Hansard, 2009-02-09

Under the provisions of clause 2(d) of Article 46 of the Constitution of the Republic of Singapore, the following Members have been granted permission to be or to remain absent from sittings of Parliament (or any Committee of Parliament to which they have been appointed) for the periods stated: Name From (2009) To (2009) Mr Lee Kuan Yew 09 Feb 09 Feb Mr Heng Chee How 13 Feb 15 Feb 27 Feb 01 Mar Dr Ahmad Mohd Magad 18 Feb 21 Feb

ABDULLAH TARMUGI Speaker Parliament of Singapore

Order read for consideration in Committee of Supply [3rd Allotted Day].

Head V – Ministry of Trade and Industry (cont.)

Resumption of Debate on Question [6th February, 2009],

"That the total sum to be allocated for Head V of the Estimates be reduced by $100." – [Mr Inderjit Singh].

Question again proposed.

Head V – Ministry of Trade and Industry. Mr Heng Chee How.

Proactive Defence of Demand

Sir, the greatest fear and difficulty confronting businesses in this crisis is the sharp drop in demand and the uncertainty over when the upturn may come. With all the major export markets down, economies and companies will be scrambling to grab what is remaining of the pie, until such time that growth returns.

Protectionist attitudes and measures may also become more visible and prevalent internationally. In the 12th January 2009 Wall Street Journal article entitle "Surge in Protectionism Threatens to Deepen World-Wide Crisis", the columnist Bob Davis said, "Industries are starting to line up in Beijing, Brussels and Washington for import protection. That has happened in past downturns, too, but this time the restrictions may bite harder because of the global nature of the problems." He further said, "The global turn to stimulus spending also may come wrapped in protection, as each country tries to ensure that its industries benefit. In the US, congressional Democrats and their allies in steel, textile and organised labor are pushing to include strong 'Buy America' provisions in a US stimulus program that would limit spending to firms in the US. Already European officials are crying foul." Similar worries were voiced at the recently concluded World Economic Forum (WEF) in Davos.

Sir, in the face of such a scenario, Singapore-based companies cannot be passive or risk losing even more of their

demand through ever fiercer international competition for the remaining pie, and by direct or indirect protectionist measures. Saving costs will help companies last longer but will not enable companies to save their way out of a recession.

In my opinion, we cannot just rely on the Budget measures to work their magic through companies doing their sums and responding individually. Economic agencies, business chambers, industry bodies and companies must all step up their individual and collective efforts to compete and to defend their market share and demand.

I would like to know what specific measures will the Government be embarking on to catalyse this process of collective effort, to get chambers and industry bodies to do more. What investments, activities and events can Singapore target, in the current situation, to attract that leverage on our strengths of safety, connectivity, service quality and our season-proof weather in order to produce additional multiplier effects in the economy? What specific help can our network of Free Trade Agreements and bodies such as APEC give us in this time of heightened risk of protectionism and ever-intensifying competition?

Capability Development for Local Enterprises

Sir, in the words of a senior MTI officer, this economic downturn is the "sharpest, deepest and most protracted" recession we have ever experienced. Singapore is among the first countries in Asia to enter into recession, and so far, it is indeed a sharp, deep and protracted one for us, judging by the business climate survey in today's Business Times.

Can the Minister share his thoughts as to why we seem to be harder hit than many of the regional economies in this

downturn and also amongst the first to enter into a recession? Is our economy destined to be always so volatile? While the key reason for the sharp drop in our manufacturing is due to the collapse of demand in our major export markets, some analysts have, however, pointed out that our lack of strong local industry anchors, especially in the manufacturing sector, is among the reasons why we are harder hit.

Our manufacturing industries consist mostly of foreign MNCs. Thanks to the hard work of our economic agencies like EDB, we have been able to attract global MNCs to invest in Singapore. The Government also offered attractive schemes and incentives to draw in foreign direct and R&D investments. These investments have added value to our economy and created jobs.

However, we have to be mindful and realistic that for some of these foreign companies, their business plans are drawn up by their head offices based outside Singapore. Their investments and business plans can change due to the challenges they faced in their home country or other regions they operate. Hence, while we should rightly continue to attract and draw in foreign direct investments, I hope the Government will also spend and commit equally significant funds and resources to help our local enterprises in their set- up and assist them in expanding their capabilities. We should spare no effort in continuing to nurture and grow our steady base of home-bred and locally anchored companies here.

I am glad to hear that in this Budget, $130 million will be spent to enhance our grants and training schemes to encourage enterprises across different sectors to refresh and develop new capabilities so as to capture growth opportunities when the economy starts to recover. I look forward to the announcement of further details as

to how SPRING and IE Singapore can help local enterprises develop new capabilities and globalise.

One of the recommendations put up by the Economic Review Committee in 2002 is to assist our domestic enterprises break out of the low-cost, low-efficiency cycle and move into the innovation-driven cycle of growth. Our aim then was to nurture our domestic enterprises to become the future growth engine for the economy. I would like to ask the Minister how much progress we have made on this front so far.

New Market Development to Position for Future Growth

Mr Chairman, while we look at measures to support viable businesses in Singapore, to manage cost, enhance cash flow, build and retain capability, we cannot ignore the fact that unless there continues to be demand for services and products, businesses in Singapore, though more resilient, will not be able to survive for too long. Recognising that the economic challenges are global and that our growth and total demand have slowed over the last two consecutive quarters, how are we investing to build capability to create new markets and opportunities to address the demand for our services and products? I would like the Minister to share the initiatives and programmes in place to develop new markets and build capability to support growth for Singapore's economy in the near term. As it will be difficult to generally export demand, what is being done to look for new markets where demand still exists? Do we see the alternative energy sector as one that could support new demand for our services as companies look to improving their energy efficiency in the near term? Given the size of Singapore's local market, unlike other regional countries with large and growing domestic demand, our ability to create and grow local

demand will be limited, what measures are there to encourage Singapore companies to look for new overseas markets? Does the Minister see intra-regional trade and investments as a potential market to drive demand? Or are other markets the focus to drive near term demand for Singapore's services products? How are our local enterprises involved in the development of these markets and capabilities? What about availability of skills locally to support these new sectors or markets?

Sir, can the Minister also share the status of existing and new foreign investments that have remained in Singapore in various industries, from manufacturing plants, facilities and financial services? Given the slowdown in demand and the economic challenges, what are the implications of these investments? Are they at risk? Will we see a shift of investments in Singapore?

In this crisis, while we look at ways to ensure that companies survive and weather the storm, we will still need to continue to ensure that we invest the engines for growth and capture opportunities. Although there will be pain until the US and the global economy recovers, this will help us stay viable and put us in a better position to live and participate in the recovery when it does happen.

US-Singapore Free Trade Agreement (Costs and Benefits)

Sir, in October last year, the Business Times reported that Singapore continued to suffer a twin trade deficit in the US in both goods and services. In respect of goods, since 2000, the US exported more goods to us that it imported and the surplus has been increasing year after year. According to US government data, the US trade surplus

for the first eight months of 2008 was US$9.5 billion which puts Singapore among the top 10 countries with the largest trade deficit in goods with the US. As for services in favour of the Americans in 2006 and 2007, it was significantly higher than previous years', around US$3-4 plus billion. Is this an indication that the US-Singapore Free Trade Agreement, in its implementation, has favoured the Americans? Have we encountered difficulties penetrating American markets and can we expect the FTA to be in parallel, in view of the current US protectionist sentiments?

Cut Total Costs to Save Jobs

Sir, companies are the receptacles for jobs. To save jobs, it is crucial to help keep companies afloat. Cutting costs enables companies to stretch their resources and thus last longer under any given circumstances. The National Wages Council (NWC) and tripartite partners have issued guidelines to tackle wage costs using the flexible wage system.

The Government has also stepped in a big way with the Jobs Credit Scheme to subsidise the payroll of companies, and this amounts to an equivalent 9% CPF cut to assist companies without causing pain to workers. This is on the wage side. But non-wage costs are equally important. Chief among them are rents and utilities, mainly energy and water.

The Government, through HDB, JTC and SLA, will be reducing rents by 15%. I would like to know how much this reduction would be equivalent to on average, in terms of cost reduction to companies. What percentage of businesses incur rents outside of HDB, JTC and SLA, and what steps, other than moral suasion, can be taken to see that the other items of Budget assistance, such as the rebate in property tax, are substantially passed through to them?

Will surveys be conducted to ascertain the efficacy of such pass-through, so that Government will be in a better position to assess the effectiveness of such a channel, as it plans future moves?

While energy prices have come off the peak of 2008, they have also come off the trough. Energy and water costs are significant costs especially in the manufacturing sector, and companies must certainly do their part to improve efficiency and cut waste in their use of utilities. What additional help, in terms of pricing levels, stability of pricing of utilities may be possible to further help companies?

For the hotel sector, I have received specific feedback that they are worried about the additional levy that they would have to pay in connection with "F1" because they expect occupancy and pricing to be significantly poorer than last year. I think this was also reported in the media. Depending on their actual ability to raise rates and occupancy, the industry is concerned about how the additional levy will impact their cashflow and may even become a cost instead of a surplus revenue-split. In these difficult times, the industry hopes that the Government will seriously consider adjusting the formula to help them.

Green Technology

Sir, the fledging solar installation industry appreciates the Solar Capability Scheme launched last May. Together with EDB's CERT Scheme and enhancements to the BCA's Green Mark Scheme, it has helped drive demand from practically zero to a level that is beginning to support a handful of businesses. I am sure that the construction sector also welcomes the additional business opportunities from solar to help to offset the decline in traditional projects.

Solar PV has a potential to supply a double-digit percentage for Singapore's electricity demand by the year 2020. But we are still in an interim phase where solar power is not commercially viable without supported policies. We need support during this phase for Singapore-based companies to be ahead of the pack when falling cost opens up huge regional solar power markets. Solar installers are now hiring staff and training sub-contractors to meet rising demand in this emerging sector. Our concern is the lack of any clearly communicated long-term targets or policies to ensure that this promising start is not muted because of the lack of follow-through programmes and incentives. What happens after the $17 million CERT Scheme and the $20 million Solar Capability Scheme expire?

We must avoid mistakes made by some governments where start/stop policies stunted solar business growth in a country, after which it was difficult to pick up the momentum again. It would therefore be disastrous for Singapore's solar companies if business collapse next year for lack of follow-through of the recent positive initiatives. The same applies to students just starting courses in renewable energy at our polytechnics and universities. Without local demand for their engineering skills, upon graduation, we face an inevitable brain drain of local talent seeking better opportunities abroad.

From the news, we learn that the new Obama Administration is spending billions to develop green technologies and green jobs. Japan and South Korea are likewise investing US$30-US$50 billion in the three to four years in green technologies and generating some 960,000 and 1 million green jobs respectively. I would therefore like to request MTI to provide a medium to long-term plan for the clean energy sector so that the private sector, the Sustainable Energy Association Singapore (SEAS), the R&D institutions and the institutions of higher learning, can

work in concert to fit into this plan and strategy for developing Singapore into a green energy hub with the right skill sets and trained Singaporeans to handle these green jobs.

12.15 pm

Tourism

Sir, Singapore's reputation as the best destination for tourists' retail experience is under threat. We hear cases of retail shops selling over-priced electronic goods, overcharging tourists, dealing in unfair retail practices, "bait and switch" or misrepresentation. Such poor service appears to be prevalent despite the introduction of Singapore Service Star by the Singapore Tourism Board which seeks to recognise, through accreditation, businesses that promote good service.

Tourists' confidence in Singapore's retail sector can be easily tarnished by a few black sheep and shops that chose to remain outside this scheme.

I would like to ask what is the Government's strategy to provide a uniquely Singapore tourists' retail experience in view of the present recalcitrant retail businesses that continuously dish out poor service and bad practices.

Next, rapid urbanisation and redevelopment of Singapore have eroded our heritage in the name of development. Take Chinatown, for instance. While it has been preserved for tourists, many of the original trades located in Chinatown have been replaced by touristy shops selling souvenirs and trinkets. Tourists are becoming more sophisticated. They will prefer the experience of the real cultural heritage of a place as opposed to a copy of it. Thus, our conservation strategy

toward places for tourism should focus on retaining the original trades, businesses and attractions that are authentic to the place. A Straits Times Forum writer shared in his letter on 6th January 2009 that perhaps the real Chinatown is at Waterloo Street because Chinatown is becoming too touristy to the extent that tourists would want to give it a miss.

I would like to ask the Minister what is his strategy to conserve our heritage sites for tourism. How are we preserving our history to provide an authentic cultural and uniquely Singapore experience for tourists as well as for our children?

Ready Built Factories

Mr Chairman, Sir, ready-built factories (RBFs) have been an integral feature in Singapore's industrialisation programmes since the 1970s. We have been instrumental in our ability to attract foreign investments and represented a major competitive advantage for our nation in getting factories up and running at lightning speed.

Echoing the concern of the Singapore Manufacturers' Federation and my personal observation, it appears that the Jurong Town Corporation has stopped building such factories and are leaving it to private developers and market forces to meet factory space needs.

May I ask the Minister for Trade and Industry to clarify whether there is truth to this and also the Ministry's position on RBFs?

In this fast-moving world where decisions are made more quickly than ever in terms of investment and business tie-ups, I feel that reasonable costs of RBFs remain a key competitive advantage in foreign SME investment considerations as well as play an important part in meeting the needs of our local SMEs.

Could the JTC consider reviving the construction of RBFs?

SMEs and Entrepreneurship

Sir, I would like to speak on survival and new growth opportunities.

Sir, we need to save companies which have viable businesses but are facing the liquidity crunch and unless the Government gets more involved, we will not succeed.

Sir, I have got feedback that since the Government implemented the SRI, some banks have undermined it by transferring their commercial loans to the SRI loans. This defeats the purpose of SRI to catalyse new loans and if all the banks start adopting this approach, we then would have a zero net gain. So while the Government might think that new loans are being created through the SRI, this may not be the case. We need to control this.

While we hope that the SRI will work, we need to do more. I want to suggest three things that we should do.

First of all, like in Canada and Taiwan, where the governments till today are still directly involved, we should therefore consider setting up a SME or development bank to do something like this so that in the future, when we are faced with a similar loss of confidence of the financial sector, we will be able to act much faster in getting liquidity going again into our markets and not be held ransom, waiting for the market to get organised again. Such a bank could be still a secondary source of funds while we rely primarily on the tested approach of lending through banks supported by the various Government schemes. To be realistic, it will take time for us to set up such a bank but I think we should think about one for the future. We, therefore, need to work

within the current systems if we want to help companies fast.

Second, I suggest that we open up a new channel or front for lending where SPRING sets up an investment committee, consisting of bankers, entrepreneurs, consultants and SPRING officers to approve loan applications made direclty to SPRING. Upon approval, SPRING then directs the banks to lend. This may require a different risk-sharing profile for banks to want to participate. I therefore suggest a three-year-loan where the Government gives a 100% loan guarantee in the first year, 80% in the second year and 50% in the third year. This way we avoid the moral hazard of banks lending when it does not make sense because the Government takes 100% of the risk for the full duration of the loan period. If the Government does not want to guarantee 100% and still wants to stick to 80%, then I think this system of in-principle-approval by SPRING can still work if we allow the companies to put a 20% deposit with the banks as their share of the risk while the banks disbursed the other 80% through the SRI. I am sure that these initiatives will better facilitate the cash flow for companies.

Third, Sir, I have suggested the setting up of a Corporate Rescue Task Force, where we have the public and private sectors getting together rescuing companies that have capabilities that we may want to keep alive for Singapore in the long term. We should seriously consider this because there are many of these companies that are viable, have good models that could survive in the long term but need a lifeline in the short term.

Sir, JTC, like HDB and SLA, is still adjusting rentals upwards. I have seen a number of examples. This needs to stop. JTC should instead conduct a review of market rental rates to be accurate. The Inland Revenue Authority of Singapore (IRAS) is doing the same to review

property tax because of the significant drop in properties prices in the last six months. Sir, JTC also recently instituted a new rule to restrict sub-leasing – I believe not more than 50% of space owned by or leased by a tenant can be sub-leased out. This is rational, but counter-intuitive. In this current environment, it will choke off more of the company's cashflow leaving too much of unutilised space if they cannot lease out. The implication of this is that we will have vacant space left and therefore drive up rentals.

Sir, start-ups will be the worst affected by the bank lending squeeze so we must try to help those which are innovative and have got the potential for high growth. I suggest that SPRING proactively extends further investments to all SEEDS invested companies. SEEDS should also be enhanced such that start-ups that find difficulties in finding third-party investors can go to the SEEDS Investment Committee to get an in-principle approval to invest first and then the SEEDS team can help them look for third-party investors. Currently the process is reversed, where the third-party investors need to be found first.

Sir, I also like to repeat my call for SPRING to set up a Growth Fund, which is a direct investment fund investing into growth companies. This fund can incentivise the entrepreneur to buy back the Government's share at a nominal return to the Government. This will help us build some local anchors capable of playing a big role in our economic development of the future.

Sir, I also see no harm in spurring micro enterprises. We should, perhaps, set up what I call an Opportunity Fund to support small or micro enterprises, targeted at helping people who are out of jobs but have some business ideas. Even

if a few succeed, we can create a vibrant environment of many start-ups. SPRING could perhaps work with the various CDCs to co-fund this Opportunity Fund.

Finally, the need on creating demand for our SMEs. While SPRING is focused on growth locally, IE Singapore is focused on growing demand externally. I think IE Singapore has not been effective in bringing our SMEs overseas. SPRING, I think, can do a better job. At the same time, EDB is not interested in attracting foreign SMEs into Singapore and I think there is value in bringing some of them who are thinking of relocating. For this purpose, for gaps that are appearing, I suggest that we relook at how our economic agencies are organised to do this job more effectively.

Help for SMEs and Entrepreneurship

Sir, SMEs employ the majority of workers in Singapore – six out of 10. They are also the most vulnerable in a prolonged downturn. To help SMEs improve their productivity during this time, perhaps the Government could offer a scheme that grants SMEs to carry out an organisational review of their processes and systems to better streamline for optimal manning. So an employer's SPUR can be launched which gives a grant for retaining external expertise service and the allocation of internal resources for such productivity and workflow streamlining exercise.

Sir, I commend the Government for the $5.8 billion to assist businesses and the SRI in assisting to keep these companies afloat. However, Sir, increasing the loan quantum coverage is a thoughtful measure as some SMEs have larger companies as customers and if these larger companies go bankrupt, the SMEs will soon follow suit. There are instances of healthy companies which cannot get loans simply because the banks are reluctant to lend. I think it is

necessary to assess the efficacy of these measures by assessing loan activity on a regular basis. This can be carried out by SPRING Singapore.

Sir, in times of adversity there can be opportunity. This recession could be a good time to encourage entrepreneurship. Many PMETs are being laid off and this surplus executive-level human capital must be assisted. We can encourage these individuals to tap into their skills to offer services such as business consulting. Therefore, our aim should be to encourage entrepreneurship, flexibility, self-reliance and leveraging on current skills. In this way, we not only achieve our objective of developing the spirit of enterprise, we also help with gainful employment.

I would like to urge the Government to develop, one, a database of these consultants and entrepreneurs to facilitate businesses; and, two, a network hub of companies and PMETs to further facilitate job and business opportunities. SME-targeted schemes should be further publicised. Examples, Local Enterprise Finance Scheme, the Micro Loan Programme and the SEEDS Fund for employers with no more than 10 employees. Are there outreach programmes for these Schemes? What is the take-up rate? And I hope that the Government can actually give some publicity here.

Help for SMEs

Sir, I have been speaking with many SMEs and others in the corporate sector.

On the various financing schemes, my friends in the SMEs, they are either not aware of them or they insist that it is just as difficult to get loans. So, I ask the Minister to step up efforts to raise the level of awareness among SMEs of the various help schemes offered by the

Government and to make the process as simple as possible.

Sir, I have five other suggestions for the Minister to consider.

First, Government rental rebates. The Government has given landlords some rebates on their rents. My question is whether these savings are passed on to the businesses who lease these properties?

One way to ensure more landlords do so is to allow those who pass the rebates on to tenants to claim 110%-125% of the amount rebated to tenants against the property tax to be paid.

In this way, landlords gain a tax benefit against their property tax while tenants benefit directly. Most landlords will then want to give the rebate to tenants. The scheme is easy to implement, highly accountable and will add to the cashflow of both tenants and developers.

Second, JTC recently announced that it would allow 50% of space in end-user factories to be sub-leased out to third parties. And for the balance 50%, they are imposing a levy. JTC should relax these rules and allow as much sub-leasing as tenants want and suspend the levy. SMEs need cashflow, and if they can get this by sub-leasing surplus space for short periods, then I see this as being a good thing overall. It will also help to lower business costs.

Third, many SMEs are having difficulties producing up-to-date accounts to substantiate their loan applications. SPRING can consider offering cash grants of, say, $10,000 over the next two years to help SMEs pay for their company accounts to be brought up to date. It will also help to lower borrowing costs and these data can be captured in a SME-type credit bureau to spur competition to lend

among financial institutions. I see this as being similar to the sort of credit bureau being used by credit card companies now.

Fourth, rental deposits for investors. EDB/SPRING can assist to put up a 50%-75% share of banker's guarantee to landlords, as a means to co-fund investors or businesses trying to expand or consolidate their operations under one roof. This can be limited to a cap of, say, two months and on a gradually reducing scale over, say, three years, starting from 75% in Year 1 down to 50% in Year 3. Some potential tenants who are looking at leasing generally do not want their cashflow tied up via rental deposits. They may also have problems coming up with banker's guarantee in these times, especially SMEs who are starting up or expanding their businesses.

Finally, could the Government consider buying off some of the assets of banks? These are not bad debts but those on the margins. Perhaps the Government can buy over these assets on the condition that the banks will make the resulting capital available for renewed lending. Instead of waiting for deterioration on the loans portfolio, it is better for the buyout of such marginal assets when the banking system is still robust. The buyout is a concrete step to break the impasse especially for banks which are now forced to withdraw commitments or do not renew maturing loans.

Sir, in this current crisis, it is time we looked for unconventional and new methods for the future.

Miss Penny Low, you have two cuts.

SOS for SMEs

Sir, according to the Global Enabling Trade Report by the World Economic Forum,

Singapore has been increasingly dependent on trade, especially since 2002. While this has boosted our GDP, it also makes us more vulnerable to the global economic climate.

In recent years, our SMEs have also been encouraged to venture abroad, adding to our exposure. Can the Minister explain whether there is a particular Government policy in terms of

our GDP versus trade ratio, the impact of this increasing dependency on our SMEs, and what measures might be in place, or not, to help SMEs with large trade exposure, cushion any global downturn?

12.30 pm

Sir, SMEs employ some 60% of the workforce and, therefore, keeping them afloat by smoothening their cash flow and credit lines are keys to job preservation. So in that light, I applaud the Government’s move in this Budget.

However, the devil is always in the details of the implementation. Can the Minister explain how will the well-intended policies be operationalised and translated into actual benefits on the ground? For example, is the form-filling process too onerous or is there still a lot of red-tape that could be cut? In cases where credit applications are rejected, how will SPRING reassess such cases? In fact, who has the authority to make these decisions? Will it be based on the number of employees that they have to save jobs or whether the business is in our economic thrust sector? Also, if the credit assessor is a civil servant with no business experience, would he have the wisdom to judge the viability of a business that is hit by the downturn? Some businesses may have a good track record during the boom time but is now hit by a demand drought.

Entrepreneurs are the engines of growth and innovation. These mavericks'

job creation and game changing innovations may provide solutions to the present crisis. Hence, can the Minister update the house on its entrepreneurship push and what it intends to do in helping SMEs increase their demand, increase their risk capital pool and raise the bar for societal capital, which is the capacity for failures as norms? And, ultimately, it should not be the one-hit wonders but the pay-offs from persistent ongoing businesses.

On to my second cut, Sir, on social economy. Sir, the combined global social economy forms the fifth largest economy in the world. I am wondering how is MTI taking advantage of it. In recognition of the innovative value of those involved in the social economy, several OECD countries have launched a series of strategies to promote social enterprises and social economies and the results have been encouraging. In 2002, UK launched a strategy in their Department of Trade and Industry and even has a Minister for the Third Sector. In 2004, the Canadian government allocated CAN$132 million to support social and community academic development and they do it via three levels. One, financing at $100 million over five years; two, capacity building, CAN$17 million over two years; and, three, research, CAN$15 million over five years.

The budget is also committed to improving the access of social enterprises to programmes and services for SMEs. And the result? Today, just Quebec alone has 6,200 social economy enterprises that employ 65,000 people and generate annual sales in excess of $4 billion.

In contrast, our effort is dwarfed and, hence, the results are wanting. Can the Minister enlighten us on what and how much resources are set aside by MTI to take advantage of this global growth in social economy?

Last year, EDB amended its Act to include NPOs and NGOs in its ambit, while SPRING Singapore has also become part of the inter-agency Social Economy Implementation Committee. That is laudable. However, due to its constitution, schemes under EDB has been mainly foreign-enterprise focused while SPRING’s schemes are largely targeted at for-profit enterprises. Therefore, its spirit is willing but its flesh is weak. While time is needed for our Government-led agency to study the landscape, the changing academic and demographics wait for no man. Like any businesses, social economy enterprises may face overnight demand and credit crunches. Therefore, urgent measures need to be rolled out to help social economy save jobs and create community-based solutions. In such a tumultuous time, a clear signal needs to be sent and I urge MTI not to miss a good opportunity to help build this sector that do good and do well.

Consumer Protection and Education

Sir, let me first declare my interest in speaking on this topic as the Vice-President of CASE.

In August last year, Parliament passed the Amendment Bill to the Consumer Protection (Fair Trading) Act (CPFTA). The Amendment Bill contains several amendments which CASE has advocated for, namely, the extension of the CPFTA to include the sale of financial products, the increase in the jurisdiction of the Small Claims Tribunal to hear claims under the CPFTA up to $30,000 and the extension of the cooling-off period for resale in the timeshare industry. There were also four sets of subsidiary legislation proposed, one of which relates to the regulation of motor vehicles dealing with the refund of deposits. May I ask MTI when would the provisions of the amended CPFTA be implemented or

effective? Similarly, when would the different sets of subsidiary legislation come into effect? The sooner the Amended Act and the subsidiary legislation take effect, the better it is as more protection would be accorded to consumers dealing with financial institutions and motor vehicle traders.

Sir, for the past few years, the Consumers' Association has received several feedback from consumers who have either parted with monies on false investment schemes, promising to pay large amounts of returns or have parted with monies to businesses, promising to resell timeshare products. Some of the tactics used by these businesses are tantamount to deceit and fraud, making promises to consumers which the businesses do not intend to fulfil or making promises which are not possible to fulfil. Some of these schemes are tantamount to Ponzi schemes where large numbers of consumers were deceived into parting with monetary deposits in exchange for promises of high returns.

While education may be the best way to stop people from falling into potential scams, the presence of a regulating body and legislation is equally important. Had there been a regulatory body in charge of such consumer frauds, then it could be possible that fewer consumers are conned and cheated of their monies. The Director of one such company currently faces prosecution by the Commercial Affairs Department (CAD). May I urge MTI to work hand-in-hand with CAD or other relevant authorities to set up an investment fraud division to investigate such fraudulent schemes and to take prosecution action wherever justifiable. Any delay in taking action will result in more consumers being taken for a ride and losing their hard-earned savings.

CASE would also request that MTI works with MAS to extend the scope of

the MoneySENSE programme. We hope that MTI can fund more educational programmes to educate consumers about basic investment objectives and the risks of investment in the financial markets. Looking at the large numbers of consumers who have bought investment products like the Minibonds and other derivatives from the banks and other financial institutions without really understanding what these products are about and the kind of risks involved, it is of great concern. It also suggests that the MoneySENSE programme, or other educational programmes, can do more to reach out to the man-in-the-street to help them become more aware of investment risks. These programmes can reach out to more people through different avenues, such as regular radio broadcast, TV broadcast, newspapers and magazines as well as talks at Commuity Centres and Residents' Corner.

Finally, may I ask MTI when will the Ministry consider implementing a law to regulate timeshare operators? I recognise that there are legitimate timeshare companies which operate genuine holiday sharing schemes. But there are also many operators who sell their timeshare schemes with misleading and false claims. They exert undue pressure on consumers and do not abide by the five-day cooling-off period. It takes a long while for consumers to recover their payments from the timeshare companies. The lack of action from the Government has prompted many other industries to use similar strategies to sell their products. CASE has received many complaints about high pressure selling and coercion from consumers undergoing beauty treatments, massage, slimming treatments, joining a gymnasium and make-over photo shoots. There are complaints that such high pressure selling methods are used to persuade consumers to buy a beauty or slimming package whilst they are wearing a bath towel. These companies which rely on such tactics to increase their

business, bring a bad reputation to the entire industry. Could MTI extend the provision on the five-day cooling-off period under the CPFTA to such industries?

Consumer Protection

Sir, let me, first, declare my interest as CASE's President to speak on this cut.

Sir, in the last three years, after the Consumer Protection (Fair Trading) Act was introduced, the timeshare industry continues to top the CASE's complaints chart with complaint figures hovering above 200 cases per year. This shows that we need a new time share registration to provide our consumers with better protection.

In the UK and the United States, timeshare operators are required to make clear disclosures such as the description of the accommodation, the services and amenities available. In Malaysia, timeshare operators are also required to issue a prospectus before they can sell such interests. We need a similar legislation framework here to request timeshare companies to disclose material information. The information should also be subjected to stringent audit checks. The requirements should also apply to other timeshare-related businesses as they are also involved in the scam against helpless consumers.

In the UK, timeshare operators are also not allowed to collect money during the cooling-off period. Breach of this is a criminal offence. In Texas of the United States, any payment made during the cooling-off period is to be paid into a trust or escrow account. We should introduce such regulation here as well.

I would also like to request MTI to extend the current cooling-off period from

three working days to five working days under the Consumer Protection (Fair Trading) Act. This is to give consumers more time to reconsider their purchase decision, particularly for timeshare as well. In addition, vendors should not be allowed to collect any deposit during the cooling-off period for timeshare.

Sir, the Consumers' Association of Singapore also has, for many years, lobbied for the lemon law to be introduced in Singapore. In 2006, there were 1,473 complaints of defective handphones, electrical and electronic products, computers, motorcars, airconditioners, and so on and so forth. In 2008, they increased to 1,670. I am happy that MTI has already set up a task force to look into the possibility of introducing lemon law in Singapore. I hope that we could expedite it and would like to enquire on the progress of the review of the lemon law here and when the law can be expected to come into effect in Singapore to provide better protection for our consumers.

Mr Chairman, first, let me thank Members for their comments and suggestions.

Let me respond to the general questions on the economy and explain our strategies for the downturn, Senior Minister of State (SMS), Mr Iswaran, will deal with the questions on resource costs and tourism and then Minister of State (MOS), Mr Lee Yi Shyan, will respond on SMEs, entrepreneurship and consumer protection.

Mr Inderjit Singh and Mdm Ho Geok Choo asked about the global economic environment and the outlook for Singapore. Our GDP forecast of between -5% and -2% reflects a sober but realistic view of the economic prospects for Singapore for 2009. The critical uncertainty is the recovery of the G3

economies, particularly the US economy. The higher end of our forecast range is premised on the G3 economies recovering, albeit weakly, in the second half of 2009. The lower end of our forecast range is based on the G3 economies not recovering until 2010.

There are many uncertainties in the global economy this year. But what is clear at this juncture are the following: One, the de-leveraging process will continue and credit would be tighter going forward. Two, the synchronised global recession would have a negative feedback loop on the financial sector. Three, the collapse in global demand means overcapacity in many sectors. This is very obvious in the auto and steel industries. Other sectors will face different degrees of overcapacity. There will, therefore, be consolidation and a shakeout. Four, the global imbalances have to be corrected and settled down to a new, more sustainable balance.

So, how do we deal with this extraordinary downturn and the expected changes in the global environment?

Our first priority has been to address our companies' cash flow issues, by introducing the Jobs Credit Scheme, facilitating credit and alleviating cost pressures.

On credit, Members are already very familiar with the Special Risk-Sharing Initiative (SRI) and the other enhanced credit schemes to stimulate bank lending. We introduced a new Bridging Loan Programme to assist companies in their working capital needs. We also introduced Trade Financing Schemes to facilitate trade finance and export credit.

As several Members pointed out, the key is in the implementation. Let me assure the House that MTI agencies will

actively facilitate this. I have explained previously why it is unwise for MTI agencies to replace our banks in the credit evaluation process, but nevertheless we will work closely with the companies and the participating financial institutions to make sure that credit flows to viable businesses.

One outstanding issue is trade credit insurance. We have received feedback from companies that demand for trade credit insurance is growing. Exporters are now more wary of buyers' credit risks and, hence, want to get coverage to protect against the risk of buyers default. But insurers have also become more selective. Furthermore, the cost of insurance is rising.

To address this issue, with effect from 1st March 2009,

IE Singapore will introduce an Export Coverage Scheme (ECS) to provide better access to trade credit insurance cover for Singapore-based companies. ECS will protect our exporters and traders against the risk of default by their buyers. IE Singapore will, through the pooling of insurers and co-sharing of risk, increase the insurance coverage capacity of this programme. To help SMEs manage the rising costs of trade credit insurance, IE Singapore will subsidise 50% of the insurance premium for SMEs. The ECS is expected to support up to $4 billion worth of trade turnover and benefit around 1,000 Singapore-based companies. IE Singapore will separately provide more details of the ECS.

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On cost alleviation, the Budget has already provided various measures to help companies manage their costs in order to stay afloat, such as the Jobs Credit Scheme, property tax rebates and rental rebates. However, we should also bear in mind that many of the cost pressures we are facing have to be relieved primarily

through market adjustments rather than through direct handouts from the Government. Senior Minister of State, Mr Iswaran, will elaborate on this later.

Credit financing and cost alleviation are immediate solutions we have put in place to help companies in this downturn. Members, such as Mr Zaqy Mohamad, Mr Heng Chee How, Ms Jessica Tan and Mr Liang Eng Hwa, have highlighted the importance of helping our companies source for demand by identifying opportunities where they still exist today. Our companies also need to build up their capabilities so that they can produce products and services to meet the opportunities of tomorrow.

Sir, as part of the Resilience Package, my Ministry will set aside $660 million over the next two years to assist companies to seek new markets and growth opportunities, and to build up their capabilities. IE Singapore, STB, SPRING and EDB will enhance their existing programmes in these areas and will also introduce a range of new initiatives.

IE Singapore will set aside $66 million to enhance its internationalisation and export-promotion activities to help companies seek new markets and growth opportunities. IE Singapore will launch the Exporter Development Programme to develop the export competencies of promising Singapore exporters, particularly our SMEs which have limited export experience. All in, the enhanced schemes under IE Singapore are expected to benefit almost 5,000 companies. The increased funding will allow IE Singapore to support our Trade Associations and our Chambers of Commerce to organise participation in more than 340 international trade fairs and business missions, an increase of 55% from the 220 business missions that we conducted last year. These efforts will support companies to go into new or niche export markets where opportunities remain

despite this downturn and where the Singapore brand is highly regarded.

Let me now turn to our strategies to building capabilities for the future, to be ready when the downturn ends. SPRING will enhance its capability development schemes under a new $200 million programme called Business Upgrading Initiatives for Long Term Development (BUILD). Minister of State, Mr Lee Yi Shyan, will elaborate on this later on.

EDB has earlier announced a $100 million programme called PREP-UP (PREParing for the UPturn). This programme will assist companies to preserve jobs and develop capabilities, particularly targeting professionals in the field of science and technology.

EDB will also set up a $200 million Living Lab Fund to make Singapore a "living lab" for companies and entrepreneurs to nurture new ideas, to test innovative solutions and to develop future global businesses.

Sir, I have explained our strategies for the downturn to facilitate credit, to alleviate costs, to boost demand and to build capabilities. This is what we term as improving the "horizontals". MTI agencies will complement this approach by working with our partners at the cluster level to develop appropriate sectoral responses; in other words, addressing the "verticals".

This is how we organise ourselves. We have about 160,000 SMEs and more than 1,000 large companies. MTI agencies engage our companies broadly through the SBF, our Chambers of Commerce, SMA, and ASME, etc. We have EDCs as touch points at these organisations. In addition, we have about 30-odd industry and trade associations representing the different sectoral clusters. MTI agencies work with the industry associations through the LEAD programme and other projects.

Last year, I spoke of our growth strategy of developing clusters of industries, exploiting synergies across related activities. Mr Inderjit Singh asked about how this downturn has impacted manufacturing. Going forward, we can expect the consolidation process to affect the sectors differently. It will be a changed landscape. Some activities will lose relevance while others will become more important. We will need to be nimble in seeking new competitive positions. Let me illustrate by examining a few of our sectors.

In the petrochemical sector, we are experiencing a double hit - falling demand because of the global economic recession and oversupply because of significant new capacity coming up in the Middle East. But our major projects remain very much on track. Shell’s cracker plant will come on-stream in 2010 and ExxonMobil will have its Singapore Parallel Train ready in 2011. Other projects such as Mitsui's TAFMER plant are also scheduled to start up by 2010.

These various projects are expected to create approximately 1,000 jobs over the next few years. The prospects for our engineering SMEs which provide maintenance services are also very good.

In the petrochemical sector, our competitive strength lies in our efficiency, our integration of the various products and processes, our use of technology and our connectivity to the rest of the world. We will continue to invest in the Institute of Chemical and Engineering Sciences on Jurong Island to undertake more world-class research programmes so as to develop new processes and applications that can move our petrochemical industry up the value chain. We will also support our engineering service providers, members of the Association of Process

Industry (ASPRI), to upgrade their capabilities in areas such as plant management, design engineering, machinery upgrading, and maintenance management, so that they can handle larger and more complex projects. In this way, both the big MNCs and our SMEs can leverage on each other to compete more effectively. I believe the business community in the petrochemical sector is quietly confident about their future.

Let me turn to the pharmaceutical industry. This sector is facing key challenges from the slowing global economy. But demand for effective medicines will continue to grow because people become more affluent and people age. Companies want to gear up to access the expanding market opportunities in Asia, and Singapore is well positioned to tap into this. In fact, this sector will be increasing its hiring by bringing in 900 jobs this year, with expansions by companies such as Wyeth, Abbott, GSK Bio, Schering Plough and Perkin Elmer.

Eleven of the world's top pharmaceutical and biotechnology companies have already invested in more than 25 commercial-scale manufacturing facilities in Singapore. Seven new plants are expected to open in Singapore in the next three years. We are confident that more will come to Singapore so that they can reach out to the Asian market more effectively.

We should also prepare for the upturn by anchoring ourselves in new niches. Within biomedical manufacturing, we need to continue to push into areas beyond small molecule pharmaceuticals, such as biologics and medical technology. Biologics manufacturing is expected to be a key growth driver for Singapore’s biomedical sciences industry. The global compounded annual growth rate for biologics is 13%, compared to just 0.9% for the traditional pharmaceutical market.

We will also continue investing in infrastructure development in Biopolis and the Tuas Biomedical Park, and in our strong scientific foundation through R&D. Eli Lilly is one example of a leading company which is investing more in R&D despite this downturn, with their opening of the expanded Lilly Singapore Centre of Drug Discovery in October last year. This expansion, worth US$150 million, is slated to take place over the next five years.

We also encourage more companies to explore partnerships to tap on the growth opportunities that result from synergies between our R&D start-ups and mainstream firms based in Singapore. S*Bio, a homegrown oncology-focused drug discovery firm, recently made headlines with its partnership with Onyx Pharmaceuticals, pairing their complementary capabilities, intellectual properties and technologies in a winning combination.

We believe that more opportunities similar to that of S*Bio will arise during this global financial crisis. So in the pharmaceutical industry sector, we are facing competition from traditional areas like Puerto Rico and Ireland, and also new centres, but because our plants are new and more technologically advanced, we believe we can be competitive.

Let me now turn to the precision engineering (PE) sector, which is probably one of the most adversely affected by this downturn. As Members know, the demand for precision engineered parts and components across the manufacturing industries has declined sharply. However, this sector has been reinventing itself since the previous downturn and has diversified beyond electronics into medical technology, aerospace, oil and gas equipment and, more recently, clean energy.

Even within electronics, our PE companies have moved from producing

parts for high-volume consumer disk drives to focusing on parts for higher end enterprise drives and disk media production. Nevertheless, given the fall in demand in all related sectors, our PE sector has to adjust in tandem. They have to shift their production to other sectors which are holding up better than others. They also have to focus on new skills in design, manufacturing technologies, supply chain and materials processing. Already, the original equipment manufacturers (OEMs) are partnering our suppliers to co-design product and manufacturing processes beyond the traditional "build-to-print" model. The additional support that we have for internationalisation would enable our suppliers to develop access to new markets.

Our companies can also tap on the BUILD programme to work with the Precision Engineering Centre for Innovation, that we set up in SIMTech, so as to leverage on technologies for innovation and for growth. BUILD will also help our PE companies to deepen their capabilities and become more flexible and adaptable, and position them better for the upturn.

Sir, MTI agencies are engaged with each sectoral cluster to develop the appropriate response for this downturn. Time does not permit me to go into detail into the other sectors. However, SMS Mr Iswaran will be able to cover the Tourism sector to illustrate how this complementary "vertical" approach works.

Sir, to summarise, we recognise the tough challenges that lie ahead of us. But we are in a position of strength because we grew all our clusters and we anchored strategic capabilities here when the global economy was going strong. Singapore is small. We have no choice but to adopt an outward oriented strategy and to make the world our market. We will feel the pain of global market corrections more

sharply because we are small and exposed. But because we are small, we are also nimble. This gives us an edge over others in good years as it allows us to take advantage of opportunities when they arise.

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Our growth strategy in the last five years has served us well. We managed to grow strongly yet enjoy low inflation. I have distributed a chart comparing Singapore’s growth and inflation record with both regional as well as advanced economies. It shows that we have grown faster than most economies in this region and certainly faster than any other economy with a comparable level of per capita income; while still enjoying lower inflation. While our growth has been more volatile, our average has been higher than in the other economies. This is not bad.

The reason why our economy has contracted more sharply than others has to do with our small size, our openness and our dependence on global markets. Other countries that grew at a more moderate pace in the past have also entered into recession. Some, like Taiwan and Ireland, are expected to contract just as sharply as Singapore this year. Others whose economies do not rely on exports as much as we do have also seen similar or even steeper declines in their exports than we have.

We are on the right track in pursuing strong economic growth. Growth has helped us to build up healthy balance sheets at the Government, corporate, and household levels. This has enhanced our resilience. Growth has helped us to build up valuable skills and capabilities in our industry sectors and in our workers. This has enhanced our competitiveness. Growth has made possible a strong

investment pipeline that is helping to create jobs even through this recession. Even during this downturn, we continue to think long-term. Over the long term, the Asian growth story is still intact. Asia is in a position to experience rapid recovery once the global economic situation improves. Therefore, we must not lose the capacity, the capabilities and the skills that we have built up over the years. This is why preserving jobs and keeping companies afloat are so important. We will continue to engage our companies and industry associations on a sectoral basis to tailor to the specific needs of each sector. Policies and measures will be reviewed and adjusted to meet new changes and challenges.

The world will eventually settle into a new balance, and we must be ready to capture the new opportunities that surface with the tides of change.

Mr Chairman, let me now address a couple of the specific issues raised by Members.

Ms Sylvia Lim asked whether the US-Singapore FTA has delivered the expected benefits to Singapore. Let me explain the changing nature of trade between Singapore and the US. Part of the reason why the trade deficit has grown over the years is because a large proportion of goods from Singapore is not exported directly to the US but through China. Because we have gone up the value chain, we are exporting the more value-added components to China; China finishes up the product and sends it to the US. So the trade is still growing but is not reflected in our trade statistics.

Traditionally, we have had a deficit in services but, over the years, I think the deficit has grown smaller because Singapore is also becoming more competitive in services. What has benefited us particularly with the US-

Singapore FTA is foreign direct investments. The foreign direct investments (FDI) stock from the US has increased from S$37 billion as at end 2003 to S$49 billion as at end 2007. So the FTA has encouraged many more US companies to invest and to re-invest in Singapore.

Mr Heng Chee How raised a concern about protectionism, I think this is something that we are very concerned about. Our FTAs with our partners allow us to keep this issue alive. At the various forums, whether within ASEAN, APEC or WTO, we will continue to raise the voice against protectionism.

Mr Inderjit Singh asked about how we can engage with our companies and suggested the formation of a Corporate Rescue Task Force. As I mentioned just now, we are engaged very effectively with the companies at all levels. I mentioned that we have about 30-odd industry and trade associations. Each association has about 300 to 400 members. So we are plugged in with all the key members in every sector, and we know the status and the situation in all the clusters.

Both Mr Inderjit Singh and Mr Liang Eng Hwa asked about how we can anchor more local companies to complement our MNCs. I think this is what we have done effectively. As I mentioned, the petrochemical, with the MNCs, but our ASPRI members are SMEs and they are working very effectively. Similarly with the pharmaceutical and precision engineering industries. Another example is our Marine and Offshore Engineering industry, where in fact the 'queen bees' are our local shipyard companies, Keppel and SembCorp Marine, and supporting them are some 500 local SMEs with various capabilities. So we have taken a cluster approach rather than a divide between MNCs and local SMEs.

If I may borrow Deng Xiaopeng’s observation, that "it doesn’t really matter

if it’s a black cat or a white cat". So, similarly for us, we look at a company and assess its value-add, its ability to generate jobs, its commitment to Singapore and its contribution to our economy. It does not really matter if it is an overseas MNC, an overseas SME or a local company. Of course, if it is a local company, we are even more cheered by the prospects of helping our own companies. Now let me turn to ask Senior Minister of State Iswaran to continue on resource costs and on tourism.

I will supplement the Minister's response by addressing some specific questions raised by Members which pertain to three broad issues – managing resource costs, boosting demand and building capabilities for the future.

Managing the cost of resources is an important concern for businesses, especially so in a recession. Let me start with the cost of energy, which Mr Heng Chee How has raised. As we import virtually all our energy supplies, Singapore is vulnerable to volatility in global energy prices. Competition in our power sector has been a bulwark against rising energy prices. Competition motivates efficiency and exerts downward pressure on prices. Our experience since 2001 when we began to liberalise the electricity market, vindicates this approach. While fuel oil prices have risen by 143%, tariffs have risen by only about 15%. More recently, household electricity tariffs fell by 25% in the first quarter of 2009 after peaking in the last quarter of last year. We can expect a further reduction in April for the second quarter, in tandem with global fuel oil prices.

EMA will continue to study measures to inject more competition into the

market. One example is the Electricity Vending System (EVS) which would allow households to purchase electricity direct from competing providers. EMA has commenced a pilot of the system which, if successful, will lead to its eventual implementation on a national scale. In the interim, EMA is considering other steps to bring more benefits of competition to small consumers and households. One idea is for the power generation companies to bid for a portion of the domestic electricity load on a competitive basis. EMA expects to complete a detailed study of this proposal by the end of the year. In October last year, I informed the House of EMA’s plan to review the formula for setting household electricity tariffs. The current formula has served us well over the years by providing relative certainty and stability in an era of less volatile oil prices. The aim of the review was to enhance the formula given the greater volatility in global energy prices in recent times. At present, fuel oil prices in the first month of the previous quarter are used to set the electricity tariff for the current quarter. Going forward, EMA intends to revise the formula by using the average of fuel oil prices in the preceding three months, to determine the tariff for the current quarter. For example, the new formula would have used average fuel oil price from October to December last year, rather than just October, to set the tariff for the first quarter of 2009. This change will entail material adjustments to the hedging operations and processes of industry players.

The new approach has two advantages. First, it will help to reduce the volatility of the electricity tariff by averaging fuel oil prices over a longer

period. Second, with a three-month average, more recent fuel oil price data will be used to determine the tariff. This will allow the tariff to be more reflective of the prevailing market prices of fuel.

EMA will use the revised formula to set the electricity prices for the third quarter of 2009 and beyond, after consulting key stakeholders and industry players. I will now move on to land-related costs. Several Members, including Mr Heng Chee How and Mr Seah Kian Peng, have asked the Government to ensure that the savings from the 40% property tax rebate are passed on to current tenants. Some private-sector landlords like CapitaLand, Lend Lease, Mapletree, City Developments and Frasers Centrepoint have committed to pass on the property tax rebate in full or in part to their tenants. This will exert competitive pressure in the market and I urge more landlords to follow their good example. Government has taken the lead by providing a 15% rental rebate for HDB, JTC and SLA tenants. Mdm Ho Geok Choo asked if the Government can double the rental rebates to 30%. Mr Chairman, a 15% rental rebate is, in fact, quite significant. It is more than three times what other lessees and tenants would enjoy, even with a full passing through of the property tax rebate. This 15% rebate will provide savings of over $300 million to some 31,000 companies in 2009.

Besides the rebates given by the Government, businesses are likely to obtain additional relief as rentals ease from their peak in the past one to two quarters. Dr Ahmad Mohd Magad has suggested that JTC revive the construction of Ready Built Facilities (RBF). The private sector is actually quite well equipped to provide multi-user space, including RBF. About

80% of all new multi-user space is provided by a diverse group of players. They provide generic factory spaces of varying sizes in different localities and at competitive price points. Market projections indicate that the multi-user space to be released over the next two years will be more than adequate to meet the net increase in demand. JTC will continue to monitor this closely to ensure that there is sufficient supply, which is, I think, Dr Ahmad Magad’s concern.

I would like to assure Mr Inderjit Singh that JTC regularly reviews and benchmarks our industrial land costs against locations that compete with us. We stressed that our value proposition here is not just premised on cheap rental, but on the overall total system, cost and value. As a principle, JTC aims to lag the market for upward revisions and lead the market for downward adjustments. In fact, JTC proactively reduced its posted rents and prices by 5% to 10% in January this year. Combined with the rental rebates, all except 0.1% of JTC’s tenants, who are on very short-term tenancy agreements, will benefit from the lower rents in 2009.

Mr Inderjit Singh and Mr Seah Kian Peng asked if JTC could relax the rule that allows JTC lessees to sub-let only up to 50% of their built-up space. First to clarify, this is not a new rule as Mr Inderjit Singh said. In fact, in 2003, this rule is already pre-existing and JTC relaxed this policy and allowed lessees to sub-let their entire gross floor area (GFA) as a short-term measure to assist companies in financial difficulties because of the economic downturn. The policy was then reinstated in September 2008.

I think the rationale for the policy is self-evident. Mr Inderjit Singh identifies with it. JTC has to ensure that our limited industrial land is allocated and optimised to support our economy and its key industries. This is why majority-owner occupation must be the norm. At the

same time, we want to give companies some flexibility: first, to put to productive use vacant space that may occasionally come about; and second, to facilitate co-location of related business activities where it makes economic sense. A 50% sub-letting cap enables JTC to achieve these twin objectives in a balanced manner.

However, I agree with Mr Singh and Mr Seah that in the current exceptional operating environment, the strain on a company’s cash flow will be exacerbated if it is unable to sub-let any unutilised space. For this reason, JTC will temporarily lift the 50% sub-letting cap until 31st December 2011 as a relief measure to help businesses ride out the current downturn.

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Mr Heng and other Members have highlighted the problems posed by the sudden fall in global demand. I would like to use the tourism industry to illustrate how Government agencies will partner the private sector to seek opportunities to boost demand where possible, a vertical approach which Minister talked about.

In 2009, the global tourism industry faces a difficult year. For Singapore, the Singapore Tourism Board (STB) forecasts total visitor arrivals to be in the range of $9-$9.5 million, a year-on-year decline of 6%-11%. The total tourism receipts generated are also expected to fall to a range of $12-$12.5 billion in 2009, that is around a 15%-18% decline.

Nevertheless, our tourism industry approaches this challenging period from a relative position of strength. Tourism projects secured in recent years will generate an estimated 3,000 new jobs this year. This is on top of the 9,000 jobs from the IRs in 2009, building up to 20,000 when the two IRs are completed. Our successful hosting of the world's first

Formula One (F1) night race has captured the attention of the world and the international media with more than 110 million television viewers worldwide. The event also drew more than 40,000 overseas visitors and generated $168 million in incremental tourism receipts, which exceeded our initial estimate of $100 million. As expected, hotels across all tiers benefited substantially in terms of revenue per available room during the F1 race weekend. I would like to inform Mr Heng that the review for the plans for 2009, including the levy, is in its final stages and it will take into account this year's tourism outlook.

To secure demand for our tourism sector in the immediate to short term, and to build capabilities to capture the growth opportunities in the upturn, STB will roll out in a $90 million initiative. The acronym is BOOST which stands for Building On Opportunities to Strengthen Tourism.

In the near term, STB will partner stakeholders in a targeted marketing campaign with the theme "2009 Reasons to Enjoy Singapore" - which is a key initiative under BOOST. Travel patterns are expected to change in the current climate with a switch from long-haul to short-haul trips. The campaign will target this potential higher intra-regional traffic from our key regional markets. STB will also reach out to our resident population as a complementary strategy to generate additional demands for our tourism sector.

STB will also increase its support to strengthen bids to attract events to Singapore over the next two years. This will generate demand and yield spin-offs for the wider tourism sector, including our hotels and F&B businesses. STB will leverage on Singapore's reputation as a global business centre to target Meeting, Incentive, Convention and Exhibition

events that are aligned to Singapore's economic priorities, such as digital media and environmental technology. Some examples include the Anime Festival Asia and the inaugural Clean Energy Expo Asia which are expected to attract more than 11,000 visitors.

Let me also elaborate how we intend to build our capacity and capabilities in the tourism sector - in terms of human capital, infrastructure, new growth areas, and R&D.

As part of BOOST, STB will complement SPUR by providing more support for businesses to train and upgrade the skill of their employees under the TIP-iT Scheme which already exists.

STB also strives to foster a business culture in the tourism sector that prioritises service quality. Mr Low Thia Khiang raised a question on dishonest retail shops. This, I agree, can tarnish the image of Singapore and undermine visitors' confidence. STB works closely with CASE to address such issues. In the first instance, STB takes a preventive approach to warn tourists against such retailers by publishing a list of errant retailers on STB's website and other marketing material. Now, inevitably, some tourists will still fall prey to such errant retailers and STB investigates such complaints thoroughly and will also mediate on behalf of the tourist for refunds or exchanges and, if necessary, represent them at the Small Claims Tribunal. But I think if we can prevent it, it is far better.

STB also aims to rejuvenate our existing tourism infrastructure to enhance Singapore's attractiveness. Mr Low raised an example of Chinatown which highlights the balance that STB has to strike in developing tourism precincts – meeting the development and economic objectives on the one hand without losing the charm and character, and I suppose the inherent

"messiness" of the place which many tourists and locals find quite attractive. STB actively engages key stakeholders in these precincts, both on the development of the infrastructure and also on the softer aspects like activities, to try and preserve that balance and keep it lively. In the case of Chinatown, they work closely with the Kreta Ayer Kim Seng Citizens Consultative Committee, and the celebrations they have for Chinese New Year is a good example of how this collaboration can be very successful.

Besides the IRs and Gardens by the Bay, there are also plans to develop new tourism projects to augment our infrastructure over the next two to three years. The new International Cruise Terminal will allow Singapore to tap opportunities in the Asia-Pacific region to grow our cruise sector. Wildlife Reserves Singapore will also be announcing a first-of-its-kind attraction in the Mandai precinct, which will re-create river habitats from around the world. It will complement the existing attractions and strengthen the draw of Mandai as a destination for families.

As Ms Jessica Tan has mentioned, we do need to build our capacity in new areas to support the future growth of Singapore's economy. Mr Edwin Khew has also enquired about our medium to long term plans to grow Singapore into a global CleanTech centre.

As Mr Khew noted, many countries have moved progressively into the CleanTech space, and this will mean greater competition in our bid to attract globally mobile CleanTech investments to Singapore. At the same time, the increased global focus on environmental sustainability will create an even larger market share which we can access.

Singapore is well-positioned to be a global leader in the CleanTech space. We are already recognised as a leader in the

environment and water sectors. Our experienced and skilled manpower from existing clusters, particularly in electronics and precision engineering, have enabled Singapore to venture successfully into the clean energy space.

We have already attracted significant investments from major players like REC and Vestas. In addition, homegrown companies are also riding the CleanTech wave. One example is Alpha Biofuels. Formed by three entrepreneurs, Alpha Biofuels collects and converts waste vegetable oil into biodiesel. Since its formation in 2004, it has grown significantly and now partners more than 100 establishments to convert their waste cooking oil into biodiesel. Despite the current downturn, Alpha Biofuels has recently moved from their research facility in ITE College East into a bigger factory at Tanjong Penjuru and has plans to expand beyond its current three retail outlets.

Sir, I would like to assure Mr Khew that Government takes a long-term view of the clean energy sector. We have set ourselves an ambitious target to grow this sector to a $1.7 billion industry in Singapore by 2015. Our plan for the clean energy sector has three thrusts: First, to develop a cluster of strong local and foreign companies; second, to build strong technological and manpower capabilities; and third, to help Singapore based companies internationalise. In line with this, the Government will continue to invest heavily in R&D and test-bedding to better position Singapore to capture the enhanced business opportunities that will arise with technological progress.

Our strategies will evolve in tandem with the competition from around the world in this space. First, we will ensure our regulatory regime keeps pace with developments. This will ensure that new technologies can be easily integrated into our energy ecosystem. Second, we will position Singapore as a "living laboratory"

for test-bedding CleanTech-based solutions applicable to urban settings. EDB will collaborate with Government agencies to develop platforms that the private sector can use to test-bed cutting-edge urban solutions. Solar test-bedding, which Mr Khew mentioned, is one such example and once proven feasible in Singapore's context, these solutions can be replicated on a commercial scale and exported to other cities.

Mr Chairman, I have highlighted some of the efforts we are undertaking with some key verticals and we are confident that our measures, which are targeted at these very specific sectors and their needs, will help our businesses manage both the immediate challenges and also position them well for the eventual upturn when it comes.

Mr Chairman, I would like to add my thanks to the members who spoke passionately on the best ways to support our SMEs during this time of crisis. MTI remains firmly committed to helping our SMEs now and in future.

More so than in other countries, our SMEs are closely connected to the global economy. Many of our SMEs play an important role in our key manufacturing clusters like electronics, petrochemicals and precision engineering, supporting larger companies. Many export to overseas markets and some of them have grown to become small multinationals themselves with operations in the region and beyond.

Without a doubt, the slowdown is affecting many of our SMEs. In the manufacturing sector, many SME suppliers have seen sharp reductions in their order books. In the services sector, lower tourist arrivals and consumer spending

mean slower businesses for hospitality, retail and the F&B business. Operating in an open economy like ours, our SMEs have not been immune to the severe shifts in the global market conditions.

Mr Inderjit Singh and Mdm Ho Geok Choo have asked what the Government would do to help our SMEs to ride out this crisis. We will do so through an enhanced SME strategy comprising four pillars. One, alleviate costs and facilitate credit; two, support internationalisation; three, develop capabilities and service excellence; and four, support entrepreneurship. Let me elaborate.

The Budget contains many measures that assist all companies, including SMEs, in managing costs and accessing finance.

In the area of managing costs, businesses will enjoy as much as $840 million in savings on property and transport related costs through the tax rebates announced. For companies that take advantage of the downturn to make capital investments in areas such as renovation and refurbishment, they will get accelerated write-downs. Most importantly, companies that retain their employees will get substantial relief in their wage costs through the Jobs Credit Scheme. For an SME employing 10 workers, this translates to potential savings of as much as $36,000 a year.

The Budget also contains enhanced measures to facilitate business financing. Let me emphasise that the main beneficiaries will be SMEs. Mr Seah Kian Peng has asked how SPRING will make known the availability of these credit schemes to SMEs. Since December 2008 SPRING has conducted 14 financial seminars and briefings to date, reaching out to nearly 2,000 participants. Members would have noticed too, SPRING’s advertisements in our local media publicising the many enhanced loan programmes.

Miss Penny Low has expressed concerns with the processing of loan applications. To ensure efficient implementation, SPRING helps SMEs in two ways. First, it refers unsuccessful applicants to other participating financial institutions. Second, SPRING makes available experienced financial advisers to advise SMEs on writing up their loan applications and even on alternative financing options and this is for free. Since the launch of this Financial Facilitator Programme (FFP), 285 enquiries have been handled. Of course, I should add that these advisory initiatives are in addition to the many relationship managers from the 14 participating financial institutions, meeting SMEs daily on the ground.

But the role of Government can only be facilitative. Miss Penny Low is right that civil servants do not have the experience or the expertise to assess credit worthiness. Government officers seek to supplement, but not supplant the role of bank credit officers in loan credit assessments.

I must add, however, that even in this global economic downturn and with declining demand, there remain opportunities for SMEs, so long as they are quick to adapt and able to seize new opportunities. IE Singapore hopes to work through industry and trade associations to help SMEs from different industries to penetrate existing markets and tap new ones.

Mr Inderjit Singh has suggested that IE Singapore do more for SMEs which want to export and internationalise. Well, as a matter of fact, of the 35,000 companies supported by IE Singapore last year through its broad-based programmes, more than 80% were SMEs.

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As highlighted by Minister Lim, IE Singapore will introduce the Export

Development Programme (EDP) to develop export competency of first-timer exporters, especially the SMEs. In addition, IE will be increasing the number of trade missions by more than 55% to 340, benefiting some 5,000 companies. It will step up its efforts to help companies secure trade credit insurance. In particular, IE will subsidise 50 per cent of insurance premiums for SMEs under its new Export Coverage Scheme (ECS) that facilitates access to trade credit. The ECS is expected to benefit 1,000 Singapore based companies and cover up to $4 billion worth of trade insured. As such, addressing Miss Penny Low’s query, we have indeed expanded our efforts in helping export-oriented SMEs.

Next, let me re-emphasise the need for SMEs to build new capability and capacity even in this period of downturn. This is, in our view, the best way to stay afloat and plan ahead.

SPRING offers a comprehensive range of capability development programmes, ranging from IT upgrading to design, branding and business management systems, process re-engineering and product development. Over the past year, these programmes have helped some 2,600 businesses to upgrade their capabilities. Many have become leaner and stronger. Others managed to increase sales with more effective design and branding.

Consider Tungsan Food Industries, a local manufacturer of sauces. With SPRING’s support, it has automated its sauce production process and increased production capacity by 150 per cent. The improved operational efficiency has enabled Tungsan Food Industries to sell more at a lower cost per unit.

To help our SMEs stay focused on the long-term capability building, SPRING will

launch a new $200 million Business Upgrading Initiatives for Long-Term Development (BUILD) programme as mentioned by Minister Lim. BUILD has two important components.

For individual SMEs, SPRING will increase funding support from 50% to 70% under its capability development programmes. For example, with support from SPRING, Nanyang Optical has built up a strong in-house product development capability. As a result, it will be rolling out a new series of mid-range eyewear targeted at trendy and yet budget-conscious consumers. With increased funding levels under BUILD, SPRING hopes to help other SMEs to continue to upgrade their capabilities.

For industry-level projects, SPRING will raise funding support from 70 per cent to 80 per cent under the Local Enterprise and Association Development or LEAD programme. Several of our industry associations have been pro-active in responding to this crisis. For instance, the Singapore Furniture Industries Council (SFIC) launched the $1 million Member Assistance Scheme (MAS), which helps eligible members lower business costs and strengthen business capabilities. The funding can also be used to support missions to explore new business opportunities. We agree with Mr Heng Chee How that agencies and industry associations must work together for collective competitiveness. This enhancement to LEAD will allow associations to provide more customised services to their members.

Mr Chairman, a large number of our SMEs are in the services industry. The productivity of the service workers, their inclination and ability to serve with excellence, will have a direct impact on Singapore’s aspiration to be an

international hub for business and tourism. In fact, as we prepare to welcome several world-class events, such as the F1, APEC meetings and the inaugural Youth Olympic Games, the task of raising our service sector productivity has become even more urgent.

To ensure that we are up to the challenge, SPRING, STB and WDA, NTUC and ISES (Institute of Service Excellence) of SMU (Singapore Management University) recently launched a $100 million GEMS-Plus programme to raise the service standard of our industries in some very fundamental ways. The agencies hope that through the funding, applied in three areas; namely, research on service standards and methodologies; two, capability development and adoption of best practices; and three, promotion and recognition of role models, would raise the service standard of our workers, and the productivity of our service firms to new and international levels.

Mr Chairman, Mr Inderjit Singh, Miss Penny Low and Mdm Ho Geok Choo have spoken on the importance of entrepreneurship even in this period of downturn. I agree wholeheartedly with them. Start-ups bring renewal and dynamism to our economy, and are the seeds of tomorrow’s large enterprises. Our efforts to promote entrepreneurship will not waver even in the downturn.

The Action Community for Entrepreneurship (ACE) is an important initiative in driving entrepreneurship. Over the years, ACE has reached out to 32,000 aspiring entrepreneurs. Together with other entrepreneurship groupings, ACE has created a strong fraternity, promoting a pro-enterprise culture and the sharing of best practices amongst them. More educated and young Singaporeans are now willing to consider entrepreneurial undertaking as so-called "career choices". Our recent survey suggests that 65% of startups’ founders are below 40

years old. And more than one-third of our start-ups are started by graduates.

We have created a conducive environment for start-ups. Our smaller companies and start-ups already enjoy the world’s lowest effective tax rates. It takes less than 15 minutes and $300 to register a company in Singapore. Singapore has been ranked by the World Bank as the world’s easiest place to do business for three years running.

But we are not contented. Recognising that start-ups too will be affected by this crisis, we have recently enhanced our support in three ways: Providing working capital and equity; encouraging further investments in innovation; providing greater opportunities for student entrepreneurs.

In the current economic climate, start-ups, like all enterprises, may be vulnerable to cash flow problems. Our Government loan schemes, especially the enhanced $100,000 micro-loan programme, will provide loan assistance to all small enterprises, including start-ups.

Recognising that equity capital may also be affected, SPRING recently enhanced the Start-up Enterprise Development Scheme, or SEEDS, in three ways. Funding ratio is now increased from 1:1 to 2:1. We would also allow follow-on funding after the initial investment. The funding cap has also been raised from $500,000 to $1 million per start-up. These enhancements will be available to both new and existing start-ups.

Beyond increasing funding options for start-ups, we are also helping nascent start-ups to commercialise their ideas. The Technology Enterprise Commercialisation Scheme (TECS) launched last year provides $50 million to help start-ups create their first prototypes for market trials and acceptance. So far, SPRING has supported 17 such technology

projects, providing up to $500,000 for each start-up.

Recognising that the spirit of enterprise has to be inculcated from young, SPRING introduced The Young Entrepreneur Scheme or YES! in October last year, providing $4.5 million of funding to help schools develop entrepreneurship learning contents. Under YES!, we would also fund student ventures with a 4:1 matching ratio.

One example of a recent YES! start-up is Slow Loris, a manufacturer of designer bags catering to the increasingly environmentally conscious commuter. A recent graduate of the Singapore Management University (SMU), Miss Sarah Yip chanced upon the opportunity when she observed cyclists in Europe sporting stylish messenger bags as a lifestyle accessory. Such an ability to smell business opportunities and to convert an idea into a commercial proposition is what we would like to see more of amongst our youth.

Let me now turn to issues related to consumer protection raised by the Members.

Mr Lim Biow Chuan asked for an update on the amendments to the Consumer Protection (Fair Trading) Act (CPFTA). The CPFTA Amendment Bill was passed in Parliament in August last year. Since then, we have been working with agencies and stakeholders to finalise the supporting regulations, taking into account feedback received during the public consultation exercise. The finalised regulations will be published later this month and will come into operation thereafter in April.

Mr Lim also recommended that an Investment Fraud Division be set up to deal with fraudulent investment schemes. The Commercial Affairs Department (CAD) of the Singapore Police Force

already has the responsibility and power to deal with such scams.

Mr Lim suggested that the MoneySENSE programme to deliver financial education be extended to more people through different avenues. MoneySENSE already does this. Besides the various channels mentioned by my Minister in his reply to Ms Penny Low last Thursday, MoneySENSE also partners with the media to arrange print and broadcast programmes. For instance, it had arranged radio programmes which have a total listener-ship exceeding one million.

Both Mr Lim and Mr Yeo Guat Kwang suggested introducing laws to regulate the timeshare industry. Based on the feedback from CASE, we are strengthening the CPFTA to give consumers even stronger protection with respect to timeshare contracts. The cooling-off period will be extended from three to five days, and will extend to businesses that claim to help consumers resell their rights under timeshare contracts. We are also stipulating a 60-day refund period for contracts that are cancelled within the cooling-off period. The Police will also investigate if there are allegations of cheating or other criminal offences. We should let these new measures take effect and re-assess the needs for further tightening from there.

I must also reiterate the fundamental pillar of our consumer protection framework, which is one based on caveat emptor, free market principles in the provision of goods and services, and the sanctity of contracts. The best protection for consumers is still founded on their ability to discern the best deals for themselves, being vigilant to any unrealistic promises and to walk away from pressure selling with bath towel or otherwise.

Mr Lim proposed to extend the cooling-off period to the beauty industry and related industries as well. Before introducing legislation to protect consumers against a particular industry, we will consider whether consumers need protection because (1) the product or service is complex and beyond the reasonable understanding of consumers, (2) the method of selling is complex, or (3) existing provisions are inadequate to protect the customers.

In the case of beauty-related products and services, many of the complaints are related to high pressure selling. Consumers victimised by high pressure selling already have clear recourse under the CPFTA against such unfair practices. Members of this committee would probably also agree that facial products and slimming treatments are neither complex nor hard to understand. Patrons of beauty-related industries would probably be better off if they develop a heightened sense of vigilance and self-defence, which would serve them well both shopping here and overseas.

We have also noted the increased number of complaints in the beauty care industry, but the numbers are still much smaller than the time-share industry. This is despite the fact that the beauty care industry is much larger and does not have a mandatory cooling-off period, unlike the timeshare industry. Thus, we believe that consumer education and industry-led accreditation are still the best way forward. In any event, consumers victimised in high pressure selling already have clear recourse under the CPFTA against such unfair practices.

Lastly, Mr Yeo asked about the progress of the Lemon Law Taskforce. The Taskforce, co-chaired by CASE and MTI, and comprising representatives from the industries, has been deliberating on the issue. The Taskforce is nearing

completion of its work and formal recommendations will be made shortly.

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We still have time for clarifications.

Sir, on the issue of financing, I would like a clarification from the Minister regarding a comment by SPRING Chairman, Mr Philip Yeo, which was reported in the Lianhe Zaobao. Let me quote Mr Philip Yeo said that, "If the Government were to provide enterprises with loans directly, all Members of Parliament would lobby the Government for loans for the enterprises within their constituencies, creating political suicide".

Sir, I would like to ask whether this is the Minister and the Ministry's view about all the requests that the MPs have been making. I am, in fact, disappointed that this came from the Chairman of SPRING who should be more sympathetic towards SMEs. His comments belittled the issues taken up by the Members of Parliament who have real concerns for SMEs and want to help solve liquidity problems. I wish that the SPRING Chairman was a bit more sympathetic. Can I ask the Minister whether he agrees with this view?

I think Mr Inderjit Singh knows that Mr Philip Yeo speaks his own mind. He does not echo the Minister. [Laughter]

Can the Minister clarify the question that I asked earlier on – whether the Government has a specific policy regarding our GDP versus trade ratio? And also his comments on the growing social economy which, obviously, has the capacity to soak up any excess capacity from the private sector.

My apologies for not addressing that specific observation. Basically, our trade comprises several elements. One is, of course, domestic

exports where it is obviously in our interest to be able to sell as much as we produce and to sell more.

The second part is re-exports, and this is a very important part of our role as a trading nation. When you look at our statistics and it shows that our trade is more than three times of our GDP, you must see it in this context – a big proportion of it is re-export. We do not see this big ratio as a disadvantage. In fact, we see this as a very big advantage of Singapore. In the world trading forums, Singapore clearly is seen as punching above its weight. The fact that a small country with 4.5 million people is ranked somewhere between 12th and 15th in the world trading league is really something to our credit.

Sir, the Senior Minister of State, Mr S Iswaran, talked about ensuring competition at our energy market sectors. Three of our major gencos are now under foreign ownership and they have paid a significant price for the assets. I would like to ask the Senior Minister of State whether there are sufficient safeguards to ensure that our utility rates for both households as well as businesses remain competitive or even more competitive? And how do we ensure that these foreign gencos will continue to invest in long-term capabilities?

Sir, I thank the Member for the question. I think, first and foremost, we have to recognise that the companies which invest in power generation are undertaking very substantial capital expenditure. These run into billions of dollars and, therefore, it is evidently and clearly in their vested interest to ensure that, one, they invest and continue to invest in technology and capability that keep them abreast of the competition, and two, they do not end up pricing themselves out, if there are multiple players in the market and the competitive tension is sufficient.

So, our objective in the overall management of the electricity sector, has been to ensure that we have as many players as possible. EMA is on record, saying that when there are applications for new planting, they will be considered and be quite generous about it. I think the important thing, then, is to make sure that we create a level playing field where all players feel they can come in. There are no unfair barriers to entry, and once we have that capability, then, that together with the inherent competitive tension within the market, will take care of the concerns that the Member has raised – whether it is in terms of investment to maintain the capability of your infrastructure or in terms of pricing to ensure that it is fair and reasonable to households as well as businesses.

Sir, with respect to the various financing schemes, I would like to ask whether SPRING is measured by how much it lends or how much is left of the total amount set aside for the various schemes. Likewise, what about the time taken to process the applications? I think these benchmarks are important. These KPIs are important because I believe that it will set the right framework which our public officers would embrace, adopt and, more importantly, ensure that the intended objectives of these various financial schemes are met.

I would also like to ask the Minister on the issue of cost of living and cost of doing business. Annually, there is a Cost of Living survey done by Mercer. It ranked Singapore as the 13th most expensive city in the world for 2008. In fact, it got worse, we were 14th and now, 13th. I would like to ask if the Ministry should set a target for us to get out of this top 20 most expensive cities survey by a certain timeline? I think this is important for businesses and all Singaporeans.

Mr Chairman, let me assure the House that SPRING's role in facilitating credit applications is, as I have mentioned, they will take all efforts to make sure that viable and deserving businesses have access to the credit. The way they go about it is to work closely with the companies and the participating financial institutions. We are tracking the status. SPRING follows up when an applicant is not able to get approval from the bank, so that they try and understand from the credit officer, reasons for the rejection.

SPRING also facilitates the company to redirect the application to other banks. Sometimes, the bank does not grant the loan because banks adopt a portfolio approach towards bank loans. If a loan is within a certain sector that has reached the ceiling for that portfolio, then, the bank may not extend additional loans in that sector. But other banks may be underweighted in that sector and portfolio and, therefore, may be prepared to grant loans for that particular sector. So SPRING does this facilitation. SPRING also, as Minister of State Mr Lee Yi Shyan explained, provides assistance in the application process by tutoring and helping the companies to fill up the forms and put up its best case for the companies. So, we do not have a specific target but, clearly, the objective for SPRING is to facilitate and, I think, the senior management and the officers down the line, know their roles.

As for the cost of living in Singapore, I think this is a very complicated subject. I understand Mercer monitors this and does this assessment but, perhaps, it is targeted at expatriates living in Singapore. And in recent years, of course, the index has gone up because of cost of rental. But, as you know, this is just a cyclical phenomenon. I believe, some years ago, we were ranked probably number 30-something in the Mercer's survey. Many

agencies in Government watch this carefully. And we want to make sure that, for Singapore to succeed as a global city, we have to have an attractive environment but at the same time, we should not be expensive environment.

Can I seek a clarification from the Minister of State on my call for the Lemon Law - how long will the Ministry take? When can we see the light at the end of the tunnel?

Well, let me first thank CASE for being a part of the task force. It is a multi-agency task force that considers – similar legislations in other regimes that have such a law – not only having such a law, but how it is implemented, and its effectiveness.

We should expect the task force to finalise its report in the next four months or so.

Mr Inderjit Singh, are you withdrawing the amendment?

Sir, I would like to take the opportunity on behalf of the GPC (Finance, Trade and Industry) and all the Members to thank the Minister, Senior Minister of State and Minister of State for all their answers. We are very happy with the replies. I think they answered most of the queries that we have. We understand that this is a challenging environment so we wish MTI all the best in trying to tackle this on behalf of Singaporeans. You have our support.

I would also like to, before I withdraw my cut, offer one more acronym. The Minister has mentioned a few. I would like to suggest one more: Goal – "Government Offers Additional Lending". I hope that we can do this at the next announcement. Sir, I beg leave to withdraw my cut.

Amendment, by leave, withdraw.

The sum of $740,357,600 for Head V ordered to stand part of the Main Estimates.

The sum of $8,691,512,200 for Head V ordered to stand part of the Development Estimates.

Head L – Ministry of the Environment and Water Resources

Head L – Ministry of the Environment and Water Resources. Mr Charles Chong.

Development and Environmental Sustainability

Sir, I beg to move,

That the total sum to be allocated for Head L of the Estimates be reduced by $100.

Sir, the Government has previously made development and environmental sustainability a priority. Could the Minister comment if, in this economically uncertain times, sustainable development and environmental sustainability remain as relevant priorities.

Sir, I am concerned that during this downturn, business owners may be less inclined to devote resources towards developing and improving environmentally initiatives, but may, instead, decide to concentrate their efforts on the core of their businesses. In many cases, this may actually be the right approach to save their businesses and to preserve jobs, but the health of the environment should not depend on the recovery of the economy and it is something that we must look at in good times, as well as in bad.

Could the Minister tell us if his Ministry will consider extending financial support to businesses and, perhaps, even individuals to improve their resource

sufficiency and to implement green initiatives, so that the environment is not placed on the back burner while the economy remains troubled? One potential area which the Government can help households and businesses be more environmentally-friendly is by further encouraging energy and water efficiency with more incentives for consumers. Apart from the benefits to the environment, generally, greater efficiency will also lead to cost savings for individuals and business owners. Could the Minister tell us what measures his Ministry has taken or will be taking in these areas?

Another area of concern I have is Singapore's air quality, in particular, our fine particulate matter or PM2.5 levels. A large percentage of PM2.5 emissions is contributed by vehicles that run on diesel. With the more stringent Euro IV emission standards, having been introduced for some time already, greater use of CNG by commercial and private vehicles would contribute towards reducing our air pollution. If more vehicles were to switch to CNG, it may even be able to bring down our PM2.5 levels below the level set by the US Environmental Protection Agency.

One reason why CNG is not widely used in Singapore is the difficulty vehicle owners have in filling up their CNG tanks. There are just too few CNG filling stations available in the country. This is especially so for private vehicles which do not have access to the Jurong Island filling station. Feedback from owners of CNG-equipped vehicles has also been that waiting times at stations can be quite considerable, especially if CNG terminals are not able to fill vehicles in quick succession – the same way as petrol-filling stations can.

While the NEA provides co-funding to the private sector to develop CNG

distribution network through the innovation for environmental sustainability fund. I am concerned that leaving it purely to the private sector to construct the network may take a very long time to happen in the prevailing economic climate. Will the Government consider developing the infrastructure itself, and then handing it over to the private sector, as it did for the MRT system?

2.00 pm

With lower oil prices followed by lower pump prices for petrol and diesel, there may now be less incentives for vehicle owners to switch to hybrid and other more environmentally-friendly vehicles. Could the Minister consider reviewing the current incentives with the view of making them more attractive for vehicle owners to switch to green vehicles?

Sir, I note that the existing green vehicle rebate scheme will end this year. To encourage greater ownership of green vehicles, will the Minister consider extending the scheme for a much longer period to just, say, one year? On a separate but equally compelling note, with a significant proportion of our coastline area not very high above sea level, could the Minister tell us what measures have been implemented in our development plans to address our vulnerability to climate change, especially to rising sea levels? With new reclamation projects having to be built, at least 125 centimetres above the highest recorded tide level, this appears only to deal with our man-made coastline and not to our natural coastline, thereby leaving what nature has provided us to susceptible sea levels.

Finally, Sir, would the Minister be able to provide any update on the status of the Report on Climate Change commissioned by the NEA, which he previously mentioned that we can expect to see this

year, and also an update on the Inter-Ministerial Committee on Sustainable Development?

Environmental Problems and Challenges

Sir, I wish to raise my concerns for several environmental problems and challenges in Singapore. Despite efforts by the MOH and MEWR to control the spread of Chikungunya, the number of outbreaks of this disease has continued to be on the rise late into December last year. We need to do more to look into this disease to see how it can be eradicated. What new initiatives will be adopted to inhibit the spread of this disease? In view of the fact that Chikungunya infection has no cure and may limit its sufferers' ability to work, for up to many months, what can be done to curb the ensuing problems of the patients in our workforce? Several of my nursery operators in Bah Soon Pah Road told me that they were fined $2,000 the first time. Soon after that, they were fined $4,000 or $5,000 the second time. And soon after that, they were being hauled to Court and was fined between $12,000 and $13,000.

By any standard, the fine was huge. They cannot afford it especially during this economic downturn. I would like to ask the Minister: is the Ministry imposing such a huge fine to eradicate the mosquitoes or to eradicate the nursery operators? I believe that just as in the case of controlling dengue infection, controlling Chikungunya should be a joint effort between citizens and the Government. More resources should be invested in educating the public on the effective preventive methods and symptoms of Chikungunya. I am very sure my residents in Bah Soon Pah Road are keen to learn the effective way of eradicating mosquitoes and, hence, sharing of good practices with all nursery operators in Singapore and all households

in Singapore could be more helpful and effective.

Next, littering in the neighbourhoods remains a persistent problem even after many years of public education. Our conservancy workers dispose large amounts of carelessly displayed litter daily, ranging from bulky furniture to half-empty drink cans. Publicity campaigns and flyers have proven to exhibit limited results. I believe that the root of the problem could be due to the lack of pride amongst Singaporeans and Singapore residents about their neighbourhood. Without a sense of belonging to the neighbourhood, residents would not have the urge to voluntarily protect it. Likewise, we get feedback about the littering habit of Singaporeans when they are abroad. What can be done to change this mindset and evoke a sense of social responsibility for the environment. Perhaps we need to approach the littering campaign from a different perspective.

With the economy looking bleak this year, energy efficiency is no longer just a solution to environmental problems. As income is tightened, it becomes all the more necessary to pay attention to efficient energy usage. Expenditure on energy usage can impact the competitiveness of a business. In last year's budget, a comprehensive plan had been drawn up for a multi-tiered approach to involve public sector, private sector and residents in embracing energy efficiency. Although this plan incurred some financial investment, we should continue to promote energy efficiency in Singapore. This way, we would not be penny wise and pound foolish. Given the benefits of energy efficient business practices, will the Ministry consider providing financial support for individuals and corporations not already benefiting from energy efficiency schemes? What are the Ministry's plans to push for more efficient energy usage amongst businesses and households?

We have an ambitious target of hitting a 60% recycling rate by 2012. Our National Recycling Programme has helped boosted Singapore's recycling rate in recent years, but it may not be entirely efficient with regard to household waste. In today's Forum page in the Straits Times, there was an article titled "Recycling: All that effort gone to waste" by Reuel Royston Wee. Are our waste disposal contractors taking waste recycling seriously? Are our residents still putting the wrong items in neighbourhood recycling bins and giving up non-recyclable products for collections? I hope we have more residents like the foreign writer, Reuel Royston Wee. Can more be done to educate the public about recyclable materials? What are some initiatives the Ministry is embarking on to further improve our recycling rate? The demand for waste disposal is also expected to rise. How are we going to cope with this demand?

Prudent Use of Natural Resources

Sir, with the economic recession, I would like to know how will the Ministry help households and businesses cut cost and ride out the crisis by becoming more resource efficient. What technologies and methodologies can we use for energy and water efficiency mentality in industries and households? And, ultimately, how do we employ them? How do we ensure that these technologies and methodologies are effective and efficient?

I understand that a multi-agency committee, namely, the Energy Efficiency Programme Office was established to drive energy efficiency improvement in Singapore. Can the Minister provide an update on the following matters?

Firstly, how successful has the programme been at reaching out to the

public and businesses and promoting energy efficiency behaviour and practices? What big truths have we achieved in building Singapore's capability in energy-efficient technologies? Based on what we have achieved, how capable is Singapore to drive and sustain energy efficiency efforts and to develop the local knowledge base and expertise in energy management? How have businesses, industries and consumers and households in Singapore responded to the adoption of energy-efficient technologies?

I would like to applaud the Ministry's effort to instil energy and water conservancy mindset through the 10% Energy Challenge and 10% Water Challenge programmes. Can I have an update on the reduction in the energy and water usage as result of these programmes. What initiatives does the Ministry have in moving forward? How far are we from reaching our national targets of energy and water conservancy?

Finally, a typical household refrigeration and air-conditioning account for a significant portion of electricity consumption. A large percentage of my residents belong to the low-income group who are owning refrigerators and for some, possibly air-conditioners, with older technologies. These residents may not be able to afford to buy new appliances that have good energy utilisation rating like the energy labelling scheme. If they cannot afford new ones and are stuck with the old ones, how can they contribute towards energy efficiency? What programmes do we have in place to ensure that energy-efficient appliances are affordable by the general population?

Sir, every dark cloud has a silver lining. Last year, the high prices of food, commodities and oil affected every sector of our economy and reduced our purchasing power. It has made many wake up to the fact that there is a limit to natural

resources and we need to reduce and conserve natural resources. The economic tide has turned. Although we are in the midst of our worst recession, efforts to conserve and recycle should be given more priority and emphasis.

Are we doing enough for recycling? The hype on recycling that gained steady momentum over the past few years seems to have lost steam. We started with "Bring your own bags" once a month and now it is every Wednesday of the week. Can we further increase this to twice a week or three times a week?

We have successfully implemented one recycling bin to five blocks of HDB flats and recycling receptacles for all commercial and private properties. Can the Ministry update the House on the issues and feedback regarding the recycling bins and the actions taken? Can we start to think about implementing one recycling bin per block now? If so, I would like to volunteer Canberra division in Sembawang GRC to pilot this.

We have also door-to-door recycling bags collection fortnightly. What is the actual take-up rate from the door-to-door recycling bag collection? What is the Ministry doing to improve the participation rate? Can we improve the frequency to weekly? Can the Ministry also highlight some of the obstacles in moving forward to achieve a higher recycling rate for Singapore and how can we overcome those challenges?

Our drive for greater energy efficiency is the right step forward. The Government has introduced various initiatives to encourage households and companies to promote energy efficiency. Can the Ministry update us on the progress of these initiatives and share the plans on the promotion of energy efficiency in Singapore? Will legislation be used to enforce standards?

We did well for the past few years in reducing our water consumption. Can the Ministry update us on the status of the 10-Litre Challenge and what other programmes will the Ministry be rolling out to ensure our taps will always flow? Is the Ministry looking at ways to reduce our carbon emissions although the Government has rejected previous suggestions for a climate change Bill? Can the Ministry update the House on our results so far on solar energy ultilisation? And will Singapore consider nuclear energy in the near future as an alternative source of carbon neutral energy?

Sustainable Development and Environment Sustainability

Sir, it is timely that the Inter-Ministerial Committee on Sustainable Development (IMCSD) was formed in February 2008 to formulate a clear national framework and strategy for Singapore's continued sustainable development. It is also appropriate for the Finance Minister to announce a $1 billion budget to spend on sustainable development. Can the Minister elaborate on what programmes these funds will be spent on and when the IMCSD's masterplan would be released?

As illustrated by the general uptrend in resource prices such as energy and food, as well as on-going international negotiations on the post-Kyoto regime, issues like global resource scarcity and climate change are long-term challenges that all countries, including Singapore, will have to tackle. Sustainable development is undoubtedly important for the long term and should be a key priority for us. However, the immediate challenge we are faced with is the current economic downturn which will affect businesses, industries and households who are all looking towards the lowering of their costs. May I ask the Minister, under these circumstances, is sustainable development still a relevant priority in this

economically uncertain times? Can businesses, industries and households benefit from adopting sustainable development practices?

In the Budget speech, the Minister for Finance mentioned that "there is also an economic imperative for sustainable development" as resource efficiency can reduce costs and boost resource security. Can MEWR elaborate on whether there are any economic opportunities that Singapore can tap on in the area of sustainable development, for instance, in the area of environmental sustainability solutions?

Finally, the target of 25% reduction in terms of carbon intensity has been achieved two to three years ago. Can the Minister state what new figures Singapore has achieved and whether there are any new targets for the next five years to ensure that we continue to strive for higher rates of energy efficiency and therefore a more sustainable Singapore?

Energy Efficiency

Sir, Singapore imports all its resource needs and energy is no exception. With the price of energy likely to remain volatile and growing concerns with the environmental sustainability, we should have a forward-looking energy efficiency strategy targeted not just at individuals and their lifestyles, but also industries and businesses.

I applaud the Government's efforts in the area of sustainable development in the last two years. During these difficult economic times, I can understand that the last thing on the mind of a company is long-term energy efficiency. However, it is important that we do not lose the momentum which has been built up in the last two years. May I ask if the Ministry has strategies and schemes in place to

ensure the sustainability of the energy efficiency initiative?

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In addition, will the Minister share with us his views on and plans in the area of energy efficiency, as to how it intends to encourage and incentivise private sector involvement?

Carbon Footprint in Singapore

Sir, I would like to focus my cut on air-conditioning. Last year, I pointed out a general need to be greener as a Government, and I made some suggestions. This year, I want to make one specific suggestion which can be very easily implemented. I would like to propose that we legislate the setting of air-conditioning in all public buildings at 24 degrees Celsius. I will explain why. This is because I want policymakers on energy to take the same approach as their counterparts in water – husband supply carefully, and control demand assidiously.

Sir, with the Marina Barrage, we have taken a big step forward towards greater self-sufficiency. But there is another project, which to me is more important but has gone relatively unnoticed. This is the Deep Tunnel Sewerage project. With this seven billion dollar project, we are able to reclaim much of our used water from 2008. We have in effect closed the water loop – to ensure that we recycle as much water as we possibly can.

In water, we control demand and we recycle the expand supply. For electricity, one quick way to control demand is to enforce the NEA recommendation of 24 degrees Celsius for air-conditioning setting. Many public buildings - shopping centres, offices and pubs - are set at artic temperatures. So are our offices. We should make it a law to turn all air-conditioning in public and commercial buildings to 24 degrees Celsius. There can be pro-

visions in the law for exemptions for those buildings which needs to be colder. Yes, I know too that enforceability can be an issue. But for those of us who remember that section 377A debate will know that some laws are not made, or kept, to be strictly enforced. They are a symbol to show what Singapore stands for. Sir, more immediately, I would like to get the Minister's support of all Government buildings to set their temperature controls at 24 degrees Celsius or higher. I would like the Minister and other political leaders to set an example by not wearing jackets to meetings – including to Parliament.

Sir, air-conditioners generate hot air. Do you think that the NEA can think of ways to harness the heat energy from this air in some way? Maybe laundromats from the same building. Sir, these are small steps. We can and I think we ought to take them today.

Thank you very much, Sir. Sir, first of all, I wish to thank Mr Charles Chong, our GPC Chairman, and other Members for their suggestions and questions.

Sir, sustainable development is important for Singapore's continued progress. Our economy, environment and society are inter-linked. If economic activities lead to more pollution and wasteful use of resources, it will impair our quality of life and threaten our long-term growth. If we make the wrong choices now future generations will likely contend with unhealthy air, water and land and struggle for depleting resources in a congested city with little or no greenery and water areas. We must continue to put sustainable development high on our agenda so that future generations enjoy the same, if not, a better quality of life than what we have today.

Sustainable development will contribute towards a more dynamic economy and a clean environment. This is the vision set out by the Inter-Ministerial Committee on Sustainable Development, or IMCSD, which the Minister for National Development and I co-chair. The Committee will release its report in March together with the details on how the $1 billion budget for sustainable development will be spent.

Sir, both Mr Charles Chong and Er Edwin Khew asked if sustainable development is still a relevant priority in these economically uncertain times. Given the global downturn the ability to grow the economy in a sustainable way has become more and not less relevant. Continuing to achieve good growth while maintaining a good environment will require, first, the prudent use of natural resources; second, building capability in the environmental sector; and, finally, protecting our environment to ensure that environmental standards do not slip and even improve.

The prudent use of natural resources is particularly pertinent during this period of economic uncertainty. By continuing to take a long-term view and sustaining investments and resource efficiency, our economy and companies can emerge from the economic crisis with leaner cost structures, higher productivity and greater competitiveness. Similarly, Sir, by becoming more efficient, households and families can save energy and water, cut cost and cope better during tough economic times.

Dr Faishal asked how the Ministry will help households and businesses to become more resource efficient while several Members asked about the Ministry's plans for energy efficiency. But, Sir, let me address Mr Charles Chong's question on our vulnerability to climate change before I elaborate on the

initiative that my Ministry is embarking to promote resource efficiency.

Sir, in 2007, the NEA commissioned a two-year study to better understand the long-term effects on climate change such as sea level rise and temperature changes in Singapore. The study is expected to be completed in the middle of this year. Preliminary results indicate that our existing infrastructure is sufficient to address the risk in the short to medium term. For instance, the mean sea level rise for Singapore is expected to be between 23 cm and 69 cm by the end of this century and our current land reclamation levels which are set at 1.25 m above the highest tide level are sufficient to address this rise.

Notwithstanding this, Sir, we will continue to work closely with the relevant Government agencies to assess the need to implement additional adaptation measures in the longer term. We will also be embarking on the second phase of the study on Singapore's vulnerabilities to climate change to look at how climate change may affect both public health and bio-diversity.

Sir, energy efficiency is our key strategy to mitigate climate change. It is also a pragmatic approach to lower business cost and increase our competitiveness. The Energy Efficiency Programme Office (E2PO) led by the NEA was set up in 2007 to drive energy efficiency efforts across sectors. It has rolled out measures to increase awareness on energy efficiency, incentivise update of energy efficient technologies and develop capability in energy management. Discussions are on-going on suitable national targets for energy efficiency and these will be released later this year.

To increase public awareness on energy efficiency, NEA launched the 10%

Energy Challenge in April 2008 to encourage households to reduce their energy consumption by 10%. Every household can save electricity with simple habits, like not leaving household appliances on standby, using a fan instead of an air-conditioner and using more efficient light bulbs. The 10% Energy Challenge Campaign uses a range of media platforms such as television, internet and events to inform households of such energy saving tips. Sir, the early results are promising. The average monthly household electricity consumption from May to August last year fell by almost 4% compared to the corresponding period in 2007.

Grassroots organisations and companies have also been encouraging households to conserve energy. For example, residents in the South East District took part in quizzes on energy conservation in exchange for energy saving light bulbs for needy households. Over 3,000 light bulbs sponsored by Philips Electronics will be given out to more than 600 needy households. Separately, Osram Singapore is partnering North West CDC and is donating 1,000 energy light bulbs to needy families in Marsiling.

And to enable our household to choose more energy efficient equipment, air-conditioners and refrigerators in stores, now Sir, carry the mandatory energy label. MEWR and NEA are also working with our retailers and supplies of home appliances to promote the sales of energy efficient appliances.

Sir, I announced last year that the Government will introduce the mandatory fuel economy labelling scheme (FELS) for passenger cars from April this year to help car buyers choose more fuel efficient vehicles. All car retailers will display the fuel economy labels or passenger car models at the showroom. We estimate that the car owners can save nearly $900

in fuel cost each year by switching to a more fuel efficient car and practising good driving habits. We have been in close consultation with the industry to prepare them for FELS and of course will take into account their feedback in the implementation.

To help businesses keep costs down, NEA will extend the waiver on registration fees for air-conditioners and refrigerator models under the Mandatory Energy Labelling Scheme (MELS) by an additional year, until 30th June next year. NEA will also waive the registration fees for clothes dryers under the MELS and for vehicles under FELS till 30th June of next year.

Sir, in the business sector, we see huge potential to save energy and reduce cost by investing in energy efficient technology. Some companies are already implementing energy efficiency measures and realising the savings. For example, United MicroElectronics Corporation is reaping energy savings of about one million kilowatt-hour or over $200,000 per month by improving the efficiency of its chiller system. To encourage wider adoption of energy efficient design, technologies and practices, we have put in place a number incentives.

First, we launch the Design for Efficiency scheme to co-fund workshops to design new energy intensive facilities to be as energy efficient as possible. And for existing industrial facilities, we launch the Grant for Energy Efficient Technologies (GREET) to co-fund up to 50% of the cost of energy efficient equipment or technology. Sir, the response by industries is encouraging and NEA is working with them on several energy efficient proposals.

To build capability in energy management, NEA launched the Singapore Certified Energy Manager (SCEM) training grant to co-fund the cost of attending SCEM courses. The SCEM programme

equips facilities and building managers, engineers, technicians with the skills to manage energy services. Since the launch of the grant in September 2008, we have approved 82 applications and all the applicants have started their training.

Sir, the Government is also taking the lead on energy efficiency. We earlier announced that all Government buildings with more than 15,000 sq m of air-conditioned floor area will conduct energy audits by March 2010. Sir, we are on track to meet our goal. Twelve out of 48 Government buildings have completed their energy audits and are now implementing the recommendations, and this will achieve about $3 million in total annual savings. Another 10 buildings have completed their energy audits and are implementing the recommendations. An additional $2.5 million in total annual savings could be realised if all the identified measures are implemented. Sir, the remaining 26 buildings will complete their audits within the next year.

Sir, all large public buildings are also to ensure that the ambient indoor air temperature is maintained as high as comfort levels allow within the range of 22.5 to 25.5 degrees Celsius. Going forward, we will look into extending this requirement to cover all public sector premises.

Sir, I wish to thank Mr Seah Kian Peng for his suggestions on how we can be more energy efficient as a country. My Ministry will continue to look into how the Government can improve resource efficiency as well as how we can engage the private and people sectors on similar efforts.

Sir, there is more that Singapore can do to improve our energy efficiency. As we progress towards more prudent energy use with greater awareness, expertise and support by the Government, we also need to lock in the gains by introducing mandatory efficiency standards selectively

to ensure a permanent improvement in energy efficiency.

In the household sector, the NEA will implement the Minimum Energy Performance Standard (MEPS) for household air-conditioners and refrigerators by 2011 to remove the least efficient models from the market. The minimum standards will be set between the one-tick and two-tick range and will affect less than 20% of the existing appliances models. Consumers will continue to have a sufficient variety of appliance models to choose from while suppliers have a two-year lead time to clear their existing stocks and bring in the new models. Beyond 2011 we will look into the feasibility of introducing MEPS for lighting.

For the buildings and industry sectors, we are studying the feasibility of mandating good energy management practices such as regular monitoring and reporting of energy use and the appointment of trained energy managers for facilities with high energy consumption.

Sir, Singapore will continue to depend on fossil fuels in the near future. Improving energy efficiency is the most cost effective way of enhancing security while lowering energy bills and is a key thrust of our sustainable development strategy. The industry and community must therefore work in active partnership with Government to push aggressively on energy efficiency.

Sir, Dr Lim asked about the deployment of solar technologies. Solar energy is still more costly than conventional grid electricity generated from fossil fuels but prices are expected to come down as the technology matures. To build up our capabilities for future adoption when it is cost effective to do

so, we will continue to research and test-bed such new technologies.

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Sir, the National Research Foundation (NRF) has set aside $170 million for research into clean energy. The Clean Energy Programme Office under the EDB also launched the $17 million Clean Energy Research and Testbedding Programme in 2007 to support the testbedding of clean energy applications in Government buildings and facilities, and a $20 million Solar Capability Scheme which was launched last year, to offset part of the capital cost for installing solar technologies in new buildings.

Sir, the IMCSD is also considering other solar test-bedding opportunities and further details will be released with the IMCSD report next month.

Sir, Dr Lim also asked about recycling. I will respond to his points later. Mr Charles Chong also raised several points. With his indulgence, I will address them later.

Sir, let me now move on to water. Like energy, water is a key resource in which we have to optimise. With the completion of the Marina Barrage last year, we now have the Marina Reservoir. Punggol and Serangoon Reservoirs are on track to be completed later this year. Our largest NEWater plant at Changi is also on track to be completed in 2010. Through forward planning, we ensure sufficient supply to meet demand. We will continue to monitor the demand trends and review the need for new projects. Developing our resources in a timely way to meet demand helps to ensure an affordable water supply. We also strive to improve efficiency and leverage on technology to manage our costs amid other cost pressures, such as inflation and fuel cost.

Our Four National Taps strategy also provides us with useful options during dry

weather. Some Members may be aware that this January was drier than usual, and traditionally February is a dry month too. While our reservoirs may not be as full as they usually are, I would like to reassure Singaporeans that we have adequate water to meet our needs. With our diversified water sources, we can supplement our supply with desalinated water. Since 2003, we have been introducing NEWater via indirect potable use into our reservoirs, and we can increase this if need be. NEWater and desalinated water are not affected by fluctuations in rainfall, and thus we are in a stronger position to meet any challenges from dry weather. Though much has been done to improve the drought resilience of our water supply system, we are nonetheless dependent upon the rain for our supply, and the vagaries of the weather that seem to have hit many countries may not spare us either. New water sources are also costly to develop. It is therefore important for everyone to conserve water and use it efficiently. The current dry season is an opportune time to remind ourselves of the significance of this, and to play our part.

Sir, several Members have asked about the 10-Litre Challenge. The 10-Litre Challenge is a major initiative launched in 2006 to engage the public in water conservation and help households save on their water bills. The community has taken an active role. Seventy-four Water Volunteer Groups have been formed in 42 constituencies. And together with PUB, they visit households to educate them on water conservation practices and install water-saving devices, such as thimbles and cistern water-saving bags.

Through these outreach efforts, the domestic water consumption per person per day decreased from 157 litres in 2007 to 156 litres in 2008, and we are on track to meet the Singapore Green Plan target of 155 litres by 2012.

I announced last year, Sir, that we will mandate water efficiency labelling of taps, dual-flush low capacity flushing cisterns (LCFCs) and urinals from 1st July 2009, so that consumers can make smart purchasing decisions and use water-saving devices to conserve water. Industry consultation started in late 2006 and we are in regular contact with them to ensure a smooth implementation.

Furthermore, from 1st July this year, taps, urinals and dual-flush LCFCs installed in all new developments and existing premises undergoing renovation must have at least a one-tick water efficiency rating. All new domestic premises and existing domestic premises undergoing renovation will also be required to use dual-flush LCFCs from July this year.

Last year, we launched a set of initiatives under the 10-Litre Challenge to promote water conservation in the non-domestic sector. The aim, Sir, is to encourage users to manage their water demand along the value chain, from sustainable and efficient design, to the use of water conservation devices and water demand management.

A one-stop website was set up, offering a tool for organisations to assess their water consumption, benchmark against similar organisations and identify areas for improvement. It also provides water efficiency tips, such as improving the design and operation of cooling units.

To build up industry capabilities in water management, a two-and-a-half-day course for building facilities and operations managers was developed by PUB and Singapore Polytechnic. To-date, 29 participants from hotels, building managing agents, and plumbing companies have been certified. An industry guide on Water Efficient Building Design has also been published.

As the profile of water use varies across industry sectors, we are adopting a sector-specific approach to identify areas for improvement and share best practices. For a start, we have worked with the Singapore Hotel Association and the Ministry of Education to encourage hotels and schools to work towards being water efficient buildings, and reduce their water consumption by 10%.

Regent Singapore Hotel showed that water savings of up to 16% can be achieved by adopting a Reduce, Replace and Reuse approach in water management. The hotel installed water efficient taps, uses NEWater for cooling towers, irrigation and water features, and has a system to monitor for any abnormal increase in water consumption. For its efforts, the hotel was awarded Gold Plus under the BCA’s Green Mark Scheme and certified a Water Efficient Building by PUB.

Best practices and success stories, such as Regent Singapore Hotel have been shared at water conservation seminars. Following the engagement with schools and hotels, PUB will broaden its focus to include commercial and Government buildings, and Town Councils this year.

Sir, PUB is doing more to help users save water and cut costs. To help needy households reap savings, PUB will spend $600,000 to install water-saving devices in such households with above average water consumption. PUB is working with the People’s Association and the CDCs, and engaging volunteers to conduct house visits.

For non-domestic customers, PUB has increased the co-funding for small and medium enterprises (SMEs) for water efficiency projects carried out under the

Water Efficiency Fund, from 50% to 80% of the cost of qualifying projects. The aim is to help SMEs reduce their water costs in these lean times. And the PUB will work with SPRING Singapore to promote the use of the Fund to SMEs.

To help SMEs benefit from the lower price of NEWater, PUB will also provide assistance to defray part of the retrofitting costs involved in switching to NEWater. PUB will also work with SMEs to manage their water consumption and work towards reducing their water bills by providing free constant flow regulators and spray nozzles.

We previously announced that we would look into restructuring used water charges into a single volumetric fee. Sir, in the light of the economic downturn, we recognise that the changes could add to the sense of uncertainty for households, and therefore we will hold off the revisions for now.

Sir, I will take the other cuts of Members later.

Recycling

Sir, could the Minister provide us with an update of Singapore's recycling and waste minimisation efforts? Like several speakers who spoke before me, I too am interested to know if there has been any improvement in our overall recycling rate, and what measures have been taken by MEWR to improve the rate, especially in condominiums and private apartments.

Going forward, will the Minister consider providing financial incentives for companies, households and individuals for recycling initiatives?

And, finally, will there also be a development plan for our current landfill at Pulau Semakau?

Waste Management and Recycling

Sir, before I speak on the subject, I would like to declare my interest as I manage a food waste and renewable energy company.

The recycling rate of waste in Singapore, in general, has been slowly increasing by 1% to 2% per year over the last four to five years. Based on the statistics given by NEA for 2007, four out of 12 or 33% of the categories of waste types have achieved or exceeded the Singapore Green Plan (SGP) 2012 target. Four have a fair chance of reaching the target by 2012, but four of the categories (ie, plastics, horticultural waste, glass and food waste) have no chance of reaching the target as the discrepancies between the current and the SGP 2012 target figures are greater than 15%.

With the current global economic situation, commodity prices for paper, steel, plastics and other recyclables have seen a sharp decline which will, no doubt, have a major effect on the recycling rate of all waste, making the four waste types, which have a fair chance (which includes paper, wood, cardboard, ferrous and non-ferrous metals) not achieve the 2012 targets. This, then results in eight, or 67%, of waste types not reaching the SGP 2012 targets. This, in turn, means that our incinerators will have to work harder and our landfill in Palau Semakau will have to receive more waste. This is obviously not desirable for Singapore's waste management strategy.

Sir, in my consultation with the Waste Management and Recycling Association (WMRAS) and a number of waste recyclers, I would like to feedback to the Minister, the suggestions that the industry have that will relieve the projected weak situation on recycling, so as to bring recycling back on track.

Increase the gate or tipping fee into the incinerators, as it is currently too

low compared to many of the developed countries. Having such low rates will not promote segregation and recycling. There is also little or no incentive for recyclers to invest in alternative waste recycling technologies (eg, innovative recycling and recovery technologies and hi-tech waste to energy plants).

Singapore's waste operators must move up the innovative and technology chain so that they can showcase these technologies in Singapore to their prospective customers in the East Asian market, ie, develop Singapore into a hub for waste technology and solutions.

Mandate the segregation of waste at source for industrial, commercial and large institutions to support and complement point (1) above. Segregation at source also supports and encourages recycling, particularly food waste from recyclables as food waste contaminates recyclables, therefore rendering them non-recyclable. Since there is a back-end facility to treat food waste, the recovery of recyclables should increase.

Provide grants, funds and incentives to support recycling and recyclers who are introducing innovative and technology to recover resources, particularly in the current economic crisis. The Government should invest during this downturn in this sector to exploit opportunities and to sustain and create new "green" jobs. As technology is applied, most of these "green" jobs will require technical skills which will be suitable for Singaporeans. Grants can be given to organisations prepared to upgrade and apply innovative solutions in their premises to segregate and facilitate the easy handling and disposal of their segregated waste. Similarly, incentives should be given to recyclers who are prepared to invest in segregated collections, and then applying innovation and technology to recover resources from the waste.

I would like to seek the Minister's views on the above suggestions.

Enhancing Capacity and Boosting Long-term Competitiveness

Sir, the magnitude of challenges in the area of water as a precious resource has increased. It is particularly more pronounced with climate change where even rain-abundant areas can face severe droughts, further exacerbating water shortage in the world.

Singapore, known for its innovation in the areas of water recycling, is well positioned to play a role as one of the leading players to share good practices and lead the way in developing new technology solutions in water technologies. In addition, there was a mention on the research programme, and the Minister explained the size and scope of our R&D on environment and water technology. Can I ask the Minister whether this will translate abundantly into jobs and careers for our citizens? Are there opportunities that mid-career professionals can take to reskill themselves during this recession?

Sir, as I mentioned earlier, sustainable development would require the prudent use of natural resources, and we agree with Dr Lim Wee Kiak that efforts to recycle should be emphasised in this downturn. Improving resource efficiency through recycling and minimising waste will, of course, save costs. It also reduces the demand for waste disposal infrastructure, freeing up land for other uses.

Sir, NEA has spearheaded

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many initiatives to promote recycling and waste

minimisation. These include recycling programmes for sectors, such as households and industries, and public education on proper recycling habits. As Er Lee Bee Wah has noted, public education is important, and these efforts will continue. She referred to the article in the Straits Times today. I will address that later, in terms of what we do at the constituencies.

NEA also collaborated with the food and beverage sector on the voluntary Singapore Packaging Agreement to reduce packaging waste. Results are encouraging with a total of 850 tonnes of packaging waste avoided in the first year. On the "Bring Your Own Bag Day" initiative, which is introduced by the Singapore Environment Council (SEC), we will let the participating retailers determine if the frequency needs to be increased, as suggested by Dr Lim. This is now led by SEC and they will work with the industry.

Mr Charles Chong also asked about recycling in our households. The NEA launched the National Recycling Programme (NRP) in 2001. Under the NRP, the public waste collectors (PWCs) serving HDB and private landed estates provide door-to-door collection of recyclables once a fortnight. The participation rate in the NRP increased from 15% in 2001 to 63% in 2008.

Since 2007, the PWCs have also provided 1,600 centralised recycling bins in the common areas of HDB estates. There is a set of bins for every five blocks of HDB flats and the majority of residents need not walk more than 150 metres from their blocks to use them. The response from our residents has been encouraging. The average amount of recyclables collected from each set of bins increased by 58% from 65 kg per month in 2007 to 103 kg per month for 2008. However, there is still room for improvement, and I encourage all residents to make full use of

the recycling facilities, but in a responsible manner. The location at which the recycling facilities are located is a decision made by the Town Councils in consultation, sometimes, with the Residents' Committees.

On the case reported in the Straits Times today, we have asked the waste collector for that area to investigate. As the recycling bins are on rollers, they are, therefore, easily moved by anybody who may want to move it. So we will ask them to study how best we can avoid such a problem, as mentioned in today's papers.

Sir, Dr Lim also asked whether there are enough centralised recycling bins, and he offered Canberra as an example. NEA's data shows that the number is sufficient. But if Dr Lim wants to experiment, I am sure the NEA can work together with the PWC, and if they are prepared to do it, I will leave it to the PWC to work together with Dr Lim on this matter. But for locations where the bins are filled up more quickly, NEA has been working with the PWCs to increase the collection frequency from the usual once per week to twice per week. NEA will continue to monitor the usage of the recycling facilities and review their adequacy on an ongoing basis.

Last year, I announced that NEA will mandate the provision of recycling receptacles in condominium and private apartments by 2009. Implementation has been ongoing in phases to give the management councils and waste management companies sufficient time for compliance. NEA targets to achieve full implementation by the end of 2009. All households in Singapore will then have convenient access to recycling facilities. Both Er Lee Bee Wah and Er Edwin Khew spoke about our new measures to improve our recycling rate. Our recycling rate improved steadily from 40% in 2000

to 56% in 2008, and we are on track to meet the Singapore Green Plan 2012 target of 60%. We also achieved high recycling rates for waste streams, such as used slag, construction debris and ferrous metals. While these results are encouraging, it will become increasingly challenging to sustain this progress, as the remaining waste that is disposed is not easy to segregate and recycle. We agree with Mr Khew that additional measures will be needed to further increase our overall recycling rate and the recycling rate of waste streams with lower recycling rates, such as food waste and plastic waste.

Sir, I am pleased to inform the House that NEA will be launching an $8 million 3R Fund over the next two years to co-fund new waste minimisation and recycling projects. So those ideas that Mr Khew has suggested, some of the companies can consider submitting a proposal. The Fund will co-fund up to 80% of the qualifying costs, subject to a cap of $1 million per project. NEA has received several preliminary proposals from its industry consultations, and these include the separate collection and recycling of food and garden waste, glass and batteries. More details on the Fund will be provided by NEA when it is launched within the next two months.

As part of the Government's efforts to help businesses tide over the current downturn, my Ministry will give a 15% monthly rental rebate from January to December this year to the recycling companies located at the Sarimbun Recycling Park. I think this will help them in these difficult times. We are aware that some developed countries have used legislation to mandate recycling. In view of the current economic downturn, we are not looking at introducing legislation in the near future, as it would likely increase costs for businesses and households. However, in the longer term, we will

study the use of legislation to further improve our recycling rate. We will also review our gate fee regularly, taking into consideration the need to appropriately price our waste disposal operations and the cost impact on businesses and households.

Mr Charles Chong asked about Semakau landfill. It is located off mainland Singapore. Semakau landfill is clean and free from smell. In fact, it is open to the public for them to enjoy its rich biodiversity. That said, we hope to achieve even more with Semakau. We are developing a plan to turn it into an Eco Park, where companies can conduct field testing of renewable and clean technologies, such as wind and solar energy. More details will be announced when the concept plan has been finalised.

I have spoken about resource efficiency and how this supports sustainable development. Our second key thrust to ensure sustainable development is to build capability in the environment and water sector. This will not only generate new solutions for Singapore, but create economic opportunities that Mr Khew mentioned about. Environmental goods and services are expected to have a global market worth over US$500 billion each year. New materials, energy technologies, and applications to minimise waste and conserve resources will be important in future. By building up our capabilities in sustainable development, we can secure a long-term competitive advantage for Singapore in this sector.

Mr Masagos Zulkifli asked for an update on our efforts to build up Singapore's capabilities in environment and water technologies. I am pleased to share that we are making very good progress. In 2008, the Environment and Water Industry Development Council (EWI) injected another $21 million into the

R&D ecosystem through the award of 14 R&D projects to companies and institutes of higher learning based in Singapore. This contributed to a high level of R&D activities, and attracted global ideas and talents into Singapore. To grow the local pool of talent in water technologies, EWI supports promising candidates to pursue Masters or PhDs through scholarships. In 2008, EWI widened its outreach to overseas-based applicants and this saw the award of eight PhD scholarships, up from two in 2007. The third round of PhD scholarship applications just closed in January, with more than 60 applications received.

The EWI regularly reviews our schemes to develop the water industry. In 2008, the TechPioneer scheme was enhanced by removing the need for grant repayment, to encourage more companies to adopt new technologies early. One project that has benefited from the enhancement is Keppel's membrane distillation project which is scheduled to commence in the first quarter of this year.

Singapore's vibrant water industry continues to attract reputable water R&D institutes and companies. For instance, Nitto Denko will be the first Japanese enterprise to set up a water R&D centre in Singapore. It will invest a modest sum, to begin with, of about $6 million to focus on R&D in membrane applications for desalination and water reuse. Another example is Marmon Water, a US-based company, which is investing $24 million to set up a water filter manufacturing facility in Singapore, employing 100 staff.

The EWI also made good progress in grooming local SMEs and encouraging them to develop capabilities and proprietary technologies that can be exported. For example, PUB is working with a local company, Optiqua, to test and validate sensor applications to detect organic and biological contaminants in water. More Singapore water companies

have started to export their expertise and expand their overseas presence. In 2008, our water companies continued to internationalise, securing a total value of more than $1.3 billion of contracts. While most projects came from the key markets of China and the Middle East, Singapore companies are also enjoying some success in regions such as North Africa. For instance, Hyflux secured a $630 million Algerian desalination contract.

The Singapore International Water Week (SIWW) 2008 held in June 2008 received strong global support with more than 8,500 participants from 79 countries. Business deals in excess of $367 million were inked. Extensive local and international media coverage profiled Singapore as a global water hub to the world. SIWW 2009 will ride on this success and aim for greater participation from China, Middle East, India and South East Asia, which are key markets for our water technologies. This year's event will focus on water infrastructure and technologies with the theme "Sustainable Cities – Infrastructure and Technologies for Water". To further bolster this theme, the 7th Ministers' Forum on Infrastructure Development in the Asia Pacific Region will be one of the key events to co-locate with this year's SIWW. Drawing from industry feedback, SIWW 2009 will feature a larger exhibition area, more networking opportunities, and environment technologies and companies.

Beyond the water sector, my Ministry, together with the EDB and IE Singapore, have been studying market drivers, technology trends and Singapore's competitive strengths and value propositions in the environment sector. Our study assessed that clean environment technologies will be an important growth area for Singapore's environment and water sector. My Ministry will, therefore, be working with our research institutions and industry to build up Singapore's research and development capability in clean

environment technologies over the next few years. Possible focus areas being considered include waste management which has been assessed to have good market potential. This new effort will complement the existing Clean Water and Clean Energy programmes, and enhance Singapore's position as a hub for environmental solutions and technologies that Mr Khew spoke about.

Notwithstanding the economic downturn, MEWR will sustain efforts to develop Singapore's capabilities in environmental and water technologies. We are offering courses to build up specialised competencies in the environment and water sector. For example, NEA's Singapore Certified Energy Manager, or SCEM, programme, which I spoke of earlier, will provide the foundation for engineers to become professionals in the promotion of energy efficiency. In the water sector, PUB has worked with the Singapore Water Association to roll out competency programmes for membrane technologies employed in the production of water. These programmes will not only augment our pool of skilled manpower, but are also timely for mid-career professionals, such as engineers and plant managers, who want to re-skill themselves, particularly in this downturn. There are opportunities in the environment and water sector for mid-career professionals, both in the public and private sector.

Sir, I will again take some other cuts later on.

Order. We will take the break now.

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

Order. I suspend the Sitting and will take the Chair again at 3.20 pm.

Sitting accordingly suspended

at 2.58 pm until 3.20 pm.

Debate in Committee of Supply resumed.

Head L (cont.) –

Sitting resumed at 3 .20 pm

Protecting and Enhancing Our Environment

Sir, in a very densely populated island like Singapore, protection of the environment is critical. The effect of any pollution on the population is almost immediately felt as there is very little buffer space. This applies to air, water and noise pollution.

How are we doing for air pollution? What is our PM2.5 in year 2008? As PM2.5 is linked to respiratory diseases, such as asthma and bronchitis especially in the vulnerable young and old, it is critical that we hasten our efforts to improve our air quality to ensure that our air is safe for the population, especially for the vulnerable.

The main source of PM2.5 pollutants is motor vehicles. Like hon. Nominated Member of Parliament, Mr Edwin Khew, I would like to appeal to the Government to implement more measures to increase the proportion of green cars on our roads and encourage the use of cleaner fuels and engines. Suggestions, such as green car COE is one fast solution that will entice more drivers and the motor industry to embrace green cars, were made previously but were sort of put on hold. I hope the Government can further enhance the green car scheme and will consider further measures, such as green car COEs.

Let me shift our attention to larger particulate matters in the air. Two years

ago, I requested MEWR to work with shipyard operators and factories near Sembawang town to reduce the black dust pollution problem to the nearby HDB households. I am pleased to inform the House that the problem has significantly reduced, but I would like to urge MEWR to continue the good work to ensure black dust pollution is kept to the lowest possible level.

I am glad that the Government is pump-priming the economy by bringing forward many infrastructural projects. Can the Minister update the House on whether projects under the ABC programme will be brought forward? If so, which projects? What is the current status of the programme? I hope the Minister can also include some waterways which were not included, such as Sungei Sembawang, in this programme.

With the completion of the Marina Barrage, what is the status of the water quality in the Kallang River and the new Marina Reservoir? What measures are taken to ensure that we will continue to have clean water, beautiful and active waterways?

Last, we all hope for a quiet and clean home to relax after work. Noise pollution from domestic, construction and traffic can impact one adversely. Can the Ministry update the House on the status of noise pollution in Singapore and the measures that are taken?

Air, water and noise pollutions are challenges that we have to tackle fast and head on if Singapore wants to continue to be the choice location for global talents and the best home for all Singaporeans. As the population strives to increase to 6.5 million in future, I am sure this pollution problem will be even a greater challenge if we cannot take this on now.

Mr Chiam is not here. Mr Charles Chong.

Noise

Sir, construction activity is expected to rise in many areas in Singapore as we renew older estates and develop new ones under URA's Masterplan 2008. The number of vehicles on our roads has also increased steadily over the past few years. Both construction noise and vehicle noise are expected to rise with these developments. Could the Minister tell us what measures NEA has taken and will be taking to minimise noise levels in order to ensure a pleasant and relatively noise-free environment? And what standards have been set for noise levels near residential areas, especially at night and on Sundays and public holidays?

Sir, on 18th November last year, this House was informed that the number of construction sites increased from 5,023 in 2006 to 6,098 in 2007. That is an increase of about 20%. However, the number of complaints on construction noise received by the NEA increased from 6,160 in 2006 to 9,228. That is an increase of 50%. We live in a country where space comes at a premium. Having more apartments and houses mean that we are living closer and closer to each other. In a crowded and developed society like ours, it is impossible to guarantee complete peace and quiet for residents. There must be an element of give and take, of live and let live. But Singaporeans also deserve an opportunity to rest and spend quality family time without being constantly harassed by noise pollution. The rising number of complaints is evidence of an issue worth looking into.

The Environmental Protection and Management (Control of Noise at Construction Sites) Regulations have a detailed and complex list of noise levels allowed in different areas, times and

duration. However, the current regulations are difficult to understand and are unrealistic. Let me give some examples. Part 1 of the Second Schedule says that the maximum permissible noise level between 7.00 pm and 7.00 am for construction sites affecting residential buildings located less than 150 metres from the site (reckoned as an equivalent continuous noise level over a period of 12 hours) is zero. But for periods of one hour, 55 decibels is allowed between the hours 10.00 pm and 7.00 am. From 7.00 am on Sunday mornings, which is the only time, I suspect, many of us are able to sleep, the contractors are allowed 75 decibels. How is the public to know when the contractor has breached the regulations? The problem is particularly difficult if the breach is a short intermittent one which disturbs sleep or rest but it is difficult to regulate a complaint against. It only takes a short burst of noise to disturb rest. Why do we allow contractors working on a site less than 150 metres from residential buildings to start work at 7.00 am on Sundays? I am not suggesting we have strict rules like they have in some countries where the noise regulations are so strict that, for apartments, they cannot even take a shower during certain hours at night. But I think the pendulum has swung too far in favour of contractors and developers. I, therefore, ask the Minister to review the rules on noise. Does the Minister not agree that Singaporeans should be given at least a day or some hours of a day or a weekend of peace and quiet? Can we not have stricter rules about noise at construction sites, particularly those near residential areas and particularly during the usual hours of sleep? Is it really going to create difficulties for our contractors or developers to start work, say, at 9.00 am on Sunday?

Tackling Noise Pollution

Sir, increasingly, Singaporeans value a quiet and conducive

living environment in their homes and neighbourhoods. In my usual house visits to my residents at both the HDB and private estates, noise nuisance is one of the most common complaints I receive. Noise pollution is also a frequent grouse received by the workgroup on "Promoting Better Social Behaviour at Housing Estates" chaired by Senior Minister of State Grace Fu. In addition to noise nuisance created by immediate neighbours, we receive frequent complaints about construction noise and vehicular noise. Singaporeans’ tolerance towards noise, especially around vicinity of their homes, has obviously decreased.

In the area of construction noise, can NEA step up enforcement and monitor construction sites more closely to ensure that the noise they generate stay below the limits implemented, especially during night time, weekends and public holidays?

Similarly, on vehicular noise, can NEA also work with LTA to review standards? I am sure Singaporeans living near roads, and a great number of us do, would appreciate the Ministry's effort and consequent improvements in this area.

While the noise nuisance at the public housing estates comes under the ambit of HDB, can NEA, as the leading agency for environment and noise pollution control, work with HDB and Town Councils to review the following:

Lower the noise limits in neighbourhoods during night-time;

Introduce a more effective enforcement regime; and

Step up on public education to cultivate considerate neighbours and minimise noise nuisance.

Sir, the Government has committed substantial funds to create and maintain a livable environment in Singapore – this is the hardware. The software – how we treat one another in this environment is just as, if not even more, important. Minimising noise pollution is an integral part of a good quality living environment and requires the cooperation of all stakeholders, legislation and consistent enforcement.

Dengue

Sir, there has been a surge in dengue cases in neighbouring countries. Singapore is usually not spared during the warmer months where we usually see an increase in the number of cases. Could the Minister tell us what measures have been taken to control the outbreaks of dengue and Chikungunya cases in Singapore?

Other than stricter enforcement action, have efforts also been made in research for a vaccine in cooperation with regional countries to study and control the spread of these diseases?

3.30 pm

Sir, we have seen reports on the increase of incidences of dengue outbreaks in neighbouring countries, especially over the last few weeks. Singapore will continue to be susceptible to dengue transmission in the foreseeable future as we are situated in a dengue endemic region.

Sir, the local dengue incidence tends to follow the current natural cycle of five to seven years, and it was expected that we are likely to see a further increase in incidence of dengue after 2007. I would like to ask the Minister what was the dengue incidence in Singapore in 2008,

and how does this compare with 2007. As mentioned earlier, we reported a rise in dengue cases in the region. What is MEWR's strategy to keep dengue under control in this and ensuing years?

Sir, everyone needs to play a part to be vigilant to minimise mosquito breeding at homes and in public places. We have seen the extensive public education campaigns by NEA and MEWR in this regard. I would like to ask the Minister what is MEWR's assessment of Singaporeans' level of awareness on dengue and their willingness to play an active role in dengue prevention. What more can be done to increase Singaporeans' sense of ownership and responsibility in reducing dengue transmission?

We also know that fines are imposed on those found to have mosquito breeding sites. I would like to ask the Minister how many people have been fined for mosquito breeding in their homes in the last five years, and whether these measures have been effective in reducing the number of breeding sites.

Dengue and Chikungunya

Sir, a report in the Straits Times mentioned a spike in the number of dengue cases in the first three weeks of this year. A total of 509 people were infected, compared with 341 during the same period last year. That is a 49% increase. It was also reported that the spike could be due to short-term fluctuations. I would like to check whether this increase is due to short-term fluctuations or any other reasons.

Malaysia has seen a recent upsurge in the number of cases. Malaysian news reports state that 4,221 dengue cases with 12 deaths were reported in the first 23 days of this year. This compares with

2,103 cases with five deaths over the corresponding period in 2008. That is about double.

What is the Government doing to ensure that the higher incidence of dengue in Malaysia does not spill over here? Could we have fever sensors at the Malaysian immigration checkpoints, like we had during SARS? Can we also have an update on the dengue situation? And what is the Ministry's strategy to keep it low this year? Will the Ministry need to increase manpower given the need to fight dengue as well as Chikungunya?

Sir, ever since Chikungunya set foot on our shores, it has taken a liking to Singapore, multiplied locally and even applied for PR status! Given the fact that it is not foreign talent, we have tried to prevent it from taking up permanent lodgings. But has that been effective? Has Chikungunya become endemic in Singapore?

The Ministry of Health reported that for the first four weeks of this year, there were 160 cases, compared with 11 cases for the same period in 2008. That is a 16-fold increase. This is very bad. Surely there must be weak spots in our control regime. Can we have a progress report on its management, and are there any improvements that we can make? Other countries who are also dealing with this disease might provide us with some good vector control methods. Have we sought their expertise?

Mr Chairman, Sir, I have spoken about resource efficiency and building capability in the environment sector. Now, allow me to move on to our third thrust, which is to ensure sustainable development in protecting and enhancing our environment in the areas of air and water quality, noise management, as well as public health and cleanliness.

Dr Lim Wee Kiak asked about our air quality and efforts to promote green vehicles. In 2008, Singapore continued to enjoy good air quality with the Pollutant Standards Index in the "good" range for 96% of the year. Our key pollutant levels, including those found in Sembawang, were within the standards set by the United States Environmental Protection Authority (USEPA) with the exception of very fine particulate matter or PM2.5.

Diesel vehicles are a significant source of PM2.5, accounting for about half of PM2.5 levels. My Ministry has adopted various measures to reduce PM2.5 from diesel vehicles. For example, we introduced the more stringent Euro IV standards for new diesel vehicles from October 2006. Euro IV-compliant diesel vehicles emit as much as 70% less PM2.5 than older Euro II vehicles. Our aim is to bring PM2.5 levels down to the USEPA standard of 15 microgram per cubic metre. We are making good progress towards this goal. Our annual mean PM2.5 level in 2008 was 16 microgram per cubic metre.

Sir, to reduce pollution from vehicles, we have also been promoting the use of environmentally friendly vehicles, such as compressed natural gas (CNG) and hybrid vehicles through the Green Vehicle Rebate (GVR) Scheme, which narrows the cost differential between green vehicles and conventional ones. Since its introduction in 2001, the GVR Scheme has been reviewed on a regular basis. In January 2006, the rebates were enhanced from 20% of the open market value of the vehicle to 40%. Since then, the number of green vehicles has increased from about 200 to more than 5,400 as at end 2008. As a proportion of the total car population, the number of green cars here is still low, at about 1%, but this is comparable to countries such as the UK and the USA.

I am pleased to announce that the GVR scheme will be extended by another two years till 31st December 2011. The Government will continue to review the GVR scheme, taking into account changes in vehicle technology and more stringent emission standards for diesel vehicles.

Mr Charles Chong asked about our efforts to promote CNG vehicles, and Mr Edwin Khew also spoke about this during the Budget debate. The GVR has facilitated the initial adoption of CNG vehicles as a cleaner alternative to diesel vehicles. CNG vehicles have also enjoyed exemption from the special tax which is levied in lieu of a fuel tax. As MOF announced in the Budget this year, this exemption will be extended for another two years till December 2011. NEA has also supported private sector efforts to develop CNG refuelling infrastructure by providing co-funding for the start-up costs of three stations. There are now three CNG refuelling stations, and I understand that this is expected to increase to five by the end of this year with the opening of a station at Serangoon North and another at Toh Tuck. Now that the Government has facilitated the set up of the initial refuelling infrastructure, further expansion on a sustainable basis must take into account the private sector’s business considerations. At some point, we hope that the private sector can pick up from where we have stopped to work together with other private sector players to build up the infrastructure.

Sir, I will now ask my Senior Parliamentary Secretary, Dr Amy Khor, to reply to the remaining cuts.

Sir, Mr Charles Chong, Mr Liang Eng Hwa, Mr Hri Kumar and Dr Lim Wee Kiak asked about efforts to manage noise. All construction sites must abide by noise limits set by the NEA. These limits vary

by time period and by the type of premise affected by the construction noise. For instance, night-time noise limits are more stringent than day-time noise limits, and noise limits are more stringent for construction sites near hospitals and schools. The number of complaints on construction noise received by NEA increased from about 9,200 in 2007 to just over 14,100 in 2008. One of the reasons for this increase is the rise in construction activity in Singapore. Another reason could be the higher expectations from our public, as pointed out by Mr Liang.

To ensure that construction activities do not unduly affect quality of life, NEA tightened the noise limits for night-time and Sundays and public holidays from October 2007. NEA also increased the maximum fine for construction noise violations from $20,000 to $40,000. Furthermore, contractors that repeatedly violate the noise limits will have the operation hours at their sites restricted. In 2008, 10 work restriction orders were issued.

While we strive to improve our quality of life, we must allow construction to keep pace with our development. The current approach of setting noise limits to regulate the industry, instead of banning construction activities during certain times, allows the construction industry the flexibility to adopt solutions to minimise noise, and avoids imposing undue cost on the construction industry.

Mr Liang Eng Hwa and Mr Charles Chong also raised the issue of traffic noise. NEA, together with LTA, URA and HDB, has explored measures to minimise the impact of traffic noise on residents living along expressways and roads. Measures which have been implemented include noise-absorptive road paving

materials, buffer distances, and even siting industrial buildings, multi-storey carparks or parks between major roads and residential buildings to act as noise shields.

In addition, new vehicles must meet noise standards before they can be registered, while in-use vehicles must comply with noise standards when they undergo their mandatory periodic inspections. Noise disturbances from motor vehicles arise mainly from the illegal modification of the exhaust systems. NEA will continue to work with LTA to take action against such vehicles.

Singapore is a highly urbanised compact city with vibrant economic activities, and noise pollution cannot be eradicated completely. However, my Ministry will continue to work with key stakeholders to regularly review the management of construction and traffic noise, taking into account public feedback and international best practice. We also note Mr Liang's suggestions on community noise and NEA will look into them with HDB and the Town Councils. While some degree of noise is inevitable in our compact city, we agree with Mr Liang that if each of us shows consideration for our neighbours, all of us will enjoy a more pleasant living environment.

Mr Charles Chong, Dr Mohamad Maliki and Mdm Ho Geok Choo asked about the dengue situation. In the absence of a vaccine, Singapore will continue to be susceptible to dengue transmission as we are located in a dengue endemic region. Historically, Singapore experienced dengue in cycles of six to seven years, with cases increasing each year and peaking in the 6th or 7th year. We saw the beginning of a new cycle in 2007, and further increases in annual dengue incidence were anticipated for 2008 and beyond. I am pleased to inform the House

that we bucked the trend last year. Instead of a rise, there was a 20% decline in dengue cases, from about 8,800 reported cases in 2007 to just over 7,000 in 2008. This would not have been possible without our collective efforts to prevent mosquito breeding. We must build on this and strengthen our efforts to control dengue. As Mr Heng Chee How mentioned during the Budget debate, dengue is still a threat and we must not let our guard down and continue to remain vigilant.

Singapore is a travel hub with as many as 10 million visitors a year, and with workers transiting in and out of Singapore daily, it is continually at risk of outbreaks from mosquito borne diseases contributed by imported cases, be it dengue or Chikungunya. Keeping our mosquito population low through effective source reduction will serve to minimise such risk. Thus, NEA will continue to sustain its integrated approach to dengue control, with pre-emptive source reduction as the key thrust, complemented by active virus and mosquito surveillance, public education, research and enforcement

We will continue to carry out intensive source reduction exercises to reduce the mosquito population ahead of the peak dengue transmission season from June to October. Source reduction has been assessed by the World Health Organisation as the most effective means of controlling the mosquito vector. But it is also labour-intensive. NEA has strengthened its vector control workforce since 2007, recruiting some additional 500 personnel. This has also strengthened our capacity to control the risks posed by Chikungunya, which I will elaborate on later.

Nonetheless, we must know where to focus our limited resources. Using a risk assessment approach, NEA has focused

its manpower in areas that are highly susceptible to outbreaks, averting large dengue clusters.

NEA will also continue to build up vector control knowledge and capability through research at the Environmental Health Institute where new tools are developed and evaluated. For example, a test that can simultaneously detect the dengue and Chikungunya viruses is currently under development with the Institute of Molecular and Cell Biology and Tan Tock Seng Hospital.

Sir, I agree with Er Lee Bee Wah and Dr Maliki that we must increase Singaporeans' sense of responsibility in reducing dengue and Chikungunya. Public education is a key element of our dengue prevention efforts. The results have been encouraging. An NEA survey showed that the awareness level for dengue prevention was high, more than 90%,

with many respondents adopting good habits, such as changing water in vases on alternate days. The number of cases of enforcement taken for Aedes mosquito breedings in homes increased from about 5,000 in 2005 to about 8,800 in 2008 due to more inspections, not because there are more dengue breeding places, say, 100 households that we inspect. More positively, the number of homes found with Aedes mosquito breedings per 100 homes inspected, decreased from 0.53 in 2005 to 0.34 in 2008. I am heartened by the good support we have received from the public, but we must aim to do even better. Keeping our premises mosquito-free should become a way of life for Singaporeans.

3.45 pm

I assure Er Lee that NEA is very clear that our target is to suppress the mosquito population. Hence, we will continue to work closely with premise owners like the nursery operators, and educate them on best practices. Having

said that, enforcement action must be taken against those who persist in mosquito breeding so as to ensure that we do not miss our target.

Singapore also collaborates with other countries in the area of dengue control. For example, under the Asia-Pacific Dengue Partnership (APDP) we worked with the Western Pacific and South-East Asian Regional Offices of the World Health Organisation to formulate a Dengue Strategic Plan for both regions. The Plan was endorsed by the Health Ministers in September last year and serves as a roadmap for member states to formulate their national plans for dengue control. We will continue to work closely with the international community to promote greater knowledge sharing in the region.

In January last year, we detected the first local transmission of Chikungunya fever. A total of 718 cases were reported in 2008, about 75% locally acquired. Although Chikungunya is not considered endemic currently, we can expect sustained local transmission of Chikungunya this year. In January, 159 cases were notified, compared to 13 in the same period last year.

As with dengue, vector control is the key strategy to prevent the transmission of Chikungunya. NEA and MOH are working closely in the surveillance for Chikungunya. As soon as a case is notified, NEA initiates vector control operations to clear the implicated areas of mosquito breeding. MOH also made the disease legally notifiable last December. This will contribute to timelier reporting of cases, and allow NEA to undertake prompt vector control measures.

As Er Lee pointed out, Chikungunya can cause morbidity and strain our healthcare system. The only way to minimise the individual risk and disease burden is for each of us to prevent

mosquito breeding as this is the most effective way to overcome the scourge of the disease.

Littering

Sir, littering complaints and the number of littering offenders have shown significant increases over the past few years. Our efforts to create a clean and green environment to beautify our estates and water bodies would be futile if we are unable to reverse this littering habit. Sir, we really cannot expect to have more and more cleaners to pick up and clean up after us. Could the Minister tell us what efforts have been made to improve and sustain cleanliness in public places, particularly in the areas of public education and enforcement actions, and whether these efforts have been effective?

Anti-littering Enforcement Efforts

Sir, in spite of best efforts by NEA to keep Singapore free of litter, indiscriminate littering remains a day-to-day problem. Littering is a threat to public health and we cannot take lightly. Especially in our warm and humid climate, litter attracts rodents, flies and cockroaches. It can be a breeding ground for mosquitoes and bacteria, spreading harmful diseases. Taxpayers have to bear the cost of enforcement as well as that of clearing carelessly discarded litter.

The number of offenders caught littering has ballooned over the years from 3,819 in 2005 to more than 30,000 people caught for littering in 2008. The increase has been attributed mainly to the step up in enforcement efforts by NEA.

Sir, in December, a newsletter reported that since 2006, NEA has had dedicated 322 man hours per day to catching litterbugs with 500 officers

empowered to take action against them, while another 50 officers to catch litterbugs as well as those who caught smoking in banned places. There is no doubt that the extra manpower has indeed proven effective in catching litterbugs, judging from the number of offenders caught littering and proactive work orders issued. Nevertheless, the sheer number of offenders show up clearly the fact that there are still many people out there who think nothing of littering.

Sir, it is impractical if we were to rely on public education and campaigns alone to tackle the problem of littering. As we have a large number of foreigners and visitors at any given time from different cultures and different strata of society who bring with them different standards and practices of cleanliness and environmental awareness, it is not always possible for everyone to appreciate the message of our Anti-Litter Campaigns, nor is it possible for law enforcement alone to fully eradicate the problem of littering.

Sir, I think, like it or not, to keep our city clean, we need to get out the tongs and brooms and clean up the litter left inconsiderately behind. I would suggest that operators of outdoor and open air eating establishments be tasked with the responsibility of clearing up any mass or litter that their patrons leave behind within a certain perimeter of their premises. They should be made to comply with the stipulated cleanliness standards by certain times of the day, for example, 2.30 pm, 11.00 pm and 7.00 am. This way, NEA would be able to substantially cut down on the number of enforcement efforts and officers who make the daily tedious time-consuming patrols.

From what I hear, NEA's enforcement officers have also been diligently catching smokers for littering their cigarette butts.

It is quite easy to nab such an offender. You see a smoker in a public place and if there is no ash tray nearby, chances are that if he finishes his cigarette, he will simply throw his cigarette butt onto the floor and most probably even stub it out with the sole of his shoe. This is quite a common sight. However, it takes some time for an enforcement officer to observe the would-be offender and wait for him to finish his smoke. I question if all these hundreds of hours are well-spent. Is there some way that NEA can deploy its limited resources more efficiently?

Littering and Public Cleanliness

Sir, the standard of public cleanliness in Singapore is generally good. But I think the task of sustaining public cleanliness will become increasingly challenging as Singapore's population grows over the last eight years. For example, from 2000 to 2008, we saw an increase in total population from 4 million to 4.8 million and this will continue to grow to 6.5 million in the next 10 to 20 years, as projected by the MND. With more people living on our small island and an increase in foreign residents and new Singaporeans, who were not aware of our Anti-Litter Campaign some years ago, how is the Ministry addressing this challenge?

Next, littering still seems to be an issue in Singapore today. Results of the NEA's littering behaviour study showed that 13.6% of the respondents thought littering was a socially acceptable behaviour, while 8.6% said littering would not lead to hygiene problems. In addition, it was reported that since 2006, the number of litterbugs caught had gone up significantly, ie, in the first 11 months of 2008 alone, about 30,000 litterbugs have been caught. How does the Ministry ensure that the current enforcement regime and penalties are effective?

Finally, apart from having a good cleaning regime, sufficient infrastructure,

such as bins as well as effective enforcement and penalties, keeping Singapore clean and sustainable requires all Singaporeans to adopt the right mindset and behaviour – how does the Ministry intend to strengthen public education and outreach efforts to instil a sense of pride and ownership for shared environment?

Mountains of Trash in Jurong

(In Mandarin): [For vernacular speech, please refer to Appendix A *.] Sir, Singapore is one of the cleanest and most beautiful garden cities in the world. This honour does not come by accident. It is a result of many years of hardwork through various campaigns to keep Singapore clean and inculcating in our people public health education.

Credit must be given to the cooperation of all Singaporeans, and the strict enforcement by the Ministry of the Environment. But in order to maintain this reputation of a beautiful garden city, we need to work doubly hard so that we will not regress.

I discover that whenever we have large-scale activities such as the National Day Parade and New Year Festivals at the Orchard Road, there are always lots of rubbish left behind after the events. The cleaners have to work all through the night to clear the rubbish. If this bad habit of littering in public places is not changed, it would seriously affect the beautiful image of Singapore as a clean and green garden city.

One of my constituents complained to me that when he carelessly dropped a cigarette butt on the floor, he was fined. I told him that Singapore practices the rule of law and in order to maintain our clean and green environment, we have no choice but to eradicate littering in public

places. He fully agreed with me and admitted that he was in the wrong. However, he also told me that near his place of work, which was just beside the Mobil Refinery, there was a huge heap of rubbish which was deposited there for such a long time that small plants were growing from there. The rubbish was very smelly and seriously polluted the air around the area. Moreover, the heap of rubbish was very near the refinery. Should there be a fire, the consequences will be very serious.