which more than $400,000 of Central Co-op funding was approved for it to help women, especially those who are unable to find full-time employment, to engage in home-based economic opportunities. There has also been a marked increase in the number of enquiries on co-op registration.

Mr Speaker, Sir, I had begun my speech by citing the role played by credit co-ops during the 1920s in meeting the financial needs of public sector employees. I had also highlighted to the House the role played by co-ops in present day Singapore. With this Bill, co-ops will be better able to meet the challenges of its operating environment

while serving their members and the community. The Bill balances the need for greater oversight of higher risk co-ops while liberalising those aspects of co-op operations which can be more effectively decided by the co-ops themselves. We have taken a measured approach in arriving at this Bill which was based on the recommendations of the co-op review team. We consulted SNCF, NTUC, MAS and other key stakeholders at various points along the way. This risk-based regulatory approach will further strengthen the position of the co-op movement in Singapore and increase the confidence of members and the public in the co-op movement. We will continue to review co-op regulation to ensure that it is relevant to the needs of all stakeholders. So, I assure the Members that we will review from time to time.

5.30 pm

Mr Speaker, I would like to thank the Minister of State for a very comprehensive reply to my earlier questions. I just have three questions which I would like to ask the Minister of State.

The first question is, she had said there is a fair amount of supervision by the members of the co-operative of the management. Based on the Ministry's understanding, would she be able to tell the House how many members generally participate at the members' meeting and the level of participation in the selection of leaders of these co-operatives.

The second question is more fundamental and, that is, I understand that credit unions or societies are not widely exposed and, therefore, they are not required to come under the supervision of the MAS. The difficulty often is where does one draw the line between members of the public and

members of a union or society. Do 10,000 members constitute the public or do you confine these 10,000 to just the membership of the union? Surely, if there is a sizeable number, how do we then have the confidence that the credit societies have the same robustness of supervision that the MAS subjects the financial institutions too?

As I was sitting there listening to MOS, I was quite concerned to learn that there are over $1 billion worth of money sitting in these credit societies. I was thinking why it is not the case that we cannot bring these credit unions within the supervision of the MAS; particularly when such huge sums of money are involved and also because the people who have an interest in these savings are not people of substantial means.

My final question is, I did say earlier in my speech that perhaps the Government can consider repealing the provision of the inability of the courts to review the decision of the liquidator. Perhaps, the MOS can respond to my earlier plea for repealing such a provision.

Mr Speaker, Sir, under the Co-operative Societies Act and also the by-laws of various co-operatives, the general meeting is the supreme authority and it is based on the one-share-one-vote system. They need to have quorum for a meeting, and they must fulfil the required number of attendees before a meeting can be called. So, there are some safeguards.

The other point is whether credit co-ops should come under the supervision of MAS. Like I mentioned just now, the credit co-ops were started by a group of people who know each other, and they only confined it to deposits and simple loans. Now, they have grown bigger and, therefore, we want to amend the law to make sure that if they want to provide

more comprehensive financial services, they will automatically come under the regime of the Banking Act or under MAS supervision. If they confine themselves to their membership and limit themselves to providing certain approved financial services undertaken by co-operatives, then they do not need to come under the Banking Act or Finance Act. This is quite clear.

I mentioned just now that the $1 billion is from the 41 credit co-operatives in Singapore. It is quite a big amount and, therefore, we want to have this restriction. The Member mentioned about the members. For instance, for NTUC Thrift and Loan, the umbrella is definitely broader. At this moment, they have 60,000 members. But if you take the Telecoms Union, the teachers union or AUPE, the number of members is smaller. Only 11 out of 41 credit co-operatives today have a by-law clause to say that they can extend their membership to the public. But we want them to amend their by-laws to confine it to only their members or family members.

This Amendment Bill also strengthens the power of the Registrar and it also gives more powers to the Minister. If the Registrar or the Minister is unhappy about certain things, he can dissolve the co-operative or he can suspend the accounts of the co-operative. The Registrar may also refer questions of law to the High Court. So it is not completely withdrawn from the judicial system. On the management and day-to-day execution of duties, we empower the Registrar and the Minister, but other than that, we still can go through the process of our legal system.

Question put, and agreed to.

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

The House immediately resolved itself into a Committee on the Bill. – [Mrs Yu-Foo Yee Shoon].

Bill considered in Committee.

Clauses 1 to 31 inclusive agreed to stand part of the Bill.