Hansard, 2011-04-11

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 (2011) To (2011) Mr S Iswaran 14 Mar 19 Mar Mr Baey Yam Keng 16 Mar 18 Mar Mr Yeo Guat Kwang 16 Mar 18 Mar Mr Lee Yi Shyan 19 Mar 19 Mar Mr Teo Chee Hean 22 Mar 23 Mar Assoc. Prof. Dr Yaacob Ibrahim 22 Mar 26 Mar 08 Apr 11 Apr Mr Alvin Yeo 24 Mar 26 Mar Mr Teo Ser Luck 24 Mar 25 Mar 05 Apr 07 Apr Mr Arthur Fong 25 Mar 26 Mar Mr Zainul Abidin Rasheed 26 Mar 31 Mar 09 Apr 10 Apr Mr Lee Kuan Yew 28 Mar 03 Apr 11 Apr 11 Apr Mr Chan Soo Sen 29 Mar 07 Apr 12 Apr 14 Apr Assoc. Prof. Paulin Tay Straughan 29 Mar 01 Apr Mr Seng Han Thong 29 Mar 01 Apr Mr Tharman Shanmugaratnam 30 Mar 31 Mar 07 Apr 08 Apr Assoc. Prof. Koo Tsai Kee 31 Mar 01 Apr Mr Charles Chong 04 Apr 05 Apr Mr George Yong-Boon Yeo 08 Apr 11 Apr Mr Goh Chok Tong 11 Apr 19 Apr Dr Ahmad Mohd Magad 12 Apr 17 Apr 11 May 19 May Mr Inderjit Singh 15 Apr 18 Apr Dr Lee Boon Yang 16 Apr 18 Apr Mr Wee Siew Kim 29 Apr 29 Apr 01 May 06 May 14 May 18 May 23 May 24 May 31 May 31 May

ABDULLAH TARMUGI Speaker Parliament of Singapore

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

14th March,2011 (1) Supplementary Supply (FY 2010) Bill (2) Supply Bill 25th March,2011 (1) United Nations Personnel Bill (2) Environmental Protection And Management (Amendment) Bill (3) Children Development Co-Savings (Amendment) Bill ABDULLAH TARMUGI Speaker Parliament of Singapore

[Mr Speaker in the Chair]

1. Mdm Halimah Yacob asked the Minister for Trade and Industry if he would provide an assessment on the impact of the recent earthquake and tsunami in Japan and the conflicts in the Middle East and North Africa on our economy.

2. Mr Teo Siong Seng asked the Minister for Trade and Industry whether his Ministry would provide an assessment on the impact of the political turbulence in the Middle East and North Africa and the Japanese nuclear catastrophe on Singapore's economic outlook.

3. Mdm Ho Geok Choo asked the Minister for Trade and Industry in view of the current global developments like the nuclear crisis in Japan and unrest in North Africa and the Middle East (a) what is Singapore's projected economic growth for 2011; and (b) how will these developments affect our pace of inflation.

Mr Speaker, may I have your permission to take Question Nos. 1 to 3 together?

Yes.

Sir, Mr Speaker, the situations in Japan, the Middle East and North Africa remain fluid, with a great deal of uncertainty. However, let me give my Ministry’s preliminary views based on current state of events.

Japan, as we all know, is the world’s third largest economy, accounting for around 5% of global trade and 9% of world output. It is one of Singapore’s key trading partners, accounting for around 6% of our total trade with the world. As such, the recent developments in Japan will inevitably be of concern to the rest of the world, including Singapore. The immediate source of concern lies in the impact of the ongoing nuclear emergency and power outages on Japan’s industrial activities. As Japan is an integral part of the regional supply chain, particularly in the electronics and automobiles sectors, the near term output loss in the economy could have some spill-over effects on manufacturing and trade activities in the rest of the region.

Much will depend on how prolonged the disruption to industrial activities in Japan will be. At this juncture, we do not expect significant impact on our supply chain. Less than 10% of our electronics imports – mainly components and parts – are from Japan. Feedback from our precision engineering firms also suggests that they have sufficient inventory buffers to tide over any supply disruptions for a few months. If Japan can resolve its nuclear power plant problems and factory production resumes in the near term, any negative impact on the supply chain will likely be transitory.

The events in Japan could also have some implications for our services industries. Japan accounted for around 5% of the total number of visitor arrivals to Singapore in 2010. A slowdown in tourism flows from Japan would thus affect our tourism-related industries. However, our preliminary assessment is that the impact is not expected to be significant at this juncture.

Let me now turn to the political unrests in the Middle East and North Africa which have led to higher volatility in global crude oil prices. Crude oil prices, for example UK Brent, have risen from around US$100 per barrel at the end of last year to US$120 per barrel recently. Higher oil prices will lead to an increase in business cost. Certain sectors such as our transport and chemicals sectors will be affected more. It could also affect consumer sentiments and lower private consumption. Higher oil prices could also dampen global economic growth and affect us indirectly.

At this juncture, the unrest in the Middle East and North Africa has not significantly affected global oil supply as the worst-affected countries such as Libya and Bahrain are not key exporters of oil. Moreover, some members of the Organization of the Petroleum Exporting Countries (OPEC) such as Saudi Arabia have made commitments to increase oil production to cope with any supply disruptions in the region. As such, although the recent increase in oil prices is likely to have affected global economic activities to some extent, the impact has been small.

Barring any further deterioration in events in Japan, the Middle East and North Africa region, Singapore’s economic outlook remains positive. Early indicators of industrial production and exports point to growth continuing at a healthy pace. There are also signs that the recovery in the advanced economies is gaining momentum, as indicated by recent improvements in the US job market.

Growth for the year is expected to be in the range of 4% to 6%, unchanged from the forecast announced in February this year.

Mdm Ho Geok Choo has also asked about the impact on inflation. Assuming no further escalation in global oil prices, we expect the full-year headline CPI inflation to stay within the current forecast range of 3% to 4%. This means that CPI inflation, which rose by 5.2% on a year-on-year basis in the first two months of 2011, is expected to moderate from here on.

The Government will continue to closely monitor these external developments and the potential impacts on our economy.

Sir, I would like to ask the Minister: if the problem in Japan is not resolved within the next few months, what measures will be in place to assist sectors that are affected, notably, sectors like electronics? Secondly, if the problem in Japan is not resolved within the next few months, what is the impact on the current assessment of our GDP for the year?

Mr Speaker, Sir, as I had mentioned in my reply earlier, these assumptions were based on the current power disruptions in Japan. We expect the situation to stabilise and not deteriorate too badly in the coming months. In that case, the supply disruptions will be minimal and our companies have taken steps to find alternative sources for their supplies.

Sir, I would like to ask the Minister whether he expects the disaster in Japan to reduce the direct investments from Japan to Singapore, and whether the existing Japanese investments in Singapore will be impacted. Does the Minister expect to see some repatriation or reduction in the investment-dollar in Singapore?

Mr Speaker, Sir, I think it is too early to tell. We have to do a deeper sectoral analysis on how this whole situation will pan out. It can work both ways. The need to rebuild and grow in Japan may require some repatriation of funds. At the same time, on the other side of the spectrum, Japanese industries may also want to diversify from their base in Japan. It is too early to tell which of these two trends will be the stronger trend.

Sir, I would like to ask the Minister for his comments on how the political crisis in the Middle East and the nuclear crisis in Japan will have an impact on our energy needs. In view of these developments, what are Singapore's plans to go nuclear and what are our alternative sources of energy?

Mr Speaker, Sir, between the two developing situations, I believe the developments in the Middle East and North Africa still have several legs to work through. I do not think we are seeing the end of it yet. Whereas in Japan, the signs – hopefully – are pointing to stabilisation and maybe improvement from here on. It behooves us to be very vigilant because the situation in the Middle East and North Africa can turn for the worst, affecting oil prices and global growth, and affecting us, particularly in the cost of energy. As to the impact on our "pre-feasibility" study on nuclear energy, I think there are subsequent parliamentary Questions filed on this subject. I will let Senior Minister of State, Mr Iswaran, respond to those.

4. Mdm Cynthia Phua asked the Minister for Trade and Industry with the continued high oil prices coupled with the recent disruptions in food supply chains arising from natural disasters (a) what is the Ministry's projection on inflation for Singapore in the next six months; (b) what is the Ministry doing to mitigate the effects of inflation especially on essential foodstuff; and (c) what is the Ministry doing to ensure that Singapore is able to import food produce from alternative sources.

Mr Speaker, Sir, I have covered my Ministry's response on the outlook for inflation in my earlier response.

As a small and open economy, Singapore is obviously a price taker in the global market. With almost all of our food and energy needs imported, we are vulnerable to any increase in global commodity prices. However, the Government adopts various measures to mitigate the effects of higher inflation on households. One of the key strategies is to allow the Singapore dollar to strengthen. This would dampen the cost of imported goods including essential food items. But we are mindful that strengthening the Singapore dollar too much could hurt export competitiveness.

Hence, the Government has also rolled out the "Grow & Share" Package to help Singaporeans cope with the rising costs of living. The initiatives include – Growth Dividends for all adult Singaporeans, with most getting between $600 and $800, Workfare Special Bonuses for those on Workfare, and a 20% rebate on personal income tax for Year of Assessment 2011, up to a maximum of $2,000. To help with specific household expenditures, there are also additional U-Save rebates of up to $360, rebates for service and conservancy charges of up to three months, and others. For the lower and middle income Singaporean families, the benefits they receive from "Grow & Share" are significantly more than the increase in costs they will face.

The Government has also set up the Retail Price Watch Group (RPWG), headed by the Minister of State for Trade and Industry and Manpower Lee Yi Shyan, to keep a close watch on excessive price increases and anti-competitive behaviour from businesses in Singapore. The RPWG works with grassroots leaders to provide the public with information about competitive alternatives. This gives consumers more choices.

To date, the RPWG has also implemented various initiatives to help moderate the inflationary pressures consumers face. For example, the RPWG has worked with various supermarkets, such as NTUC FairPrice and Sheng Siong, to maintain the prices of various house-brands of essential food items for the next six months. Through the "I Support RPWG" label, the RPWG has helped identify businesses that have recently decided to maintain prices or provide promotions for their customers. About 1,000 food stalls in hawker centres and food courts are part of this initiative. This informs consumers of the range of affordable food options. It also helps to promote patronage of the stalls that are providing good value.

To ensure food supply resilience in Singapore, Singapore has been actively pursuing the strategy of import source diversification. By buying from many sources, Singapore is better buffered against potential food shortages and to a lesser extent from food price volatility.

The Agri-Food and Veterinary Authority (AVA) of Singapore has been leading food diversification efforts. They have also worked closely with International Enterprise Singapore (IE Singapore) to encourage companies to source food from a variety of sources and to enter into upstream sourcing, for example, through contract farming. This will provide better leverage over the food supply chains. Various sourcing missions have been carried out to diversify the sources of our food imports such as seafood, fruits and vegetables. To enhance the diversification efforts, a $10 million Food Fund was also launched in December 2009 to allow food companies to explore new food sources overseas, raise local farming productivity and enhance local farming capabilities.

The Government will continue to monitor the external situation and ensure that there will not be any disruption to Singapore's food supply.

Sir, I am very glad that the Minister has elaborated on the diversification of our food sources. On the ground, our senior citizens are saying that the 10-cent increase in a cup of coffee is affecting their daily needs. I would like to ask the Minister and maybe the RPWG Committee if they find the justification for increases at the coffeeshops reasonable.

If you look at the coffeeshop sector in Singapore, one can say that it is a competitive sector. There are no signs of monopoly or anti-competitive behaviour, so we should let the traders decide on the prices. And I think the RPWG has done a good job highlighting those stalls which have pledged to keep their prices stable for the next six months and encourage customers to patronise such stalls.

5. Mr Teo Siong Seng asked the Minister for Trade and Industry in view of the recent Fukushima nuclear fallout, whether his Ministry would provide an update on the status of the feasibility study for nuclear power in Singapore.

6. Mr Low Thia Khiang asked the Minister for Trade and Industry (a) whether the Fukushima nuclear power plant crisis in Japan has derailed the Government's decision to study nuclear energy as an option; and (b) whether the Government has assessed the risks to Singapore if ASEAN countries pursue nuclear energy options.

7. Mr Michael Palmer asked the Minister for Trade and Industry in light of the ongoing Fukushima nuclear power plant crisis in Japan (a) whether the Government would reconsider proceeding with a pre-feasibility study for nuclear power in Singapore; and (b) whether the Government would explore other sources of alternative energy instead of nuclear energy.

(for the Minister for Trade and Industry): Mr Speaker, Sir, may I have your permission to take Question Nos. 5 to 7 together?

Yes.

Mr Speaker, Sir, in light of the crisis of the nuclear power plant in Fukushima, it is quite understandable that Members have raised questions about the Government’s study on nuclear energy.

Let me first emphasise that what we have embarked on is a "pre-feasibility" study on nuclear energy. A "pre-feasibility" study is a preliminary step for us to better understand the complex field of nuclear energy. The aim is to gain a deeper insight into critical issues like the different technologies that are available and being developed; the international regulatory regime; the essential elements for the safe operation of a nuclear plant; the management of spent nuclear fuel; protection against terrorist attacks; radiation protection; and emergency planning. Even with the completion of the pre-feasibility study, we will still be a long way away from making any decisions on nuclear energy for Singapore per se.

The Member for Hougang has asked if the Fukushima incident would derail our study of nuclear energy. On the contrary, what happened in Fukushima makes it all the more important that we conduct such a study, and build our knowledge and understanding of nuclear energy. Further, several countries in our region, such as Indonesia, Malaysia, Thailand and Vietnam, have announced plans for nuclear energy. Therefore, even if we do not proceed with nuclear energy for Singapore, we need to understand its implications for the region and for us in Singapore.

Our scientists and engineers must know how current and emerging nuclear technology work, and be able to assess fully the safety risks associated with nuclear energy. Only then can we work constructively with our ASEAN partners and other partners to ensure that nuclear energy, whenever and wherever it is deployed in this region, is done so in a safe and secure manner.

The pre-feasibility study will help us understand these risks and make recommendations on the type of training, education and research that will be necessary.

It will take months, if not years, for the global nuclear energy community to assess the lessons from Fukushima. But in a world with increasing competition for scarce energy supplies, nuclear energy will continue to be an option for many countries. We should, therefore, deliberately, systematically and methodically shore up our knowledge and understanding of nuclear energy issues.

Mr Michael Palmer has asked about alternative sources of energy. We are also actively exploring options to diversify our fuel mix in the near and medium term. The completion of our liquefied natural gas (LNG) terminal will expand our geographical sources of energy. We have been studying other energy options such as electricity imports, renewable energy and clean coal, while investing in R&D to improve energy efficiency and develop new energy technologies.

Mr Speaker, Sir, with energy constraints expected to increase in the future, we need to adopt a portfolio approach and maintain a range of energy options for Singapore.

8. Mr Michael Palmer asked the Minister for Foreign Affairs if he would provide an update on the assistance that Singapore has rendered to Japan following the recent earthquake, tsunami and ongoing nuclear power plant crisis.

Mr Speaker, Sir, exactly a month ago, Japan was struck by three disasters on 11th March − a massive earthquake, a devastating tsunami and a nuclear power plant crisis. More than 13,000 people are known to have perished and another 15,000 are still missing. Immediately after the earthquake, I called a long-time friend, Kazuo Tomita, who was residing in Osaka then out of concern for him and his family. Fortunately, the disasters had spared Osaka, and my friend and his family were safe. He was thankful for my call, but I also detected from the tone of his voice the seriousness of the disaster for Japan as a whole. Just as the word "tsunami" has a Japanese origin, friends of Japan will remember another Japanese word "kizuna" which Japanese Prime Minister Naoto Kan has used yesterday to thank the world for the new "bonding" this 11th March tsunami has brought between Japan and the world.

Mr Speaker, Sir, the scale of the disaster brought about a spontaneous and huge outpouring of sympathy among Singaporeans for the Japanese people. Both individuals and organisations in Singapore have contributed generously to requests for donations from the Singapore Red Cross Society and Mercy Relief.

Prime Minister Lee wrote to Japanese Prime Minister Kan expressing his condolences for the disaster victims and pledging our readiness to assist in any way we can. At the request of the Japanese government, we immediately sent a Singapore Civil Defence Force team of search specialists and search dogs the day after the earthquake, to help in search and rescue operations.

When Japanese Ambassador Yoichi Suzuki briefed Minister George Yeo on the disaster on 15th March, he said there was a shortage of blankets, mattresses, bottled water and water containers and requested our assistance in supplying these articles. The Ministry of Foreign Affairs (MFA) worked with the Singapore Armed Forces, the Singapore Red Cross Society and Mercy Relief to source for these items and to dispatch them. Our humanitarian support was carried out in close consultation with the Japanese government. The supplies reached the Sendai distribution centre in Miyagi prefecture on 20th March, and were then distributed to various evacuation centres. Sendai was one of the worst hit cities, destroyed by the tsunami. Mercy Relief has so far dispatched three teams to Japan, including the prefectures of Iwate and Miyagi. The teams are doing good work on the ground.

The Singapore Government has contributed S$500,000 as seed money to the Singapore Red Cross Society to encourage donations to relief efforts in Japan. Since its appeal opened on 15th March, the Singapore Red Cross Society has collected S$19 million in donations so far. This amount excludes the Government's contribution.

Besides the Government, it is gratifying to see many Singaporeans and businesses also stepping forward to offer support that goes beyond monetary donations. Singaporean youths have put up fund-raising performances in support for Japan. Recognising the human dimension of the disaster and the need for us to be at one with the Japanese people during this period, an Inter-Religious Organisation gathering, comprising Singapore religious leaders from the different faiths, was held on 23rd March to express our solidarity with the Japanese people. Minister George Yeo and I were present at the gathering. In fact, there were touching moments when we saw children, school children and even kindergarten children, presenting paintings and drawings of greeting and solidarity with the Japanese people to the Japanese Ambassador. And so was at the Singapore Discovery Centre International Friendship Day last Friday where I saw schoolchildren making origami cranes for presentation to the Japanese Embassy.

The humanitarian and recovery phases are likely to end in the coming weeks. Singapore will also contribute to the reconstruction phase that follows. When I met the Japanese Foreign Minister Takeaki Matsumoto at the sidelines of the Special ASEAN-Japan Ministerial Meeting in Jakarta over the weekend, I reiterated Singapore's offer of further relief assistance to Japan and our readiness to work with the Japanese government to contribute to the long-term reconstruction efforts in the disaster-stricken areas of north-east Japan. MFA is now working with other Singapore organisations, public, people and private, to pool resources under the Singapore Red Cross Society for this purpose.

I thank the Senior Minister of State for his comprehensive reply. I was just wondering if there are any other areas aside from donations of funds and outpourings of comfort that Singaporeans could do for Japan in this time of recovery, post-crisis.

I think much has been done as far as recovery is concerned, and the Japanese government itself is now paying due attention to reconstruction. Just at the Jakarta meeting, in fact, there was a lot of sharing of what has been done, and while they are grateful, they also look forward to us working together in terms of the reconstruction. As far as reconstruction is concerned, we are still waiting for the Japanese government. They are also consolidating their position and to see what needs to be done. We will work closely with the Japanese Embassy here and also the Japanese government, as far as reconstruction efforts are concerned.

9. Mdm Halimah Yacob asked the Minister for Trade and Industry (a) what measures are in place to assist Singaporeans cope with the higher cost of electricity; and (b) what would be the impact of rising electricity prices on companies.

Mr Speaker, Sir, let me first place the recent hike in electricity prices in the context of global events. There is uncertainty in global energy markets due to factors such as the unrest in the Middle East and North Africa, and the Fukushima incident. This has caused fuel oil prices and, consequently, our electricity prices to rise.

Our approach has always been to price energy right. This ensures that consumers understand the true cost of energy, make efficient use of a scarce and precious resource, and avoid the wasteful consumption associated with subsidies. Nonetheless, the impact of global fuel price increases on our electricity tariffs has been mitigated in several ways. An appreciating Singapore dollar has helped to cushion the effects of rising fuel oil prices, which are denominated in US dollars. Since the beginning of 2010, the Singapore dollar has appreciated by about 8% against the US dollar. Without this, the electricity tariff in the second quarter of this year would have been 5% higher. Also, the introduction of competition into our electricity market since 2001 has improved efficiency. Power generation companies have switched from oil-fired steam plants to more cost efficient ways of generating electricity, such as gas-fired combined cycle gas turbines (CCGT). Had we continued to use steam plants, the electricity tariff today would be about 15% higher, reflecting the relative efficiency of the CCGT.

While these measures have helped, they cannot fully offset the effects of oil price increases on our electricity tariffs. To help households which may face difficulties in coping with the rising cost of energy, the Government has provided targeted assistance. This year, about $250 million in utilities rebates will be given to help Singaporeans. Three-room households will receive $340 in rebates; this is equivalent to the cost of about five months of electricity consumption by such households. Four-room households will receive $320, which will cover about three and a half months of their electricity bills, assuming there is no change in their consumption behaviour. Put another way, 3-room households will receive rebates this year which are worth about five and a half times the overall increase in their electricity bills over the past 12 months. In other words, if you look back over the increase in their bills over the last 12 months and you compare that with the rebates in this year, the factor is more than five times. Households will receive the next tranche of utilities rebates this month. Since 2007, the Government has provided close to $800 million of such rebates, for the benefit of 800,000 households. So, by all measures, the assistance rendered has been substantial.

We also recognise that increases in our electricity tariff may affect the competitiveness of our businesses. As our electricity prices reflect global factors, our principal approach is to help companies manage their demand. The Government administers several programmes to promote more efficient energy use among companies. The Energy Efficiency Programme Office (E2PO), which is a multi-agency committee led by National Environment Agency (NEA) and Energy Market Authority (EMA), co-ordinates various programmes to raise awareness of energy management and energy efficient technologies, provide support for companies which are trying to adopt such technologies, train energy management professionals, and encourage sharing of best practices in energy efficiency among companies.

Mr Speaker, Sir, adopting energy efficiency practices helps companies cope with the rising energy prices in the short term, but also prepares them for a future that will increasingly be energy constrained.

Mr Speaker, Sir, I am really happy to hear about the immense investment in helping households cope with the rising cost of energy. There will continue to be households that, despite these assistance measures, will face difficulty in paying for their electricity bills. Sir, I would like to urge the Government to make sure that Singapore Power work with these families to give them time to pay off their arrears – some of them may have chalked up a lot of arrears – so that their electricity supply will not be disrupted.

Mr Speaker, Sir, I thank the Member for her supplementary question. I understand her sentiments and fully empathise with them. I think as Members are well aware, there are instances of families who, even after all the assistance that I have described have been rendered, still have difficulties and in those instances, SP Services, at the behest of or appeal by the Member of Parliament, has considered cases on an individual basis to see what kind of help can be rendered. That will continue to be the case, in addition to other assistance that is available through the ComCare schemes.

Sir, the global situation is very uncertain with the conflicts in North Africa, the Middle East and the disasters in Japan. Can I ask for an assurance from the Senior Minister of State that the Government will stand ready to take any extra measures, if necessary, should the situation worsen and the cost of electricity and other inflationary pressures should rise and impact Singaporeans, so that Singaporeans can be protected from the ill effects of these conflicts?

Mr Speaker, Sir, the Minister for Trade and Industry has already described the proactive stance we are taking with respect to inflation and its impact on our population. Specifically on energy, we continue to be vigilant. We are tracking the trends to see what kind of impact it can have. Certainly, as the track record of the Government suggests, as and when there is a need, appropriate steps would be taken to mitigate the impact on those households that need the help.

10. Ms Ellen Lee asked the Minister for Home Affairs (a) whether Singapore is prepared for similar major disaster of magnitude and impact as the recent earthquake and tsunami in Japan; and (b) besides Total Defence, National Education and the Community Engagement Programme, are there any other plans to foster the calmness and resilience of our people and community for similar major disasters.

Mr Speaker, Sir, the earthquake and tsunami that struck Japan recently was of an unprecedented scale. As we have just heard from Senior Minister of State Zainul Abidin, the death toll has exceeded 13,000, with many thousand survivors having to rebuild their lives almost from scratch.

Sir, notwithstanding the scale of the disaster, what has made a deep impression on many is the fortitude and resilience of the Japanese people. There was a general calm and support for one another. People queued in an orderly fashion for food and other essentials. There was no outbreak of looting or hysteria.

Singapore is fortunate in that we are relatively unaffected by earthquakes, and our geographical location makes it highly unlikely for us to be affected by tsunamis. Nevertheless, this does not mean that Singapore is immune from other hazards, such as major accidents or terrorist incidents. Such incidents will test our society.

Whether we will pass the test depends on three factors. First, are we prepared for a crisis? The Ministry of Home Affairs (MHA) co-ordinates the entire Government effort to prepare for various crisis scenarios, including a terrorist incident, flu pandemic and others.

Our civil defence and disaster management agencies are also constantly improving their operational capabilities to handle disasters and crises.

The second factor is whether our leadership will be able to respond effectively during a crisis. The Government has in place a crisis management system designed to prepare for and respond to a wide variety of hazards, including terrorist attacks, major accidents and other homefront crises that could affect Singapore on a national scale. In a crisis situation, the Homefront Crisis Management System (HCMS) is activated. The Ministry of Home Affairs takes the lead, but works closely with other Ministries and Government agencies to coordinate a Whole-of-Government response.

The third factor is how Singaporeans will respond in a disaster and how quickly we will recover from it. This is the nub of Ms Ellen Lee's question. How resilient are Singaporeans? Will we be able to respond with fortitude and strength in a crisis, coming together as a nation, or will relations be strained and ultimately break?

Sir, under an ongoing Community Engagement Programme (CEP) launched in 2006, the Government engages various sectors of the community, including the business sector, religious and community leaders, and grassroots organisations among others to bolster community resilience and preparedness. The CEP just celebrated its Fifth Anniversary last month. Good progress has been made in all sectors but because this is a continuing effort, we are pushing ahead on all fronts.

In addition, over the years, the Home Team has introduced a variety of programmes to better prepare the community for emergencies. These include outreach programmes to educate the public on emergency preparedness and training the community with basic first aid, fire-safety and emergency preparedness skills. For example, annually, the SCDF works closely with key grassroots organisations to organise about 48 Emergency Preparedness (EP) Day exercises that typically instil in participants the mindsets and skills required to respond to a major incident occurring in the neighbourhood.

We also adopt a focused approach to reach out to various segments of the community. Hence, under the Safety and Security Watch Group (SSWG) programme, the Home Team works closely with key partners such as Residents' Committees and Neighbourhood Market Associations. Under the SPF's Project Guardian initiative, private security personnel receive training on key emergency functions such as traffic control, emergency communication and evacuation. With these additional skill-sets, these security officers are able to provide a critical first response during a crisis situation, prior to the arrival of the authorities and also to render immediate assistance to anyone in need nearby.

At the individual level, more Singaporeans and Permanent Residents are now learning first aid and Cardio Pulmonary Resuscitation (CPF), with many doing this at SCDF's four Division Headquarters. Increasingly, grassroots leaders have taken ownership of community emergency preparedness by actively participating in scenario planning exercises, walking through the types of responses required in crisis situations and helping to conduct them when ready. Indeed, I had officiated at one such large-scale multi-agency exercise just a few months ago at Yishun.

These programmes and initiatives complement platforms such as the Total Defence, the National Education and the Community Engagement Programmes.

Sir, our efforts at enhancing preparedness and resilience in Singaporeans are wide-ranging and continue to be a work-in-progress. But we all know that to derive maximum outcomes from these efforts, they cannot just be driven centrally by the Government, with Singaporeans just completing activities or attending courses. Whilst these are useful, what must undergird them is a mindset and social compact that we will continue to look out for one another. In short, we can only be resilient as a society if each one of us recognises the need for us to all do our part, take steps to be prepared and stand ready to rally together should a disaster strike.

11. Ms Ellen Lee asked the Minister for Home Affairs whether there are plans for willing Singapore Civil Defence Force (SCDF) volunteers and National Servicemen to be sent to observe our SAF and SCDF in action in overseas rescue missions so that they can prepare and gain experience in the event of such calamity happening in Singapore.

Mr Speaker, Sir, SCDF's Operation Lionheart contingent is deployed on overseas humanitarian missions to conduct search and rescue operations so as to save lives and help the local authorities restore the disaster site to normalcy. Since 1990, the contingent has been deployed for 13 overseas missions. The latest deployment of five SCDF officers and rescue dogs was to Japan, in the aftermath of the earthquake and tsunami there.

On such missions, SCDF's priority is to render immediate and effective assistance to those affected by the disaster. Hence, the officers who are sent must be well-trained and competent to handle the difficult tasks involved and to operate under very harsh environments. The composition of our rescue team is based on guidelines set by the United Nation's International Search and Rescue Advisory Group (INSARAG) – a network of disaster-prone and disaster-responding countries and organisations dedicated to urban search and rescue (USAR) and operational field coordination. In terms of capacity and skills, teams classified by INSARAG will be able to integrate better as they have the same basic structure, resulting in a safe and effective multinational operational response. SCDF was classified as a heavy USAR team by INSARAG on 18th January 2009, the highest level possible for any USAR team. The composition of the contingent must meet the needs of the affected country which typically would share their requirements in terms of the contingent's desired size and skills.

Although the majority of a typical Operation Lionheart contingent is made up of regular officers, SCDF does include suitable National Servicemen who can add value to the mission. For example, one full-time National Serviceman and one Operationally-ready National Serviceman who are doctors were deployed to New Zealand following the Christchurch earthquake recently. SCDF will continue to include National Servicemen to such overseas missions judiciously.

12. Mdm Ho Geok Choo asked the Minister for the Environment and Water Resources (a) what is the impact of Japan's nuclear crisis on Singapore's environment; (b) what is the possibility of air-borne and water-borne radiation permeating our environment; and (c) what steps are in place to ensure that Singapore remains radiation-free.

Sir, since the massive earthquake and the subsequent tsunami that struck Japan's north-eastern coast on 11th March this year, the Japanese authorities and the Tokyo Electric Power Company have been attempting to cool down four of the six units at the Fukushima Daiichi Nuclear Power Plant by spraying and pumping seawater and freshwater. The Japanese authorities and the International Atomic Energy Agency have reported elevated levels of radiation in the air and the sea water within 100 km of the plant, with readings at Fukushima City, located 60 km away, reaching as high as 8.5 micro-sieverts per hour on 18th March this year. Above-normal levels of radiation were also detected beyond 100 km from the plant.

Although the current situation at the nuclear plant in Japan remains very serious, assessments from modelling simulations carried out by NEA and the World Meteorological Organization show that the likelihood of any radioactive plume reaching Singapore is very low. As Singapore is located more than 5,000 km away from the Fukushima Daiichi Nuclear Power Plant, even in the unlikely event that the radioactive plume reaches Singapore, the impact of the plume is expected to be inconsequential as the concentration of radioactive substances in the plume would be diluted to insignificant levels. Likewise, the possibility of the radioactive seawater around Fukushima affecting the waters and coast of Singapore is also very low because of the distance and dilution.

Notwithstanding this, NEA has been monitoring the radiation levels in our environment and coastal waters. NEA has not detected any abnormal radiation levels beyond the natural background level. The average daily radiation level in Singapore is made available to the public on NEA's website. In addition, NEA is monitoring reports of any significant changes in radiation levels in regional countries. This will provide an early warning should the radioactive plume spread towards Singapore. At home, our inland waters and drinking water supply are not affected by the nuclear fallout in Japan. PUB's daily monitoring of radioactivity levels in our drinking water indicate that the levels are well within the safety levels stipulated by the World Health Organization.

To guard against contamination of our food chain, the Agri-Food & Veterinary Authority (AVA) has been working closely with its counterparts in Japan and has stepped up its surveillance on food imports from Japan. To-date, the AVA has detected radioactive contaminants in a few shipments of vegetables from Japan and these have been disposed of properly. AVA has since 23rd March suspended the imports of fresh produce and milk from affected regions in Japan.

I would like to assure the House that contingency plans are in place to deal with any deterioration of the situation in Japan. MICA will continue to keep the public informed of the situation through timely and regular updates.

MICA has also established a micro-site, www.gov.sg/japanquake, on the Government response to the Fukushima situation. It is a one-stop information portal for the public. Regular updates from MICA and NEA are also available to the public via social media tools such as Twitter and Facebook.

I thank the Minister of State for the comprehensive response. Just one question: the public had indeed been expressing reservations about eating seafood and I think we are also seeing Singaporeans shunning Japanese restaurants for fear of contaminated seafood. How safe is seafood imported from elsewhere and in Singapore now? How are we going to educate our public on the safety of seafood imported from Japan and the surrounding countries?

Sir, in fact, all shipments of fruits and vegetables, seafood, milk, meat and milk products from Japan are subject to, what we call, the "hold and test" policy. That means, samples from each shipment are taken for testing and the shipment is only released when it is found to be safe for consumption. As such, food imported from Japan, including seafood that is available in the market, is safe for consumption.

As regards public education, as I have noted earlier, MICA has established a micro-site, that is, a one-stop information portal that the public can access information relating to the nuclear incident in Japan. MICA as well as the National Environment Agency (NEA) also provides regular updates through social media tools like Twitter and Facebook.

13. Ms Sylvia Lim asked the Prime Minister (a) whether he would provide the rationale for the recent changes to Nomination Day proceedings which were gazetted on 14th March 2011; (b) what criteria would the Returning Officer use to decide if candidates in contested constituencies would be permitted to address their supporters at the Nomination Centre; (c) when and how are candidates to apply for such approval; and (d) how much time will candidates be given to address their supporters.

Mr Speaker, Sir, with your permission, could I ask that some documents* be distributed to the Members?

*Cols. 4833-4856.

Yes.

These documents set out the factsheet as well as the list of legislation summarising the changes, for Ms Sylvia Lim's ease of reference. I think she will appreciate that we always try and make things easier for her.

Many of the legislative changes which were gazetted on 14th March 2011 were to refine existing electoral proceedings; some changes were also technical in nature in view of the prevailing laws. Nomination Day proceedings will remain largely the same as in previous elections.

One change from previous practice for Nomination Day proceedings is that candidates in contested constituencies will now be allowed to address their supporters at the Nomination Centre. Previously, they were not allowed to do so, so it is a relaxation.

This change was made in response to feedback following the last elections. Candidates addressing their supporters at the close of nomination proceedings will have to abide by the instructions given by the Returning Officer or the Group Assistant Returning Officer (GARO) and adhere to some conditions such as the length of their address. An area outside the nomination hall will be designated for such speeches to be made at the close of nomination proceedings.

There is no need for candidates to make an application for approval to address their supporters at the Nomination Centre. At the close of nomination proceedings, the GARO will invite the candidates, both from contested and uncontested constituencies, to address their supporters.

Upon invitation by the GARO, each Single Member Constituency candidate will have up to one minute to give a short address. Each team of Group Representative Constituency (GRC) candidates can take up to three minutes. There will be no limit to the number of candidates from each GRC team who can speak, so long as the team keeps within the allotted time. Speakers will be alerted by bell chimes towards the end of their allotted times.

Mr Speaker, just two supplementary questions. I thank the Minister for the details as to the timings and so on. In the Gazette, it is also mentioned that the RO or ARO will decide the order in which the different candidates will speak. Is there a principle to this? For example, is it by alphabetical order?

Last of all, it is also mentioned in the Gazette that we have to use equipment as authorised by the RO. So, can I assume that the equipment will be provided – the Public Announcement (PA) system?

Sir, there is some degree of discretion given to the RO and GARO but generally they will follow the alphabetical order, and I believe the equipment will be provided.

14. Mr Lim Biow Chuan asked the Minister for Transport whether LTA would consider installing escalators or lifts at pedestrian overhead bridges in estates like Mountbatten and Marine Parade where there is a large proportion of elderly residents.

15. Mdm Halimah Yacob asked the Minister for Transport (a) whether LTA can install lifts at overhead pedestrian bridges to help the elderly who are not able to climb the stairs to use the bridges to cross the road, especially in the Bukit Batok East estate; and (b) whether LTA has any other solutions to deal with such challenges faced by an ageing population.

Sir, may I have the permission to take Question Nos. 14 and 15 together?

Yes.

Sir, we want to build an inclusive land transport system that caters to the accessibility needs of our people, including the elderly and less mobile.

In this regard, we have been improving the barrier-free accessibility of our transport facilities. All road facilities such as pedestrian walkways and public roads within a 400-metre radius of all MRT and LRT stations have been made barrier-free. All our MRT stations are already wheelchair accessible with at least one barrier-free route. By the end of this year, seven in 10 MRT stations will have at least two barrier-free routes. To further enhance accessibility to our MRT stations, the Land Transport Authority (LTA) recently announced that it will retrofit lifts at six pedestrian overhead bridges located next to MRT stations.

On the wider issue of enhancing mobility on our roads for our elderly, let me clarify that escalators are not barrier-free access facilities. Other problems may also arise when the escalators undergo maintenance or when they break down. For example, the elderly and other pedestrians might find it more difficult to walk up or down the steps on the escalator as they are steeper and higher than the steps on a normal staircase.

As for installing lifts at pedestrian overhead bridges, these are costly and difficult to maintain. Given that there are about 500 pedestrian overhead bridges island-wide, we have to be prudent in our use of public funds. Instead of installing lifts at pedestrian overhead bridges, LTA's approach is to provide at-grade crossings at suitable locations as these are more convenient and accessible for the elderly and less mobile. When this is not possible, LTA provides ramps at pedestrian overhead bridges, where feasible, to make it easier for the elderly and less mobile to use.

LTA will also be expanding the Green Man Plus scheme to 500 more pedestrian crossings island-wide, starting from 2012, to allow the elderly more time to cross the roads.

Nevertheless, I would appreciate it if Mdm Halimah and Mr Lim could let LTA have the details of the specific areas in Mountbatten, Marine Parade and Bukit Batok East where there are mobility concerns so that they can see how best to address these concerns.

I thank the Senior Parliamentary Secretary for the clarification, and for his information, I have written twice to LTA. The answers have been negative. My question is, what is the alternative because the purpose of the overhead pedestrian bridge is for people to cross over but the elderly has difficulty crossing over? Granted that there are resource constraints in the use of public funds for installing lifts or escalators, there are maintenance difficulties and so on. What other alternatives are there to assist the elderly and the disabled to cross the road if the pedestrian bridges are not effective or sufficient?

I assure the Member that we understand her concerns and we will look into this seriously. I believe that we can work with the Land Transport Authority (LTA). We will look at specific areas where we can implement alternative measures, for example, the Green Man Plus scheme that I have mentioned, as well as some other potential at-grade crossing measures that we can implement around that area, or near to certain transport nodes. We will try to do that. So it is something that we can work closely with the Member and get more details and information.

16. Mdm Ho Geok Choo asked the Minister for National Development whether the Ministry would consider allowing HDB grants to be applied towards the payment of the cash-over-valuation component of the purchase price of a resale HDB flat.

Mr Speaker, resale flat prices are jointly determined by buyers and sellers through negotiations. Cash-over-Valuation (COV) arises when buyers are willing to pay sellers a premium above the market valuation to secure the flat. COV is not a requirement. HDB and banks do not grant loans above the market valuation of a flat, as it is not financially prudent to do so.

Allowing HDB grants or loans to pay for COV may result in flat sellers demanding higher COVs. This will drive resale prices up and does not help flat buyers.

Those concerned about high COVs should plan ahead and apply for Build-To-Order (BTO) flats instead. New flat buyers can look forward to plenty of choices and supply this year, as HDB is prepared to launch up to 22,000 BTO flats in 2011, if demand is sustained.

I am happy to note that many young couples are planning ahead. About 30% to 40% of BTO flat buyers book their flats under the Fiance Fiancee Scheme today, where they only need to be married no later than three months after collection of keys to their new flat.

Thank you, Senior Minister of State. I have two supplementary questions. First question: short of sounding ageist, would the Ministry consider introducing an age quotient into the qualification criteria of this grant as such a move would encourage young couples to own a home and start a family of their own? Question two: what is the profile of the recipients and the take-up rate for the HDB grants?

Mr Speaker, as I have replied earlier, we do not think that it is appropriate for the grant to be used to finance COVs. We do not think that there are people who are using the grants now to finance the COVs. That is in relation to question two. Question one: we will consider the suggestion and we will give due consideration in our subsequent review of the policy.

17. Mrs Mildred Tan asked the Minister for Community Development, Youth and Sports (a) how much of Singapore's GDP is accounted for by the non-profit sector; (b) what is the rate of growth for this sector over the past 10 years and what is the projected growth; (c) how much of the local workforce is in this sector; (d) what are the types and amounts of capital funding for this sector; and (e) what is the percentage of funding that comes from donations, Government funding, and fees collected by these organisations.

Mr Speaker, Sir, there is no standard definition of the non-profit sector. For Singapore, the non-profit sector generally consists of organisations that are not set up to generate profit and rely mainly on grants and donations to cover their operating expenditure. These organisations are across sectors such as social service, health, education, arts and sports, among others. They include charities and Institutions of a Public Character (IPCs).

The non-profit sector contributed 1% of Singapore's GDP and employed some 48,000 people in 2009. The sector grew at a compounded annual growth rate of about 7% from year 2000 to 2009.

For financial year 2009, the Government provided $54 million in capital funding for infrastructural development to non-profit organisations in the education, health and social service sectors. In 2009, Government funding accounted for almost 50% of the total funding received by the charity sector; the other 50% came from donations and fees.

In the area of social services specifically, local manpower for the social service sector rose from 5,114 in 2003 to 7,207 in 2009. MCYS' funding to social services increased by more than threefold over 10 years to $139 million in FY2010.

The Government also provides additional funding to help non-profit organisations develop their capabilities through the $45 million Voluntary Welfare Organisations Charity Capability Fund (VCF).

The Government supports the critical work done by non-profit organisations through funding as well as by encouraging community giving. The tax deduction for donations was increased to 2.5 times in 2009 and this has been extended for another five years until 2015.

There are also matching grants for donations towards essential areas. During the recent Budget 2011, $1 billion was set aside for the Community Silver Trust to match donations to voluntary welfare organisations that provide long-term care for the elderly and disabled.

The non-profit sector complements the public and private sectors. The non-profit sector and its volunteers serve the community with passion and champion causes to create a better society, be it in the arts, sports or other sectors. It also provides opportunities for people to volunteer and be actively engaged, which in turn fosters social cohesion. Thus, it is vital that the non-profit sector continues to grow. The Government and the community will continue to support and grow the sector to achieve better social outcomes.

I thank the Minister of State for her comprehensive reply. I just have one quick question. With this growing trend, what is the Government's stand in ensuring the continuous upgrading of competencies in this field? There is a phenomenal number of people in this sector and the numbers keep growing every year. So what steps of measures are we looking at to upgrade the skills and competencies of the people?

Mr Speaker, the Member has filed a second Question about the voluntary sector and it is related to this supplementary Question she has now asked. May I take the next question now?

Yes.

18. Mrs Mildred Tan asked the Minister for Community Development, Youth and Sports (a) how does Singapore compare with other countries in terms of pay in the voluntary sector; (b) what is the range of pay of CEOs and Executive Directors within this sector; and (c) would the Government consider making the pay of these leaders more transparent like those in public listed companies.

The employment terms in the voluntary sectors in different countries vary, depending on factors such as numbers of players in the sectors, the state of philanthropy and volunteerism, the labour market and the job scopes. Therefore, direct comparison of pay structures across countries will not be meaningful.

Based on a 2009 survey on 200 key executives in the social service sector, we found that about 79% of these executives are earning below $100,000 per annum. The remaining key executives, who are from organisations with annual receipts of over $10 million, earn between $100,000 and $200,000 annually.

Although the National Council of Social Service provides pay guidelines for the VWOs, ultimately, the boards of the VWOs decide on the salaries of the CEOs or Executive Directors. They have to bear in mind various considerations such as their financial state, the job requirement and the ability to attract and retain capable persons, as well as the depth and the breadth of experience and expertise that the potential appointee can bring to the organisation.

The Office of the Commissioner of Charities also works closely with the people-sector led Charity Council to encourage greater disclosure and transparency by charities and Institutions of a Public Character (IPCs). The Code of Governance developed by the Charity Council recommends that IPCs and large charities disclose in their annual reports the annual remuneration of its three highest paid staff in salary bands of $100,000. And while compliance is not mandatory, charities and IPCs would have to explain the reason for non-compliance in their Governance Evaluation Checklists submitted to the charity regulated annually.

We are glad to know that almost 80% of IPCs and large charities are already making the disclosure in their annual reports. The Office of the Commissioner of Charities will continue to work with the Charity Council to promote greater transparency in the charity sector under the comply-or-explain approach. There is no need to treat voluntary organisations the same as public listed companies and mandate the public disclosure of the remuneration of their leaders.

At the same time, the NCSS has set up a lot of programmes with my Ministry. We have put aside quite a number of training funds and in the last few years, 2007 to 2010, we spent about $4.7 million to upgrade the salaries of the volunteers, social counsellors and social workers. And last year, we added an additional $3.9 million to help this sector, especially in the area of personnel training, and we also give scholarships and bursaries as well training overseas to upgrade the skills of this sector. NCSS and the VWOs have done a lot in this area together with the Charity Council. The Council is private sector-led, and the chairperson is Fang Ai Lian. I think we can work closer to enhance the professionalism and quality of this sector.

Mr Speaker, I thank the Minister of State for her answer. I have been very encouraged by the growth of the social sector. Two supplementary questions. First, the Minister of State mentioned that there is no strict definition of non-profit sector in Singapore but I remember that the John Hopkins University once measured the combined net worth of the NPO sector and put it to a figure of one-fifth of the global GDP. If the same is to be applied to Singapore, it would mean that this is a huge sector that is also developing very quickly and having a lot of social and financial impact in Singapore that might be worth measuring. My point is what gets measured gets done. Can the Ministry consider including or coming up with a set of key performance measurements to better track both the financial as well as the social impact of this sector? The second point is that if this is done properly, it would serve not only to encourage the social sector but also increase transparency, give more faith and increase professionalism and plug the gaps, since the gaps do start to show. Can the Ministry consider that?

I thank the Member for her suggestions.

19. Er Lee Bee Wah asked the Minister for Education (a) what are the Ministry's pricing guidelines on the sale of food to students in school canteens; (b) how does the Ministry balance the needs of the students and those of the canteen operators to meet their operating costs; (c) why are schools allowed to operate drinks vending machines which are a direct competition to the canteen stalls.

Mr Speaker, the Ministry of Education sets the general policy and guidelines on the management of school canteens. Schools are given the autonomy to manage their canteens within these guidelines and they seek to ensure that food sold in the canteen caters to the nutritional needs of students at reasonable prices.

MOE guidelines require every school to set up a School Canteen Committee (SCC), headed by the Principal. This Committee monitors food prices as well as portion sizes and considers stallholders’ requests for food price increases on a case-by-case basis. While they take into account the stall-holders’ operating costs and viability, the SSCs seek to ensure that food prices remain affordable and students get value for money. MOE regularly provides schools with information on the average price food items commonly sold in school canteens to help them determine if requests to raise food prices are reasonable.

The food prices in our school canteens are on average lower than in hawker centres and public eating places. In 2010, the average price for a typical meal comprising a cooked food item with a drink sold in a school canteen was $1.39 at primary school level and $1.98 at secondary level.

Needy students can continue to tap on various financial assistance schemes administered by the School Advisory Committee (SAC) or School Management Committee (SMC) that provide them with pocket money for meals or free breakfast. MOE recently topped up $4.7 million (between $10,000 and $15,000 per school) to the SAC or SMC funds to ensure that schools have sufficient funds for this purpose.

Schools may decide to install drink vending machines to complement stall offerings or to meet the needs of the students when the drink stalls are closed.

Sir, I have received quite a lot of feedback from parents that the portions of food sold in the school canteens have shrunk. Instead of buying one portion, they have to buy two portions and even three portions. I wonder whether MOE has received this feedback and if there is any action to be taken.

Sometimes, the portions shrink because after my visits to the schools, I tell them that there is really too much for the child to eat. It is not always because of prices. I think the Member has to look at which schools we are talking about. If the situation is due to a way for the school canteen stallholders to profit from smaller portions, we will certainly take action.

20. Ms Audrey Wong Wai Yen asked the Minister for Education (a) in the past five years, what are the numbers of students who have taken Art and Music as a subject at GCE 'O' and 'A' levels; (b) how many of these students have chosen to join the teaching profession; and (c) of these students who have joined the teaching profession, how many of them are teaching Art and Music in our primary and secondary schools.

In the past five years, 2006 to 2010, an average of 3,300 and 340 students took Art and Music respectively at the O-level. The average candidature of Art and Music at the A-level was 170 and 60 respectively.

It is still too early to tell how many of these students will eventually apply to be teachers as many of them are still pursuing their tertiary education.

As of March 2011, there are close to 1,050 trained Art and Music teachers across the levels in our schools, 1,000 of whom are teaching at the primary and secondary level. Sixty percent of all our Art and Music teachers had studied Art or Music at the O- or A-levels. The rest would have attained other relevant qualifications in Art and Music from recognised boards, diploma or degree-awarding institutions.

21. Mr Lim Biow Chuan asked the Minister for the Environment and Water Resources whether there are any plans to cover up all drains in private estates and, if so, what is the timeline for doing so.

The Estate Upgrading Programme (EUP) was launched in 2000 to rejuvenate and upgrade the physical environment of selected private estates in Singapore. In conjunction with the EUP, PUB upgrades the old roadside drains into covered drains to provide more space for walkways and green verges. This co-ordination of drainage works with the EUP minimises inconvenience to residents.

In addition to this, PUB has an on-going programme to continually improve old drains across Singapore, including those in private estates. Under this programme, old drains are upgraded to increase their conveyance capacities or to restore their structural integrity towards the end of their economic life. Where possible, these drains will also be covered.

Over the past 10 years, PUB has upgraded close to 300 km of existing open roadside drains into covered drains in over 30 private residential estates. Most of these works were carried out as part of the EUP. Public feedback on the drainage upgrading works in private estates has been positive so far.

Going forward, PUB will continue to upgrade old drains in private estates progressively. By 2015, PUB will have upgraded another 100 km of drains in more than 15 estates.

I thank the Minister of State. Sir, I receive frequent complaints about the poor maintenance of drains as leaves and branches are frequently dropped into these uncovered drains. May I ask the Minister of State whether there are plans to step up the cleaning of these drains until the drains are covered, which may be in 2015?

In actual fact, many of the drains are uncovered to facilitate easy maintenance and to prevent mosquito breeding. In any case, regular maintenance of the drains is carried out by our PUB contractors to ensure the cleanliness of the drains, the drainage system and to reduce the risk of chokage.

There is a minimum performance standard stipulated for our contractors and for certain areas with heavy human traffic, or if they are litter-prone, including from the falling leaves and so on, additional cleaning may be required of the contractors. PUB regularly audits these cleaning contractors and penalises the contractors who fail to meet the required performance standards. This provides a targeted approach to improve public cleanliness.

If the Member has any specific area where he feels that the performance standard or the cleanliness is not maintained to standard, we will be happy to hear from the Member and we will follow up with the necessary action.

2.46 pm

Order. End of Question time.

Mr Speaker, Sir, I would like to make a clarification. On 8th March 2011, during a parliamentary sitting, Ms Denise Phua suggested extending the foreign domestic worker levy concession to include children with disabilities who are older than 12. I would like to clarify and indeed I am pleased to inform Ms Phua that the concession is already available to all persons with disability, regardless of age. This scheme is administered by the Centre for Enabled Living. A clarification to the media was issued on 9th March.

Order for Second Reading read.

2.48 pm

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

This Bill enhances existing protection schemes for depositors and insurance policy owners, and brings them together into a single piece of legislation. The Deposit Insurance Act which established the Deposit Insurance (DI) Scheme, as well as provisions under the Insurance Act relating to the Policy Owners' Protection (PPF) Scheme, will be repealed as a result.

The proposed enhancements in this Bill will strengthen the protection of depositors and owners of insurance policies. In developing the enhancements, MAS consulted the industry and the public and, where appropriate, incorporated their feedback in the key features of the Schemes. MAS also took into consideration lessons learned internationally during the recent global financial crisis.

Mr Speaker, Sir, I will first provide some background to the existing DI and PPF schemes.

The DI Scheme in Singapore was implemented in 2006. It aimed to provide a basic level of protection to small depositors. A DI Fund, built up through regular contributions levied on the full banks and finance companies who are Scheme members, would help ensure that depositors can receive quick compensation on their deposits up to the coverage limit without having to wait for the outcome of the Scheme member's liquidation process. The Scheme was also designed to keep the cost of providing deposit insurance manageable, while preserving incentives for large depositors to continue to exercise market discipline.

At present, the DI Scheme insures Singapore dollar deposits of individuals and charities in current, savings and fixed deposit accounts held with a full bank or finance company, up to S$20,000 per insured depositor per Scheme member. This was sufficient to fully cover 86% of insured depositors when the Scheme was first designed, which was within international norms of 80% to 90%.

A separate scheme – the Policy Owners' Protection (PPF) Scheme – exists to protect insurance policy owners. The PPF Scheme is provided for in the Insurance Act to compensate policy owners of life policies and compulsory insurance policies in the event that their insurer fails. The existing PPF Scheme covers 90% of the liabilities for life policies and 100% of the liabilities for compulsory insurance policies. The Scheme is currently post-funded. This means that PPF levies will be collected from PPF member insurers only when there is a payout following the failure of an insurer.

The PPF Scheme provides policy owners with certainty as to how much of their policy monies will be protected and also whether the losses they have incurred from insured events will be compensated, should their insurer fail. Besides alleviating financial distress to individual policy owners, the PPF Scheme supports public confidence in the insurance industry and helps limit possible disruption to the economy.

To ensure that the DI and PPF Schemes continue to provide adequate protection to depositors and policy owners, several enhancements are proposed. Mr Speaker, Sir, I will now go through the key provisions of this Bill.

DI Scheme-Coverage

There are two main changes to the deposit insurance coverage. First, the coverage of the Scheme will be expanded from insuring only individuals and charities to insuring all non-bank depositors. This means that deposits of sole proprietorships, partnerships, companies and unincorporated entities will be insured up to the coverage limit. This will mitigate potential cash flow problems of small business depositors in the event of a bank failure, which is in line with the Scheme's primary objective of protecting small depositors.

Second, the maximum level of coverage under the DI Scheme will be raised from S$20,000 to S$50,000 per depositor per DI Scheme member. The separate coverage of monies placed under the CPF Investment Scheme and CPF Minimum Sum Scheme will also be raised from S$20,000 to S$50,000.

With the increased S$50,000 coverage limit, the proportion of insured depositors that are fully insured will be raised to 91%.

Gross payout

In addition, under the enhanced Scheme, depositors will be paid the gross amount of their insured deposits up to the DI coverage limit, without first netting off their liabilities to the Scheme member. Gross DI payout contributes to greater confidence and stability in a distressed situation as it is easier for depositors to understand and is operationally faster. It also allows depositors to have quick access to the full amount of their insured deposits up to the coverage limit, mitigating potential cash flow difficulties they may face. If payout is on a net basis, a depositor who has a loan with the same Scheme member may receive partial payout, or no payout if his loan is larger than his deposit, thereby limiting the effectiveness of the Scheme in protecting small depositors. The depositor, however, still remains responsible for any liabilities owed to the Scheme member. The Scheme member's liquidator will be empowered to recover these liabilities from the depositor.

PPF Scheme-Coverage

Sir, let me now explain the enhancements to the PPF Scheme. First, the scope of coverage will be expanded. Currently, the PPF Scheme only covers life policies written by life insurers as well as compulsory motor third party injury and work injury compensation insurance policies. The PPF Scheme will be extended to cover all accident and health (A&H) policies written by life insurers and Singapore policies of specified personal lines written by general insurers. These specified personal lines are personal motor insurance, individual and group short-term A&H insurance, personal property insurance for structure and contents, foreign domestic maid insurance, and personal travel insurance.

In addition, the PPF Scheme will be enhanced to cover 100% (up from the current 90%) of the liabilities of life policies, subject to caps. The increase in the level of coverage will help allay the concerns of policy owners, should they become anxious that their insurer may fail and seek to cancel their policies. Where the level of coverage is 90%, some policy owners may believe that they are better off getting back 100% of their policies' surrender values, rather than waiting for compensation under the PPF Scheme. But if the insurer does not fail, policy owners who prematurely surrendered their life policies may not be able to obtain equivalent new insurance cover, for example, due to advanced age or deteriorating health.

The introduction of the aggregate caps, which did not exist previously, will mitigate the risk of moral hazard as it creates an incentive for policy owners to exercise prudence in their selection of insurers. In this way, the caps will help keep the PPF Scheme affordable. This approach is similar with the DI Scheme, which provides for 100% coverage up to a cap of S$50,000 per depositor per Scheme member. General insurance policies will be fully covered with no caps, as general insurance policies typically indemnify losses as they occur and payouts are made based on actual claims incurred. As there is no relationship between the amount of losses and the level of sophistication of the policy owner, the moral hazard risk is lesser.

Pre-funding

In addition, the revised PPF Scheme will now be pre-funded, like the DI Scheme. Life insurers and general insurers will pay levies annually into the PPF Life Fund and PPF General Fund, respectively. A pre-funded approach is more equitable compared to a post-funded approach, as the failed insurer would have contributed to the fund prior to its failure. It will also expedite payout in the event that an insurer fails.

Review and administration of the schemes

Sir, the coverage limits and scope of the DI and PPF Schemes have been carefully calibrated to meet the objectives of these Schemes. These features will be reviewed from time to time by the MAS in consultation with the Singapore Deposit Insurance Corporation (SDIC). To facilitate changes that may arise from such reviews, the Minister-in-charge of MAS will be given powers to approve an increase in coverage for these Schemes, based on MAS' recommendations. In its review, MAS will have regard to the interests of depositors and policy owners, taking into account the costs to the Schemes, or the stability of, or confidence in, the financial system. If the increase is temporary, the Minister may also decide on the duration of the increase and the period of any extension.

Sir, I will also speak briefly on the administration of the Schemes. The SDIC, which currently administers the DI Scheme, will also administer the PPF Scheme. This arrangement ensures cost efficiency and leverages on the SDIC's capabilities. Since its incorporation, the SDIC has established systems and processes to ensure that insured depositors can be compensated quickly in the event of a payout.

The SDIC will collect premium contributions and levies from DI and PPF Scheme members respectively, compensate those who have been insured in the event of a payout as well educate the public on the DI and PPF Schemes. In addition, the SDIC will manage the DI, PPF Life and PPF General Funds. These three funds will be maintained separately and no inter-fund lending will be allowed. The Bill requires the SDIC and the funds to be audited, and for a copy of the audited financial statements, auditor's report and annual report of SDIC's key activities during the year, to be provided to the Minister.

Sir, the proposed enhancements to the DI and PPF Schemes will strengthen the safety net for small depositors and policy owners. The enhancements have been carefully designed to achieve this objective, while keeping the costs of the Schemes manageable and preserving incentives for market discipline.

Sir, I beg to move.

Question proposed.

3.00 pm

Sir, I rise in support of this very important Bill which serves to alleviate Singaporeans' concerns about the security of their saving deposits in financial institutions. This Bill is particularly timely as Singaporeans are still recovering from the financial crisis triggered by the failure of Lehman Brothers in 2008.

I have one short query for the Minister. With regard to health and life insurance policies, my primary concern is with older policy owners. Should an insurer fail, one main concern for older Singaporeans is their inability to take up alternative insurance because of their advanced age and/or deteriorating health conditions. Is there provision in the Bill to ensure that they would be able to obtain equivalent new insurance cover?

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

It is an important Bill and it augurs well that MAS has been proactive in the ever changing developments in the global financial regulatory environment as well as looking after the needs of local depositors.

Since the Singapore Deposit Insurance Corporation (SDIC) was formed in 2006, we have seen an increase of the amount insured from $20,000 to $50,000. This, I believe, is in keeping with international norms as well as the growing wealth of Singaporeans. At the same time, this is an increase of 150% over the past five years. Perhaps, it is a little bit like crystal-ball gazing, but I wonder if the Minister would be able to project future increases or see the need to increase this over time, and to give regular interval updates on the need to review this.

Sir, I would like to speak on two parts: first, relating to businesses and insurance practitioners; and, second, on retail depositors.

First, on business and insurance. Sir, this Bill seems to address a gap that exists for deposit insurance when compared to intrinsically similar deposits written by banks which have been covered historically by other legislation. I understand that the Policyholder Protection Fund (PPF) will be formally established in this Bill. To me, this is significant as previously there was no formal PPF that existed, especially with the early contribution by insurers. It is also heartening to know that with the enhancements, we will see an increase of the life policyholder's coverage to 100% and the introduction of an aggregate cap that will enable PPF to be more accessible.

I would say that this Bill will provide policyholders with an additional level of comfort over and above that which already exists in the form of insurers' holding reserves and capital. However, having said that, PPF will increase the costs to the insurers which will ultimately be passed back to policyholders. It then begs the question and the consideration as to how large is large enough. Too small a fund, there is no protection or even worse, it creates a perception of protection without the means to provide the protection. Too large a fund, the capital costs will be unduly onerous.

Sir, the basis for levies paid to the Scheme needs to be clear and fair in respect of an insurer's overall risk profile. For instance, insurers that maintain a capital adequacy ratio above a certain level might reasonably pay a lower levy as their risk insolvency is higher. The levy should also be reasonably consistent over time to allow an insurer to make the right commercial decision as to what the price to set and where to deploy its capital.

Sir, next, I move on to businesses. It is clear that the DI Scheme is to protect small depositors which include small businesses. First, I must say this is an important step to protect businesses as I think that this follows the same form as the protection for retail depositors: that you may be very rich, but $50,000 is all the protection you are getting at this point and, generally, this is a sensible approach. I applaud MAS for this timely initiative and congratulate them for having gotten consensus to expand the Scheme to include businesses.

Sir, the Deposit Insurance and Policy Owners' Protection Schemes Bill increases the protection of depositors from $20,000 to $50,000. Then, I ask, for all intents and purposes, can someone with, say, $200,000 in cash be protected completely? Can they, therefore, spread their money to four banks, with each amount of $50,000, up to $200,000? The percentage of people who are covered under this Scheme would therefore mean that there is an increase of 83% to 91% protection. This places us on the high side of norms in terms of actual amounts insured, and there are countries such as Hongkong, United States and Britain which pay out such high amounts.

Sir, I note that there is no cover on investment products such as unit trusts or guaranteed capital funds. The increase of deposit over $50,000 may encourage investments in low interest deposit accounts. This is not desirable in an inflationary environment. One way is for the protection to be extended to less risky investment products to ensure higher interest savings but, at the same time, I know this risk increases the costs to banks and financial institutions. Sir, this is a delicate balancing act and one that we may need to constantly bear in mind. The balancing is not between risks and premiums alone, but it is also assurance and reality checks.

Sir, I would like to finally touch on corporate governance and audits. Here, I would like to declare that I am from Ernst and Young, a public accounting firm. The current Bill talks about audits, as the Minister had mentioned, but it does not quite indicate the audit of premium collections and the internal audit of SDIC. Perhaps, this could be considered.

Finally, I stand in support of the Bill as I believe that the changes are for the better and this is an important juncture for us to do this. I urge the agency, the Singapore Deposit Insurance Corporation, to continue its good work of educating the public on its role, and the strength of Singapore's financial system as the fundamental issue remains one of credit, and even more basic – that of trust. This is partly for the general financial literary and also to build up an important reservoir of trust, so that in the event of any financial crisis, the depth of trust would provide some form of foundation and stability.

To that end, I do hope there will be more public education and, perhaps, the Minister can share with us the outcomes he hopes to share and the key messages he will ask SDIC to send out.

Mr Speaker, Sir, I would like to thank the Members for their support of the Bill and for their comments raised. Let me address these comments respectively.

First, Assoc. Prof. Paulin Straughan asked whether the PPF insurance will allow the transfer of policies from a failing insurer to another insurer. This, I think, is one of the key intentions. If the insurer fails, if there is indeed a willing buyer and allows the insurance policies to be transferred to this willing buyer, then, of course, we will try to facilitate it because this is a very neat solution.

In the event that there is not a willing buyer, then, of course, SDIC has the option to establish a separate legal vehicle to continue with the coverage of the outstanding policies and let these policies, as a technical term, run off. Of course, if this is not deemed to be a good solution, then the third option is to pay off the policies. But we do recognise that for older policyholders, especially those with existing health conditions, finding a willing buyer is a better option or having a run-off is also a good option.

Mrs Mildred Tan asked about the review timeframe. I think we established the key parameters of the Deposit Insurance Scheme on the level of coverage desired and, therefore, the review will really take place when we see the coverage dropping. So, we try to achieve between 80% and 90% coverage. When the Scheme was first started in 2006, it took us five years to review it and the significant increase is because of the increases in the level of deposits and we are now able to achieve 91% coverage.

The second question is, of course, the cost considerations. I think this is a very important trade-off. The more comprehensive the coverage of the PPF, the higher the funds will need to be created and, therefore, the higher the levies. So, we need to have this balance and we have yet to establish the actual fund size and the levy structure. MAS will be consulting the industry both on the target fund size as well as the levies in due course. The aim of this Bill is to set up the structure but, in setting up the target size and the levies, we will be very mindful of this trade-off needed and also the basic principles in setting up the levies. This will be risk adjusted to be equitable to all the participants.

Mrs Mildred Tan also asked whether the DI can be extended to investment products. This is something that we have considered and consulted with the industry and felt that we should not at this moment provide cover for investment products because that will entail higher costs because the nature of investment products entails a higher risk. At this juncture, it is better for people to understand the risks especially if they invest in complicated investment products and do not expect this to be insured by the DI. So, this is the position for the time being.

On corporate governance: this is very important. There will be proper audit of the SDIC. The process will be that MAS will decide on the levies of the individual's scheme member participants depending on their deposit liability base and the SDIC will then collect the appropriate levies from them. And as MAS does its bank inspection, they will be able to check that these deposit liabilities that are declared by the banks and the finance companies are actually accurate and true. So, there will be proper processes to make sure that everybody who is participating pay up the correct levies.

Question put, and agreed to.

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

The House immediately resolved itself into a Committee on the Bill. – [Mr Lim Hng Kiang].

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

Order for Second Reading read.

3.15 pm

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

The House has just debated on the Deposit Insurance and Policy Owners’ Protection Schemes Bill (DI-PPF Bill), which will, among other things, strengthen protection to policy owners in the event of a failure of an insurer. In conjunction with the DI-PPF Bill, the Insurance (Amendment) Bill 2011 will amend the Insurance Act (Cap 142) to enhance MAS’ powers in relation to the resolution of a failing insurer. This will reinforce protection to policy owners.

While MAS seeks to promote and preserve stability in the financial system through high standards of licensing, regulation and supervision, it does not aim to prevent the failures of all financial institutions. Such a "zero-failure" scheme is neither feasible nor desirable as it leads to considerable moral hazard and places an excessive regulatory burden on our financial institutions. When dealing with an insurer in distress, a private sector resolution option is often preferred by regulators. In the event that this is not possible, what is of utmost importance is the ability of the regulator to be able to take action quickly to protect the interests of the policy owners.

The Bill will align the resolution powers in the Insurance Act with that in the Banking Act, providing MAS with a broader range of resolution options in dealing with a failing insurer. The Bill will also strengthen MAS' ability to make arrangements so far as reasonably practicable for securing continuity in insurance coverage when an insurer fails.

In addition, the Bill will amend the priority ranking of liabilities where an insurer becomes insolvent or is unable to meet its obligations, and remove the requirement for insurers to maintain a statutory deposit with MAS.

In preparing this Bill, MAS has consulted the industry and the public on the policy positions as well as on the draft Bill. The feedback received was carefully considered and has been incorporated into the Bill where practicable and consonant with its regulatory objectives.

Mr Speaker, Sir, I will now touch on the key features of the framework for the resolution of an insurer.

Powers for insurance resolution – pre-liquidation

In the event that an insurer gets into financial difficulties, the existing Insurance Act allows MAS to direct the insurer to stop issuing or renewing policies to protect existing policy owners from any further deterioration of the insurer's financial strength. To achieve the objective of securing continuity in insurance coverage where reasonably practicable, MAS or the insurer may search for potential buyers for the business.

In order to facilitate the transfer of policies from a failing insurer, MAS will have the power to direct such a transfer and, at the same time, a moratorium will be imposed automatically on any applications to wind up the insurer or commence legal proceedings against the insurer. This will widen the options available to MAS in seeking to secure continuity in insurance coverage for policy owners of a failing insurer. Continuity in coverage is especially important in respect of life policies as they tend to be long term. An early termination could cause substantial loss due to surrender penalties or the inability of the life assured to take up new insurance cover because of advanced age or deteriorating health.

In the case where an insurer is voluntarily transferring its assets and liabilities, such a scheme will have to be approved by MAS before submission to the High Court for confirmation. This provides MAS the opportunity to check that proper due diligence has been exercised when determining the appropriate amount of assets to be transferred.

To facilitate the smooth transfer of assets and prevent such transfers from being subsequently unwound, any claw-back mechanism available in the Companies Act will not apply to transfers of assets that have been directed or approved by MAS.

The Bill also empowers MAS, with the approval of the Minister-in-charge of MAS, to make a determination on the transfer of share ownership of a Singapore incorporated insurer. This could be either through a compulsory restructuring of the share capital or a sale of existing shares to other investors. Before these powers can be exercised, MAS has to consider the interests of policy owners of both the transferor and transferee. The affected parties will be given a right to be heard prior to the Minister's approval of such a transfer, except where it is not practicable or desirable to do so.

Powers for insurance resolution – post-liquidation

Where an insurer has gone into liquidation, no person may be appointed as liquidator of an insurer registered under the Insurance Act without MAS' approval. To secure the continuity of insurance coverage, a liquidator of a failed insurer must either seek to sell or transfer the portfolios of the insurer or continue the business of the insurer until the portfolios are transferred.

Amendment to the priority ranking of liabilities

To be equitable to all insurers that have contributed to the Policy Owners' Protection (PPF) Scheme, the priority of claims following the insolvency of an insurer will be conferred first to outstanding levies due from the failed insurer to the PPF Scheme. This is followed by payment or funding, as the case may be, that comes from the PPF Scheme for the policy liabilities of the failed insurer that are covered by the Scheme. This priority ranking also serves to strengthen the ongoing viability of the PPF Scheme. Priority will next be accorded to policy liabilities not covered by the PPF Scheme. Of the policy liabilities not covered by the PPF Scheme, policy liabilities in respect of direct policies will be granted priority over policy liabilities in respect of reinsurance policies.

Removal of statutory deposit requirement

Mr Speaker, Sir, the requirement for registered insurers to maintain a statutory deposit of S$500,000 with MAS will be removed. The statutory deposit, first established when the Insurance Act was enacted in 1963, was intended to provide some security for policy owners if an insurer were to be wound up, and to defray potential costs incurred in winding up an insurer’s business. This statutory deposit acted as a capital buffer, which is no longer relevant with the introduction of the Risk-Based Capital Framework for insurers in 2005. With the enhancements to the PPF Scheme, there is also no longer a need for a statutory deposit as a means of providing security for policy owners.

Mr Speaker, Sir, the framework for the resolution of insurers contained in this Bill will enable MAS to act swiftly when dealing with a failing or failed insurer, so as to protect policy owners and maintain stability in the financial system. It will also enable the continuity of insurance coverage as far as reasonably practicable for policy owners.

Mr Speaker, Sir, I beg to move.

Question proposed.

3.23 pm

Sir, I rise in support of this Bill which exemplifies the Government's commitment to protect the interests of policy owners.

As a policy owner, I am much assured by the provisions stipulated in this Bill that will protect my interest should an insurer fail. May I ask the Minister if he can share with us the reaction of the Industry on the proposals specified in the Bill? Specifically, how do the new rules which enhance the powers of the MAS, affect the attractiveness of the Singapore market when compared to comparable economies like Hong Kong? Will these new regulations result in less attractive and more expensive insurance options for Singaporeans?

Mr Speaker, Sir, I thank the Member for speaking in support of the Bill. As I mentioned just now, MAS consulted widely with the industry and took in many of their comments. Generally, the industry is in support of the Bill. First of all, the proposed resolution powers are in line with major jurisdictions and, therefore, we are not out of line. Secondly, the anticipated levies for the PPF Scheme are not expected to be onerous and, therefore, will not affect the competitive position of our insurance sector.

Question put, and agreed to.

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

The House immediately resolved itself into a Committee on the Bill. – [Mr Lim Hng Kiang].

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

Order for Second Reading read.

3.26 pm

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

Singapore's university sector has evolved considerably since its inception as a small medical college in 1905. It took another about 80 years before we had about 8% of our cohort going into university. And from there, 30 years to reach 26% and we are on track, by 2015, to reach the target of 30%.

But it would be a mistake in developing the university sector to focus just on expanding the number of places because that would basically pit us against other countries on a comparative disadvantage. Let me give Members two examples – two hefty ones. China recently announced their goal to have eight million graduates a year by 2020. India similarly has committed to six million graduates a year by 2020. Combined, 14 million graduates a year compared to our figure of about 14,000 graduates. You can do the maths. We cannot compete on numbers. Instead, we must always differentiate ourselves from the rest of the pack by attaining the highest quality of tertiary education in Singapore. We must be bold and open to new models that will become more relevant as the future unfolds. We need to do this, if our students are to acquire a competitive edge in education against other graduates. So, quality and innovation have therefore been the key themes that have guided our university sector, not the number of places. This is the approach that has led to the creation of the Singapore University of Technology and Design (SUTD) – for which the Bill is being read today – but also the Singapore Institute of Technology, Lee Kong Chian School of Medicine, new degree programmes at NAFA and LASALLE, and also the Yale-NUS College.

I would like to use this opportunity to give some brief updates on the various institutions so that Members can see the overall landscape in addition to SUTD.

The Singapore Institute of Technology's (SIT) model preserves and leverages on the strengths of our polytechnic sector. It provides polytechnic students an option to obtain a university degree from well-regarded foreign universities. This approach has many advantages, not least the focus on producing graduates who are attuned to the needs of industry and business. Within a short time, SIT has gathered an impressive stable of top institutions – including the University of Manchester, Technical University of Munich (TUM), Newcastle University, University of Glasgow, University of Nevada (Las Vegas), the DigiPen Institute of Technology and the Culinary Institute of America.

The Lee Kong Chian School of Medicine (LKCSOM) is a tie-up between NTU and Imperial College London (ICL). It will not only produce more doctors – because we need them to cater to our health care needs – but also facilitate innovations in the field of medicine. Imperial College was chosen because it will provide a different and complementary model to the existing Yong Loo Lin Medical School and Duke-NUS Graduate Medical School. Like NTU, Imperial College has strong engineering expertise and is a world leader in applying technology to the field of medicine. It also has a deep ethos of producing doctors who are patient-centred.

The Yale-NUS College (YNC) will be another unique model that provides a different pathway for students. I have described it as "strategic for Singapore". Indeed, it can prove to be, at various levels. For schools, especially pre-university education, the YNC, as the pinnacle programme at NUS, will have a pervasive and powerful effect. It will signal to students and parents that critical thinking, analysis and deliberation, which are hallmarks of liberal arts education, will be needed and valued in education. Singaporeans and Asians are, if anything, pragmatists. If it does not count, it matters less. A liberal arts college will be a physical reminder that, as Einstein remarked, "Not everything that can be counted counts, and not everything that counts can be counted." It will hopefully move us from a system that is now world-renown for students who answer set questions well, to one that produces students who want to start asking the right questions to produce solutions to complex problems. Our curriculum in our junior colleges and polytechnics has already started on this journey. The YNC will accelerate this.

Last year, we have also made quality enhancements in our two arts institutions – NAFA and LASALLE – for new high-quality programmes they will offer in partnership with reputable foreign universities. This will create an additional pathway for students with strong talents in the arts.

As our economy restructures into high productivity, high value-added industries, our universities must complement this strategy by being engines of knowledge, innovation and enterprise. Our universities should ride on tides of global developments and help Singaporeans seize valuable opportunities that will come our way. The rise of China in this century will drastically re-shape the global landscape. The US economy, with its dynamism and a constant capacity to re-invent itself will continue to be a potent economic force, its present problems notwithstanding. Singapore needs to ride on the wave of growth in China and tap on good ideas from the US. With our cosmopolitan outlook and bilingual language and culture, we can function as a bridge between these two giant economies. This was the motivation behind the establishment of SUTD, in collaboration with two top universities in their respective countries, the Massachusetts Institute of Technology (MIT) from the US and Zhejiang University from China.

All these new institutions that I have listed, which were added within the last two years – the SIT with its top-class foreign partners, NTU's new medical school with Imperial College, SUTD, the Yale-NUS College, new degree programmes at NAFA and LASALLE – now position our higher education sector for the future. We have a forward-looking higher education sector, not a backward-glancing one, which will prepare our students well for their future. And I think they offer exciting new and high quality tertiary education for Singaporeans, and to attract top international talent.

Let me now focus on the substance of today's Bill, SUTD. First, SUTD is conceptualised as a medium-sized, high-quality and research-intensive university, with an undergraduate population of about 4,000, focusing on technology and design in the disciplines of engineering, information systems and architecture. SUTD hopes to produce graduates who are innovators, who can bring ideas from the drawing board into the real economy, very much like what MIT and Zhejiang University have produced. For those who know these universities, that is indeed the culture of these two universities. Apart from these foreign partners, SUTD will also leverage on other local universities. For example and as a start, SUTD and the Singapore Management University (SMU) are exploring the possibility of working together to launch mutually beneficial educational programmes.

Second, we established SUTD in collaboration with MIT and Zhejiang University, both of which are eminent universities representing the best of East and West. SUTD students will benefit from MIT’s strong tradition of engineering excellence and entrepreneurial spirit. Its core curriculum will be jointly developed with MIT and will involve top MIT faculty in co-teaching the programmes. Through Zhejiang University, SUTD students will gain access to China, through the electives developed and delivered by Zhejiang University faculty in SUTD. There will also be opportunities for students to spend time both in MIT and Zhejiang University.

This unique East-West partnership, with SUTD positioned at the centre, offers many opportunities for the flow of ideas and talent. This will be mutually beneficial to all three parties. This partnership has yielded results even before SUTD formally starts lessons. Led by MIT faculty, SUTD students-to-be participated in the International Robotics Competition in Shanghai last year. It has not started classes yet; they were just basically on the enrolment list. So, SUTD decided to rope these students-to-be to participate in the International Robotics Competition, and they emerged in second and third places.

SUTD's mission is to nurture technologically grounded leaders to serve societal needs. Its educational programme will be distinctive in several ways:

First, as undergraduates, SUTD students will be exposed to research that is focused on addressing global challenges in areas such as healthcare, energy and environment, and those that the developing world faces;

Second, its curriculum will be multi-disciplinary, with degree programmes cutting across traditional engineering disciplines and integrated by design as a central theme; and

Third, internships and innovation programmes will also feature strongly in SUTD's curricular and extra-curricular programmes.

The cost of such a high quality education at SUTD will be high. It is a different format, and you need it to develop smaller classes, a lot of interaction and it will cost about two to three times that of traditional courses. As I mentioned in this House previously, it is only fair that benefiting students bear their fair share of the costs and pay higher fees compared to other programmes in the local universities. At the same time, financial aid options, including loans and bursaries will be available for qualified needy students. As with all other publicly-funded universities, the Government will ensure that no capable student will be denied a chance to matriculate at SUTD due to the lack of financial resources.

Our intent is for SUTD to be an Autonomous University, a separate legal entity, allowing it to take full ownership of its own development. This is the same approach that we had used for the National University of Singapore, Nanyang Technological University and Singapore Management University. Basically, the greater autonomy promotes differentiation and motivates these universities to want to achieve greater excellence.

However, given the substantial investment of public monies in SUTD and the key role our universities play in nation building, it will, like our other autonomous universities, have to be gazetted by an Act of Parliament to safeguard public interests. The SUTD Bill will, therefore, serve three key functions:

First, it signals to the public the Government's support for SUTD and assures the public of SUTD's credibility and standing;

Second, it empowers the Government to better guide the strategic development of SUTD towards meeting national objectives; and

Third, the Bill enables the Government to resource the university adequately to meet these objectives, while putting in place an accountability framework to monitor the use of public funds.

Let me now highlight the key clauses in this Bill:

Clauses 3 and 8 will signal the Government’s support for SUTD to the public. Clause 3 affirms the function of the university and allows the university to confer and award degrees and other qualifications in its own name. Clause 8 makes provision for the Government to provide funding to SUTD, which will be expected to be deployed only for those objectives agreed to by the Minister for Education;

Clauses 4 to 7 safeguard public interest by granting the Minister for Education the power to appoint and remove Trustees, and to give his consent for: (i) the admission and removal of members of the university; (ii) the disposal of the university's undertaking or property; (iii) the voluntary winding-up of the university; and (iv) any alterations to the university's constituent documents.

Clause 9 provides accountability for the use of public funds by requiring the university to allow the Minister full and free access to the company's financial information; and

Clause 12 provides for a consequential amendment to the Private Education Act 2009 (PE Act) to exempt SUTD from the PE Act.

SUTD is on track to matriculate its first cohort of students next year (2012). Students who have been admitted thus far are of a high quality both in grades and co-curricular activities. We are also very pleased with the ownership and engagement of MIT and Zhejiang University. MIT and SUTD have agreed to mount Dual-Masters programmes this year; in other words, two Masters degrees – one from SUTD and one from MIT. As a signal of MIT's commitment and confidence in the quality of SUTD. The local industry and community have also been forthcoming with numerous offers of internships and scholarships to students of SUTD, showing their support for this innovative curriculum.

I am confident that SUTD will, in due course, become a new peak of excellence in Singapore's higher education landscape, and be upheld as an innovation in the global university sector.

Mr Speaker, Sir, this Bill will facilitate our goals and aspirations for SUTD.

Sir, I beg to move.

Question proposed.

Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 4.00 pm.

Sitting accordingly suspended

at 3.40 pm until 4.00 pm

Sitting resumed at 4.00pm

Debate resumed.

Mr Speaker, Sir, I declare my interest as a member of the Board of Trustees of the SUTD. Sir, in Mandarin, please.

(In Mandarin ): [For vernacular speech, please refer to Appendix A*.] Mr Speaker, whenever I do house visits in Toa Payoh, I will always notice the photos hanging on the walls of many residents' living rooms. The biggest and the best framed is usually the one with parents posing with their children donning the black graduation robes and the mortarboards.

When parents talk about how their children have managed to improve themselves in times of adversity, the smiles reveal the pride in their heart. You see this kind of heartwarming scene more often in 3-room HDB apartments.

Asian families value highly their children's education. To send their children to universities is many parents' life time dream; some would not hesitate to spend all their savings on their children's tuition. These parents have high expectations of their children, hoping that a good education will boost the children's career in the future. Hence, we must be very careful when it comes to planning our university education.

Singapore University of Technology and Design (SUTD) will be Singapore's fourth university and the second brand new university after the independence. SUTD's uniqueness is that it does not only collaborate with a top US university, Massachusetts Institute of Technology (MIT), but also with one of China's top universities, Zhejiang University. SUTD is likely to become the pioneer of a new era of combining eastern and western education.

There are two things we need to pay special attention to. First is the job prospects of SUTD's graduates; second, is how to lay a solid foundation for the students so that they can face the ever growing global competition.

(In English): I would like to make two observations. The first is that during the global financial crisis of 2008/2009, many college degree graduates in US and Europe lost their jobs to due to a combination of offshoring, productivity improvements and lack of economic growth.

One estimate is that close to 1.1 million jobs in corporate finance, IT and other business functions were lost in large US and European companies in 2008 and 2009. Over 1.3 million additional jobs will disappear by 2014. Many of these are white-collar jobs held by college degree holders.

The second observation is that the trend of offshoring white-collar jobs has emerged due in large part to a vastly increased supply of university graduates in countries like China. In 1998, China produced fewer than 900,000 university graduates each year. In a little over a decade, this number has increased more than seven-fold. This year, it is estimated that nearly 6.5 million Chinese will graduate with a university degree. They will join an estimated 1.5 million graduates from the previous batches to compete for jobs in the labour market. We heard earlier from the Minister that China has set a goal of 8 million university graduates by 2020. So those are very large numbers indeed.

Fortunately in Singapore, employment of fresh graduates has remained high. Typically, out of every 100 new university graduates, between 93 and 95 are able to find jobs within six months. Even during the very difficult years in 2008 and 2009, more than 90% of fresh graduates could find work within six months.

Nonetheless, the global explosion in the supply of graduate workers will mean that we cannot assume this will be the case year after year. In the face of such intense competition, how will we ensure Singapore graduates, in particular, those from a new university like SUTD, firstly, will secure employment upon graduation? And, secondly, have an education that prepares them for the global competition?

Sir, finally, I would like to touch on the issue of affordability. During this year's Committee of Supply, the Minister for Education outlined the many ways in which our education system still provided opportunities for upward social mobility.

Sir, the fees for the SUTD are going to be quite high, as the Minister has also acknowledged, and more than that for comparable courses in NUS and NTU. While I understand this is because of factors such as the student-faculty ratio, I would like to have the Minister's assurance, once again, that no student who qualifies for the SUTD will be denied an education there because his family cannot afford it.

Sir, in conclusion, I would like to point out that Singapore has been very prudent in managing the number of university graduates. Taiwan, which has a population of about 23 million, has 23 universities and produces 250,000 college graduates each year, many of whom are under-employed or unemployed. As a Taiwanese education journalist noted, over 20% of the graduates would need to spend at least one year to land a job. Malaysia, our nearest neighbour, has a population of 29 million, 21 universities and produces 155,000 graduates each year. That is more than 10 times the number that we produce and theirs is a population of maybe five to six times of ours.

Singapore produces far fewer new graduates each year. I did a quick calculation: it is about one for every 400 in our population. This compares to Taiwan's one per 100 population and Malaysia's one per 200 population.

Nonetheless, the number of graduates in Singapore is also on the rise. Thirty percent of each cohort will get a degree. Forty percent will get a polytechnic diploma, and of the 40%, nearly 60% will advance to degree qualifications within 10 years of graduating. Now, this means that in total, about 54% or well over half of the current and future cohorts of Singaporeans will be degree-qualified.

I think this is great news for parents and goes a long way to meeting the aspirations of younger Singaporeans, provided we are able to ensure the employability of university graduates within Singapore and in competition with the rest of the world. Only then will a university degree be a meaningful attainment, fulfilling the expectations of the parents and graduates alike. Sir, I look forward to hearing the Minister's view on this.

*Cols. 4857-4858.

4.09 pm

Mr Speaker, Sir, thank you for allowing me to join in this debate. I would like to express my strong support for this Bill.

People are the most important resource we have and Singapore has always invested heavily in education, regardless of economic cycles. Despite the major financial crises in 2008 and 2009, the Ministry of Education has seen through the plans for our fourth university. This shows that the Government and Minister for Education are serious about and committed to delivering education for our children despite difficult economic climates. This Bill exemplifies the Government’s commitment to providing first class education to future generations of Singaporeans. I would like to go into two main points about the Bill followed by some queries.

Firstly, Sir, while the Singapore University of Technology and Design (SUTD) is a welcome addition to Singapore's university landscape, it is also a new institution and it will need to differentiate itself from its peers. In particular, SUTD is predominantly an engineering school and will undoubtedly be considered alongside NUS and NTU, both of which are established universities in their own right, offering a broad range of engineering and related disciplines. Against this backdrop, how will the SUTD’s genre of education be different and differentiated from engineering and architecture programmes in other universities both locally and abroad? How does it plan to attract its fair share of talented students as well as faculty members?

Secondly, Sir, the establishment of SUTD was announced in 2009. The collaborations with its key partner institutions, MIT and Zhejiang University, were also finalised in January and August 2010 respectively. Can the Minister for Education update the House on the progress of SUTD's development in preparation for its first undergraduate intake in April 2012? Perhaps the Minister can also update the House on the progress of the graduate programmes under SUTD's fold?

I hope the Minister will be able to shed light on these two points and, with that, I record my strong support for the Bill.

Mr Speaker, let me thank the Members for their support for the Bill.

They have both raised very relevant issues that entered our thinking in designing and implementing this fourth university – SUTD. In fact, if I can sum up, first, how do we ensure that in the face of not only an increasing number of graduates locally but globally, on an explosion of graduates coming onstream, that whatever university we create, for today's Bill, SUTD adds value to graduates in terms of employability and training of their minds? Mr Christopher de Souza's point: how do we ensure that it adds value and can I give some updates? Let me address these questions.

Mrs Josephine Teo is absolutely spot-on. In the face of these changes and trends, we cannot plan a university especially for our small population just to cater only to aspirations. Aspirations count. We can recount how all of us, during our house-to-house visits, see photos of parents and their graduate children wearing their caps. Invariably, their mother and father will bring you to the photo and then will explain to you where it was and how it was such a defining moment. We have to meet these aspirations, but we have to meet them such that there is value in the education they get. As I have mentioned, with 14 million graduates coming onstream and given that the world is interconnected, employers will have a choice of the type of graduates they want.

Our approach to SUTD was to give something different. We do not know what we do not know and the best bet is to bring in people with very strong entrepreneurial and very credible capabilities as university professors to design the curriculum. It is a very novel concept to just amalgamate all three disciplines: Information Systems, Architecture and Engineering. To have a common curriculum that has not been done in any university I know of. As I travel and share these plans, the responses have been very intriguing. It has gone off to a good start and we want to be able to offer to students something special.

By the end of the day, how do we know if we will succeed? The way you know is by looking at intermediate markers. The type of students who apply for it because students are quite clever, and the faculty members.

By way of sharing progress: I think we have got on to a good start. We had two admission exercises last year – April and October 2010. SUTD has set very high admission standards and despite that, it has received over 2,000 applications. High calibre students who are basically in the top 10 percentile of our population.

Secondly, faculty members. SUTD has also successfully recruited an initial core of top faculty which includes academics and graduates from Cambridge, Harvard, Stanford, EPF in Lausanne, Switzerland. In fact, seven of them are now in MIT for a year-long customised faculty development programme. They are there, so they are working alongside MIT professors designing the curriculum for SUTD.

Thirdly, industry's response. The way industry responds to this university will tell you whether they think that this is where we are going to produce graduates which are worthwhile. And I am happy to say that SUTD has already secured participation from industry heavyweights who are willing to fund internship or to allow these graduates to join their companies for exposure and these include IBM, Google, Huawei, Keppel Corporation and Deutsche Bank. Good brand names. This is the university that has not opened its doors but already you have got good feedback from students, from faculty, and from industry. We do not want to be ahead of ourselves, we do not want to be complacent, but I think these are signs that it is a good start.

Mrs Josephine Teo asked for an assurance and let me give it categorically. No student in Singapore, because he or she lacks the financial means, would be denied an education in any of our institutions. If you are able to enter that institution, we will support you financially and you will be able to complete that institution. Higher fees are for those who can afford it but no student or family that cannot afford it will be denied an education, and I can say that categorically.

Mr Christopher de Souza has also asked for progress in the post-graduate programmes. I am happy to say that we announced last year that we were trying to launch a Dual Masters Degree which means that Masters students will get both a Masters from MIT as well as SUTD, and that indeed has come about. The Dual Masters programme will provide a very valuable articulation pathway for top SUTD undergraduates. Admissions have been launched and MIT and SUTD are on the track to admit their first Dual Masters cohort this year. So we will have a situation where SUTD will, in fact, produce Master graduates before its Bachelor graduates. It is a bit odd but I think that is a reflection of the commitment as well as the respect that MIT has for SUTD.

Question put, and agreed to.

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

The House immediately resolved itself into a Committee on the Bill. – [Dr Ng Eng Hen].

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

Order for Second Reading read.

4.20 pm

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

In previous years, the House has heard about lawyers who absconded with their clients’ conveyancing money. Such defrauding of money set aside to purchase a home often had a devastating effect on the people whose money was taken.

My Ministry, therefore, proposes to put in place, through this Bill, new measures which will provide greater protection for the public, while at the same time, balancing the commercial needs of the conveyancing market.

Sir, first, let me deal with the amendments to the Conveyancing and Law of Property Act.

Rule-making powers to regulate conveyancing transactions

Clause 2(c) of the Bill introduces a new section 73D to empower the Minister to make rules to regulate conveyancing transactions and the receipt, holding and distribution of conveyancing money. In the main, these rules will:

prohibit lawyers from holding conveyancing money except in the manner allowed in the rules;

make a breach of this prohibition a criminal offence;

require lawyers, who wish to receive conveyancing money, to deposit them with appointed entities or otherwise enter into an escrow agreement;

prescribe the requirement of a two-party authorisation system in most circumstances, whereby any instructions for the withdrawal and distribution of conveyancing money deposited with an appointed entity will need to be countersigned by another party; and

confer a limited level of protection from liability for persons who are required by the rules to countersign any document for the purposes of facilitating the payment of any conveyancing money.

New conveyancing accounts

Most of the changes will be detailed in the Rules. It will be useful for me to give a brief overview of the new regime to the House.

At present, conveyancing money may be banked into law firms' client accounts. Withdrawal may be made with two authorised signatures from lawyers in the law firm.

When the new Rules are in place, conveyancing money must be held in special accounts, termed "Conveyancing Accounts". These Conveyancing Accounts will be offered by banks appointed by the Minister. Clients also have the option of engaging the Singapore Academy of Law to hold such conveyancing money.

Where CPF money is involved, lawyers will similarly have to set up a CPF Conveyancing Account so as to prevent co-mingling of funds.

Money to be withdrawn from a Conveyancing Account or from the Singapore Academy of Law (SAL) would, in the majority of cases, require prescribed pay-out forms and two-party authorisation. Generally, the lawyer acting for the other party will serve as a check on the payment details and then counter-sign on the payment instructions. The appointed entities (SAL or the banks) will also seek to ensure that the countersigning party has counter-signed before processing payment.

Various system enhancements have also been introduced to facilitate the new counter-signing process. The Singapore Land Authority has set up an electronic platform to enable a more efficient counter-signing process. Lawyers will use electronic signatures and instructions for funds will be automatically generated.

The Law Society will be providing a set of guidelines to assist lawyers in performing their role in the new regime. A new adjudication scheme, staffed by members of the profession, has been put in place. This will enable clients to seek a quick resolution should there be any disagreement between the lawyers involved.

Clause 2(c) of the Bill introduces a new section 73E to provide for the establishment of an adjudication scheme to be administered by Law Society, to enable parties to submit their case for adjudication. Adjudication can take place where the counter-signing party declines to facilitate the payment out and distribution of conveyancing money which has been deposited in a conveyancing account. Parties can go to the courts if they feel that the adjudication scheme is not appropriate in any particular case.

Scope of new measures

In order to ensure compliance with these measures, there will be a prohibition against lawyers receiving and holding conveyancing money other than in accordance with the new conveyancing rules. Breach of this prohibition will attract a criminal penalty, which could be a fine of up to $50,000, or imprisonment for up to three months.

Lawyers will also not be permitted to hold money for the general purposes of conveyancing, where the client has not identified the property he wishes to deal with.

The measures do not disallow the current practice of some buyers who make direct payments to sellers. Nor does it affect larger commercial transactions where the present method of holding conveyancing money is to set up escrow accounts jointly held by lawyers acting for both parties.

Consequential amendments to the Conveyancing and Law of Property Act

Clauses 2(a) and 2(b) of the Bill amend the existing sections 64 and 65A of the Act to effect technical changes necessary to update the current conveyancing practice relating to the completion of a conveyance under the new regime.

Amendment of the Legal Profession Act

Consequential amendments have been made to the Legal Profession Act to bring the new conveyancing workflow into the existing rubric of a law practice. The two key amendments are:

First, the current section 25A(1)(h) of the Legal Profession Act provides that if the Attorney-General or the Law Society Council is satisfied that a lawyer has failed to comply with the rules made by Council for the keeping of accounts, the Attorney-General or Council may request the Registrar of the Supreme Court to refuse that lawyer’s application for a practising certificate, or issue such a practising certificate subject to such conditions as Council may specify. Clause 3(a) amends section 25A(1)(h) to bring parity to include non-compliance with the rules made by the Minister pursuant to section 73D of the Conveyancing and Law of Property Act, as an additional ground on which the Attorney-General or the Council can make a similar request to the Registrar;

Secondly, the First Schedule to the Legal Profession Act prescribes the circumstances under which one can intervene in a lawyer's practice, for example, when there is contravention of rules made by Council or when the sole lawyer of the practice has passed away. Clauses 3(d) to (i) seek to enable the Council to exercise its powers where there is a contravention of the rules made by the Minister pursuant to section 73D of the Conveyancing and Law of Property Act or where the practice of the sole lawyer that passed away has a conveyancing account. Lawyers currently hold conveyancing money for practical and important reasons as stakeholders or as agents for their clients who may be overseas or otherwise unable to attend to legal completion. They perform a valued service within the conveyancing market; these new measures will help enhance public confidence in their role.

Sir, these measures have, as their object, the striking of a good balance between protecting the public, on the one hand, and ensuring, on the other, the efficacy of commercial life.

In formulating these measures, my Ministry has engaged key stakeholders including banks, lawyers, real estate players and the relevant Government agencies. Two public consultations, two pilot trials and multiple dialogue sessions have been conducted over a two-year period.

More than 110 law firms have tested the new system, in the course of nearly 700 conveyancing transactions. Close monitoring and assessment of feedback from our partners have enabled us to make substantial enhancement to the new workflows.

After the Bill is passed, we will continue to work in tandem with all affected parties to ensure a smooth transition for the public. We expect to bring the new system into operation, with phased refinements, starting from 1st August 2011.

Sir, no system can be absolutely secure against a determined person who chooses to flout the law. But we have made it more difficult for a lawyer to try to abscond with conveyancing money.

Sir, I beg to move.

Question proposed.

4:28 pm

Sir, allow me to declare my interest in speaking on this Bill as a practising conveyancing lawyer.

Sir, this Bill seeks to introduce new rules to protect clients' money and to prohibit lawyers from holding conveyancing money in their clients' accounts. I understand that the Bill came about after several cases where dishonest lawyers had absconded with their clients' conveyancing money ranging $32,000 to $6 million to $11 million.

Many lawyers that I have spoken to have expressed great disappointment whenever they read about these cases of cheating or criminal breach of trust by lawyers because these cases affect adversely the reputation of many other honest lawyers.

Sir, the proposed rules make quite drastic changes to the way conveyancing has been practised. As a lawyer who has been practising conveyancing for more than 20 years, I found the changes quite difficult to adapt to. Nevertheless, I welcome these new rules as these measures will assist to protect innocent members of the public from being cheated of their hard-earned money which are intended for either their purchase or for the sale of their properties.

Many lawyers that I know have also expressed support for the new Bill and new regulations. In fact, some lawyers have expressed that they would rather not hold on to any client's conveyancing money as it is additional administrative work for them, with no benefits in holding such money.

Sir, section 73D of the Bill provides for the Minister to make rules. I understand that these rules have been drafted to prohibit lawyers from holding conveyancing money save in certain situations. The draft rules have been circulated to many law firms and two pilot trials have been conducted as the Minister has said. The draft rules have introduced a two-party authorisation for the withdrawal of conveyancing money from special conveyancing bank accounts. Thus, any withdrawal of money from this special conveyancing bank accounts would require the authorisation from two lawyers.

One concern which many lawyers have raised is the duty of the counter-signing lawyer for a Category "C" payee. Sir, this is a category of payees who are not Government agencies like the Stamp Office, CPF Board or discharging mortgagees. The question is whether the counter-signing lawyer is required to verify the identity and correctness of the Category "C" payee. What if the vendor solicitor directs that the entire balance of sale proceeds is to be paid to the housing agent or some third party whom he claims is his relative or a creditor? Is the counter-signing lawyer obliged to make further enquiries even after the vendor issues a statutory declaration to authorise such payments? Or is the vendor obliged to disclose more details when asked by the counter-signing lawyer? What if he deems the information to be confidential? Is the counter-signing lawyer obliged to make further enquiries as to whether there is any illegal moneylending transaction? What if the vendor refuses to disclose that he is indebted to some third-party payee for fear of embarrassment? Sir, I believe it to be useful for lawyers to understand more about their obligations as a counter-signing lawyer.

Sir, the proposed rules also cover the prohibition of the holding of stamp fees for tenancy agreements. Thus, for small value tenancies, for example, tenancies with very low rentals and the stamp duties are also very low, the housing agents or lawyers may not wish to be involved in the holding of such small sums of stamp fees and to e-stamp the tenancies for their clients. Is the Stamp Office prepared to handle increase of cases where the stamping of tenancies is handled directly by landlords or tenants at the Stamp Office?

Next, Sir, where there are disputes between parties and adjudication is required, may I ask who is expected to bear the additional charges and late interest payable during the period of delay whilst the parties seek adjudication? During the initial period where parties' areas of responsibilities are not clearly set out and the law in this area is not distinct or fully developed as yet, would it be fair for one party to be held responsible for the delay because he wished clarity by submitting to adjudication?

Finally, Sir, what is the intent of section 73D(2)(h) of the Act, where there is fraud or criminal breach of trust, the lawyers involved would inevitably be charged under the Penal Code? Would the Public Prosecutor charge lawyers for minor or technical breaches of law due to carelessness or inadvertence and, in some cases, incompetence? I hope the Minister can clarify these concerns so that lawyers have a better sense of the intent of the law.

Sir, with this, I support the Bill.

4.34 pm

Sir, I rise in support of this Bill as it serves to safeguard conveyancing money of buyers and sellers of property. I have only one query for the Minister. This Bill would bar lawyers from holding conveyancing money in their regular clients' accounts. With the proposed new safeguards, who will bear the added administrative costs of setting up conveyancing accounts or engaging the new conveyancing money service of the Singapore Academy of Law?

Sir, I thank the two Members for their support of the Bill.

I will first respond to Assoc. Prof. Straughan's question about the added administrative costs. She is correct that there are costs associated with the enhanced protection. These new conveyancing accounts are special accounts that require banks and lawyers to do more to protect the public. The enhanced infrastructure will come at a cost, for example, IT systems of the banks have to be enhanced. Appointed banks and the Singapore Academy of Law may charge a fee for their services. This fee will, however, be very small compared to the size of the transaction and the value of the protection. With at least four banks slated to be appointed to provide the service, together with the Singapore Academy of Law, we expect competitive forces to keep the costs in check. Once the system is functioning smoothly, banks may well choose to provide this service as part of a package of services. The parties who wish to use the service are likely to be the ones who, in the first place, have to pay for that service.

I turn now to Mr Lim Biow Chuan's queries – stamp duties issues. Let me first deal quickly with Mr Lim's query about stamp duties for tenancy agreements. Not all forms of stamp duties are governed by the new measures. If the amount of duty in question for licences, leases and tenancies is $5,000 or more, then the stamp duty must be paid through the new accounts. For stamp duties below $5,000, which is the case for the small value tenancies which Mr Lim mentioned, these are at present often dealt with by estate agents or the landlords or tenants themselves, rather than with or through the assistance of lawyers, and that practice of direct payment will continue.

Next, Mr Lim asked a series of questions about the effect of measures on lawyers. The most important of these is the need for an offence under the new section 73D(2)(h). He rightly pointed out where the conduct is serious, there are other offences applicable, such as fraud or breach of trust. He asked if the Attorney-General would charge lawyers for minor or technical breaches of the law due to carelessness or inadvertence. The new offence envisaged under the Rules makes the new conveyancing accounts a mandatory method of holding conveyancing money. As such, it is crucial to the structure of the new framework and ensures its effectiveness. Plainly, as Mr Lim pointed out, there will be different degrees of culpability in the spectrum of misconduct. For the most egregious cases, prosecution under the Penal Code will be available additionally. The Public Prosecutor will take into consideration the facts and the circumstances of each case in deciding whether to charge a person. That a breach occurred through inadvertence or was de minimis, would be relevant to the exercise of that discretion. The Public Prosecutor is also empowered to compound the offence under the new section 73D(5) for minor and technical breaches of the Rules.

Secondly, Mr Lim asked about the role of the lawyer if he had to be named as a counter-signing party under the proposed rules when the payee is a Category "C" payee. Let me give the House a little background. Under the proposed rules, conveyancing money may be withdrawn from a conveyancing account only with the use of the prescribed payout forms which would identify the types of payees. Payees are divided into categories "A", "B" and "C". Category "A" payees are bodies such as the Commissioner for Stamp Duties, Commissioner of Lands, Comptroller of Income Tax. The lawyer acting for the other party need not counter-sign. Category "B" payees include the seller, buyer, mortgagee, other bodies closely associated or connected to the conveyancing transaction. Here, the counter-signing lawyer need only check if the identity of the payee is correct. Category "C" payees are all other payees, other than those in Categories "A" and "B". Such payees are not unusual in many conveyancing transactions, for example, a vendor might at the same time be purchasing another property with the proceeds of sale and require the proceeds to be paid onward. For this category, the counter-signing lawyer must check if the identity of the payee and the amount to be paid are correct. Understandably, lawyers may have some anxiety regarding counter-signing for Category "C" payees.

The role of the counter-signing lawyer when dealing with Category "C" payees is merely to ascertain the veracity of the seller’s instruction. Thus, he need only be sure that the seller wants to pay that particular Category "C" payee in the amount specified in the payout form. He does not need to enquire into the "why" of the seller’s instruction. Unless the counter-signing lawyer has reason to be suspicious of the statutory declaration or any other supporting documents tendered by the seller, he is not required to question the relationship between the seller and the Category "C" payees or the amount to be paid.

The Law Society will be issuing guidelines to assist counter-signing lawyers in performing this role. Lawyers are also advised to attend one of the many training sessions which the Law Society will be organising together with my Ministry from June, in the run-up to implementation on the 1st of August.

Lastly, Mr Lim also asked who, during the initial period where parties' area of responsibilities are not clearly set out, should bear the additional charges and interest payable during the period of any delay whilst parties seek adjudication. He was concerned that it would not be fair for a party who simply sought clarity through adjudication to be held responsible for the delay.

I have explained earlier about the Law Society's guidelines to assist counter-signing lawyers, and training sessions to educate lawyers in general. After several dialogue sessions with practitioners and the two pilot trials I spoke about earlier, involving more than 110 law firms and more than 700 transactions, we have worked through numerous scenarios which will be distilled into guidance, on websites, publications and so forth.

In the event that there are costs occasioned by a delay on the part of one party, the issue of who is responsible will have to be dealt with by the adjudicator, who will have the power to make orders relating to interests and costs. The Law Society is in the process of forming a panel of adjudicators.

Sir, I thank the two Members for their comments. My Ministry will continue to work with the public and key stakeholders to refine and enhance the new conveyancing processes.

Question put, and agreed to.

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

The House immediately resolved itself into a Committee on the Bill. – [Mr K.Shanmugam].

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

Order for Second Reading read.

4.45 pm

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

Sir, in 2005, my Ministry undertook a comprehensive review of our workplace safety and health (WSH) legislation to improve safety outcomes. The review resulted in the enactment of the Workplace Safety and Health Act which came into force in 2006, replacing the Factories Act. The Act was crafted based on three key principles – reducing risks at source, engendering industry ownership of WSH outcomes, and preventing accidents through higher penalties for poor safety management.

Our WSH statistics indicate that these improvements to our WSH framework have borne fruit. Our workplace fatality rate had declined from 4.9 fatalities per 100,000 workers in 2004 to its lowest level in six years of 2.2 last year, a decrease of more than 55%. We have also seen a similar decrease in the workplace injury rate.

Extension of the WSH Act

When the WSH Bill was first introduced in 2005, we said then that our intention was to extend the legislation to eventually cover all workplaces, rather than only factories as defined by the Factories Act. All workers would then receive the protection they deserve against safety and health risks at the workplace. To give industry time to adjust, we had been extending the coverage of the WSH Act in stages. In 2008, following consultations with the industry, we extended the Act to six additional sectors, including healthcare, hotels and restaurants, and transportation of goods. We are now ready to do more.

Clause 2 of this Bill seeks to extend the coverage of the Act to all remaining workplaces. With this amendment, workplaces in another 14 sectors, ranging from wholesale and retail trade, public administration to administrative and support services, will now be brought under the ambit of the Act. These sectors account for more than 100,000 organisations employing more than 1.6 million workers, or almost 60% of the workforce in Singapore.

We intend to exempt occupiers of domestic premises from the Act, unless the occupier himself is using the premises for a business undertaking.

With the extension, stakeholders in these newly-included workplaces will have a general duty of care to take "reasonably practicable" measures to ensure the safety and health of workers and others who may be affected by their work. The term "reasonably practicable" means that stakeholders need only take preventive measures which are proportionate to the potential impact of the hazards at the workplace. In addition, stakeholders will also need to comply with Regulations under the WSHA that are relevant to their work activities. These include requirements for risk management and incident reporting, which apply to all workplaces covered by the Act. There are also regulations that deal with specific hazards such as excessive noise, confined spaces, the use of hazardous chemicals, and so on, that stakeholders must comply with if their work involves such hazards.

Efforts to reach out to stakeholders

To prepare for the extension of the coverage of the Act, since March 2010, my Ministry and the Workplace Safety and Health Council have stepped up our efforts to educate stakeholders in the new sectors on their roles and responsibilities under the Act, and the measures they can take to raise WSH standards at the workplace. To educate workers and members of the public on protecting themselves from common WSH hazards in the new sectors, we launched an outreach campaign in July 2010. Members may have seen some of the advertisements at our MRT stations or bus stops featuring everyday risks at work such as slips, trips and falls. In November 2010, we also published a guidebook on managing these common hazards and sent this to all the employers in these sectors. To provide more targeted advice and assistance to employers, we had also held several sessions of WSH Clinics over the last eight months, where employers receive free advice from WSH professionals on managing WSH risks at their workplaces. More than 800 employers have sought advice at these clinics. We will continue with these educational efforts, for example, through the National WSH Campaign 2011 to be launched later this month.

Scoping the definition of a factory

When the coverage of the WSH Act, and its predecessor the Factories Act, was limited to workplaces deemed to be "factories", the definition of the term "factory" was deliberately crafted broadly to cover a wider range of workplaces. This broad definition meant that hawker stalls and tailor shops could be considered factories.

With the extension of the coverage of the Act to all workplaces, this broad definition of "factories" is no longer necessary. We will instead redefine "factories" to refer to higher-risk workplaces whose activities present a higher potential for serious accidents so that these workplaces will be subject to more stringent regulation – such as notifying or registering with MOM before commencing operations; and forming a WSH committee. Clause 4 of the Bill defines a "factory" to include five broad categories of work activities that we have identified to be of higher risk, such as building operations and the manufacturing of hazardous substances. The Fourth Schedule lists 19 classes of workplaces falling under these five categories that we deem to be "factories". This revised definition will enable us to focus our efforts on higher risk workplaces such as shipyards, construction sites, manufacturing plants, etc, to achieve greater effectiveness.

Duties of principals in relation to their contractors

Section 14 of the existing Act covers principals who engage contractors for specialised tasks or engage the services of workers from third-party labour suppliers. Some principals are involved in directing the work of the contractors they hire as well as their workers, and they effectively take on the role similar to that of an employer in terms of supervision. For these principals, the Act places a duty on them to ensure the safety and health of these workers. These duties are similar to those of an employer.

However, even if the principal is not involved in directing the work of his contractors, he should still be required to exercise reasonable care to ensure the safety of the workers. Clause 5 of the Bill will require all principals to ensure that any contractor they engage is able to carry out the work safely, whether these contractors work under their direction or not. This duty on principals is not an onerous one. The new section 14A requires principals to take only such measures that are "reasonably practicable", which takes into account the level of knowledge and expertise that the principal could reasonably be expected to possess. To provide stakeholders with some clarity on what such measures would entail, sections 14A(2) and 14A(3) state that such measures would include ascertaining that the contractor and his employees have sufficient experience and training to carry out the work, and that the contractor has conducted a risk assessment on the safety and health risks posed by the work.

For example, a principal who engages a contractor to repair his roof should minimally verify that the contractor and his employees have been trained to work safely at heights, including the proper use of the necessary fall prevention equipment. The principal should also be satisfied that the contractor has conducted a risk assessment to identify the risks involved and the measures to mitigate such risks. A principal who himself can be expected to possess expertise for the work that he has contracted out will be held to a higher standard. For instance, if the principal is also a contractor himself, he would be expected to assess whether the risk assessment conducted by the contractor is adequate, and, if need be, let the contractor know what risks have not been adequately addressed. As with other stakeholders under the Act, such as employers and occupiers, principals who fail to discharge these duties with due diligence can be subject to the maximum penalties allowed under WSHA, that is, a maximum fine of $200,000 for individuals and $500,000 for businesses.

Duties of persons at work for negligence

For persons at work, clause 6 of this Bill will allow the Ministry to take to task those workers who acted negligently in the workplace and in doing so, endangered the safety and health of themselves or of others. I would like to stress that this is not a new offence per se. The Government can and has taken individuals to task for endangering the safety of themselves or of others at the workplace through a negligent act under the Penal Code. For example, in 2008, a chief engineer of a tanker was convicted and fined $7,000 for a negligent act resulting in two divers being injured. The engineer had neglected to confirm that the diving operations under the propeller had been completed before starting the tanker's engines.

We can already take other stakeholders – such as the employer or occupier – to task for negligence under the WSHA. The proposed amendment merely seeks to make the WSHA more consistent internally, to allow us to take all responsible stakeholders to task for negligence under the same piece of legislation, rather than to rely on the Penal Code for persons at work. The penalties for the new section 15(3A) are aligned to those under section 304A of the Penal Code for causing death by a negligent act and are capped at a fine of $30,000, a jail term of two years or both.

Enhance MOM's powers of investigation

This Bill also seeks to enhance MOM's powers of investigation for diseases contracted as a result of occupational exposures to chemical or biological hazards. Currently, MOM only has the power to investigate incidences of diseases that are specified in the Third Schedule of the Act. The Schedule lists only diseases that have a well-established link to work, such as hydrogen sulphide poisoning and occupational skin diseases. However, we need to ensure that MOM can investigate and take action against any lapses at the workplace that could expose workers to a chemical or biological hazard and could adversely impact their health, but which may not have a direct link to the diseases specified in the Schedule. Clause 3(b) therefore expands the definition of an "occupational disease" (OD) under the Act, to include not only diseases listed under the Schedule of ODs, but also diseases resulting from occupational exposures to any chemical or biological agents.

Finally, the Bill also makes some technical amendments, by removing obsolete references to "factory permit(s)", which are no longer used following the Ministry's review in 2008 of the factory registration system. Clauses 3(b), 8 and 11 effect the changes in this regard.

In conclusion, Sir, I would like to thank our tripartite partners, including the industry and professional associations, and the members of the public for their support in our WSH journey to date, and for their valuable feedback and suggestions on these Act amendments. The progress we have made over the past six years would not have been possible without their strong commitment and support. I look forward to working with them on the next leg of our WSH journey, in our efforts to realise our national target of bringing our workplace fatality rate to below 1.8 per 100,000 workers by 2018.

Sir, I beg to move.

Question proposed.

We have also taken this opportunity to clarify the roles and responsibilities of principals and persons at work under the Act.

4.56 pm

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

I think not many Members in this House know of the Spyros industrial accident. It was one of the worst industrial accidents in Singapore's history. But the message that came across very strongly to me was when as a rookie officer in NTUC, I had to handle a number of cases involving the injured workers. It was one month after the accident occurred and I was asked to give advice to a number of the workers who were injured because we wanted to know what options they should pursue – whether they should go under the Workmen's Compensation Act or it would have been better for them to file a claim under common law. And the image that I saw at that point of time was something that will stay with me throughout my life because it was one month after the accident, but you see these workers were still traumatised and in agony because their injuries were so extensive and they were really very confused. They did not know what was going to happen to them, how they were going to proceed with their lives.

Sir, I think this Bill is truly important because we should never in any way compromise the safety of our workers. There should never be any way in which we cut the processes or try to save cost in order to make it cheaper for us to produce but at the same time that will compromise the safety of the workers. Since the Spyros incident, I am really very happy that the Government has put in place many new legislations, processes and policies to make sure that our workplace is a much safer place for workers. Workers go to work to earn a decent living and we owe it to them that they should go back alive and, most importantly, they should go back in one piece.

However, Sir, I have a few clarifications to seek from the Minister. First, this Bill will extend coverage of the Workplace Safety and Health Act to all workplaces. This is a logical move and is consistent with the legislation in many other countries. Although not all workplaces expose employees to the same level of risk, as some are by the nature of their work, such as construction and shipyard, more hazardous. Nevertheless, it is wrong to assume that other workplaces carry no risk at all to workers. This coverage will now make it an obligation for all employers to assess the risks in their organisations and put in place safety measures to protect their workers.

However, as this provision will come into effect soon, I would like to ask the Minister what measures are in place to educate the new employers who are now covered under the Act of their obligations. The Minister has outlined some of the measures undertaken but my own sense is that not many employers are aware that they are now covered by the Act and, in my view, if they are ignorant, how would they be able to comply with the law? Would there, therefore, be a more concerted campaign, for instance, to raise the awareness of the new workplaces that are now covered under this Act on their obligations?

Sir, I would also like to ask the Minister whether he could indicate how many more companies and workers will now come under the Act with this new amendment. Although I support completely this idea of extending the Workplace Safety and Health Act to all workplaces, I still must stress that concerted effort, and targeted and focused action must continue to be placed on those workplaces that are a lot more hazardous, particularly the construction sites and shipyards, because they pose a much greater hazard to workers' lives and limbs.

Second, the new section 14A imposes two new obligations on principals. Principals will now have to make sure that the contractors they engage have the necessary expertise to carry out the work, and have taken adequate safety and health measures in the use of machineries, equipments, plants, articles or processes. What is unclear however is how this provision would apply to sub-contractors. Would the principals also be responsible for ensuring that sub-contractors employed by their contractors comply with the two new duties imposed on them? If the obligation does not extend to the sub-contractors, then we are back to square one because it basically means that the principals could outsource their responsibilities to the contractors and the objective of this amendment would be undermined. So, I would like to ask Minister for his views on that.

Third, which is somewhat related to my second point, the construction sector continues to have the highest number of fatalities. Sixty percent of all work fatalities in 2010 occurred in the construction sector. Fatalities at construction sites made up 44% or about two in five of all deaths across all industries. Two challenges were identified for the poorer performance of the sector – poorly managed sub-contracting work and smaller companies with resource constraints. A third possible cause, which was suggested by the President of the Singapore Institution of Safety Officers, is the more transient nature of the workforce deployed in the construction sector, not so familiar with the safety drills. Could the Minister update this House on the measures taken to address these issues and to improve safety at the construction sector? Also, as SMEs employ a large number of workers, what more could be done to enhance safety standards in these companies?

My next point, Sir, is to ask for Section 15(3A), which Minister just explained, makes workers liable if they are negligent and their negligence results in accidents or injuries at work. However, I wish to emphasise that before workers are penalised for acts of negligence, it must be ascertained that they had already been given proper training and equipped with the proper tools and equipment to do their work. Otherwise, it would be unfair to penalise workers for negligence if they were not properly trained or equipped or advised on the safe processes at work that they have to comply with.

Finally, this Bill will not involve the Government in any extra financial expenditure. I am somewhat concerned with this because the MOM's Safety and Health Department's scope of work would certainly increase as the Act now covers all the workplaces, yet Ministry feels that it is not necessary to have additional resources or staff, in order to monitor and ensure compliance with this Act. I would like to ask the Minister for his comment whether existing resources are sufficient to ensure the effective implementation of these new amendments. Even as the Ministry continues to ensure the more hazardous workplaces like shipyards and construction sites continue to improve their standards of safety to protect workers, they are now expanding their scope into covering other areas. They obviously need a lot more employees and staff to do the monitoring and enforcement work.

In conclusion, Sir, I also support the wider coverage of occupational diseases under this amendment. Safety and health measures will now apply not only to those specific diseases listed in the schedule but also to any other disease that a worker contracts because of his exposure to any chemical or biological agents. The kinds of chemicals that are used in workplaces now have expanded considerably and some of them are really toxic. We need to ensure that the Act effectively covers workers when they are exposed to such hazardous chemicals. Having a list of occupational diseases alone is not sufficient. It is important that we have a "catch-all" provision to make sure that as new chemicals develop, workers continue to be protected under the Act.

On this note, Sir, I support the Bill.

5.05 pm

Deputy Speaker, Sir, I am pleased today to see the full expansion of the Workplace Health and Safety (WHS) Act coverage finally coming into reality. It is indeed a watershed move in our WHS legislative regime and a realisation of our tripartite partners' aim to better protect our workers from accidents at all workplaces.

However, there is much work to be done. While the Act will be comprehensive in coverage, what is important is preparedness of the stakeholders to embrace WSH in carrying on their businesses at the ground. Employers and supervisors have to take the lead in creating a safe work environment for their workers and themselves by putting in place safety management systems at work. Every worker must take responsibility for identifying with WHS risks at their workplaces and look out for the safety of their colleagues. After all, workers come to the workplace to work and make profit for the business, so the least employers can do is to ensure that these workers can go back home safe and sound to their families at the end of every workday. We urge all employers to inculcate safety as a value in all their considerations. The sad reality is that when an accident happens, it is the worker who is usually the victim, bearing the full brunt of the accident. I would like to remind all employers that ensuring safety at the workplaces is about showing respect to human lives – a basic obligation and value that all employers must fulfill.

In 2006, when the WSH Act first came into operation, the NTUC formed the Town Council Cleaning and Custodial Services Sectoral Workgroup and working in close collaboration with the Workplace Safety and Health (WSH) Council, to look into workplace safety and health issues of workers in that sector. This was in early anticipation of the eventual coverage of the Act. The Sectoral Workgroup, which included representatives from managing agents in Town Councils and their contractors, worked hard to develop safe work procedures on the core work processes pertaining to Town Council cleaning and custodial services. As the core procedures on general cleaning, horticulture and pest control works were progressively developed by the workgroup, they were shared with industry players and feedback for improvement were gathered at various platforms. I am happy to say that the WSH Council, through the efforts of this workgroup, was eventually able to publish the WSH Guidelines for Cleaning and Custodial Services in mid-2009. I understand that to-date, 70% of contractors in this sector have attained Third level Biz-Safe with MOM.

By September 2011, the WSH Act will cover all other workplaces, including the retail, education, entertainment and services sectors, as suggested by these amendments. These diverse sectors employ about 46% of our workforce. I am concerned that a majority of these businesses and workforce are ill-prepared. I would like to urge the respective business associations and parties of these sectors: the retail, the education, the entertainment, the services industry; to take up the ownership of preparing your industry well, perhaps taking up the challenge like what the cleaning and custodial services sector did. And of course, MOM should facilitate these industries to do so. NTUC will do its part to reach out to the various sectors through its union channels to encourage all employers to come onboard. The Government must seriously look into providing more resources and incentives or any other avenues to these companies, particularly the SMEs, to help them in a group to improve WSH. We know that a safer working environment will not happen overnight. Changing the law is only the beginning. I look forward to seeing the various stakeholders, particularly the employers, taking up this mission of making our workplaces safer, and achieve the vision of our labour movement that every worker goes home safe and sound at the end of every workday.

(In Mandarin): [For vernacular speech, please refer to Appendix A*.] Mr Deputy Speaker, for the past 10 years, our tripartite partners have worked very hard and introduced many successful models to ensure workplace safety. As a labour MP, I am pleased to see that the tripartite cooperation has also led to this amendment which will take effect from 1st September this year. The Act will cover all the workplaces and our workers will be given comprehensive safety protection.

However, I must remind employers that this is only a good beginning. I hope that all the employers will make all the necessary preparation even before 1st September to provide a safer and better working environment for their workers. I also urge the Ministry of Manpower to provide more assistance to companies, especially SMEs. I understand that many employers, especially those in the services sector, do not even fully understand this Bill, let alone fulfil their duties and responsibilities under this Bill to protect the interests of the workers. I think, in this respect, we need to do more.

The Ministry of Manpower should give more support to the employers in this area. As we all know, when accidents happen, the true grave consequences are not the regret of the employer or his economic loss; what really matters is the permanent physical and emotional damage to the victim. I would, therefore, like to remind all the employers of their responsibilities to step up workplace safety measures so that our workers can go back to their loved ones safely after a day's work.

Sir, I support this Bill.

*Cols. 4859-4860.

5.11 pm

Deputy Speaker, adults spend a considerable portion of their daily waking hours at work. Thus it is important to ensure the environment is as safe and conducive as possible. Staff well-being is important to organisations. Loss of manpower hours, medical leave and inability to function optimally due to illnesses and injuries, can have a negative impact on companies as well as their productivity.

The workplace has been established as one of the priority settings for health promotion in the 21st century, according to World Health Organization. The workplace directly influences physical, psychological, economic and social well being of workers which in turn affect the health of their families, communities and eventually, society. A health promoting workplace now becomes a pre-requisite for sustainable social and economic development.

Sir, in the last 20 years as a medical practitioner, I have encountered and handled many cases related to work and industry injuries. Some lives – young lives – have been lost. Indeed, it has devastating effects on the family.

It is timely for us to debate this Bill. I support the regulations and stipulations in this Bill which has been expanded to cover all workplaces by September 2011. It helps to emphasise the greater responsibilities of all stakeholders involved. We must ensure we reduce all reckless behaviour and negligence to the lowest possible level attainable.

Singapore's workplace fatality rate has dropped significantly from 4.9 per 100,000 in 2004, to 2.8 per 100,000 in 2008. MOM has set a target for this to be reduced to 1.8 per 100,000 by 2018. I am highly supportive of this but it requires a lot of mindset change by both employers and employees to achieve this. Workplace safety can never be taken for granted. With Singapore’s effort to keep employees at work till a ripe old age and the passing of the Re-employment Act recently, it thus becomes crucial to ensure our workplaces are safe, even for the seniors and elderly employees. Besides this, the Workplace Safety and Health Fund of $70 million has also been set up. This is supposed to be used to assist companies to develop their safety culture and safe practices. Can I ask the Minister what types of projects and activities can this fund be utilised for? Will this fund be available only for Singapore companies based here or can it be tapped by Singapore companies that are also based overseas?

Can I also clarify the following:

Are there regular assessments done by MOM or related officers at work premises to ensure compliance with guidelines? Are some higher risk work places monitored more closely and, if so, how frequently?

Are all workplaces required to have at least minimal first-aid equipment and trained staff onboard all the time?

If in the course of starting a new job, after several weeks or months, an employee is found to have developed an acute occupation disease – one of those listed in the list or a related one – understandably, he would have to be terminated from that job. How much of the acute and subsequent care cost will be taken care of, by the employer or MOM? Does MOM have any specific mechanism to assist these people scout for a new job?

Leading up to the September 2011 deadline, MOM is planning some roadshows, in particular, targeting the newly affected sectors. I support this publicity and creation of greater awareness. Can I ask if these programmes will be done in several languages to target the specific industries that we want to?

Finally, can I ask if MOM will be working closely with MOH? MOH is also actively involved in the promotion of workplace health. MOH has started the Workplace Health Promotion Grant and programmes and all these are indeed in alignment with MOM's objectives as well.

Sir, with that, I support this amendment Bill.

Sir, let me first thank Members who have spoken in support of the Bill. As Mdm Halimah Yacob, Mr Yeo Guat Kwang and Assoc. Prof. Fatimah Lateef have pointed out, the extension of the WSH Act to cover all workplaces is a significant and timely move to ensure the safety and health of our workers. Let me now address some of the specific queries raised by Members.

Mdm Halimah asked about outreach efforts to educate stakeholders in the new sectors. I agree it is very important for us to ensure that employers and workers are aware of their obligations before the amendments take effect. I had earlier outlined the efforts of my Ministry and the WSH Council in this regard.

As the new sectors account for more than half of the workforce, we started our outreach and education efforts early – slightly more than a year ago – including dialogue sessions with industry associations and the WSH Clinics. We also used the 2010 National WSH Campaign as a platform to reach out to employers and workers.

I would also like to assure Assoc. Prof. Fatimah Lateef that our WSH educational efforts and resources can be readily understood by those who come from a variety of backgrounds. For instance, our Workers' Safety Handbook for Work at Heights adopts a pictorial format and is available in English, Mandarin, Tamil and Bengali. The roadshows for the new sectors on the extension of the Act will include sessions targeting our heartland retailers. These sessions will be conducted in both English and Mandarin. In addition to the roadshows, we will be rolling out a series of WSH radio talkshows in the four national languages later this month. MOM and the WSH Council also work closely with the Ministry of Health (MOH) and the Health Promotion Board (HPB) on workplace health promotion. For example, we are working with HPB to draft a Code of Practice providing workplaces with practical guidance on implementing inhouse promotional programmes on safety and health.

Assoc. Prof. Fatimah Lateef also asked about the use of the WSH 2018 Fund, which MOM launched last year. The Fund provides support on four fronts: helping companies build a strong WSH culture; helping SMEs build their WSH capabilities; tackling WSH challenges specific to the construction and marine sectors; and building new national capabilities such as the WSH Institute. The $70 million Fund supports a mix of direct funding initiatives and national programmes. For example, the Risk Management Assistance Fund (RMAF) assists SMEs through defraying the costs of building in-house risk management capabilities.

Mr Yeo Guat Kwang asked for more help for SMEs. We recently topped up the RMAF with another $11 million to help more SMEs, including those in the new sectors. We have also allocated some $8 million to help companies build a strong and progressive WSH culture.

Assoc. Prof. Fatimah Lateef further asked whether Singapore companies with branches overseas can also tap on these funding. Direct funding initiatives are meant for workplaces and workers in Singapore. However, I am sure the WSH capabilities that companies develop here will also benefit their operations overseas.

To respond to Assoc. Prof. Fatimah Lateef's query, the WSH (First Aid) Regulations will apply to all workplaces from September 2011. Currently, the Regulations only apply to factories and other specific workplaces such as laboratories. We are reviewing the requirements under the Regulations for different types of workplaces. Under the proposed amendments to the Regulations, all workplaces will minimally need to provide some first-aid equipment, such as first-aid boxes. Workplaces with more than 25 workers will need to have trained first-aiders.

To ensure that stakeholders comply with their duties under the WSHA, MOM conducts regular inspections of workplaces. We have adopted a risk-based enforcement approach where higher risk workplaces are inspected more frequently. These include workplaces such as construction sites, which, as Mdm Halimah has noted, accounted for close to 60% of fatalities in 2010. Last year, MOM carried out close to 6,000 inspections. Approximately 60% of the inspections were for the construction sector, focusing on issues such as work at height and crane safety. The WSH Council has also formed industry-led taskforces to look into hazardous work activities that are common in the construction sector.

We recognise that riskier sectors, such as marine and construction, employ large numbers of transient foreign workers. To ensure that these workers are equipped to work safely, we require workers in the construction, marine and metal-working industries to attend and pass a safety orientation course before starting work. Workers who perform certain tasks such as scaffolding work and lifting operations must also be trained and certified before performing such tasks. Contractors have also leveraged on their daily toolbox briefings to regularly remind their workers of the WSH risks and measures that they need to keep in mind when working.

To help SMEs in the construction sector, apart from tapping on the RMAF to help build their risk management capabilities, they can also tap on the Safety Compliance Assistance Visits initiated by the Work at Height Taskforce. Under this programme, WSH professionals visit small construction worksites to provide them with specific advice on WSH management.

The proposed amendments to section 14 of the Act, to clarify the duties of principals, will also help improve ownership of safety outcomes in the construction sector, where sub-contracting arrangements are common. By requiring all principals – whether or not they direct the work of their contractors – to ensure that the contractors they hire have the necessary expertise and have taken adequate safety and health measures, only the right contractors with the proper safety management processes in place will be given the job.

To answer Mdm Halimah's query, the principal's duty under the new section 14A will apply only to the contractors he hires directly, and not to sub-contractors hired by his contractors. It may not be reasonable or practical to hold the principal responsible for all the sub-contractors. Instead, each contractor will be held responsible for the sub-contractors he engages. We believe that the proposed amendment is sufficient and yet practical for achieving our objective of improving ownership of safety outcomes in the sub-contracting process. It will effectively cover all sub-contractors in the entire construction chain, as the persons who hire them will be held responsible for ensuring their ability to carry out the work safely.

Mdm Halimah asked about the Ministry's resources to cater to the extended coverage of the Act. As I mentioned earlier, our efforts to prepare stakeholders for the extension of the Act started more than a year ago, with various outreach and capability building initiatives. These will continue in the months ahead. When the Act is extended to cover all workplaces in September 2011, my Ministry will allocate additional resources to conduct inspections of workplaces in the new sectors. We have set aside adequate resources within our existing budget for these activities.

Mdm Halimah also asked about penalties under section 15(3)A. This is not a new power. But I can assure Mdm Halimah that we will take into account all relevant circumstances of the negligent act if we do take action against the workers.

Sir, as Mr Yeo Guat Kwang has pointed out, to ensure that the extension of the WSH Act achieves our objective of providing all workers with a safe and healthy workplace, all stakeholders – including employers, business associations, workers, unions – must play their part. Putting in place a regulatory framework that is relevant and responsive to the needs of stakeholders is only the first step. I am heartened by NTUC's strong support and commitment to help reach out to the various sectors to raise their WSH standards. On MOM's part, we will continue to work closely with the WSH Council, unions and employers to enhance the effectiveness of our initiatives and programmes, so that every worker can go home safe and sound at the end of every workday.

Question put, and agreed to.

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

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

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

Mr Deputy Speaker, Sir, I beg to move,

"That this Parliament, in accordance with section 4 of the Asian Development Bank Act (Chapter 15), resolves that the Minister for Finance be authorised to increase, on behalf of the Government, the total subscription of Singapore to the authorised capital stock of the Asian Development Bank by a sum not exceeding two hundred and ninety million and four hundred thousand United States dollars."

Sir, the Board of Governors of the Asian Development Bank has adopted a Resolution to increase the capital stock of the Bank by 200%. This is the fifth general increase in the Bank's capital stock. The last increase was in 1995 by 100%.

At present, Singapore's subscription to the authorised capital of the Asian Development Bank totals 12,040 shares. Under the proposed increase, we have been allotted a further 24,080 shares amounting to US$290.4 million. Parliament is requested to authorise the Government to increase the total subscription of Singapore to the allotted amount. Four percent of this amount would be paid-in as capital contribution of US$11.6 million, or US$2.32 million annually over the next five years.

As of 25th March 2011, 60 out of 67 member countries have subscribed to the capital increase. Subscribing to the capital increase will reflect Singapore's continued support for ADB's efforts to help developing countries in the region. Singapore-based companies would also benefit from partnering ADB in projects such as those related to public governance, economic development and urban planning.

Sir, I beg to move.

Question put, and agreed to.

Resolved,

"That this Parliament, in accordance with section 4 of the Asian Development Bank Act (Chapter 15), resolves that the Minister for Finance be authorised to increase, on behalf of the Government, the total subscription of Singapore to the authorised capital stock of the Asian Development Bank by a sum not exceeding two hundred and ninety million and four hundred thousand United States dollars."

Resolved, "That Parliament do now adjourn to a date to be fixed." – [Mr Mah Bow Tan].

Adjourned accordingly at Half-past Five o'clock pm to a date to be fixed.

asked the Prime Minister whether polling agents and counting agents for the General Elections are subject to age or other eligibility criteria besides the disqualifications mentioned in section 83 of the Parliamentary Elections Act.

Polling agents and counting agents for the parliamentary elections are not subject to any other eligibility criteria other than the disqualifications stated in section 83 of the Parliamentary Elections Act.

asked the Minister for National Development to date, how many HDB flat owners are not covered by the Home Protection Scheme (HPS) and, of that, what percentage is due to their inability to pay the outstanding premiums which caused the HPS to lapse.

The Home Protection Scheme (HPS) is a mortgage-reducing insurance scheme which protects HDB households against the loss of their flats should the breadwinner pass away or become incapacitated before the home loan is fully paid up.

HPS is compulsory for all HDB flat owners who are using their CPF savings to service their monthly home instalments for an HDB or bank loan. About 556,000 CPF members currently use their CPF savings to service the loans for their HDB flats. Of these, 88% are covered under HPS. 8.5% are exempted from HPS as they have already purchased similar insurance products. About 2% are not insured under HPS because of medical conditions or other reasons.

A very small percentage of the lessees (1.7%) have seen their HPS lapse due to insufficient funds in the CPF Ordinary Account to pay for the HPS premium. This may be due to a variety of reasons, including loss of employment by the flat lessees. Where appropriate, HDB will work with the relevant social agencies to extend employment assistance and other financial assistance measures to families in financial difficulty.

Section Name: ORAL ANSWERS TO QUESTIONS Title: CHANGES TO NOMINATION DAY PROCEEDINGS Filename : Nomination Day Proceedings MP Name: The Minister for Home Affairs (Mr K Shanmugam) Section Name: ASSENTS TO BILLS PASSED Title: ASSENTS TO BILLS PASSED Filename : Assents to Bills Passed