Hansard, 2012-07-09

Under the provisions of clause 2(d) of Article 46 of the Constitution of the Republic of Singapore, the following Members have been granted permission by the Speaker to be absent from sittings of Parliament (or any Committee of Parliament to which they have been appointed) for the periods stated:

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

15 May 2012

Order. Oath of Allegiance. The hon Member, present to take his seat, will please come forward when his name is called.

The following Member took and subscribed the Oath of Allegiance:

Mr Png Eng Huat (Hougang)

Order. Questions for Oral Answer.

1 Mr Sitoh Yih Pin asked the Minister for Foreign Affairs (a) whether officers in our Kuala Lumpur High Commission had participated in the recent Bersih 3.0 rally; (b) if so, whether these officers had worn yellow shirts to show support to the rally participants; and (c) whether this incident will affect our bilateral relations with Malaysia and, if so, how.

Sir, there have been reports in the Malaysian media and elsewhere that Singaporean diplomats actively participated in Malaysia's Bersih 3.0 rally in April this year. Let me state clearly and unequivocally that that is not so. Our officers from the Singapore High Commission in Kuala Lumpur were present at the rally. But they were there as impartial observers, as were many diplomats from more than 10 other countries. Our officers were doing their duty. They were there as observers. They did not participate in Bersih 3.

0. They did not wear yellow shirts or take any action to affiliate themselves with any political entity. They also avoided Merdeka Square, which had been declared out of bounds by the Malaysian authorities. Singapore does not interfere in any country's domestic politics, just as we expect other countries to refrain from interfering in our own.

Our officers abroad operate under these clear instructions. Our High Commission in Kuala Lumpur is present at a wide range of social, economic and political activities in Malaysia. This is part of their normal professional diplomatic duties like any other Embassy or High Commission. Let me quote Article 3(d) of the 1961 Vienna Convention on Diplomatic Relations, which states that the function of a diplomatic mission comprises, inter alia, "ascertaining by all lawful means conditions and developments in the receiving State, and reporting thereon to the Government of the sending State. The actions of our diplomats and, as far as we know, the actions of diplomats from other countries at Bersih 3.0 were in accordance with the Vienna Convention. So it is regrettable that some elements in the Malaysian media and blogs have chosen to focus only on Singapore and tried to deliberately misrepresent the issue. A Malaysian newspaper commentary the week before acknowledged that foreign diplomats from North America and Europe were at the rally but tried to insinuate that other diplomats were participating "passively" whereas our diplomats were doing otherwise. This was clearly an attempt to twist the facts to suit their baseless claims.

I will emphasise, repeat that our diplomats were there only in pursuance of the normal duties of all diplomats from all countries to observe and report on political developments in their host countries.

Mr Sitoh asked if these allegations will affect our bilateral relations. Singapore-Malaysia ties are strong and broad-based. Our Prime Ministers have a close working relationship as do our other Ministerial counterparts. We also cooperate closely and well at the Foreign Ministry level. I speak with my Malaysian counterpart, Dato' Sri Anifah Aman, on the phone and have a good working relationship with him. The fact that we have managed to resolve challenging bilateral issues, such as the Points Of Agreement on the Malayan Railway Land, says much about what we can do when we work together. We are also cooperating in a number of key areas including improving connectivity and making major investments in each other's countries.

But obviously not everyone may be happy with this good state of our relationship. Dato' Sri Anifah has spoken to our High Commissioner to Malaysia Mr Ong Keng Yong about this matter. I have also spoken with Dato' Sri Anifah twice on this matter. As I have said earlier, Minister Anifah and I have a good personal relationship and we were able to speak frankly. We discussed the matter and I made clear what our diplomats did and did not do. We also agreed that Singapore and Malaysia have every intention of preserving our current positive relationship. We have all worked hard to build up the strong ties that we currently enjoy. Neither of us has an interest in undermining the relationship in any way. We should also not allow any negative elements uncomfortable with the current excellent state of bilateral ties to spoil our relations. I told Minister Anifah that I look forward to continuing to work with him to further strengthen our relationship.

Relations between Singapore and Malaysia have always been bigger than any specific disagreements or points of contention. This is how it has been and this is how we should be moving forward.

Sir, I thank the Minister for his response. With Speaker's permission, I would like to show this photograph [A photograph was circulated to hon Members]. There have been many allegations in the Malaysian media and blogosphere criticising Singapore for interfering in Malaysia's domestic politics at the recent Bersih 3.0 rally. Some online postings have even urged the Malaysian government to cut off the water supply to Singapore, as is shown in this photograph. I would like to seek the Minister's clarification on two related issues. First, in the face of such provocative remarks, how should we respond? Second, some of the articles in the Malaysian media are quite inflammatory. From what I understand, some of these newspapers like Utusan Malaysia are owned by UMNO. Does this show that the Malaysian government is behind these accusations?

Sir, I have seen some of these allegations by certain sections of the Malaysian media. And we have also seen some incendiary comments, mainly from a handful of obscure blogs with very limited circulation, who obviously feel that spreading baseless allegations will give them publicity. There was also, of course, a protest outside our High Commission in KL by Malay rights group Perkasa. They have accused our diplomats of interfering in Malaysia's domestic politics. Some have even accused Singapore of supporting activities to "topple" the Malaysian government. They have come up with various demands for our diplomats to be sent home, and for Singapore to apologise. All these sentiments have been expressed without anyone clearly looking at the facts or bothering with them, because they do not want inconvenient facts to get in the way of their accusations. These actors are clearly seeking to create animosity and distrust.

I cannot profess to understand their logic but these voices seem uncomfortable with the current good state of bilateral relations. Take, for example, the picture that Mr Sitoh found that spoke of cutting off our water supply. This is hostile and aggressive. Unfortunately, it is almost a reflexive action on the part of some elements to use the threat of cutting off water whenever there is any dispute on any issue. They should know that this leads down a very dangerous path.

Fortunately, I can affirm that the Malaysian government does not seem to share the view of these blogs. Some articles also made reference to interfering with our Malay community in Singapore. These articles suggest that the Malay community here can be persuaded to vote in a certain way. It is laughable because we have every confidence in our fellow citizens. These sentiments, which, let me repeat, I do not believe reflect the Malaysian government's views, show a dangerous inclination to inject a racial angle into bilateral relationships, and they show a continuing belief in some quarters that our Malay population can be targeted from the outside. That is a deliberate provocation. But we will not be baited by these negative elements. As I have said before, our ties with Malaysia are very strong. Minister Anifah and I have affirmed this when we spoke again recently. We know that both governments want to preserve this strong relationship and continue to work together bilaterally and regionally. We are happy to continue to work with the Malaysian government going forward.

Mr Speaker, Sir, the Minister has pointed out that diplomats from many other countries attended the Bersih 3.0 rally to observe it, and not only Singapore's envoys. This leads me to my question: should Singapore not take some umbrage that it has been singled out for diplomatic criticism and public castigation with such hostile threats as have been referred to by hon Member Mr Sitoh? At the same time, can I ask Minister, while we value our relations with Malaysia, could it be that such Singapore-bashing might be due to the upcoming elections in Malaysia, and some quarters in Malaysia might be using this as a way to get some political mileage for themselves in Malaysia?

Minister has also mentioned the Vienna Convention. Indeed, it is accepted practice for envoys to observe and monitor political developments in their host countries to send back reports to their governments. Can I ask the Minister would he agree that given the importance of Malaysia to Singapore as our closest neighbour, it would have been remiss of our envoys in KL had they not observed the political rallies in Malaysia so as to be able to send back reliable and carefully nuanced reports to the Government, instead of relying on second hand and potentially biased reports from second hand sources?

Mr Speaker, I understand that there are three questions: whether we should take umbrage, what may be behind the Singapore-bashing, and also were our diplomats' actions within the Vienna Convention and were they doing their duty.

As to the first question whether we should take umbrage on the Singapore-bashing, I think we answer at two levels. One, between government to government. Government to government, Minister Anifah spoke with our High Commissioner and I then spoke with him twice, and I think it is important that we have a frank exchange of views. I have explained to him in no uncertain terms, in very clear terms, what our diplomats did do and what they did not do. And I think it is best, and I have made clear in Parliament today, as have Ministry's statements earlier, that our diplomats behaved within the four corners, four square corners, of the law, international law. They did not wear yellow, they did not participate, they are under strict instructions in Malaysia as elsewhere to be strictly neutral. Our diplomats do not stray beyond that. I have made that clear. At the government-to-government level, we need to take this in a rationale, logical way and explain it directly.

Then there is a second level where you have seen what Perkasa has done, and you have seen what the media and the blogs have been saying, and I think we have to give the appropriate importance that these statements deserve and watch. And we need not believe that these are necessarily motivated by the Malaysian government: we have no reason to believe that. And I think we should not let that affect the bilateral relationship. That is the proper way for diplomacy to proceed.

The second question on what is behind the Singapore-bashing and whether it has got something to do with the General Elections that are coming up, if it had been done for political mileage – I think it does not do well for me as Minister for Foreign Affairs to publicly speculate on these reasons. I think the best is for me to take it directly and explain what we did do and what we did not do. And we are comfortable and confident that our diplomats acted well within the bounds of the law.

On the third question, Vienna Convention - what our diplomats did, as I said in my answer to Mr Sitoh, fall within the Vienna Convention. It is the duty of our diplomats to observe and report back. The Member referred to nuanced reports. In fact, they would be remiss in their duty if they did not observe and report back. But they did not go to Merdeka Square. They did not participate. They observed and they reported back, and that is indeed what they are expected to do. And diplomats from several other countries were present doing, I believe, the very same thing.

2 Mr Chen Show Mao asked the Prime Minister (a) what is the rationale for the residency requirement for overseas Singaporeans to have resided in Singapore for not less than 30 days during the three years immediately before a general election to be eligible as overseas voters; and (b) what measures are in place or will be taken to remind and assist overseas Singaporeans to register and vote, and whether the Ministry will consider (i) increasing the number of nine overseas voting centres to be nearer the number of our diplomatic missions abroad or (ii) permitting online registration and voting by overseas voters.

Mr Speaker, Sir, the provisions for overseas voting in our election law were first introduced in 2001. Prior to that, only Singapore citizens above the age of 21 who were ordinarily resident in Singapore as on the cut-off date for the registers of electors were entitled to have their names entered or retained in the registers of electors and were thus eligible to vote.

To allow overseas Singaporeans to be registered to vote, the definition of "ordinarily resident" in the Parliamentary Elections Act was expanded to deem overseas Singaporeans to be ordinarily resident in Singapore if they meet the minimum residency period. This was first done in 2001. This residency period is used to determine whether an overseas Singaporean can be deemed to be "ordinarily resident" in Singapore, thereby qualifying him to be registered as an overseas elector.

The residency requirement, when the law was first enacted in 2001, was that the person must have resided in Singapore for a cumulative period of two years within the period of five years, that is, two years out of the last five years, immediately preceding the registers of electors' cut-off date. This was later changed in August 2008, and the current residency requirement is "30 days out of the last three years", instead of the earlier "two years out of the last five years", or, prior to 2001, when overseas voting was not allowed at all.

The residency requirement, together with the need for an overseas Singaporean to maintain a local address with ICA for his name to be entered into a register of electors, will ensure that eligibility for overseas voting is extended to only those Singaporeans who maintain links to Singapore.

By changing the residency requirement to 30 days out of the last three years, all that an overseas Singaporean needs to do is to come home for, say, 10 days a year to visit his family and friends. In this way, they remain engaged in our domestic affairs and do not lose the connection with their homeland. This will help them to make an informed choice when they cast their votes.

The Elections Department has put in place a number of channels to draw voters' attention to the overseas voting exercise, including how to register as overseas electors. Besides publicising such information on its own website and the websites of the Ministry of Foreign Affairs and the Overseas Singaporean Unit, the Elections Department also advertised in selected major overseas newspapers and distributed brochures to overseas Singaporeans through our overseas missions and at events organised by the Overseas Singaporean Unit. There were web banner advertisements at the Elections Department website, and at leading commercial websites which are frequently visited by overseas Singaporeans, such as AsiaOne, Channel NewsAsia and Lianhe Zaobao. In addition, emails were sent to overseas Singaporeans whose names were on the e-Registers of the Ministry of Foreign Affairs and Overseas Singaporean Unit, as well as to previously registered overseas electors whose registration had expired when the registers of electors were revised, to remind them to register or re-register as overseas electors.

After the Writ of Election is issued, poll letters are sent to overseas electors to their overseas addresses and e-mail addresses. Poll cards are also sent to their Singapore addresses, to allow them to vote at a local polling station if they are back in Singapore on polling day. They may also print out their poll letter online by logging in to Elections Department's e-service.

While we try to have more overseas polling stations to allow more Singaporeans to vote overseas, the selection of a city for overseas polling must take into account several factors. First, there should be a significant number of Singaporeans living in the city and country. Second, the city must have Singapore Government-managed facilities which enable the officials to exercise operational command and control to ensure that the voting process is carried out in a proper and orderly manner, bearing in mind that it is not Singapore. Third, in order to ensure that we are able to optimise our limited resources, the city or country should not be so nearby that Singaporeans can travel back to Singapore to vote on polling day with relative ease.

Based on these considerations, the cities where we can site overseas polling stations are those where we have consulates or missions with sufficient mission staff to manage the overseas polls. There are nine cities where overseas polling stations can be set up in our missions. We will regularly review the cities where more overseas polling stations can be set up.

Online registration as overseas electors is available. Eligible voters who use their SingPass to authenticate their identity for the online service do not need to send in the completed and signed application form. They may also apply online to change their allotted overseas polling station or cancel their registration subsequently should they leave the city or country where they first registered as overseas voters.

The Elections Department has studied other methods of voting, including online voting. However, the Internet is a domain vulnerable to reliability, authentication and security risks. These include hacking and denial of service attacks. There are also issues of identity authentication and voting secrecy, thus, making online voting susceptible to electoral fraud. In addition, auditing the voting results in the event of a petition to the Election Judge is more challenging and potentially problematic.

I thank Deputy Prime Minister for his answers, and it is heartening to know of all these different measures that have been taken to assist and to remind overseas Singaporeans to discharge their responsibilities in voting and to exercise their right in voting. I hope the Government will continue to study ways to help overseas Singaporeans vote in our elections.

Mr Chen, do you have a supplementary question?

I hope that the Government will continue in its efforts in this area.

Mr Chen, I assume you do not have a supplementary question. Next question, please.

I just want to point out that, given all the considerations that Deputy Prime Minister has enumerated, I think there is still some way to go to get overseas Singaporeans fully involved in our voting.

Mr Chen, I will have to interrupt you, but this is an opportunity for a supplementary question, not a speech. So, if you have a supplementary question, please ask it. If you do not, please move on to the next question.

I will move on – Question No 3, please.

3 Mr Chen Show Mao asked the Prime Minister (a) how many Singaporeans were entitled to vote in each of the 2001, 2006 and 2011 General Elections; (b) of these voters, how many were registered to vote in each case; (c) how many voters were removed from the register of electors following the 2001, 2006 and 2011 General Elections respectively; (d) how many voters were restored to the registers of electors before the 2001, 2006 and 2011 General Elections respectively; and (e) for each of the 2001, 2006 and 2011 General Elections, what is the demographic breakdown of voters who were removed from the register of electors, by (i) age (ii) gender (iii) ethnic group and (iv) type of residence.

4 Mr Chen Show Mao asked the Prime Minister (a) what is the rationale for removing non-voters from the register of electors when voting is compulsory for all eligible citizens; (b) whether the $50 penalty imposed to restore a name to the register of electors without valid reasons for non-voting can be waived for low-income Singaporeans; and (c) what measures are in place or will be taken to remind and assist citizens to restore their names to the registers of electors; and (d) whether the Ministry will consider changing the laws or regulations so that a voter's name is not removed from the register of electors even if a penalty is imposed for not voting.

Mr Speaker, Sir, may I have your permission to take Question Nos 3 and 4 together?

Yes, please.

Before starting, I would like to thank Mr Chen for agreeing with me. Under our election laws, persons who are eligible to vote will have their names entered or retained in the registers of electors automatically when the registers are prepared, revised or updated. There is no need for individual persons to register to vote, except for the registration of overseas electors. The registers of electors in operation are conclusive evidence that determines whether a person is eligible to vote. Persons whose names are found in the registers of electors must vote.

Voting is compulsory as it is as much a fundamental right of citizenship as it is a civic responsibility to be exercised by citizens to choose and elect their leaders in a democracy. Hence, those who do not turn up to vote – I will refer to them as "non-voters" for convenience – have their names expunged from the registers after the election.

However, if such a non-voter wishes to restore his name to the registers of electors, so that he can vote at the next election, he can freely apply to do so. This may be done at any time, except during the election period. His name will be restored as long as he can provide a valid reason for not voting. If he has no valid reason, his name will still be restored but he will have to pay $50 for his name to be restored. Of course, he may also choose not to apply for his name to be restored and, in this case, there is no imposition of any financial penalty. This approach is a practical and balanced one because, while voting is compulsory in the sense that you are required to vote if your name is in the registers of electors as an eligible voter, we really cannot compel anyone to vote if he chooses not to fulfil his responsibility. Nevertheless, the right for him to vote remains as he can apply to have his name restored to the registers of electors. This system has been working well and there is no need for any change.

Although non-voters have to provide a reason for not voting when applying to restore their names, a broad spectrum of reasons has been accepted as valid to cater to many situations. These include studying overseas, working overseas, on holiday overseas, on medical leave, hospitalised, bedridden, mental incapacity and so on. As such, the majority of the non-voters have not had to pay the penalty to have their names restored. Thus far, the Elections Department has not received any request for reinstatement to the electoral registers without financial penalty which have cited low income as the reason for not voting. The Elections Department will consider any such application on its merits, on a case-by-case basis.

We undertake several measures to remind people to vote and to restore their names in the registers of electors if they have failed to vote. After every election when the names of electors who failed to vote are expunged from the registers of electors, the Elections Department will send letters to inform them that they may apply to restore their names if they wish to do so. In addition to sending such letters to those who did not vote at the last election, similar letters are also sent to those who did not vote in previous elections.

In between elections, the Elections Department also sends out such letters to the non-voters every time the registers of electors are revised. After the 2011 General Election, 147,000 letters were sent to non-voters from that election within a short period of two months, so that those who wish to vote in the 2011 Presidential Election can get their names restored to the registers of electors in time for the election.

Application for non-voters to restore their names to the registers is also made simple and can be done in several ways. Upon receiving the letter from the Elections Department, non-voters may apply by filling in the relevant details in the letter and simply mailing it back to the Department. They may apply in person at any of the community centres or clubs, or at the office of the Elections Department. They may also make their application online via the Elections Department website.

Before the 2001 General Election, 30,317 names of non-voters were restored to the registers of electors. For the 2001 General Election, there were 2,036,923 names in the registers of electors for all constituencies when the writ of election was issued on 18 October 2001, and those were the electors who were eligible to vote in that election. Following the 2001 General Election, 36,403 names of non-voters were expunged from the registers of electors.

Before the 2006 General Election, 25,508 names of non-voters were restored to the registers of electors. For the 2006 General Election, there were 2,158,704 names in the registers of electors for all constituencies when the writ of election was issued on 20 April 2006, and these were the electors who were eligible to vote in that election. Following the 2006 General Election, 72,881 names of non-voters were expunged from the registers of electors.

Before the 2011 General Election, 60,086 names of non-voters were restored to the registers of electors. For the 2011 General Election, there were 2,350,873 names in the registers of electors for all constituencies when the writ of election was issued on 19 April 2011, and those were the electors who were eligible to vote in that election. Following the 2011 General Election, 150,729 names of non-voters were expunged from the registers of electors.

The lists of non-voters have been compiled after every election by simply capturing the names and NRIC numbers of voters who did not turn up at the polling stations to vote on Polling Day. The Elections Department does not maintain detailed particulars of the non-voters for profile analysis as such information is not essential for the preparation of the non-voters' lists.

Sir, I would like to thank the Deputy Prime Minister for the numbers he gave of voters who were eligible to vote in these different elections. I guess my question is related to the number of Singaporeans who are entitled to have their names included in the registers of electors, meaning Singaporeans over the age of 21 who are ordinarily resident in Singapore, because there is a number that is not necessarily the same as the number of eligible voters whose names appear on the register.

The reason I asked this is because in my visits to constituents both before and after the elections, questions were put to me about the election procedures that made me worried that some Singaporeans may have fallen off the radar screen because they did not vote in the past, because as the Deputy Prime Minister explained right now, if you do not vote in an election, your name will be removed from the registers of electors and you will not be eligible to vote unless you take action to restore your name.

Mr Chen, can you come to the question, please?

The question is, what are the numbers of Singaporeans entitled to have their names included in the register of voters for each of the three General Elections I asked about.

Mr Speaker, Sir, I do not entirely understand Mr Chen's question because he asked how many Singaporeans were entitled to vote in each of the 2001, 2006 and 2011 General Elections, and I have provided him the numbers for the Singaporeans who were entitled to vote. Singaporeans who are entitled to vote are those who are on the electoral register and if there are Singaporeans whose names are not on the electoral register, they can apply for their names to be on the electoral register at any time.

And the question is, how many Singaporeans are there whose names do not appear in the electoral register. Because once you do not vote, your name is removed from the register. And unless you take action to apply through the Elections Department and provide a valid reason or pay $50, then you are free of this responsibility to vote or put in other way €”

Mr Chen, please allow the Deputy Prime Minister to reply.

€” you lose your right to vote.

Sir, the system in Singapore is different from that in other countries. In other countries, you have to register to vote. In Singapore, if you have a registered address, you will be on the electoral register unless for some reason, as I described previously, you decided not to vote and did not ask your name to be restored. So, if indeed Mr Chen has come across such residents, I would urge him to please inform them to apply to the Elections Department in the many ways which have been described, so that they can be on the electoral register. I would want every Singaporean to be on the electoral register. So, rather than cast aspersions or doubts on the electoral system in Singapore, I would urge him to help us to make sure that every Singaporean possible can be on the electoral register and to let them know if he actually does come across such persons.

Mr Chen, last question, please.

I would be most happy to do that. I am not casting aspersions on anything. I am asking for numbers that tell us how many Singaporeans do not have their names on the electoral register. It should be a simple number to provide because it is a group of Singaporeans that we should encourage and assist to vote in the spirit of an inclusive society, in the spirit of active citizens.

Mr Speaker, Sir, I assume he has asked me a question, so may I respond?

Yes, please.

Mr Speaker, Sir, as I have explained earlier, there is no impediment to anyone who is a Singapore citizen, who wishes to vote, to come forward to have his name on the electoral register, if his name is not there already. In fact, every time the registers of electors are open, one of the things which Singaporeans are encouraged to do is to check the registers of electors to make sure their names are there and if they are not there, to please register. So, I think that is quite comprehensive. I do not have the numbers of those persons whose names may, for some reason or other, not be on the registers of electors. I cannot imagine the numbers are very high. For those who wish to have their names on the registers of electors, they are always free to do so. And as I said, if Mr Chen actually comes across any such persons, please advise them to put their names on the register of electors.

5 Mr Hri Kumar Nair asked the Minister for Law following the observations of the Court of Appeal in AOS v Estate of AOT, Deceased [2012] SGCA 30, whether the Ministry will consider amending the Inheritance (Family Provision) Act to incorporate the "surviving spouse standard" which accords a different approach to the current "reasonable maintenance standard".

The Inheritance (Family Provision) Act empowers the court to make reasonable provisions for the maintenance of a deceased person's dependants or spouse. Mr Kumar refers to this as the "reasonable maintenance standard".

His reference to the "surviving spouse standard" is taken from the amendments made to the UK Inheritance (Family Provision) Act. Those amendments were made following the UK Law Commission's recommendation that the court's powers to order a fair and equitable division of family assets between spouses should be the same, whether the marriage was terminated by death or by divorce.

The amendments thus allow the courts to order, in favour of a surviving spouse, such financial provision as would be reasonable in all the circumstances. What is a reasonable financial provision is not confined by what is required for the surviving spouse's maintenance. Financial provisions for other dependants remained confined by the "reasonable maintenance standard".

In the recent AOS case, the Singapore Court of Appeal held that its powers under our Act are confined to making reasonable financial provision for maintenance. It was not empowered to make financial provision which goes above and beyond what is reasonable for maintaining the deceased's dependant. The Court of Appeal went on to invite Parliament to consider whether to adopt the changes made to the UK Act.

We are studying the Court of Appeal's judgement and whether the law in this area should be changed and we will update the House once we have come to it.

6 Mr Nicholas Fang asked the Minister for Defence whether security checks of personnel entering SAF military camps need to be reviewed in light of the recent incident where a civilian contractor attempted to steal a rifle from a full-time National Serviceman.

Sir, the recent incident mentioned by the Member where a civilian contract worker attempted to snatch a rifle from a full-time National Serviceman, occurred just outside the Pasir Laba camp perimeter in a SAF gazetted training area where access is provided by public roads.

MINDEF's investigations revealed that the cadet put up a struggle with the worker as he attempted to snatch the rifle from him. The rifle was not loaded and no live ammunition was used in that training incident. The worker had momentary possession of the rifle, but the instructors quickly over-powered the worker, re-possessed the rifle and detained the worker for handing over to the Police. The Unit Commander in the Specialist Cadet School (SCS) has reviewed the incident and is satisfied that the cadet had made his best effort under the circumstances to prevent the worker from taking his rifle, and the commanders present had acted appropriately and promptly. Police investigations are currently on-going.

Our records show that such incidents are rare. In fact, there was only one such incident – this incident – in the last 10 years. Even so, the SAF has, after the incident, reviewed its security measures for protection of camps, personnel and equipment and is satisfied that our current protocols are robust and adequate.

The SAF adopts comprehensive security measures for our camps, personnel and equipment, especially of firearms and munitions. Camps deploy stringent perimeter protection and routinely enforce strict security procedures. Security troopers are trained through regular scenario-based exercises to guard our installations. All visitors are subjected to security checks at the gates before entering the camps. In addition, civilian visitors must be escorted by appropriate camp personnel while moving within the camp.

Security measures are also routinely applied when SAF personnel train outside the camps. Prior to the conduct of each SAF training activity, our commanders will survey the training area and take note of potential security and training hazards. Checks are routinely conducted for all soldiers during and at the end of each training exercise to ensure that all equipment and ammunition has been accounted for.

Every soldier knows that he is personally responsible and accountable for his personal weapon wherever he is, in or outside the camps. This is repeatedly drummed into all NSmen, as we know it. Soldiers are reminded to always keep their weapon in their possession if the weapon cannot be secured in an armskote. They are also reminded to keep a look-out for their buddies and their equipment at all times, as they did in this incident.

Thank you, Mr Speaker. Thank you, Minister, for the answer. It is heartening to note that the cadet actually did put up efforts to resist, contrary to some negative aspersions that are being cast in the online media about the ability to protect his own weapon. I have one supplementary question. It pertains to civilian contractors that provide transport services in and out of SAF camps. It has been my own personal experience that transport companies are registered with the SAF or with MINDEF and are then able to bus loads of either full-time NSmen or reservists in and out of SAF camps to ranges for live firing and so on, I also noticed that some of the drivers are foreign nationals. When they go into the camp, they are not actually required to be inspected or to book in because they have a badge from the transport company. What measures are in place to ensure that the transport companies in their hiring procedures have a proper screen and scan of the personnel that they hire to make sure that they do not present a security risk to our camps?

Sir, I do not have enough information about the specific aspects that the Member has brought up. I would be happy to answer them specifically if he files an additional question. But let me just speak in general terms. There are strict procedures in ensuring the security of our key installations in camps. All visitors, including civilian contractors, will be required to submit a form or a photograph ID of himself in exchange for a security pass. Long-term contractors working in sensitive areas must also do likewise with their photographs and clearance from the Military Security Department (MSD), which are prominently displayed in the guardroom, and will also exchange the original work permit card for a civilian contract pass on a daily basis. Contractors are also reminded to stay within the area of their work and at no time should they be roaming through our camps and bases.

7 Assoc Prof Fatimah Lateef asked the Minister for Defence (a) whether there are procedures currently in practice for sending casualties from SAF training sites to a SAF medical centre first before they can be referred to a restructured hospital; (b) if so, what are these procedures; and (c) on average, how far are the SAF medical centres usually located from SAF training sites.

Sir, casualties during the SAF training are evacuated based on procedures reviewed and endorsed by the SAF Emergency Medicine Specialist Advisory Board. This Board comprises senior emergency medicine and trauma surgery specialists from the Government restructured hospitals.

The first priority is to evacuate an injured serviceman to the nearest medical facility that has the appropriate level of care, as time is of the essence in an emergency situation. The nearest medical facility can either be the Emergency Resuscitation Facility (ERF), which is within an SAF medical centre or a restructured hospital's emergency department. There is no requirement that the injured serviceman must be sent to an SAF medical centre in all instances. All the Emergency Resuscitation Facilities in the SAF are equipped to deal with a wide range of medical emergencies. SAF Medical Officers stationed at the ERFs are trained and accredited in advanced clinical resuscitation protocols, including Advanced Cardiac Life Support, Advanced Trauma Life Support and Emergency Airway Management.

In the event that the injured serviceman is sent to an Emergency Resuscitation Facility (ERF), the SAF Medical Officer will assess, stabilise and start advanced treatment or resuscitation of the casualty. Resuscitation procedures will continue enroute to the restructured hospital's emergency department, if further treatment in the hospital is required. Evacuation to the hospital would be via land ambulance or helicopter if it is the faster mode after taking into consideration accessibility to a pick-up point and activation and flight time.

The SAF training areas are concentrated mainly in the western and northern parts of Singapore. These training areas are supported by a network of SAF medical centres. The average distance from a training area to the nearest SAF medical centre is about three to four kilometres.

Can I find out about the activation of the mobile Medical Evacuation Team (MET) which has been publicised recently? How long does it take for them to be activated? Also for heli-lift or air-lift to be done from, say, a site on Pulau Tekong, how long is the estimated time for activation?

Sir, I do not have the answer because it is a specific question but I would be happy to answer the Member if she files a specific question. In overall terms, the Member is quite right. Our emergency medical evacuation follows guidelines put up by the American Heart Association – the so-called chain of survival process, which comprises five key components: early access, buddy aid, basic life support and early defibrillation, advanced resuscitation and then, evacuation for continuing care. I would say that almost all the exercises will have Medics on standby so that their immediate response to an incident is there, upon which if evacuation is activated, then it would be an ambulance from the nearest medical centre. And as I said, medical centres' average distance is about three to four kilometres, so it should not take long. I will also add that in every incident for an inquiry or when we review it, these times are stated. Usually, they are within quick parameters, but the specific numbers, the Member will have to file the question.

8 Dr Lily Neo asked the Minister for Trade and Industry (a) whether the worsening Eurozone debt crisis and woes of the global economies are affecting Singapore and if so, how; and (b) whether there are measures to cushion the repercussions here.

Mr Speaker, Sir, the sovereign debt crisis situation in Europe remains worrying. While the immediate risk of Greece exiting the Eurozone has receded following the formation of a pro-Euro coalition government that supports the bailout programme, concerns over its medium-term fiscal sustainability and ability to stay in the Eurozone persist. In addition, there are uncertainties as to whether Italy and Spain, the third and fourth largest economies in Europe, would require full-scale bailouts. A key challenge would be for Eurozone economies to muster the political will to put together an effective intervention package. Against this backdrop, the Eurozone economies will remain weak, as ongoing fiscal austerity and bank deleveraging continue to dampen domestic demand in the region.

Economic growth momentum has also slowed in the US and China. The pace of recovery in the US labour market has weakened in recent months, weighing down on consumer demand. In China, economic growth has moderated on the back of a sluggish external demand. Nevertheless, the recent accommodative policy measures announced by these countries would provide some support to their growth.

The slowdown in these major economies has affected our exports to some extent. Singapore's total Non-oil Domestic Exports (NODX) growth has slowed from 6.1% in the first quarter of 2012, to 2.5% for the first two months of the second quarter, that is, April and May. In particular, our NODX to the US and EU for the two months in the second quarter contracted compared to a year ago, while the NODX to China grew at a slower pace.

However, there is no immediate need for Government to step in with measures to cushion the economy from the slowdown in external demand. Singapore's labour market remains tight, with healthy employment creation and a low unemployment rate. Our NODX to regional trading partners, such as Indonesia and South Korea, continue to expand at a brisk pace, due to their resilient domestic demand. Supported by these factors, we still expect the Singapore economy to register positive growth of 1% to 3% this year.

Nonetheless, as the situation in Europe and the global economy remains challenging and fluid, the Government will continue to keep a close watch on developments and stands ready to respond when appropriate.

Mr Speaker, Sir, three supplementary questions, please. May I ask the Second Minister whether his Ministry will introduce stimulus package should Singapore's economy turn for the worse and is there an optimal time to do so in order to prevent the deceleration of Singapore's economy?

My second question: may I ask the Second Minister whether the appreciating Singapore dollar has jeopardised the export competitiveness here in view of the global slowdown? Should this be reviewed and what are the other available measures to control imported inflation other than strengthening the Singapore dollar?

My last question: what is the exposure of the public and private sector holdings on Eurozone debt and equities? Should this be a concern?

I thank the Member for her series of questions. Let me take them in turn. Whether there should be a stimulus package and when would be the optimal time to introduce one, well, as I have explained in my answer, Mr Speaker, I think we need to monitor the situation closely and I think Members can draw reference from how the Government responded in the last crisis we faced – the global financial crisis. The timing is a matter of judgement and also what you do is a function of needs of the economy and the businesses at that point in time.

The second question pertains to the appreciating Singapore dollar: whether it can jeopardise exports, and whether there are other measures to control imported inflation. If you look at the exchange rate movement, in general, whilst it has posed some challenges to our businesses, at the same time, our export performance continues to be there, in terms of positive territory. The NODX numbers I cited are evidence of this. It is a question more of where the external demand resides, which markets are growing and it is more a function of that than export competitiveness per se, of our businesses. Having said that, we are embarking and undertaking, on an on-going basis, a range of measures, whether it is to do with productivity enhancements, whether it is to do with other forms of business continual improvement, in order to help our businesses remain competitive vis-a-vis their external counterparts, so that they continue to have their fair share of the market externally.

Finally, the exposure of the private sector and public sector to Eurozone holdings: I do not have specific numbers. I would draw the Member's attention to a question for Written Answer in today's Order Paper, pertaining to our bank's exposure to the Eurozone. In sum, the gist of the answer would be that the exposure of our banks to the Eurozone remains low, whether it is in terms of lending activities or in terms of sources of funds, and at the same time, in terms of economic activity and credit facilities here, while some banks may have curtailed their activities, others have stepped up to the table and we also have seen more Asian banks doing more in our part of the world.

Could the Second Minister elaborate on the appreciating Singapore dollar again? Are there measures other than the strengthening of the Singapore dollar, in order not to jeopardise our export competitiveness and at the same time, how do we control imported inflation?

Mr Speaker, Sir, without going into a lot of details, I would say that the Singapore dollar value relative to other currencies is one component of what impacts the cost of doing business. And that is what ultimately determines the competitiveness of our companies. And as I elaborated earlier, to the previous supplementary question, we need to look at the range of factors, because the Singapore dollar is but one component and it is an instrument that is used for a wider range of macro-economic objectives. So, our efforts through the MTI agencies, such as SPRING, EDB and IE Singapore, have really been to focus on how we can ensure our businesses remain competitive so that they can see through not just this cycle, but beyond, and remain strong firms that can get their fair share of the market, because there are a lot of strong growing markets in the region and we should make sure that our businesses are well-positioned for that.

9 Mr Laurence Lien asked the Acting Minister for Community Development, Youth and Sports (a) why the Commissioner of Charities' governance review of seven large charities in 2008, which included a review of City Harvest Church, did not uncover the lack of compliance with regulations and the code of governance; and (b) whether the governance review methodologies have to be reviewed.

Mr Speaker, Sir, before I commence, may I take this opportunity to remind Members of the House that the case against certain members of the City Harvest Church is now before the Court. We should thus refrain from making comments that may prejudice the court proceedings.

Sir, the Commissioner of Charities (COC) adopts a risk-based approach in regulating the charity sector. It uses different tools for different purposes and situations. Overall, the COC strives to maintain public confidence in the charity sector through improving governance and regulatory compliance while not over-burdening or stifling charities.

Governance review is one of the regulatory tools. Its purpose is to help charities improve their standards of corporate governance, internal controls and regulatory compliance. A governance review is carried out with the cooperation of the charities, which provide the requisite documents for review and demonstrate the extent of their compliance. At the end of a review, a charity will need to develop action plans and implement measures to address the areas of concern highlighted.

A governance review is not meant to be an audit, much less an investigation or formal inquiry to detect and establish fraud or mismanagement. A formal inquiry is more specific, intrusive and in-depth, and may include forensic work or seizure of documents. If mismanagement or misconduct is uncovered in such investigations or inquiries, the COC may take action against the charity or individuals associated with the charity. Any suspected fraud or criminal wrong-doing uncovered will also be reported to the Police which may conduct criminal investigations.

It is not always possible in a governance review to detect signs of mismanagement or fraud, although the findings of a governance review could sometimes be a trigger point for further work by the COC. This is no different from financial audits in the corporate world. The COC also makes use of other sources of information, including feedback, complaints or whistle-blowing to assess if an investigation or a formal inquiry into a charity is necessary.

Sir, Mr Lien asked about the governance reviews on seven large charities conducted by the COC in 2008. The reviews had found then that the seven large charities generally had proper systems and processes in place, and were largely in compliance with the regulatory requirements and the code of governance.

Where there were findings of weaknesses, the COC's office worked with the charities to improve these gaps. The charities adopted most of the recommendations.

I am unable to provide more information on the specific findings on the City Harvest Church in view of the impending court case. It suffices to say that the inquiry on the church initiated in May 2010 was not triggered by the governance review in 2008, but feedback and complaints on possible misuse of church funds received in early 2010.

Governance reviews are still relevant as one of the tools in the regulation of charities by the COC. It helps charities improve their governance standards. We will continue to evolve the methodology over time so that we can better achieve this purpose.

Sir, I would like to thank the Acting Minister for his comprehensive answers. I have two supplementary questions. One, whether the Acting Minister agrees that members of the public as well as members of the charities that are being reviewed in these governance reviews do rely on the clean bills of health that are given by the COC in these reviews? And, two, whether it is better to conduct such reviews either more rigorously or not at all, or even, alternatively, to outsource governance reviews to firms that specialise in audits?

Mr Speaker, Sir, I thank Mr Laurence Lien for the supplementary questions. On the first issue as to whether a governance review would give the respective charities a complete clean bill of health, as I mentioned in my answer just now, a governance review adopts a protocol that is cooperative in nature and it will go to a certain level of depth. It is not always possible for a governance review to uncover everything. For example, in this governance review, it will take a couple of months for them to do the governance review with the respective charities. But for specific investigations, like what has been done for the City Harvest Church, it took us two years of in-depth inquiry to find out many of the things that may not be uncovered in a governance review. So, while we would like a governance review to detect as many signs of trouble as possible before they arise, I must say that because of the limited nature of the governance review, it may not be able to uncover everything altogether. But we will continue to learn from the lessons and evolve the methodology to try and give as much assurance as we can to the public who are contributing funds to the respective charities.

On the second issue about outsourcing the governance review, I would like to inform Members that, in fact, the governance review is not just conducted by the COC. For the governance review in 2008, in fact, some of the accounting firms were involved with us, in partnership, giving us their advice on what were the best practices to be done. So, indeed, we constantly work with some of the accountancy firms to have the best practices in all our governance reviews.

10 Ms Tan Su Shan asked the Prime Minister in light of the current Consumer Price Index at 5.2% and low interest rates resulting in Singaporeans who are nett savers and depositors suffering from savings erosion and yet having to pay more for goods and services, whether the Ministry has any plans to alleviate this situation and to preserve the incentive for Singaporeans to save by, for example, encouraging the issuance of inflation-linked bonds for the retail market.

Mr Speaker, Sir, I am taking this question on behalf of the Deputy Prime Minister and Chairman of the Monetary Authority of Singapore (MAS) and in my capacity as Board member of the MAS.

Ms Tan Su Shan asked about the impact of high inflation and low interest rates on Singaporeans. Singapore's CPI-All Items inflation averaged 5.0% in the first five months of the year. This headline number includes imputed rentals on owner-occupied homes, which do not involve any expenditure by households. It also includes the sharp increase of car prices over the last year, due to the spike in COE prices, which also do not affect the average Singaporean directly. Excluding these two factors, inflation was 3.2% on average in the first five months. Inflation is expected to moderate gradually in the second half of the year. Nevertheless, we recognise that it is uncomfortably high, and it is also higher than bank deposit rates.

The current low interest rates on domestic bank deposits reflect the extremely low or near-zero rates in the US and other advanced economies and very loose global liquidity conditions. Unfortunately, interest rates are expected to stay low for some time, in view of the still fragile recovery in the major economies.

The Government is mindful of the problems such an environment poses to savers and depositors. We are studying what can be done to help Singaporeans get better returns on their savings. Apart from bank deposits, Singaporeans have substantial savings in the CPF. In fact, CPF savings are the main source of retirement funds for low and middle-income Singaporeans. CPF interest rates are currently much higher than bank deposit rates. This is especially so for the first $60,000 of a member's balances, which currently earn an interest rate of 3.5% if it is in the Ordinary Account, and 5% in the Special, Medisave or Retirement accounts. Beyond the first $60,000, the interest rates earned are 2.5% and 4% respectively. On average, over the past 10 years, the interest rate on CPF savings has exceeded inflation.

Ms Tan also asked about retail financial products that would help preserve Singaporeans' willingness to save, in light of sustained inflationary pressures. With the development of our capital markets, more investment alternatives are now available. Corporate bonds, for instance, provide higher returns depending on their risk profiles. Singapore Government Securities are also more readily accessible to retail investors and have been traded on the Singapore Exchange since July last year.

Ms Tan also mentioned inflation-linked bonds, which allow investors to have returns linked directly to inflation. MAS is studying the feasibility of such bonds. However, we have to recognise that market-pricing for an inflation-linked bond under the current very low interest rate environment could mean investors having to pay a large premium for such bonds. Furthermore, investors will suffer a loss should inflation fall below expectations.

For Singaporeans who do not have significant savings, it remains best to keep their investments simple and conservative. Through the MoneySENSE national financial education programme, we seek to help Singaporeans plan for their retirement and invest their savings prudently.

Sir, I thank the Minister of State for his answer. My supplementary question arises from an understanding that there is just a lot more Singapore Dollars in the system than there are Singapore Dollar (Sing Dollar) assets to absorb the Sing Dollar deposits. Hence, my question is: are there plans to relook at the Sing Dollar asset base where depositors can improve their returns? He rightly pointed out that there were more Sing Dollar corporate bonds in existence, and that is something to be applauded. However, that is only for the high end. And my question really comes from what are we doing about the middle to lower income savers who have cash in deposits. Are there ideas taken into consideration to increase, perhaps, the liquidity of such Sing Dollar bonds into smaller tranches?

I thank Ms Tan for the question. As I mentioned earlier, this is an issue which we recognise is a concern that Singaporeans would ask themselves, especially in the current inflationary environment and low-interest rate environment. So, MAS is looking at different ways. One specific idea that we are studying is this idea of an inflation-linked bond. But, as the Member is aware, there are no free lunches. An inflation-linked bond works well when your actual inflation turns out to be higher than expectations, because inflation-linked bonds would have already priced in expectations. So, if the actual inflation turns out to be higher, that works well for the investor. But in the current environment where there is already a high expectation of inflation and if actual inflation turns out to be lower, then, an inflation-linked bond may not be as good as a nominal bond.

There are different ways in which we can think about providing better returns. We are looking at what are the possible options that we can provide and these are all ideas that MAS is studying.

The following question stood in the name of Mr Ong Teng Koon:

To ask the Prime Minister (a) whether there are destabilising capital inflows into Singapore from investors seeking a safe haven; (b) if so, what will be the impact on the Singapore Dollar, Singapore Dollar-denominated assets, Singapore Dollar interest rates and Singapore's real economy; and (c) whether the Ministry has specific plans to address de-stabilising capital inflows.

Question No 11, Sir.

Mr Speaker, Sir, industrialised economies have kept interest rates at historic lows to support their still fragile economic recovery and avoid further escalation in financial market stresses. This has resulted in an increase in capital flows seeking higher returns in Asia and other emerging economies over the period 2010 to around mid-2011. Reflecting Singapore's openness, domestic interest rates have also fallen in tandem with global rates.

Since late 2011, however, investors have become more risk averse due to growing concerns over the debt crisis in Europe and some slowdown in Asia's growth. Capital has moved back into some major markets. Capital inflows to Singapore have thus receded.

Large capital flows are a cause for concern if they disrupt the financial system or fuel asset price inflation. Singapore's financial sector is sound. Our financial markets are deep and have so far been able to intermediate large capital flows. Our foreign exchange and domestic money markets have continued to function in an orderly manner.

The impact of foreign money flows on the property market has been a concern, however, and as Members know, the Government has therefore implemented measures to help moderate excessive investment demand, including from abroad.

We cannot rule out Singapore seeing resurgence in short-term capital inflows, given our strong macroeconomic fundamentals. We will continue to monitor closely the impact of capital inflows on the domestic economy and especially on our asset markets to ensure that these flows do not threaten the stability of the financial system or the property market.

12 Ms Janice Koh asked the Minister for Information, Communications and the Arts in the last five years (a) how much funding has been provided for Public Service Broadcast programmes; (b) how is the funding distributed between MediaCorp and other independent companies; (c) how does MDA measure the effectiveness of its funding and ensure that high-quality standards are met; and (d) what have been the television and online viewership figures for these programmes.

13 Ms Janice Koh asked the Minister for Information, Communications and the Arts what is being done to increase the quality and popularity of original English-language programming in light of decreasing viewership figures for Channel 5.

Sir, with your permission, can I take Question Nos 12 and 13 together?

Yes, please.

Thank you. Sir, Public Service Broadcast (PSB) programmes aim to foster a cohesive and informed society, as well as to celebrate our shared identity. They are provided primarily via MediaCorp's free-to-air TV and radio, and have been introduced on the Internet in recent years. Over the past five years, the Media Development Authority (MDA) has provided about $470 million of support to PSB funding.

Each year, PSB funding caters for over 2,000 hours of local productions. In the past year, 40% of local PSB productions were outsourced to independent production companies, an increase of about 10% since 2005. The remaining 60% were produced in-house by MediaCorp. I would like to emphasise that the requirement for MediaCorp to outsource productions to independent companies is an important part of the PSB framework as it helps to ensure a larger pool of creative ideas for quality PSB programmes and contributes to the development of the local production sector.

I am happy to share that nine in 10 TV viewers in Singapore, or about 4.3 million viewers, have watched locally-produced PSB programmes last year. In addition, PSB content on MediaCorp's XinMSN online portal garnered a total of 4.4 million views in the past year.

The hon Member has also asked how we measure the effectiveness of PSB in delivering high quality programmes. MDA has put in place a performance management framework which seeks to ensure accountability and effectiveness in the use of PSB funds. Allow me, Sir, to elaborate.

First and foremost, feedback is gathered from the public and Government stakeholders to ensure that relevant issues of importance to local viewers are used to guide the development of PSB programmes. This includes consultations with MDA's community-based Programme Advisory Committees. Secondly, surveys are conducted to measure public satisfaction with the quality and engagement value of PSB programmes. Thirdly, viewership ratings for PSB programmes and the reach of platforms carrying PSB content are measured; and lastly, MICA and MDA regularly engage MediaCorp to identify areas of improvement based on stakeholders' feedback and the performance measurement results.

Ms Koh has also raised concerns about Channel 5's decreasing viewership figures. In fact, I am told that as at June this year, Channel 5's average daily prime-time reach has actually increased to 650,000 viewers, up slightly from the past three year's average of 610,000 viewers. Nonetheless, Sir, I believe MediaCorp is not resting on its laurels and is well aware that to sustain and grow its viewership in the longer run, it must continue with efforts to provide quality productions. This is because our local TV channels are facing intense competition for viewership due to media convergence. In particular, Channel 5 has had to contend with the wide availability and volume of English programmes from other markets, such as the US and the UK, which Internet-savvy Singaporeans can easily access.

Sir, I certainly agree with the Member that we need to do more to increase the quality and reach of our local PSB programmes. This was also reiterated by the PSB Review Panel, which had submitted its recommendations during the Budget Debate earlier this year. MICA and MDA have been studying the Panel's recommendations and we will be announcing our implementation plans soon.

But let me also share on the key ongoing efforts to ensure that our audiences are engaged and their public viewing interests are met. In particular, let me highlight some examples on Channel 5.

Channel 5 has increased its local prime-time content hours by 20%, which includes a mix of information, drama, local sports and variety programmes. The House may be familiar with well-received PSB-funded local programmes, such as the legal drama, "The Pupil", which was produced by an independent production company. MediaCorp's in-house productions include the local trivia game show, "We Are Singaporeans", and the football reality series, "First XI". These programmes are also part of MediaCorp's "360 degree" approach to engage viewers through original content on TV, applications on mobile devices, and web-only content on the Internet.

Sir, last but not least, I understand that Channel 5 has also been part of MediaCorp's ramped-up audience engagement strategy, reaching out to younger viewers in particular, through online and social media platforms. In summary, I would like to assure the House that MICA and MDA will continue to work closely with MediaCorp so that it maintains effective platforms for the delivery of quality PSB content. I look forward to sharing further details when we announce the Government's response to the PSB Review Panel's recommendations.

I thank the Minister for his response. I have to declare my interest being on "The Pupil". Sir, I have two supplementary questions. In view of the rising cost of production and the cost of labour, many independent production houses are finding it difficult to produce quality programmes under tight budgets. Does MICA feel that PSB funding is adequate or is it increasing in line with rising cost? Is this funding given directly to the independent production houses or is it channelled through the broadcaster who decides on how much is disbursed or outsourced to the production houses?

My second supplementary question is with regard to evaluating quality. How is consideration given to measuring programmes that are critically successful, as opposed to simply using viewership and ratings as a measure of that success, in view of the fact that original local content may take longer to build local audiences?

I thank the Member for the two questions. On the first question, we agree with the Member that cost is a concern. For this year's funding, we are keeping to the same level as last year's spending on the PSB. But there are other avenues in which production houses can avail themselves of support from MDA. MDA, in fact, has just recently sorted out all the grants that are available into four or five grants which are available to all companies out there who wish to do talent development and things that lead to higher production quality in terms of local content. We are concerned, too, that local content is something which we should pay more attention to.

On the Member's question as to whether or not the money is channelled directly to the broadcaster or is also given to independent producers, there is a split. This is best left to MDA to decide. As I mentioned in my reply, there is a framework in which we want a certain amount of PSB funding to go to independent companies, which had happened in the past. Going forward, how do we ensure that there is a level playing field: this is something which we will continue to negotiate with the broadcaster and, of course, with the independent production houses.

On the Member's question on how we ensure that when we evaluate quality, we do give our local companies some sort of a longer runway to develop their capability and develop that cache, so to speak, among Singaporean viewers; we recognise that the competition against imported programmes is a tough challenge. But having said that, if we look at the statistics in the last five years or so, which I have seen recently, the number of local independent production companies which have come forward, submitted proposals and have actually availed themselves of the PSB funding, has been on the rise. So, it shows that the eco-system is working. But we will certainly explore more ways to help more companies to come forward and avail themselves. The key question is really talent development. That is why one of the recommendations by the PSB Review Panel – there are three recommendations actually – one is to increase funding, second is basically talent development, and I cannot remember the third one at the moment. But talent development is a very important part, so that our local production companies can really do good work. As I mentioned earlier, there are funding available through MDA which they can avail themselves of these funds.

Sir, I would like to ask the Minister, given that the PSB budget was previously funded by the TV and Radio licence fees collected and now that the fees have been removed, how would the Ministry be ring-fencing, maintaining, or even enhancing the PSB budget so that we can raise the quality of programmes?

Sir, the condition for us to abolish the TV and Radio licence is for us to ensure funding from MOF for PSB programmes. We are in negotiations with MOF. As I mentioned in my reply earlier, the review from the PSB Panel has, in fact, asked us to do more. So, we are in negotiations with MOF. But the most important thing is that we have kept, at least, in the first instance, the same level as it was for last year, that is, about $110 million. But going forward, I agree with the Member that we will have to look at this very closely because, whatever the amount is, the money must be well spent to serve our overall purpose.

Mr Speaker, Sir, I want to join in the discussion. There is one main buyer in this industry, which is MediaCorp, and often the smaller production houses do not get a good price for the programmes. The Minister earlier said that he is evaluating the process to ensure fairness. I would like to understand what are some of these thought processes.

Sir, I think the Member is referring to how we allocate PSB funding, not buying of programmes. The main broadcaster is MediaCorp, and the money goes to MediaCorp. But in the framework for PSB funding, we insist that MediaCorp must outsource some of the production to independent local companies. As I mentioned in my reply, 40% of the funding actually goes to local production companies. So, they have to bid for it. Obviously, we have to look at the quality of their proposals. But having said that, as I replied to the hon Member, Ms Janice Koh, there are other sources of funding in which local production houses can avail themselves to improve their ability to bid through talent development and other grants which MDA has announced recently.

14 Assoc Prof Fatimah Lateef asked the Deputy Prime Minister and Minister for Manpower what options are available to assist with the payment of large hospitalisation bills that exceed the cap payable by employers' insurance policies which are incurred by foreign workers and foreign domestic workers in the course of their employment here.

15 Er Dr Lee Bee Wah asked the Deputy Prime Minister and Minister for Manpower given that employers are to provide medical insurance for foreign workers to cover their inpatient care and day surgery (a) what is the rationale for not extending this regulation to employers of local workers; and (b) whether the Ministry will consider mandating employers to provide local low-wage workers coverage for their medical treatment and hospitalisation.

Mr Speaker, Sir, may I take the next two questions together?

Yes, please.

Employers are required to provide for the healthcare needs of both their local and foreign workers. However, employers face different obligations due to the different context of subsidies available for each group.

The Government does not give any healthcare subsidies to foreigners, including foreign workers. When employers bring in foreign workers for the short term, we must ensure that foreign workers' medical bills do not remain unpaid and instead get passed on to our taxpayers. This would be unfair to our society at large.

Therefore, MOM requires all employers who wish to bring in foreign workers to bear the full costs of employing these workers, including bearing the cost of medical treatment for their S Pass and Work Permit holders, including foreign domestic workers. This condition is stated clearly when they apply for work passes.

At times, employers may face financial difficulties meeting the foreign workers' medical bills and their needs, especially for day surgery or inpatient bills which tend to be larger. Mandatory employer-financed medical insurance for day surgery and inpatient expenses was introduced in 2008, for each Work Permit and S Pass holder employed. The minimum medical insurance coverage was set at a basic level in order to keep premiums affordable for the vast majority of employers. Employers are free to purchase insurance coverage of any higher amount for better peace of mind.

We regularly review whether the minimum medical insurance coverage is adequate. In 2010, in response to feedback from employers, we raised the minimum insurance requirement from $5,000 to $15,000. Where the worker's medical bill exceeds the insurance coverage, or is excluded by the insurance provider, the employer will have to pay the difference.

Employers who still have difficulties in paying medical bills beyond the insured amount may approach the relevant healthcare provider to discuss various options, such as instalment payments. We encourage employers to avail themselves of higher insurance coverage, beyond the minimum requirement, if they wish to have greater protection and peace of mind.

Local workers, on the other hand, are on a quite different and stronger footing with regard to Government subsidies and employer contributions. First, the Government provides heavy subsidies for Singaporeans, of up to 75% for outpatient treatment at polyclinics, and up to 80% for inpatient care at restructured hospitals. Second, employers are required to contribute monthly to local employees' CPF, including their Medisave Accounts. Third, the 3Ms framework, consisting of Medisave, MediShield and Medifund, exists for Singaporeans to provide for their long-term healthcare needs. The Government fully funds Medifund, and also provides top-ups to the Medisave accounts of Singaporeans, particularly for older Singaporeans and those in the lower-income groups. The Medisave component of the GST Voucher package also gives them a regular, annual top-up.

The Government will keep refining its policies to ensure that healthcare costs are kept manageable for Singaporeans, and that nobody – and I repeat - nobody in need will be denied of medical treatment.

Er Dr Lee Bee Wah. Please keep it short. We only have a couple of minutes.

Sir, I would like to ask the Minister, in the case of foreign workers, there is mandatory medical coverage. But for the same illness, when the workers go to hospital, our local workers, very often, if they are not covered by the employers, they would have to foot the bill themselves. This is the disparity. There is no mandatory medical coverage for the local workers. I would like to ask the Minister whether there is any plan to introduce mandatory medical coverage for local workers.

I would like to thank the Member for the supplementary question. Let me reiterate the principles governing this approach. In the first place, why we have these mandatory requirements for employers to cover for foreign workers is precisely because we expect the employers to pick up the tab and not for Singaporean taxpayers to foot the bills for the foreign workers. So, it is covered by insurance.

Singaporean employees are covered under the comprehensive schemes provided. Under section 89 of the Employment Act, the employers are also required to bear the cost of medical examination for employees who have been in service for three months or more for the purpose of determining if the employees are entitled to paid sick leave. The medical examination has to be performed by the medical practitioner appointed by the employer or a medical officer appointed by the Government or approved medical institution. Over and above that, as mentioned earlier, we have the MediShield, Medifund and Medisave schemes where we try to provide coverage for Singaporeans. At the same time, insurance is also provided, depending on individuals, as they take up insurance policies in the market. Subsidies are also provided for Singaporeans for hospitalisation.

The approach is different and it is important not to look at it from the perspective of whether it is fair or unfair. The whole point is that, for foreign workers on employment in Singapore, they have to be paid for by their employers so that the taxpayers do not pay for the bills.

Going forward, as has been highlighted in the various discussions, and especially during the Budget debate, healthcare costs and healthcare provisions for Singaporeans form an important area that we continue to work on. And as highlighted, going forward, healthcare spending is something that we are watching carefully and we will make sure that comprehensive coverage is provided. As reiterated earlier – and let me make this quite clear – no Singaporean who does need medical treatment will be denied medical treatment because he or she cannot afford to cover the cost.

Order. End of Question Time. Ministerial Statement. Deputy Prime Minister and Minister for Home Affairs.

[Pursuant to Standing Order No 22(3), Written Answers to Question Nos 16-18, 29-30, 32, 39-41, 43-47, 49-50, 53, 57-60, 62, 65-68, 71, 73, 78, 80-83 and 85-87 on the Order Paper are reproduced in the Appendix (Pg 318-342). Question Nos 19-28, 31, 33-38, 42, 48, 51-52, 54-56, 61, 63-64, 69-70, 72, 74-77, 79 and 84 have been postponed to the next available sitting of Parliament.]

Thank you, Mr Speaker, for allowing me to make this Statement. The death penalty has been an important part of our criminal justice system for a very long time, similar to the position in a number of other countries. Singaporeans understand that the death penalty has been an effective deterrent and an appropriate punishment for very serious offences, and largely support it. As part of our penal framework, it has contributed to keeping crime and the drug situation under control.

The Government regularly reviews the efficacy of our criminal justice system, including our penal laws and the applicable sanctions. This is to ensure that our laws keep pace with the evolving operational landscape and societal changes. In December 2010, the Ministry of Home Affairs commenced studies relating to the application of the death penalty in our laws. In July 2011, based on the studies, we started a general review of the drug situation and the death penalty as it applied to all our laws. All executions that have come due since this review started in July 2011 have been deferred.

The review came to a number of conclusions. It reaffirmed the relevance of the death penalty for all the offences to which it currently applies. Today, drug traffickers make up the majority of offenders who face capital punishment. For drug traffickers, we concluded that the mandatory death penalty should continue to apply in most circumstances. However, where two specific, tightly-defined conditions are met, which I will explain later, the death penalty will still apply but it will now be at the discretion of the courts. The review also concluded that we should retain the death penalty in our penal laws today, except that for certain types of homicides, it should no longer be mandatory but be at the discretion of the courts. The Minister for Law will speak about that in his Statement later.

Let me start by providing an assessment of the illegal drug situation in Singapore. Illegal drugs are not a new problem in Singapore or in our region. We have grappled with this problem for many years, and have long taken strict and tough measures to curb this menace. The drug abuse landscape has changed, from opium to heroin, and now to newer psychoactive substances, such as "Ice" and "Ecstasy". But the fundamental issues have not changed. Drug abuse affects not only the addicts, but also their families and loved ones. The human cost to individuals and society is very high. Those who trade in illegal drugs are still attracted by the huge financial gains to be made, and deterring them requires the strictest enforcement coupled with the severest of penalties. We have long taken a "zero-tolerance" approach against drug abuse. We deal with the drug problem comprehensively by tackling both the demand and supply factors.

To curb demand, we start with educating the young about the deleterious and dangerous effects of drug abuse, and the penalties they face if they abuse drugs. This is to deter them from picking up the drug habit and being subsequently enslaved by it. We treat drug consumption as a serious offence. Young abusers are sent to the Drug Rehabilitation Centre, where they undergo programmes to overcome their addictions. The spartan environment also acts as a deterrent against re-offending. In 1998, we introduced the "Long-Term" imprisonment regime, under which repeat drug abusers receive longer prison sentences to break the cycle of addiction. This also prevents repeat drug abusers from influencing others in the community, especially the young, and stops them from contributing to the drug demand and supply eco-system in Singapore.

Because of our firm stand against drug abuse, we have seen an improvement in the drug situation in Singapore. At the height of the heroin problem in 1994, 208 drug abusers per 100,000 of our resident population were arrested each year. Last year, the number fell to 86 per 100,000 of our resident population. But this is still a high number. As at the end of last year, drug offenders made up almost two-thirds, 66%, of the locals in our prisons. About four out of five, 79%, of the local prison population had drug antecedents.

While the Long-Term sentencing regime has proven effective in suppressing the drug problem in Singapore in the last 14 years, some 3,000 such repeat offenders are being released as they complete their Long-Term prison sentences between 2012 and 2014. We will work with them to help them stay off drugs, but some of them will be tempted to return to drugs. We may thus see a worsening of the drug abuse situation in Singapore over the next few years. The potential problems from this development cannot be taken lightly.

We also face a new challenge in the changing mindsets of the younger generation. In other countries, especially certain western countries, taking drugs is seen as a lifestyle choice. We are not immune to these influences. Some amongst our young take synthetic psychoactive drugs to lose weight, as an escape from the stresses of daily life, or simply because their friends do so, not realising that they are gambling with their lives.

While the number of new abusers arrested in Singapore dropped by 17% from 2010 to 2011, new youth abusers below the age of 20 arrested increased from 155 in 2010 to 225 in 2011 – a jump of 45%. In particular, those aged 16 and below have shown the largest increase, with 64 arrested in 2011 compared to 15 in 2007.

Many countries have given up the fight to suppress demand. Instead, they advocate what is called "harm reduction" measures. They try to reduce the collateral harmful effects of drug abuse by supplying, for example, free clean needles for addicts to inject themselves. This is meant to reduce transmission of dangerous diseases, such as HIV or Hepatitis, when addicts share contaminated needles. However, this does not get to the root of the problem, and may actually facilitate drug consumption instead of stamping out drug use and reducing the intrinsic harm of drug abuse to individuals and society.

An inter-ministry Taskforce on Drugs, led by Minister of State for Home Affairs and Foreign Affairs Mr Masagos Zulkifli, was formed in October 2011 to review the drug abuse situation. The Taskforce completed its work in April this year, recommending a comprehensive approach to tackle the drug situation. The recommendations covered targeted prevention, strong deterrence and enforcement, upstream intervention for young abusers, rehabilitation and supervision to prevent relapse, and active engagement of families and the community to support the fight against drugs.

We must continue to reinforce the message that drugs are harmful and make every effort to deter drug taking. On this front, we will introduce more intervention measures for young abusers, and improve rehabilitation and supervision for inmates released from long-term imprisonment to help them stay away from drugs. In addition to the current urine supervision regime, there will also be compulsory aftercare and a supervision regime comprising electronic monitoring with curfew hours, counselling and casework.

To restrict supply, we have adopted a highly deterrent posture against drug trafficking. In 1975, we introduced the death penalty as a punishment for drug trafficking. Under our laws, anyone who traffics drugs is liable for the death penalty, from syndicate leaders, to distributors, to couriers who transport drugs, and pushers who sell drugs, as long as the quantity of drugs involved is above the stipulated thresholds.

The weight element is often misunderstood by the public and the media. For example, the mandatory death penalty threshold for heroin is 15 grams of pure diamorphine, which is often portrayed as the weight of just a few 50-cent coins. In fact, in street form in Singapore, at a typical purity level of 2.3%, 15 grams of pure diamorphine is equivalent to some 2,200 straws of heroin worth $66,000, based on each straw having a gross weight of about 0.3 gram and street price of about $30. This quantity is enough to feed the addiction of more than 300 abusers for a week. In such cases, the death penalty is imposed, given the harm caused by these drug traffickers, and the numbers of lives they destroy.

Rigorous and effective enforcement coupled with severe penalties have allowed us to stay on top of the situation. Within Singapore, our strategy of vigorous and swift enforcement efforts against local syndicates operating inland has suppressed them. Traffickers consciously opt to traffic amounts below the capital thresholds, which means the syndicates need to make more frequent runs using more couriers. This has inhibited drug supply and pushed up the street price of illicit drugs in Singapore, helping to deter drug abuse. This is a significant achievement given our close proximity to major source countries. Singapore has also avoided being used as a drug transhipment point despite our excellent transport connectivity to the region, and the large number of people, about 500,000 travellers daily, who enter or pass through Singapore.

However, we have to adapt our strategy and approach as drug trafficking syndicates change the way they operate. In recent years, by making use of improvements in communications technology, syndicates supplying drugs to Singapore have responded to the increased risks of apprehension by moving off-shore, with their leaders controlling their operations remotely. The higher-ups in the syndicates try to avoid direct contact with the drugs. They employ others to transport the drugs into and within Singapore to minimise the risks to themselves.

They will consciously target and exploit vulnerable groups to do the high-risk work for them, while remaining behind the scenes. Our enforcement agencies, prosecutors and our courts have had to deal increasingly with this new situation. The Attorney-General's Chambers has also used its constitutional discretion prudently when deciding on the charges to be framed; and a body of case law has also been built up through cases that have come before the courts. We need to be cognisant of all these developments and make the necessary adjustments both to our enforcement strategies and to our legal framework.

We will put more resources into border checks and enforcement to stop illicit drugs from entering Singapore. As recommended by the Taskforce on Drugs, we will increase penalties for repeat traffickers, that is, those who have trafficked previously but below the capital threshold quantities, and introduce new offences for those who sell to vulnerable groups and organise so called "drug parties".

We will step up enforcement efforts against cross-border syndicates, investing more resources in technology and intelligence. We will also strengthen partnerships with regional counterparts. In this regard, just two weeks ago, I signed an MOU with the Malaysian Minister of Home Affairs Dato' Seri Hishammuddin Hussein on 26 June 2012 to increase intelligence sharing and operational co-ordination to intensify our co-operation in the fight against cross-border drug crimes.

Sir, this is the backdrop to the review of the death penalty in our laws. Since 1975, the death penalty has been the mandatory punishment for trafficking more than a specified amount of illegal drugs. This strict punishment has been necessary because of the seriousness of the drug situation, and large financial rewards which traffickers hope to reap if they are not caught. Our approach has been effective in reducing the drug problem in Singapore, at a time when other Southeast Asian countries have seen their drug problems worsen significantly.

Today, while our drug situation has improved, it still remains a serious threat. Looking ahead, we therefore need to maintain severe penalties for drug trafficking, including the death penalty. However, our society's norms and expectations are changing. While there is a broad acceptance that we should be tough on drugs and crime, there is also increased expectation that, where appropriate, more sentencing discretion should be vested in the courts.

Therefore, we will maintain the mandatory death penalty for drug traffickers, in most circumstances. In particular, the mandatory death penalty will continue to apply to all those who manufacture or traffic in drugs – the kingpins, producers, distributors, retailers – and also those who fund, organise or abet these activities. By their actions in the drug trade, these offenders destroy many lives. They know they are dealing with drugs and the consequences of their actions if they are caught and convicted.

However, when two specific, tightly-defined conditions are both met, we propose to make the death penalty for trafficking no longer mandatory, but to be imposed at the discretion of the courts. First, the trafficker must have only played the role of courier, and must not have been involved in any other activity related to the supply or distribution of drugs. Second, discretion will only apply if having satisfied this first requirement, either the trafficker has cooperated with the Central Narcotics Bureau in a substantive way, or he has a mental disability which substantially impairs his appreciation of the gravity of the act.

We propose to change the law such that when these conditions are met, the courts will have the discretion either to sentence the trafficker to death, or alternatively to pass a sentence of life imprisonment with caning.

The reasons for making the changes are as follows: as I have earlier stated, the drug menace is growing internationally. We need to find more ways of targeting those who are higher up in the drug syndicates, compared with the couriers. If the couriers give us substantive co-operation leading to concrete outcomes, such as the dismantling of syndicates or the arrest or prosecution of syndicate members, that will help us in our broader enforcement effort.

We also propose to give the courts the discretion to spare a drug courier from the death penalty if he has a mental disability which substantially impairs his appreciation of the gravity of the act, and instead sentence him to life imprisonment with caning. Currently, the Attorney-General's Chambers exercises prosecutorial discretion in considering, amongst other things, the extent of mental disability of persons, before deciding on the charges to be brought. The Attorney-General's Chambers will still have prosecutorial discretion even after the law is changed. However, the courts will now be legislatively vested with the discretion to consider, if they find the accused guilty of trafficking, whether the accused has a mental disability which is sufficient for the courts to impose the lesser punishment of life imprisonment with caning, instead of the death penalty.

Taken together, these provisions retain the strong deterrent posture of our capital punishment regime, while providing for a more calibrated sentencing framework when specific conditions are met. At the same time, we are providing a framework for accused persons to assist our agencies to target those who play more significant roles in drug syndicates. We will discuss with stakeholders how the legal provisions can best be defined in order to meet the objectives that I have laid out.

We will monitor how these changes impact and influence the behaviour of the criminal organisations. If the situation worsens, we will consider tightening the provisions, or making other changes. Mr Speaker, Sir, may I have your permission for copies of my speech to be distributed to Members, please?

Yes, please. [Copies of speech distributed to hon Members.]

This is for the convenience of Members so that they can make reference to that. The Government's duty is, first and foremost, to provide a safe and secure living environment for Singaporeans to bring up their families. We must be constantly vigilant, adapt our law enforcement strategies and deterrence and punishment regime to remain ahead of criminals. We must do what works for us, to achieve our objective of a safe and secure Singapore. The changes announced today will sharpen our tools and introduce more calibration into the legal framework against drug trafficking, and put our system on a stronger footing for the future.

The Minister for Law will now speak on the changes which we will be making in respect of homicide offences, after which, with your permission, Sir, we will both address any matters that Members may wish to raise.

The Minister for Law will be making a related Ministerial Statement. I will allow Members to raise points of clarification on both statements after the Statement by the Minister for Law. Minister, please.

Mr Speaker, Sir, as Deputy Prime Minister Teo has mentioned, the Government has, over the years, periodically reviewed the way our criminal justice system operates, and the effectiveness of our laws.

The Deputy Prime Minister has explained some of the changes we intend to make after the latest review. He has spoken about enhancing our drug control framework. He has also informed the House of the Government's intention to make changes to the death penalty in its application to drug trafficking.

I will now explain the changes we propose to make, in respect of how the mandatory death penalty applies, to homicide cases amounting to murder.

Section 300 of the Penal Code provides that culpable homicide amounts to murder where:

The act by which death is caused is done with the intention of causing death;

The act is done with the intention of causing such bodily injury as the offender knows is likely to cause death;

The act is done with the intention of causing bodily injury, and such bodily injury is sufficient in the ordinary course of nature to cause death; and

The act is done with the knowledge that it is so imminently dangerous that it must in all probability cause death, and without any excuse for incurring the risk of death.

If any of these situations are proven beyond reasonable doubt, then section 302 provides for the mandatory imposition of the death penalty.

Based on the review that was undertaken, the Government intends for the mandatory death penalty to apply where there is an intention to kill within the meaning of section 300(a). For cases falling within the other sub-sections of section 300, the mandatory death penalty will be removed. The courts will be given the discretion to order either life imprisonment or the death penalty. The drafting details are being worked out.

Let me now explain how the changes will affect existing cases. As Deputy Prime Minister Teo mentioned, all executions have been suspended since July 2011, when the current review began. Executions will continue to be suspended until the proposed changes are enacted.

Once legislation has been put in place, all accused persons who meet the requirements can elect to be considered for re-sentencing under the new law. This will involve accused persons in ongoing cases, as well as convicted persons who have already exhausted their appeals and are currently awaiting execution.

While we have outlined the principle of the changes today, we ask that those giving legal advice to the accused persons should carefully study the legislation when it is enacted and properly understand the precise scope of the changes. In the meantime they should not make any assumptions or give misleading advice.

And let me reiterate, the court will have the discretion not to impose the death penalty only when an accused person satisfies the necessary criteria. For drug trafficking, the two criteria have been set out by Deputy Prime Minister Teo. For murder, the accused must have been convicted under section 300(b), (c) or (d) of the Penal Code. In cases where the criteria are not satisfied, for example where the accused is convicted of murder under section 300(a) of the Penal Code, or where he is not just a drug courier, the death penalty will still apply and the law will take its course. And in the context of being a drug courier, there are other conditions which Deputy Prime Minister Teo has mentioned, which have to be considered.

Why these changes? The changes announced today will result in the mandatory death penalty applying to a much narrower category of homicides, compared to the situation today.

Let me explain the considerations leading to these changes.

In deciding whether and how to apply the death penalty to a particular offence, several factors have to be considered. In particular, I will mention, in broad terms, three interconnected factors: (1) the seriousness of the offence, both in terms of the harm that the commission of the offence is likely to cause to the victim and to society, and the personal culpability of the accused; (2) how frequent or widespread an offence is; and (3) deterrence.

These three factors must be considered in their totality. For example, the fact that an offence is not widespread or that its incidence is low may not, by itself, be a decisive factor. The overarching aim of the Government is to ensure the safety and security of Singapore, while maintaining a fair and just criminal justice system.

For murder falling within section 300 of the Penal Code, our assessment is this.

Intentional killing within the meaning of section 300(a) is one of the most serious offences in our books. Put simply, this is a case where the offender intends the death of the victim. It is right to punish such offenders with the most severe penalty. It is right to provide for the most powerful deterrent against such offences. It is right, therefore, that the mandatory death penalty should continue to apply to such intentional killing.

In respect of the other categories of murder, under section 300(b) to (d), there could be different degrees of intention, and these offences are committed in a variety of situations. In some cases, the culpability of the offender is serious, but additional considerations may come into play. Today, that is something considered by the Public Prosecutor when he decides the appropriate charge in each case. The factors he considers include the precise intention of the accused, the manner in which the homicide occurred and the deterrent effect a charge may have on others. We want to move towards a framework where the court also has the discretion, to take the same factors into account during sentencing.

This change will ensure that our sentencing framework properly balances the various objectives: justice to the victim, justice to society, justice to the accused, and mercy in appropriate cases. This is a matter of judgment and the approach being taken is not without risks. But we believe this is a step we can take. We now have a relatively low incidence of homicides – last year we had 16 recorded homicides, or about 0.3 per 100,000 population. As our society becomes safer, less violent, and more mature, we believe that today's changes are a right step to take.

For those who agree with the imposition of the death penalty, its application to murder will be largely uncontroversial, though some may still question whether it should be mandatory even for cases falling within section 300(a). For those who are opposed in principle to the imposition of the death penalty for any offence, these reforms will not be fully satisfactory.

We hear and take note of these views, but ultimately we have to do what we believe is right for Singapore.

I should also mention our assessment for firearms offences, which also carry the mandatory death penalty. Our conclusion is that such offences are a serious threat against law and order, against which we must continue to maintain a highly deterrent posture. The mandatory death penalty will therefore continue to apply to firearms offences.

Sir, to sum up, capital punishment will continue to remain an integral part of our criminal justice system. It will continue to apply to all offences to which it now applies. At the same time, the courts will be given more discretion in its application.

For drug couriers, the courts may decide not to impose the death penalty if two tightly defined conditions are satisfied. As Deputy Prime Minister Teo explained: first, where the accused's only role was that of a courier; and second, if the accused has either cooperated with the Central Narcotics Bureau (CNB) in a substantive way, or has a mental disability which substantially impairs his appreciation of the gravity of his acts. Where these two conditions are satisfied, the court may decide to impose life imprisonment, with caning, instead of the death penalty.

For murder, the mandatory death penalty will continue to apply where the killing is intentional, within the meaning of section 300(a). For murder falling within section 300(b), (c), and (d), where there is no outright intention to kill, the courts will be given the discretion to impose either the death sentence or life imprisonment.

In making the changes today, the Government seeks to achieve and balance two broad objectives.

The first is to continue to take a strong stance on crime. Where many other countries have failed, we have succeeded in keeping the drug menace under control. Singapore's homicide rate is one of the lowest in the world, and we believe that the deterrent effect of the death penalty has played an important part in this. Our tough approach to crime has resulted in crime rates which are significantly lower than many other major cities. Young children can take public transport by themselves. Women can move around the city freely. We have no gun violence, no protection rackets, no drug pushers on the streets, no inner city ghettoes. Citizens and visitors alike feel safe, in and out of home, at all hours of the day. This is something enjoyed by few cities in the world. And that is something we should seek to preserve.

The second is the refinement of our approach towards sentencing offenders. Our cardinal objectives remain the same. Crime must be deterred. Society must be protected against criminals. But justice can be tempered with mercy and, where appropriate, offenders should be given a second chance.

How these objectives are achieved and balanced depend on the values and expectations of society, as it evolves and matures. We believe that the proposed changes strike the right balance for Singapore today. They will ensure that our criminal justice system continues to provide the framework for a safe and secure Singapore, while meeting the need for fairness and justice in each case.

Draft legislation implementing the changes outlined today will be introduced later this year.

Sir, I seek your permission to distribute copies of my Statement to Members. [Copies of Statement distributed to hon Members.] Deputy Prime Minister Teo and I will now take any clarifications which Members may seek.

Mr Speaker, Sir, both statements carry weighty issues especially on drugs and the proposed amendments to the Misuse of Drugs Act. I have two clarifications on the drugs statement. Bearing out of the Deputy Prime Minister's provision of statistics at 15 grams of pure diamorphine translates in 2,200 straws and a $66,000 street value, that for me translates into thousands of lives ruined. Therefore, I would like to ask a clarification of the Deputy Prime Minister, whether even after these measures are put in place, the overall regime under the Misuse of Drugs Act will still secure a deterrent effect. And bearing out of that is the fact that trafficking of drugs is the most rational crime that I think exists. There is a cost-benefit analysis and the cost needs to be a sufficient deterrent.

Second clarification is the limb on cooperation. How much cooperation must be given? I certainly hope that a high level of cooperation is needed and required by the courts and by the amendments such that we can go upstream with the information collected through that cooperation and go to the people who run these rackets outside of Singapore.

My clarification in relation to the culpable homicide amounting to murder – I must say that I am less concerned about that because by and large, murders or killings are spontaneous and they are not, by and large run for commercial ends. So, my concerns are really in relation to the first Statement.

I think we are going to allow an answer.

Mr Speaker, Sir, the changes that we propose to make to the drug regime are carefully calibrated. There are some risks indeed, as Mr Christopher de Souza has pointed out, with regard to the deterrent effect and whether that will be diminished. However, we have proposed to define it in a very careful way so that there will still be a very strong deterrent effect because the mandatory death penalty will still apply in most circumstances. The discretion only acts in very specific, tightly-defined conditions and those two conditions which I have listed out are: first, the trafficker must only have been involved as a courier and not in any other type of activity associated with drug supply and distribution; and, secondly, either he has provided cooperation, substantial cooperation, in a substantive way, or he has a mental disability which substantially impairs his appreciation of the gravity of the act. So, it is a very tightly-defined set of conditions and we believe that this will still preserve the very strong deterrent value of the legislative framework.

In addition to that, on the cooperation element, we believe that it will help give us an extra set of tools to reach higher up into the drug syndicates. It is going to be very difficult. I am not sure that we will succeed but it gives us an extra set of tools to encourage the couriers, in this case, to assist us, to dismantle drug syndicates, or to arrest or prosecute members of the syndicates. And I have described the substantive cooperation in those terms. We will have to define the precise way of having this enacted in the laws as we go ahead and I will be happy to have Mr de Souza's assistance here as well as your inputs.

Sir, can I clarify something? I should clarify a couple of points in my Statement. My Statement which I have distributed, refers, in paragraph 21, to "a mental disability which substantively impairs his appreciation of the gravity of his acts." It should be "substantially", not "substantively". And second, my Statement should be taken as made in Parliament orally, and there are slight differences between what I have said and what is in the text. The written text should be taken as an aide-memoire but what I said takes precedence.

Thank you, Sir. Two clarifications to make. Firstly, the Deputy Prime Minister in his Statement said that we will increase and introduce penalties for those who sell drugs to vulnerable groups and organise drug parties. I would like him to clarify what he considers "vulnerable groups". Secondly, we have had mandatory sentencing for death penalty. I wonder why we cannot leave it to the courts to decide and to impose appropriate sentence rather than mandatory sentence especially death penalty. And if mandatory death penalty is an important deterrent, how will non-mandatory compared to mandatory provide more deterrence? If the courts impose death sentences under certain circumstances, is that not a sufficient deterrent?

Mr Speaker, Sir, for vulnerable groups, we are thinking, for example, of those who target young people. As I have mentioned earlier, we have seen an increase in the number of young people who have been arrested for drug abuse. So, I would say that those who have deliberately gone out to target young people, I would consider them to have committed an offence which is of a more serious nature.

On the difference in deterrence value between a mandatory death sentence and a death sentence: the mandatory death sentence provides, on conviction, a very certain and severe punishment. And it has been a very strong deterrent. For example, as the Minister for Law has pointed out just now, in the case of firearms, firearms offences fell from more than a hundred a year before the mandatory death sentence was put in as a penalty, and fell within three to four years to a very low level and remains at a very low level today. That is one example.

In the case of the mandatory death penalty for drug trafficking, we can see that drug traffickers and others involved in the supply chain are deliberately, where they can, opting to come below the threshold levels for the mandatory death penalty. So, it clearly has an impact on behaviour. Hence these changes we are making are carefully calibrated to maintain a strong deterrent value of the mandatory death sentence while providing for courts to have discretion in certain specific, tightly-defined situations.

The Deputy Prime Minister and Minister for Law, I certainly welcome the refinement to our criminal sentencing laws to balance the deterrent effect with judicial discretion. My question relates to the issue of this factor of cooperation and how that is going to be measured. Is it going to depend on the prosecution's assessment of how substantial the cooperation is?

I am also slightly troubled by the remark that the cooperation needs to lead to concrete outcomes. As the Deputy Prime Minister has rightly observed, the many drug cartels are very difficult to penetrate to the higher levels. And indeed, the lower down the hierarchy the courier is, the less likely he is to have information that will lead directly to implicate the ring leaders. Are we in some danger of setting too high a barrier? Indeed, if a courier has concrete information which will implicate the higher ups in the hierarchy, that might suggest he is not just a simple courier.

So, my concern here is that while we do want to give an incentive to those who are caught in the whole process of drug trafficking to cooperate fully with authorities, I do think considerable thought needs to be given to make this criterion of cooperation, one that is objective, and one that is fair.

Mr Speaker, Sir, let me respond by saying where our start point is. Our start point is that trafficking in drugs in the quantities above the threshold amount is a very serious offence, and should normally merit the death sentence. That is the start point. But if he is involved only as a courier, and has information which can help us in our broader objective to dismantle the syndicate, prosecute and arrest those higher up in the syndicate, then I think that is fair that this option for the courts to impose a lesser punishment of life imprisonment with caning, should be provided.

On the specific ways of defining how we achieve this objective, we will go through a consultation with the appropriate stakeholders, and we will be very happy to have Mr Yeo's inputs as well.

Sir, I have two points to make. One, how many prisoners currently on our death row will potentially be affected by these changes that we are discussing today? I suppose the numbers will also tell us roughly how much workload the legal fraternity will have to face, for those who want to request for review. Secondly, on the issue of dealing with the public by the Ministry of Home Affairs and the Home Team, we noticed that the middle to low level people who are involved in drug-related issues are actually caught in a vicious cycle and this may actually pass from generation to generation and within the same family. So, I am wondering whether the Ministry is working with partners on different strategies to look for exit points in that vicious cycle.

Mr Speaker, Sir, as I mentioned in my speech, Mr Masagos Zulkifli led a taskforce to study how we should deal with the drugs issue in Singapore. It is a very comprehensive report and proposes many programmes and initiatives to deal with the issues that Assoc Prof Fatimah Lateef brought up with regard to persons who are affected by drug consumption.

On the question of how many people are potentially affected by this change, there are currently 35 prisoners awaiting capital punishment − 28 of them for drug offences and seven for murder. It is not possible, and not appropriate, for me to speculate on how many might have a change in their sentences. But there will be an appropriate process where they will be given the opportunity to be considered, whether or not the new sentencing regime can be applied to them and, then, of course, whether the new sentence is appropriate for them. So, it would not be correct or appropriate for me to speculate today on how many might possibly have their sentences changed.

Sir, first of all, if I may just add a sentence. I think there have been many of us who have been concerned with the whip of the death penalty for many years, and I believe that the Government's review today and the steps announced are steps towards having some measure of balance. However, Sir, I have several clarifications for the two Ministers concerned.

One is the overriding concern that while we look at the death penalty itself, it should not be looked at in isolation of the criminal procedures as a whole, because the sentence finally comes up at the end of that process. And I think all of us are interested to ensure that we do not convict the wrong person. In that regard, I have two clarifications for Deputy Prime Minister Teo and two for the Minister for Law.

The first clarification for Deputy Prime Minister Teo is related to Mr Alvin Yeo's point earlier. We do come across cases of accused being charged under the Misuse of Drugs Act where they say they are couriers and some of them even say that they have been tricked into carrying certain substances, the nature of which they did not know. Now, under the Misuse of Drugs Act, several presumptions arise when substances are found in the physical possession of the accused. The current position is that it is up to the accused to rebut those presumptions and there is a burden of proof placed on the accused, up to the standard of balance of probabilities. This is quite difficult, in particular where we have accused who do not have witnesses coming forward to testify on their behalf, as they could be foreigners and so on. So, I would like to ask Deputy Prime Minister Teo whether there is actually any concurrent review also of the substantive law on the Misuse of Drugs to alleviate some of the potential sentencing of the wrong person because of the problem of proof.

The second question to Deputy Prime Minister Teo, and also a clarification, is in relation to confessions that are used in these cases often to achieve convictions. Under our law currently, oral confessions are admissible and this means the confession is not acknowledged by the accused person at all. So, is this something that we really need to live with because after all we do record written statements from the accused, and that is at least acknowledged by the accused?

For the Minister for Law, many a time, those facing death penalty, of course, they are remanded pending their trials, access to their lawyers is a concern. Of course, the State provides lawyers but access is a concern, meaning that they have to apply to see their lawyers at fixed times, they cannot really call their family members freely, and so on. So, I would like to ask the Government whether it is prepared for accused facing death penalty cases to have greater access to their lawyers and also to their family members, provided that there is no jeopardy to the evidence gathering, and so on. I think this is an area that would help them a lot to ensure that they can marshal a proper defence.

Last of all, for the Minister for Law, I would like to clarify whether the Government is actually looking at the trial process for death penalty cases. Would he consider, for example, re-introducing two Judges to hear capital cases, which gives a greater assurance that the findings of fact and law, in that sense, have a wider consensus?

Sir, I will take all four questions. I think Ms Lim's preliminary remark was that many of us have been concerned, in some measure, with the death penalty. Let me start off by saying that none of us – and I think this applies to Ms Lim as well as all of us sitting on this side – none of us want to see the death penalty imposed as such. We have it in our books and we impose it with a heavy heart only because we believe, based on the balance of benefits put forward by the Deputy Prime Minister and myself, that it is ultimately in the interest of society.

Just to give you an example, if you know that you are going to steal a rifle and go out and shoot a few people, we can take the view taken in some other countries – that even in those circumstances, the death penalty ought not to be imposed, even if you have killed 100 people. But we want a situation where such a person must know beforehand what the consequences of his actions are. Likewise, if you do bring in 30 to 40 grams of heroin, and you know what 15 grams can do – 300 people for a week – if you want to destroy society in that way, then, you ought to know what the consequences of your actions are, upfront. Going back to Mr Low's point, you know exactly that if you are caught, and you knew what you were doing, you will face the death penalty with some certainty, and that has a deep and powerful effect on the entire criminal organisation.

So, we do it, we have this legislation, with reluctance, but because we honestly and sincerely believe that this is necessary. And when we can, the underlying philosophy is to vest more and more discretion with the courts. And I think we are ad idem on that.

With those remarks, let me then say this. I think her point is that we must not be looking at the death penalty in isolation, we must make sure we do not convict the wrong person. I entirely agree, and that is why we must make our criminal justice system rigorous. We have been reviewing it regularly. We have had a number of amendments to the Penal Code. We have amended the Criminal Procedure Code. And we work with the Bar and with the Judges to make sure that we have a system that does not fall into either end – either an extremely liberal system where prosecution becomes a game of catch-me-if-you-can, with a series of procedural hurdles which have no real substantive value, or another system where even innocent people can be convicted. We want the cases to be proven beyond reasonable doubt in a fair and proper way. And all suggestions to make the process more rigorous will always be welcome. My Ministry, as well as the Ministry of Home Affairs, will be willing to listen to any suggestions in that context. Ultimately, the test is: does it improve the system?

As regards her four specific points. The first one was cases where the defendants are charged as couriers and they say they do not know, and it is quite difficult for them to prove their innocence. Let me put it this way. Every time you pick up someone with a substantial amount of heroin, they usually say they did not know what they were carrying. If you allowed that simpliciter as a defence, and the prosecution is supposed to prove that they knew the circumstances in which they obtained the heroin in another country overseas, realistically, how many convictions do you think there are going to be, and do you believe that the law will serve as a deterrent? You need to be realistic about this. At the end, whose interests are you protecting – that of society? And does this best serve a system where a person who is guilty ought to be found guilty and at the same time the society's interest ought to be protected?

What is wrong with the present position, given that the accused himself is best placed to know how he came across the drugs? What is wrong with imposing the onus on him to show the circumstances, and to let the courts hear him, look at him, and ask themselves: am I satisfied beyond reasonable doubt? A hard-bitten, professional Judge in the High Court who looks at the accused, hears his testimony carefully, considers where only the accused himself can give evidence, and say, "I believe him" or "I do not"? If you change that, in practical terms, you ask the CNB or the Police Force, "You prove that this man got his drugs in the Golden Triangle, or Bangkok, or somewhere", you will have Singapore awash with drugs. The choice is there for Singaporeans to make.

Second, oral confessions. I think implicit in her question is that oral confessions should not be accepted. I again go back to this point there are processes for evidence to be introduced in court. Anyone who brings up an oral confession in court will have to explain why it is oral. And do we not trust our Judges enough for them to examine the circumstances in which the confession was obtained, the manner of the confession, what was said, did the accused have a reasonable opportunity to explain himself through lawyers – and then decide? Why do we want to pre-fix a framework which is meant to apply to all situations where we say some evidence should not be admitted? Let the Judge decide whether the confession can be relied upon. But having said that, I agree with Ms Lim on the point that as often as possible, the evidence must be the most credible in the most serious of the cases, and we should generally move our criminal justice system towards that. We are again ad idem on that.

Third, on access to counsel. Greater access as long as it does not prejudice the investigations is Ms Lim's point, and I entirely agree. That is the practice that we should encourage – as long as it does not prejudice the investigations, access ought to be given. And I believe that it is, but that is a point we will emphasise. And we work with the criminal Bar regularly, and these are matters that the Attorney-General's Chambers, Ministry of Law and Ministry of Home Affairs discuss. And where it is believed that access has been denied unfairly, that can be brought up to us and we will look into it.

Finally, is the Government looking at the trial process? I think the specific question was whether we will re-introduce the hearing of capital cases by two Judges. This was something that was considered by the courts, and we have discussed it with the courts. They do not feel that they need to have two Judges. But nothing is set in stone, and these are matters that can be reviewed as necessary. But based on what we have heard – and we have always looked at these areas internally on a very regular basis, once every year-and-a-half, 18 months or so – the courts' view is that one Judge is adequate because, in any event, it is subject to appeal − to the Court of Appeal − where it will be reviewed again. And the court, in appropriate cases, can look at the facts, as it has in a number of cases, and overturn the convictions.

Thank you, Mr Speaker, for allowing me to speak on this very important and significant matter.

It is helpful to note of the Government's general loosening of the position of the mandatory death penalty and this is actually very much in line with the WP's position of eschewing mandatory sentences. I would like to ask Deputy Prime Minister Teo on what considerations did Minister of State Masagos' Committee deliberate upon in not extending to the courts a full discretion to determine cases that oblige the court to mete out the mandatory death penalty.

Mr Speaker, Sir, I should clarify that this was not a subject that Mr Masagos' Committee studied.

Sir, I think we can all see the logic behind the different grades of culpability which underpin the homicide and the drug trafficking offences and the introduction of commensurate levels of discretion for Judges in sentencing. Sir, but that logic behind those differences has always been there. In that context, can I ask the Deputy Prime Minister and the Minister for Law why was that review conducted, why in 2010, and eventually the review in 2011 July, and what were the reasons for the review?

Mr Speaker, Sir, I did not quite answer Mr Pritam Singh's question but I think I explained earlier already why in the review we have maintained the mandatory death sentence for most of the circumstances under the current MDA, and why we have allowed for an exception in these two very specific tightly defined situations when these two conditions are met. I think I have explained that quite clearly already, and I said that is not a subject which Mr Masagos' Committee addressed.

On Mr Edwin Tong's question, from time to time, the Ministry of Home Affairs and the Ministry of Law have looked again at our punishment framework and also at the death penalty. In 2006 and in 2009, there were actually reviews conducted. In 2010, again, there was a background study conducted and subsequently in July 2011 when the study was presented, the decision was taken that a general review would be appropriate. And that was the history of the reviews that have been conducted on the death penalty.

Mr Speaker, I welcome the Ministerial Statements. The refinement to our criminal justice system is to be welcomed. These refinements will help to enhance the confidence in as well as the legitimacy of our criminal justice system.

I have three clarifications to seek of either Deputy Prime Minister Teo or the Law Minister. One is regarding the role of the courier and the co-operation that has been extended to the CNB. As pointed out by other Members, the problem of the couriers is that if he or she is a courier, then he or she is unlikely to have very significant information. The larger concern here relates to whether the investigation agency would have an unfair leverage over the accused person, promising that perhaps the mandatory death sentence would not be imposed. So, that is one clarification sought.

The second relates to the time frame with regard to tabling the amendments to the Penal Code and other relevant legislation. As the Deputy Prime Minister has mentioned, there are 35 prisoners on the death row. I would like to know whether the process will be expedited in terms of tabling these amendments, and what would be done to protect the interests of these 35 prisoners. One can imagine that they could be subjected to a lot of inaccurate information, and the concern here is whether this will give rise to false hopes for them.

The last point relates to the guidelines on judicial discretion. While the Bill has not been drafted, it is my hope that the guidelines will not be drafted so rigidly to the effect that the Judges will not be given the full force of exercising judicial discretion. That, ultimately, the Judges should not operate within a very strict and tight regime which does not enable them to mete out justice that fits the individual merits of each case.

Sir, I will take all three questions.

I think the first point that the Member made is that the role of courier is unlikely to be significant and whether the concept of cooperation could operate as an unfair leverage. The precise scope of the cooperation required and how it is to be identified would be worked out, and as Deputy Prime Minister Teo has indicated, the stakeholders will be consulted on the matter.

But I would ask the House to bear this in mind – that we are dealing with a very serious problem. Any criminal justice system has to take into account a number of different factors. One, the external environment, how it is changing, and Deputy Prime Minister Teo has painted the picture of how the drug situation is changing – in fact, negatively. Second, the criminal justice system, the legal system, has a framework which will operate within this external environment. Third, any justice system must have the support of the people. They must believe it to be just. So, these are the three factors, but underlying it, as people who are in charge of the matter, while we take these factors into account and give substantial weight, we must generally move towards a system where the philosophy must be that Judges have more discretion, not less. That is the underlying philosophy. But that underlying philosophy has got to be seen in the context of these three factors. And if you believe that the external situation is deteriorating badly, and that that might impact on society substantively, then you need to react to make sure that safety and security are not compromised. That is the operating philosophy.

You focus on the courier, but let us look at the courier as part of a larger framework. Today, the message is out there, extremely clearly, that Singapore is tough on drugs. And the entire criminal organisation operates on that assumption and people outside know that there are a lot of risks in coming to Singapore. Any change you make to that perception, you will add to the risks, which is what the Deputy Prime Minister has alluded to, and we need to see how it operates in practice. And if the situation goes downhill substantially, then we need to reconsider it. Let us be clear about that. Within that framework, should we take into account cooperation? It helps enhance the enforcement, and in that sense the courier faces a lesser penalty if he is able to cooperate; otherwise he does face a severe penalty. That is the framework we have announced in the statement. How that is to be operationalised is something that we will work out in the next few months.

Second, as regards the 35 accused persons, they all either have lawyers whom they chose or they have assigned counsel. The Ministry of Home Affairs will immediately contact their lawyers, and where their lawyers have discharged themselves, the Law Society will be contacted very quickly within the next few days, and these lawyers will be briefed on the framework. We hope that they will not mislead the defendants on death row, and we will try to make sure that they understand, both the accused, their next-of-kin, as well as their lawyers. We intend to operationalise this quickly but, of course, what actually happens has got to wait for the Bill to be passed. We will do that as quickly as we can.

The third point I think is a more general sentiment that Asst Prof Tan expresses − that the guidelines for judicial discretion should not be so closely circumscribed. I take note. I think it is best to wait to see what the actual guidelines are and I have indicated that we will consult the stakeholders. You can see from today's statement, for example, for section 300(b), (c) and (d), it is a discretion that is going to be given to the courts to either impose the death penalty or life imprisonment. For drug couriers, the setting out of the framework has been done by the Deputy Prime Minister.

Ms Faizah Jamal, last clarification.

Thank you, Mr Speaker. I really applaud the developments that I have been hearing the last few minutes. My concern is also an extension of what Asst Prof Eugene Tan said and this is in reference to the very precise circumscribed conditions for the Judge. Very often − I am speaking specifically about couriers as well in drug trafficking − most of these couriers are very young and probably driven by hard circumstances.

While I understand the primary objective is always for the society, my concern is, in the course of that long period of time when they are in remand or in prison, change happens and I wonder if that can be taken into account. People change and there could be real remorse and this can be attested to by authorities. And if this happens, I think that should be taken into account because what we are working towards really is not just to change the law but compassion. I hope that would be something that could be really considered seriously.

I thank the Member for her comments. I think I will emphasise again some points I made earlier. We have this legislation – death penalty as well as mandatory death penalty in the legislation – because we believe that it is necessary in the interest of society. If we believed otherwise, we will seek to change it. And the fact is that we have always been considering it, as shown by the fact that we have been reviewing it fairly consistently. Deputy Prime Minister Teo mentioned that we have reviewed it for a very long time but the most recent reviews were in 2006, which lasted a year; in 2009; and then again in December 2010 we started studies, and then conducted a full review in July 2011 based on the studies. So, we ourselves are constantly aware of the need to look at this legislation and see how it impacts – in the context of the facts as I explained just now – the external environment, society and the protection of society.

I think if we focus on any one individual, a powerful case can emotionally be made out for saving a life. For saving lives, powerful cases can always be made out. It is more difficult if you want to balance that against the reality. Fifteen grams of heroin feeds 300 addicts for a week. Somebody who peddles that, and usually they peddle much more than that, is bringing death, or at least a life of ruin, to a large number of people. Let us say instead of 15 grams it is 100 grams – work it out for yourself how many thousands of people that is.

What is never in the headlines is the number of lives that have been lost, the number of children who are orphaned either literally or through their parents being in jail, the amount of sadness and impact on the social fabric of society that those who are on the ground see every day. The headlines never focus on the victims of crime. If you look at it – the number of people who are impacted and how tough you need to be to try and save the society as a whole – then you need to send out a clear and consistent message. And the clear and consistent message is that if you deal in drugs in a quantity that is enough to support 300 people or more, then you face the death penalty. That has been the message we have been giving.

So, if those are aspects that we do not need to consider, supposing we do not need to think of society, we do not need to think of the victims, we do not need to think of the young children, we do not need to think of all the wives and daughters who are going to be impacted, and we only need to think of the courier, then I agree with her point. But if you believe that it is right also to think of these people, and that it is right for Singapore not to become like some other cities where you cannot walk on the streets and where needle exchange centres are now a reality, then I think you need to think of these things.

So, it is never an easy debate. It is not because we like the death penalty. It is not because we think it ought to be imposed for no reason. It is not because we want to simply be tough. It is imposed with the duty of ensuring the safety and security of every single Singaporean who goes out on the streets. We feel there is no choice but to have this framework, and that is the conversation that we should continue to have. Thank you.

"to amend the Immigration Act (Chapter 133 of the 2008 Revised Edition), and to make related amendments to the Customs Act (Chapter 70 of the 2004 Revised Edition)",

presented by the Second Minister for Home Affairs (Mr S Iswaran); read the First time; to be read a Second time on the next available Sitting of Parliament, and to be printed.

Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 4.40 pm.

Sitting accordingly suspended

at 4.20 pm until 4.40 pm.

Sitting resumed at 4.40 pm

Order for Second Reading read.

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

Sir, allow me to give Members some background on HUDC estates and the HUDC privatisation programme before I bring Members through the Amendment Bill.

HUDC flats were built in the 1970s and 1980s to provide a more affordable alternative to private homes and to meet the aspirations of middle-income households. HUDC estates were developed under two different frameworks − Phases I and II and then Phases III and IV.

The Phases I and II HUDC estates were built and sold by the former Housing and Urban Development Company (or HUDC in short) in the mid-1970s. In 1982, HDB assumed the responsibility for the development and management of these HUDC estates. In 1984, the HUDC Housing Estates Act, which we are now proposing to amend, was enacted to allow the Phases I and II HUDC flat owners to take over the maintenance and management of their estates.

The Phases III and IV HUDC estates were built and sold by HDB, which is different from the Phases I and II, in the 1980s under a different Act, the Housing and Development Act. Like HDB flats, these estates are maintained by the Town Councils.

In 1995, HDB announced the privatisation programme for HUDC estates. This was to meet HUDC residents' aspiration to own private housing and have control over the management and maintenance of their estates. Under this programme, HDB converts the existing flat leases to strata titles under the legal framework of the Land Titles Act. HUDC estates must obtain 75% support level before HDB can proceed with the privatisation works.

To-date, 17 out of the 18 HUDC estates have been offered the privatisation programme. The only exception is the Braddell View Estate.

The Braddell View Estate is one of the six Phases I and II HUDC estates developed in the late 1970s. It was the only estate to be completed in two phases, on two land parcels under two State leases each with different expiry dates. The flat owners of both land parcels share common facilities such as swimming pool, tennis courts and a clubhouse. The estate is self-managing under the HUDC Housing Estates Act; there is a corporation (which the Act calls a body corporate) managing and maintaining Braddell View Estate.

Unlike all other HUDC estate residents, the residents of Braddell View Estate do not have the easy option of privatisation under existing law because of the different expiry dates in the leases for their estate. Three options were explored. The first is to privatise Braddell View as two separate estates based on the two leases. The second is to reduce the lease tenure of the land parcel with the longer lease to align it with the land parcel with the shorter lease. The third option is to do the reverse: top-up the lease tenure of the land parcel with the shorter lease to align it with the longer one.

Over the last few years, HDB has explored all three options with the Braddell View Estate body corporate's management committee and residents. The first option – to privatise the estate as two separate estates – is not feasible because there are shared facilities straddling the land parcels, and dividing these facilities, as well as shared financial accounts, will be highly challenging. The second option is not attractive because all the owners on the land parcel with the longer lease have to agree to reduce their lease tenure without compensation. The most feasible is the third option.

To implement this option, the Braddell View residents will need to pay premium to top up the lease term for the land parcel with the shorter lease so as to align its terminal date with the lease of the other parcel. The Chief Valuer will assess this lease top-up premium. The privatisation of the Braddell View Estate can then be effected through the transfer of the common property and its residual interest in the housing estate by HDB to the owners of all flats in the Braddell View Estate after the HDB obtains a topping-up of the lease for the estate. Process-wise, the Braddell View body corporate will levy contributions on the flat owners who are the sub-lessees of HDB to cover the lease top-up premium, and pay over to HDB, being the lessor under the head State leases, as part of the costs for privatisation before the legal documentation for the estate's privatisation is lodged with the Land Registry.

Currently, the HUDC Housing Estates Act only empowers the Braddell View body corporate to levy contributions from residents based on their respective share values. The Braddell View body corporate's management committee, representing the residents, has approached HDB to amend the Act, so that the Braddell View body corporate has the flexibility to vary the basis of levying contributions for the levelling-up of lease tenure. Braddell View residents need to have the autonomy to decide how best to apportion the cost amongst themselves, taking into account the potential benefits of privatisation, particularly between residents on the land parcel with the longer lease vis-Ã-vis residents on land parcel with the shorter one.

The Bill before you today is in response to this request, so that Braddell View residents, like other HUDC residents, can have the option of privatisation, should they decide to do so. At this point, I would like to acknowledge the efforts of the current and previous Advisers and management committees of the Braddell View body corporate in working with HDB to explore ways to resolve the issue and helping to get the process to where it is today.

Sir, I will now move on to the amendment of the Bill.

Clause 2 of the Bill amends section 8 of the HUDC Housing Estates Act to allow Braddell View body corporate to levy contributions on the flat owners in order to pay HDB the lease top-up premium.

Clause 3 amends section 13(1) to empower the Braddell View body corporate to convene a general meeting to determine the apportionment of the contribution among the respective flat owners for the lease top-up premium. The decision is to be made by way of special resolution. This means a resolution passed at a general meeting against which not more than 25% of the owners of all the flats in the housing estate concerned have cast their votes.

The new sections 13(4), (5) and (6) provide that the Braddell View body corporate must pay HDB the lease top-up premium it has collected and the related expenditure incurred by HDB. Payment must be made within 30 days of HDB's written request for payment, or within such extended time as HDB may allow, but before the legal documentation for the estate's privatisation is lodged with the Land Registry. Any sum unpaid by the due date will attract interest.

Sir, the amendment of the HUDC Housing Estates Act will facilitate the harmonisation of the tenure in the two leases of Braddell View Estate, so that its residents, like all other HUDC estate residents, can have the option of privatisation, if they choose to do so. Braddell View Estate is the only HUDC estate left governed by the HUDC Housing Estates Act. The amendment has no impact on other HUDC estates. The HUDC Housing Estates Act will be repealed only if Braddell View Estate is privatised. Sir, I beg to move.

Question proposed.

I rise in support of this Bill. The residents of Braddell View have waited a long time for this move.

They have for a number of years, functioned as a private estate in all but name – they have the facilities of a private estate; they have their own Management Committee; they levy and collect their own maintenance fees; they manage and maintain their estate independently. It is a beautiful estate, with green areas and wide-open spaces – a throw-back to the days when the value of a house was not measured by the amount of built-up space you can squeeze from your land.

But because of a historical quirk, which was in all fairness not anticipated by anyone, they were unable to take the next logical step and be legally privatised. It was not for the want of trying. Previous Management Committees, together with my predecessor Members of Parliaments, and I have held countless dialogues and discussions with MND and its agencies to find a workable solution. Many options were explored and polls taken from the residents, all to no avail. The legislative framework simply did not allow for viable solution. It has been the source of much frustration for the residents, who could not understand why nothing could be done to help them resolve an issue which is not of their doing.

This Bill now allows them to take a major step towards privatisation. No doubt it comes at the time when all other HUDC estates have been privatised or in the process of completing that process, but its passage is nonetheless welcome. As Rousseau once observed, "Patience is bitter, but its fruits are sweet."

On behalf of the residents of Braddell View, I would like to thank the Ministry and the Minister for taking this step to help residents realise their dreams of privatisation.

But this Bill is only the first step. It remains for the residents to collectively decide how it can be achieved fairly, and there will no doubt be some who may not see this as being in their interest. That is their choice to make. From my interactions with residents, it is clear to me that most, however, do favour. However, there is a real risk that many of them may nonetheless feel constrained to vote against privatisation because of practical difficulties. Chief among these will be the premium they will have to pay. This will be exacerbated by the sum some of them will have to pay to top up the lease for Phase 1 of the estate to make up for the two-year difference between the two phases.

The Braddell View estate has been in existence for over 30 years. Many of its owners are retirees. They will have difficulty forking out thousands of dollars it will cost to privatise. The values of their homes have no doubt appreciated greatly over the last 30 years, but the real issue is their cash flow. They may not be able to take out loans as they may not qualify or have no or insufficient income to service it. If privatisation goes through, some may even be forced to sell and move out. A failed privatisation attempt may lead to acrimony within the estate, as we have seen in others in the context of en-bloc sales. That surely cannot be an intended consequence.

But the difference here is that it is only logical for the Ministry to want the privatisation to succeed because it makes little sense for the HUDC Act to remain in force because of this one estate. As the estate gets older, there will be greater challenges in respect of its maintenance and management. Future housing policies may also have to take into account the existence of this once remaining HUDC body.

I therefore hope that the MND will help the residents of Braddell View overcome the hurdles in the privatisation process, in particular the financial hurdles. I also look forward to working together with the Ministry and its agencies in helping residents navigate this journey and allow them to reach the destination they seek.

Mr Speaker, Sir, I thank Mr Hri Kumar who has spoken in support of the Bill. Clearly, he has a very good understanding of the issues at hand and has reflected the sentiments of the residents. Let me now respond to the issues raised.

Mr Hri Kumar is concerned about the amount of premium flat owners have to pay to top up the lease tenure of the land parcel with the shorter State lease. As I explained earlier, the top-up premium will be determined by the Chief Valuer. It will take into account factors such as the state of the property, the prices of the properties sold in recent transactions and other determining factors. This approach is consistently applied to all requests from land owners for topping up their existing leases. The premium paid will go into and form part of the past reserves which is constitutionally protected.

The flat owners will have sufficient time to prepare for the payment as this payment is due only after the estate has obtained both the requisite support to privatise and to top up the lease. Between the time the requisite support and the decision are obtained to the time to the premium becomes payable, is an estimated of six months. The Bill also makes provision for HDB to grant further extension, if necessary.

Mr Hri Kumar is also concerned that some flat owners may need help to finance the payment. Privatisation will allow Braddell View flat owners to own private housing and have control over the management and maintenance of their estate. However, there is also cost involved. Hence, it is important that the Braddell View flat owners, as individuals and as a group, consider the benefit of privatisation against its cost and decide whether they wish to take the next step to privatise.

Nonetheless, HDB has worked with the CPF Board on the use of the flat owners' CPF funds to pay for their share of the lease top-up premium. The CPF Board has agreed to allow the flat owners of Braddell View Estate to use the savings in their CPF Ordinary Account to pay the lease top-up premium and the related stamp, legal and survey fees incurred in the privatisation of their estate. If an owner is aged 55 and above, he may use the savings in his CPF Retirement Account that is in excess of the Minimum Sum required cash component for the payment. Flat owners can also add in their children as owners of the flat; so they may use their children's CPF. In addition, the Braddell View body corporate can also use the estate's sinking funds to pay the premium, but it must first pass a resolution approved at a general meeting to expressly provide that the premium to be paid to HDB for the lease top-up may be paid using monies in the sinking fund.

Sir, I hope I have addressed the Member's concerns. Let me conclude by thanking the Member again for his support of the Bill.

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 Lee Yi Shyan].

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

Order for Second Reading read.

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

Sir, in February, the Government announced the Bus Service Enhancement Programme, or what I would call the BSEP for short, to significantly expand public bus capacity and improve bus service levels over the next five years. Against the backdrop of higher than expected public transport ridership in recent years, and high levels of peak period crowding, the Government had stepped in to decisively improve bus services for commuters, ahead of the roll-out of new rail lines and capacity enhancements to existing lines in the next few years.

Under the BSEP, 550 buses will be added to the existing bus fleet with the Government's assistance. The Public Transport Operators (PTOs) will fund, at their own cost, another 250 buses. Together, this will expand the bus fleet from 4,000 to 4,800 buses, or an increase of about 20%. As these buses are progressively added, commuters can expect more frequent, more reliable and less crowded bus services. In addition, we will improve overall bus connectivity, by adding about 40 new bus routes under the BSEP. This represents a 15% increase in the number of bus services. A small number of this new bus routes will run parallel to stretches of the existing MRT network.

To execute the BSEP, we had announced that $1.1 billion would be set aside in a special purpose Bus Service Enhancement Fund (BSEF). This would cover the net costs of purchasing and running 550 buses for 10 years under the programme. To put the $1.1 billion in context, we have invested some $20 billion in our Rapid Transit System (RTS) network. We will be investing some $60 billion more to expand it over the coming 10 years. Our BSEP investment in the bus system complements our investments in the RTS network to achieve a high-quality, well-integrated public transport system where both the bus and rail systems work together to deliver high levels of service at affordable fares.

With the BSEP, commuters will benefit from a quick and decisive improvement in bus service levels. It also means that no additional costs are borne by commuters, who may have to pay 15 cents more per journey otherwise. The Government will ensure that the PTOs make no additional profits from the BSEP, which will be run on a net cost-recovery basis.

Separate from the BSEP, as part of our periodic review of the overall bus financing framework, the Government had also announced, during Committee of Supply 2012, two other measures which were intended to more closely align support for the bus industry to what the Government has provided for the rail industry. First, a portion of the revenue currently received by the Government from bus shelter advertisements will be channelled to the PTOs. Second, the leasing and land-related costs for all bus depots and bus parks will be taken over by the Government. Both measures will be of some help to the bus operators as they have to cope with rising costs. We will continue to review and fine-tune our bus financing framework periodically.

Mr Speaker, Sir, let me now update Members on the implementation of the BSEP. Since the announcement in March 2012, LTA and the PTOs have been working out the implementation details. These have largely been sorted out. The first buses under the BSEP will be deployed on our roads sometime in September this year. We will provide details of the new routes and improvements made to existing services then.

Over the next one year, we expect to add around 250 buses to the combined public bus fleet of about 4,000 buses. This increase in 250 buses will allow us to improve the service levels for at least one in three existing bus routes and introduce about 14 new routes.

I know many of you in this House would be anxiously waiting for the new buses to come your way, but please be patient. The new routes will be implemented progressively, and as far as possible, geographically distributed to various parts of the island as needed. The implementation of new routes will be paced with improvements to existing services. I seek Members' understanding if some of your requests cannot be met, or not as soon as you would like, but I assure you that your constituencies will enjoy improvement in bus services in the not too distant future.

In this regard, LTA has been progressively engaging Members of Parliament and community leaders to better understand the needs of your residents. I would like to thank all of you for your support. We will carefully assess and prioritise the different requests. Our end objective must be to achieve the maximum possible benefit with the finite resources under the BSEP.

To support the roll-out of the BSEP, both PTOs have recently enhanced salaries for bus drivers to attract more Singaporean drivers, and together, the PTOs expect to hire about 360 new bus drivers from now until the end of the year.

While we have made an encouraging start to recruitment of new drivers this year, especially after the introduction of the salary enhancements, I have urged both PTOs to step up their recruitment. I would expect both PTOs to closely monitor the effectiveness of their enhanced remuneration packages, and be ready to make further adjustments if required. Recruitment and retention of bus drivers will continue to be the most challenging and critical resource constraint in the roll-out of the BSEP, and I will be personally paying close attention to this matter.

Let me now bring the House through the intent and key provisions of the Bill. The proposed amendments to the LTA Act are primarily to allow LTA to implement the BSEP, to establish the BSEF, and to provide grants to the PTOs in line with the two bus financing measures I mentioned earlier.

Section 6(1)(g) will be amended to introduce a new function for LTA, which is to implement programmes, such as the BSEP, to improve public bus services provided by the PTOs and other bus operators licensed by the Public Transport Council (PTC). Specifically, the amendments provide for LTA to carry out operational planning for bus services to meet the needs and expectations of the public, including coordinating the routes and scheduling of bus services provided by the operators.

To allow LTA to fulfil this new function, a new section 7(1)(d) will be added to the LTA Act to confer powers on LTA to provide financial assistance to the various bus operators in the form of loans, grants and guarantees for BSEP, and for any future programmes to improve public bus services. A new section 13(1)(l) is also added to the LTA Act to provide that such financial assistance can be provided by LTA through its existing revenue accounts.

Finally, in line with the Government's stated intention for the $1.1 billion to be held in a special-purpose BSEF, a new section 13B will be added to the LTA Act to provide for the creation of the BSEF. The BSEF will be used by LTA to provide financial assistance to the PTOs in the form of loans and grants, to purchase buses, and to finance the operating expenditure they incur under the BSEP.

We have also built in legislative flexibility for the BSEF to collect grants or related revenues, and fund expenditures, under any other future programmes that LTA may enter into with bus operators to improve public bus services. As I mentioned in my COS 2012 speech, we will be reviewing the bus financing framework. Depending on the outcome of the review as well as the effectiveness of the BSEP in delivering the expected bus service improvements, we will not preclude that the BSEP in its current form may need to be adjusted, supplemented or even replaced. As such, it is only prudent to build in legislative flexibility so that we can respond in a timely manner to any necessary changes.

Mr Speaker, Sir, the proposed amendments are needed for LTA to establish the BSEF, to contract the PTOs to implement the BSEP, and provide grants to the PTOs in line with the two bus financing measures announced at Budget and COS 2012. Sir, I beg to move.

Question proposed.

Mr Speaker, Sir, thank you for allowing me to join the debate. I will speak in Mandarin first.

(In Mandarin): [Please refer to Pg 368-369 for Vernacular Speeches.] Mr Speaker, Sir, food, clothing, shelter and transport are basic necessities of life. People have been seeking a perfect transport solution that is convenient, fast, safe, reliable and economical. In ancient times, people looked for horses that run a thousand miles a day, while in current times, we look to MRTs and high speed trains.

Recently, I came across an article "Subsidies for Public Transport" written by Zhao Yongshan who raised three rather noteworthy suggestions: to have the right amount of subsidy, to improve the methods of subsidies, and to enhance the supervision of how subsidies are used.

Have the right amount of subsidy. Public transport is a public service. Thus, the fares and routes cannot be totally based on market principles. The Government needs to plan and regulate and provide a certain degree of subsidy. However, public transport is also a business, and too much reliance on subsidy will lower productivity and encourage wastage of resources. Therefore, financial subsidy should not only help operators manage costs but also motivate them to be more efficient. Taking a leaf from countries like the United States, United Kingdom, France, Germany, Japan, Hong Kong and even Taiwan, the amount of subsidy is best at the "level of offsetting operation cost".

Improve the methods of subsidies. First, we need to increase the subsidy for infrastructure. Generally speaking, subsidising infrastructure development has greater impact than subsidising operating cost as an efficient and reasonably priced transportation would attract more ridership. This is why governments in many countries invest heavily in public transport facilities. Beijing, for example, believes that a fast, convenient and on-time land transport is more attractive than low fares. Secondly, we need to encourage more involvement of investment, development and operation of public transport. By creating market competition and ensuring that routes will only be tendered to operators who meet the service standards and at the same time request for the least subsidy, would encourage companies to raise productivity and not waste resources trying to secure more subsidies.

Strengthen supervision on subsidy. The writer suggests that the authorities should stipulate regular disclosure of information on public transport subsidies, PTO's profits and losses, forecast and usage of subsidies. The Government should enhance the control and audit of public transport operating cost and Government subsidies.

The Transport Minister has assured us that LTA will audit and supervise the accounts of public transport operators and funds will only be given out after the figures are in. Bus companies will not benefit from the $1.1 billion fund. This money is from the people and will be used on the people. The Government's intent of pumping in $1.1 billion is to subsidise bus fare for commuters, not operators. It is to allow all commuters to enjoy higher standards of bus services without too big a fare hike. I think most Singaporeans will find this arrangement acceptable.

Mr Speaker, Sir, I support this Bill. Singapore's population is growing, and so is our expectation of public transport. We are looking for a convenient, fast and value-for-money transportation system. And it is the Government's responsibility to build such a system.

Convenience means having public transport at our doorstep. Even though the MRT network is expanding and the Circle Line will be fully operational, the MRT still does not reach every neighbourhood. Thus, public buses play a supportive role in making it more convenient for Singaporeans to move around.

Fast – shorter waiting time and journey. This requires bus services to be more frequent, which means, we need more buses.

To attain convenient and fast service, to get more buses and improve service standards, all of these require funding. Private companies cannot afford such a huge amount. Thus, the Government needs to render help. If the Government does not take responsibility of public transport and allow market forces to control it, more Singaporeans will not enjoy public transport or have to put up with bad services. Government subsidies will enlarge the coverage of the public transport network and ensure fairer distribution of bus routes, therefore, more people can enjoy effective public transport.

Another noteworthy problem is whether we can recruit a sufficient number of bus drivers. SBS Transit has increased the monthly salaries of newly recruited Singaporean drivers from $1,375 to $1,600. Current Singaporean drivers will have a $225 pay raise across board. SMRT will also follow suit. Newly recruited drivers, with overtime and other allowances, can expect a pay of $2,250. I hope the authorities will gradually increase the pay of bus drivers in the next few years so as to retain current drivers and attract more Singaporeans to join the industry.

The various measures are good but they would inevitably increase operating cost for small-and-medium sized bus companies, which would inadvertently drive up the fares for school buses. I hope the Government will look into helping affected families.

The Government subsidies will not only help bus operators to remain viable but also improve the service standards of our public transport for the benefit of Singaporeans. Therefore, I support the Bill.

(In English): Mr Speaker, Sir, I fully support the Bill. Our bus capacity is straining to meet the demand of our commuters during peak hours and on weekends. Any increase to the bus capacity on the scale and within the set timeframe necessary to solve this problem can only be achieved with Government participation. The investment costs involved are simply too heavy for our bus operators to bear. We must bear in mind that not every route is financially viable but our PTOs are still required to provide bus services to serve the needs of our residents. Hence, we must evaluate our services based on the entire road network. The Bus Service Enhancement Programme (BSEP) is the fastest way to step up capacity while keeping our bus fares affordable.

We are fortunate that we have the financial resources and reserves which allow us to set aside $1.1 billion for the Bus Service Enhancement Fund (BSEF) without imposing a financial burden on future terms of Government. Furthermore, we have the reassurance of the Minister that the operators and shareholders will in no way profit from this Government injection. All monetary flows will be tracked and be accounted for. If necessary, not all of the $1.1 billion will be disbursed. I believe that MOT will be responsible for the judicious management and disbursement of moneys from the Fund to the PTOs; it will put in place the necessary checks and audits to monitor and control the flow of funds. With this assurance, I have every confidence that the programme will deliver the results we want.

The Bill clarifies LTA's role in the provision of transportation infrastructure including bus depots, bus parks and bicycle parking facilities. This is practical as it will remove some of the entry hurdles to new PTOs in the future and allow more competition in this sector. It will be administratively easier to let the PTOs to focus and compete on the provision of bus services. The Government should continue to do more of heavy lifting through this funding, construction and maintenance of the infrastructural assets.

I would like to take this opportunity to appeal for more bus priority measures to be implemented. Without these, more buses on our roads would cause more congestion and bus bunching. In addition, we must look into expanding our bus interchanges as the few interchanges that were built in the last three years, such as the new Boon Lay and Serangoon Interchanges, are much smaller than the previous interchanges. The temporary Jurong East and Bedok Interchanges also have the same problems.

Mr Speaker, I seek a few clarifications from the Minister with regard to sections 12 and 13B of the proposed amendment and insertion into the Land Transport Authority of Singapore Act respectively, made necessary by the Bus Service Enhancement Fund (BSEF).

Mr Speaker, the tabling of these amendments to the LTA Act sheds more light on how the BSEF will be implemented, further detailing the points covered by the Finance and Transport Ministers during the Budget and Committee of Supply debates earlier this year. In the Minister for Finance's speech on 17 February 2012, he referred to the Government's commitment to fund 550 buses as a "one-time commitment". In the Minister's round-up speech on 1 March 2012, the Minister stated that out of the $1.1 billion package, $280 million was budgeted for the purchase of 550 buses, while $820 million covers net operating costs over 10 years. The Minister also stated that should PTO's losses in running the additional 550 buses turn out to be lower than expected, Government funding will be reduced correspondingly.

My first query relates to clause 7 which introduces section 13B(1)(e) to the Act. The section states that "there shall be established by the Authority of Bus Service Enhancement Fund comprising [amongst others] − all investments and other property purchased out of moneys in the Bus Service Enhancement Fund, including the net income from such investments". Separately, section 13B(1)(f) states that BSEF will comprise "all interest received on investments belonging to the Bus Service Enhancement Fund, and all amounts received by the Authority from the sale of any investment or other property paid for with money from the Bus Service Enhancement Fund".

In light of this, could the Minister please explain the effect of section 13B(1)(e) and (f) that I have just highlighted, which give the Government wide powers to use BSEF funds beyond bus acquisition and accounting for net operating costs as long as the object of these investments is to improve and expand the range and reliability of bus services? At first blush, it appears as if the $280 million earmarked for bus acquisition and $820 million for net operating costs do not leave much scope for additional investment since this neatly comes up to $1.1 billion. If the PTOs do not use the entire $1.1 billion set aside for 550 buses, the Bill suggests that the BSEF will continue to exist to extend grants and loans to the PTOs. I understand from the Minister that this is the case because it also accounts for potential future programmes. What this really means is that the BSEF would institutionalise active Government intervention in the public transport sector for the long term, until such a time the Government decides to dissolve the BSEF.

The proposed Bill will also allows BSEF funds to be employed for investment in any property in addition to the standard investment power of statutory bodies, as provided for in section 33A of the Interpretation Act, which is referred to in section 17 of the LTA Act. Could the Minister share with the House the type of investments that the monies in the BSEF are envisaged to be used for, apart from those permitted under section 33A of the Interpretation Act and, more specifically, the risk profile of these envisaged investments?

My second query relates to clause 7 introducing section 13B(2) to the Act, which gives wide-ranging powers to the LTA to withdraw BSEF monies to provide grants or loans to the holder of a bus service licence or a bus service operator's licence. The inclusion of this provision clearly presages the use of BSEF to extend loans, not just grants − a point which I raised in my speech on the BSEF during the Budget debate, where I proposed that the Government claw back the $1.1 billion from the two PTOs over a fixed period of time.

This question is quite central to the disbursement of $1.1 billion the taxpayer monies, as it is clear that the Government eschewed from extending the BSEF as a loan to the PTOs, even though both PTOs operate in near monopolistic market conditions and have announced healthy dividends for their shareholders over the years. Can the Minister please share with the House what considerations the Government deliberated upon when it decided to extend the $1.1 billion BSEF to the two PTOs, as opposed to extending a loan − as we now know that this Bill also authorises the Government to use the BSEF for the purpose of extending loans to PTOs and holders of bus operator licences? In addition, can the Minister also clarify what factors would determine when the LTA would decide to extend a loan to a PTO or bus licence holder, as opposed to a grant from the BSEF?

My third query relates to clause 5 to amend section 12(1) of the Act. Sections 13A and 13B require certain revenue streams to be channelled into the Railway Sinking Fund and the Bus Service Enhancement Fund respectively, instead of the Land Transport Revenue Account. The explanatory note to the proposed Bill states that the Minister will apportion this revenue stream between the Bus Service Enhancement Fund on the one hand, and the Land Transport Revenue Account on the other. Would the Minister clarify what is the expected ratio of apportionment between the two accounts?

Finally, Mr Speaker, Sir, in the Channel NewsAsia report on 14 May 2012, it was reported that the purpose of the BSEF was for the Government to set aside money to fund the commitment for the Bus Service Enhancement Programme and provide transparency and accountability as to the use of the money.

I have a final clarification I seek from the Minister and this pertains to a point about the potential abuse, or even the creative use of the BSEF by the PTOs.

For example, in anticipation of 550 additional taxpayer-funded buses on the roads, can the PTOs deploy the taxpayer-funded BSEF buses rather than their self-financed buses to service existing routes which are comparatively less revenue-generating than other routes? If so, the PTOs can plausibly improve their profit margins by deploying their self-financed buses on the more profitable routes, legitimately employing the BSEF to subsidise their operations as a whole. This is conceivable since the Minister has stated that 300 of the 550 buses will go towards supporting existing bus routes while 250 will be for new routes.

The Minister also stated during his COI speech that as an additional safeguard, the LTA will scrutinise the PTOs' actual costs for the purchase and running of BSEF buses. However, does this Government scrutiny extend to the selection of bus routes by the PTOs on which the BSEF buses will operate? The Finance Minister has assured the House that should the PTOs' losses in running the additional 550 buses turn out to be lower than expected, Government funding will be reduced correspondingly.

However, there is nothing in this Bill that can protect the taxpayer from the shrewd use of the BSEF by the PTOs – a scenario that should not be discounted because these are ultimately profit-generating entities fundamentally answerable to their shareholders. Would the Minister demand strict and active regulatory oversight over the use of the BSEF such that the prospects of abuse are significantly lowered? Can we have an assurance from the Minister that the LTA will be able to perform this role and prevent the abuse of the BSEF, in light of recent question marks over the LTA's regulatory responsibilities with regard to the COI on SMRT disruptions? With that, thank you very much, Mr Speaker.

Mr Speaker, the Land Transport Authority (Amendment) Bill gives the Government the powers to fund and implement the Bus Service Enhancement Programme (BSEP). The BSEP provides for the purchase of 550 new buses over the next five years, the hiring of over a thousand bus drivers, and the funding of the maintenance and operational costs for these buses over 10 years. I support the objective of the BSEP, which is to improve and expand the range and reliability of bus services provided to commuters. Like most commuters, I hope to see more frequent and less crowded buses, especially during peak hours. However, I have several concerns about how the Government is going about achieving this objective.

The plans to increase the bus fleet to ease commuters' woes are long overdue. Over the past 10 years, Singapore's population has grown by over one million people, yet the pace of expansion of our transport infrastructure and operations has not kept pace. The Government's failure to expand our transport infrastructure and operations in tandem with the influx of foreigners has led to the current situation of long waiting times, overcrowded buses and trains, and very frustrated commuters.

The Government has belatedly realised that the quality of service (QoS) standards that the public transport operators (PTOs) signed up to previously are not sufficient to meet the needs and expectations of commuters. But who established these service standards? Is it not the Public Transport Council (PTC), which is an agency under the Ministry of Transport? Why did the PTC set the bar for QoS so low? For example, the current QoS allows for bus loading of up to 95% capacity. This is a very generous allowance, considering it includes standing passengers, not just sitting passengers. I have boarded such packed buses before, where I have found myself standing on the entrance stairs, barely able to even reach the fare card reader to tap my ezLink card. Despite this soft standard, both bus operators failed to meet the standards in three of the six months in the most recent QoS reporting period. They were issued paltry fines in the magnitude of $100 each time they were caught not meeting these standards.

Now the Government wants to set more stringent QoS standards for the PTOs. Among these, the bus loading limit will be lowered from 95% to 85%. If the Government had set these more stringent QoS standards earlier, and rolled them out more gradually over the past 10 years in anticipation of our population boom, there would be no need to suddenly ramp it up now. Bus operators could have planned their purchases of new buses and factored them into their annual cost projections. This might have cut into their profit margins, but taxpayers might have been spared having to fork out $1.1 billion to help the operators meet these sudden new standards. The Government needs to answer for this planning and regulatory failure.

A related question I have on the QoS is whether it is really the case that the Government cannot increase the standards without breaching the contracts with the bus operators. I understand the PTOs operate on 10-year contracts. When were the current contracts signed and when would they be up for renewal? According to the PTC website, the QoS standards were revised in August 2007, August 2008 and August 2009. Obviously, these were done mid-way during the contract. Why are we being told now that the Government cannot revise the QoS standards without compensating the PTOs?

A second broad concern I have about the Bill is how the Government is going to ensure that the subsidy does not get used, either directly or indirectly, to improve the bottom lines of our very profitable PTOs. During the Committee of Supply debate in March, the Transport Minister said he was going to "scrutinise the PTOs' actual costs for the purchase and running of the buses" to ensure that PTOs do not profit from this subsidy. Unfortunately, this Bill does not prescribe any mechanism for such scrutiny. Is there any process in place to prevent the PTOs from acquiring spare parts or maintenance equipment, or conducting staff training using BSEP funds that can be used to benefit the rest of their fleet? How will the LTA prevent the PTOs from making the BSEP buses run only the unprofitable routes in far flung areas, while running the profitable routes using their own buses? In short, how is the Government going to prevent BSEP funds from cross subsidising other parts of the PTOs' operations? Will the operations and accounting for the 550 buses be managed by the PTOs, who will then report the figures to LTA and seek funding accordingly? Will LTA take at face value all the figures the PTOs report to them? How will LTA audit the reporting?

Will the establishment of the BSEP mean that LTA will need to set up another department to manage and audit the operations of the PTOs? How many more staff is LTA going to have to hire to manage this 550-bus operation? How much is it going to cost? Is this cost going to be part of the $1.1 billion package or is it extra? And who is going to fund the operations and replacement of the 550 buses after the 10 years are up? Is this the last such subsidy that taxpayers are going to give to PTOs? If not, are we on a path to permanent operational subsidies being given to these two listed companies?

Mr Deputy Speaker, during the COS debate earlier this year, the Transport Minister, in arguing his case for having profit-oriented companies run public transport operations, said that, I quote, "the profit incentive drives the operators towards higher efficiency and productivity, which keeps costs as low as possible". This sounds ironic in light of all that has happened in the past year. Commuters have experienced the most serious and sustained series of MRT breakdowns in its 25-year history. It was not just the December 15 and 17 stoppages, but several other disruptions on the Circle Line, the LRT, the Northeast Line and the East-West Line that took place after that, some of which occurred as the MRT Committee of Inquiry (COI) was underway.

Despite all the official justifications for the BSEP, there is no running away from two facts. One, that bus service standards are not up to the mark and, two, the Government is stepping in to the tune of $1.1 billion to subsidise this service recovery. What higher efficiencies has the profit-oriented model brought us? We have not seen an improvement in service quality, but a deterioration, especially over the past five years. We have seen fares increase but yet the Government still needs to pour in billion-dollar operational subsidies. We have seen trains break down due to underinvestment in maintenance, yet these companies are reporting hundreds of millions of dollars in profits each year. Since 2003, SMRT and SBS Transit have paid over $1 billion in dividends to their shareholders.

Public transport is an essential public good just like education, healthcare and public housing. The returns from this public good benefit more than just the commuters themselves. When commuters are able to get to work quickly, conveniently and in comfort, their companies benefit from their more productive work. By allowing them to reach home on time after work and with less frustration, they can build better relationships with their families, and perhaps even raise the national fertility rate. The economy and society benefit when we have good and affordable public transport. These positive externalities do not show up in the balance sheets of the PTOs.

The BSEP seems to belatedly recognise that greater Government investments are necessary to rectify the market failure in the public transport industry. With this Bill, the LTA will not just be a regulator, but will purchase the buses and fully fund their operations. Effectively the LTA, which is a Government agency, is going to be the de facto owner of a fleet of 550 buses plying our roads. However, it is neither here nor there. The BSEP does not introduce any competition to spur efficiency and service improvements, yet we do not have a full public monopoly which reaps the benefits of direct control, with profits being reinvested to improve service quality. It is the worst of both worlds.

The public transport model has a great bearing on the long-term outcomes of our public transport system. The focus of our bus and train operators should be on improving service quality to meet or exceed commuters' expectations, not maximising profits for their shareholders. Mr Deputy Speaker, Sir, as a daily commuter myself, I share the concerns of many Singaporeans about the quality, comfort and affordability of our buses and trains. The public transport failures of the past few years have caused much angst among Singaporeans. It is incumbent upon this Government to set things right, both in the short term as well as in the long term.

Mr Deputy Speaker, Sir, I rise in support of the Bill which seeks to significantly improve the quality of bus services over the next five years. The public transport system has been very much in the news, reflecting the sentiments and concerns of the average Singaporean over the system's reliability, affordability, and overall integration. Given the growing congestion on our roads, on our trains and buses, the public transport system must rise to the challenge or else Singapore could, in effect, become a car park!

Sir, I use the public transport system on every work day. As it stands, the crowded buses, unreliable frequencies, and poor service quality are a poor advertisement for our bus system. Anyone seeking to switch from private car travel to public transport will hesitate, given the litany of woes that we hear, see and experience on a daily basis.

Sir, the Transport Minister in March this year had informed us that the 800 new buses – 550 funded with Government's assistance through Bus Service Enhancement Programme (BSEP) and 250 from the bus operators – will also see the two public transport operators (PTOs) having to deliver higher service standards, beyond the current requirements of the Quality of Service standards. At the outset, I seek a clarification from the Minister: what happens if a PTO does not meet the higher service standards? Will the sanctions for non-compliance be made known before the funds are disbursed? In the interest of full disclosure, they should be made known.

Sir, the Bill provides for the Bus Service Enhancement Programme to finance a wide range of purposes. These include:

• the purchases of buses;

• the acquisition of immovable property;

• the salaries of bus captains, the running costs including fuel and maintenance;

• investments in accordance with section 17 of monies in the BSEP, to payment of principal or interest borrowed; and

• the set-up, administration and management costs of BSEP, including legal costs.

Would the Minister enlighten us as to the ball-park percentages of the BSEP funds that will go to the various expense items, broadly defined? While I am not in favour of legislators or bureaucrats micro-managing, my concern is that the BSEP becomes unwieldy with a significant part of the funds going towards indirect operational costs such as the set-up, administration and management costs. In short, notwithstanding the accountability that is necessary for public funds, the financial assistance to the PTOs should not become unduly burdensome in its administration.

Sir, the Bill also explicitly introduces a new function for the LTA in order to allow LTA to implement BSEP. The Explanatory Statement to the Bill informs us that this new function includes "operational planning for bus services to meet the needs and expectations of the public". It goes on to note that this function is "without prejudice to the role of the Public Transport Council".

Sir, issues of accountability can be complex, if not blurred, where different regulatory agencies share powers and responsibilities. While I doubt there will be a turf war between the two statutory boards, the LTA and the Public Transport Council, can the Minister clarify how the LTA's roles will not duplicate, or conflict with, that of the Public Transport Council's? How would the two agencies coordinate better for the larger benefit? Or would we have a situation in which where one agency assumes that the other is minding a particular operational planning subject-matter?

In addition, I note that this new function seeks to provide the LTA with "operational planning" power. How does this conflict with and compromise the LTA's role as a regulator? Would it not be timely and necessary to consider a distinct separation of the regulatory arm and the operational arm of the LTA? After all, the LTA should not regulate and/or audit its own operational planning. It is more likely than not, however, that the LTA will not regulate or audit its own operational planning.

Sir, the BSEP has been designed and presented as a financial assistance scheme to our public transport operators. We have heard of and been given the assurance that the PTOs will not profit from the injection of the buses and the funds. At one level, that is accurate. During the Committee of Supply's debate on his Ministry on 7 March this year, the Minister for Transport assured this House "the $1.1 billion that the Government is putting into this programme is, in reality, a subsidy to benefit public transport commuters so that they enjoy a higher level of service. It is not a subsidy to the operators".

However, it is also important to appreciate that the public transport operators stand to gain financially and non-financially in the medium- to long-term if our public transport system and the PTOs are held in high regard by the users for its affordability, reliability, efficiency and effectiveness. In this regard, the BSEP can play the catalytic and complementary role in boosting public confidence in our public transport system. I hope the public transport operators would recognise that and be mindful of their social responsibility even as they pursue their commercial interests.

Notwithstanding my reservations, Sir, I welcome this Bill. Thank you.

Mr Deputy Speaker, Sir, I recall the debates in this House on the Bus Service Enhancement Fund back in March during the Budget debate. The consensus was that more buses are certainly needed but, for various reasons, our bus companies are incapable of funding these themselves. Concerns were raised by Members of all political parties in this House as to the effectiveness of our hybrid public transport model, which adheres neither to genuine privatisation nor nationalisation, and yet seems to be afflicted by the problems of both.

Clause 3B of this Bill empowers the LTA in implementing the Bus Service Enhancement Fund to provide financial and other forms of assistance to holders of bus service operator licences to improve the range and reliability of the bus services. This, of course, refers to the two big companies, SBS and SMRT, which effectively enjoy a monopoly of bus service operations in Singapore. My fear is that the two bus companies will come to rely on the financial and other forms of assistance from LTA like a handicap. It is like a bail-out fund you know you can always fall back on when you cannot do your job properly. At its worst, it may be a disincentive for the bus companies to operate efficiently.

I believe the problem may lie in how our bus service licensing works. Some elements of market competition could be introduced to the process of awarding the bus service licence to a bus company. In London, for instance, operators bid for bus routes from the government body, Transport for London, in a tendering system. Other bus service models could be studied. In Hong Kong, franchised bus services, which are operated by some of the world's largest privately-owned bus companies, run alongside with non-franchised services which serve routes that are less profitable but still indispensable. These are just some of the ways which could create the right conditions for our bus operators to operate more efficiently and not to be fixated on delivering big dividends to the shareholders which has no bearing on the bus service itself.

Therefore, my question to the Minister in relation to clause 3B of this Bill is, would he consider the benefits of the Bus Service Enhancement Fund to potential new and rival bus companies? Would he consider ending the monopoly of SBS and SMRT? Would he at least consider reviewing the bus service licensing process, now that SBS and SMRT stand to benefit from this handicap? And, lastly, if the amendment Bill is passed, would the Minister set up a committee consisting of some independent members from the public to oversee the control of this Fund?

Mr Deputy Speaker, Sir, transport was once the bane of our society. Buses were overloaded, people had to fight to hang on for a ride, and schedules were chaotic. The Government stepped in and, with its intervention, came the merger of the bus companies. Things went on for a smooth ride at least for a good period of time, and we had the MRT on our shores. This time, however, the problem is different. It persisted like the 100-day cough and refuses to go off despite prescribing various measures. The problems range from the lack of skilled bus drivers to mechanical breakdowns, inconsistent frequencies and over-crowdedness.

The Transport Minister has taken a step in the right direction to amend the Bill and give more attention to how public transport operators (PTOs) are managing a key asset of the nation. I praise the Minister for his doggedness in turning up at each major incident to personally see how the operators are coping. He is dedicated and committed to solving the problems before him, though they may not be of his doing.

In recent years, greater emphasis has been placed on expanding our train network. Up came the North East Line, followed by the Circle Line, which no doubt benefited many more residents greatly. The planning of bus routes and bus services seems to have taken a backseat. In fact, some bus routes have even been cancelled or re-routed. This is a shame, because buses can share the peak hour burden with the trains, as well as serve as an alternative form of transport during train breakdowns, if bus routes are efficient and reliable. I am glad to note that the LTA plans to assist PTOs with improving the coordination of bus routes and scheduling of bus services.

I wish to take this opportunity to ask for a new bus service to Khatib MRT station for Yishun residents. This is something I have requested several times in the last few months, and I have even raised the issue during this year's Committee of Supply Debate, but to no avail. I urge the Minister to give serious thought to this matter because regardless of how exemplary our train network is, it would be of little use to those residents who have problem in taking a bus or buses to the MRT station. I have in mind the residents in Jade Spring and Dew Spring estate and other upcoming BTOs. They live between Yishun MRT station and Khatib MRT station. The bus ride to Yishun MRT station is 10 minutes away, and residents have complained of waiting times as long as 20 minutes due to over-crowding. The total journey to the MRT station alone adds up to 30 minutes. And there is no direct bus to Khatib MRT station.

With four more BTO projects coming up, heartlands will expand, more residents will be taking the already overcrowded bus and they will require better connector services. The problem of overcrowding of buses will worsen, and bus frequencies will fall behind further. I urge the Minister to add more buses to existing bus services, including bus 806 and 969, and perhaps introduce parallel bus service during peak hours.

In the meantime, PTOs should hire more drivers but ensure that bus drivers are well-trained to understand and abide by local traffic regulations, and are familiar with their bus routes. I note with concern that SMRT bus drivers now have to do six-day work week, including Saturdays. Although they theoretically receive a salary increase, I am aware that some drivers are unhappy about the new system and claim that the adjustment to their working hours and salary, in fact, does not lead to a salary increase as SMRT claims. I hope that LTA will look into this and ensure that the drivers are paid what they rightfully deserve, while working hours that they are comfortable with. Otherwise, I fear that this will compromise the safety of the commuters and also worsen the shortage of drivers.

With the amendment of the Bill, I understand that a fund will be established to finance the PTOs. There are some Singaporeans who believe that there are measures we can adopt to improve our public transport system without utilising public funds that can otherwise be placed to better use elsewhere.

Our PTOs are private companies. They are profit-run; they have reserves and banking facilities. Advertising is a rich source of revenue for them. As corporations, they can issue bonds to raise capital quickly without diluting the current shareholders' equity. Do they require assistance from the Government? Why are they not investing their rich resources in improving our transport system? Why have they not prepared a comprehensive continuity plan in times of train breakdown? After all, even top cities with world-class transport systems are known to experience a mishap every now and then.

I quote Andrew Barr, Operational Planning and Integration Manager of the London Underground, referring to his recommendations for a backup plan during a train breakdown which he presented at the Committee of Inquiry hearing for the 2011 MRT breakdowns: "fairly common sense and not rocket science". Those were his words.

So, the various failures in our transport system are not due to lack of funding. They are the result, perhaps, of poor management of resources or insufficient allocation of resources at the right place or at the right priority. What the LTA should do, instead of providing funds and resources to the PTOs, is to assist them with hiring management personnel who actually know how to fulfil their duties, as well as drawing up guidelines and benchmarks, and ensuring that PTOs fulfil them.

Meritocracy has always been the foundation of our success; we reward those who perform well and, at the same time, we do not give the top jobs to those who are undeserving of them.

If PTOs fail to perform to public standards, the Government should step in once more, revoke their licences and de-privatise our transport system, at least until the persistent problems go away, and Singaporeans get back our efficient and reliable transport system we were once proud of.

The above is the view of some Singaporeans, including some of my residents, and I urge Minister to explain in detail why public fund is used to buy buses. For me, as a Member of Parliament, I would like to see better bus services for my residents.

We can say a lot about the grand plans that we have to improve our transport services, but the test of the pudding is in the eating.

How will our residents benefit? How will 800 new buses translate to meeting the residents' needs and expectations? When will this be done? And can this be done faster? Is 800 buses enough? If not, can the Government invest more funds to meet the residents' needs? Just now, the Minister urged us to be patient. I would like to respond, in Mandarin, in the form of a song. "你知道我在等你，吗？" 我希望部长不要让义顺的居民痴痴地等下去。我们要看的是实际行动。 ("Do you know I am waiting for you?" Yishun residents will continue to wait. What we want to see is practical action.) (In English): With that, I support the amendment Bill.

Sir, I am happy to note that commuters can expect better transport services going forward. The $1.1 billion package by the Government to help public transport operators (PTOs) meet service levels in bus operations is, indeed, extraordinary.

This Government has also pulled out all the stops to ensure bus operations remain viable going forward by bearing the development and land costs for bus service infrastructure. It will also allow PTOs to retain a portion of the advertising revenue from bus shelters.

While this Government continues to tinker with the transport model, the introduction of the Bus Service Enhancement Programme (BSEP) is nonetheless a tacit admission that privatisation, particularly for bus operations, has not produced the intended results as envisioned by the Government. I know the Minister has stated that the $1.1 billion package is a subsidy to benefit commuters, not a subsidy to benefit the PTOs. But depending on how you want to look at it, a glass can be half-empty or half-full. The BSEP will definitely benefit the operators because it will lift a huge burden off their backs in meeting enhanced bus service standards without hurting their bottomlines.

The establishment of the Bus Service Enhancement fund under section 13B of the proposed amendment to the LTA Act allows the LTA "to provide for grants or loans to any holder of a bus service licence or a bus service operator's licence for the purpose of improving and expanding the range and reliability of the bus services". From the onset, the Government has already decided to give the PTOs a grant instead of a loan despite the operators being financially healthy to begin with. These publicly-traded operators have paid out more than a billion dollars in dividends to their shareholders over the years.

We must send a message to these operators that it will not be business as usual after the gifting of the 550 additional buses that comes complete with drivers and full maintenance. Because at the end of the day, the commuters should be the ones smiling and not the shareholders.

The two main reasons cited by the Government on the need to introduce the BSEP to help PTOs are: first, the Government cannot mandate the PTOs to add 550 buses to improve bus service levels beyond what is stipulated in the existing regulatory framework; secondly, the PTOs' bus operations are already running operating losses.

While it may be seen as unfair to expect PTOs to meet higher bus service standards on short notice, it is not unreasonable to expect these operators to have planned for projected increases in ridership over the tenure of their service agreements. I believe the PTOs have done their projections. That is why they have the provision and the ability to buy 250 additional buses on their own to meet the growth in ridership.

So, what went wrong with their ridership projections that this Government sees fit to come up with a shock treatment for bus operations to the tune of $1.1 billion? The clue lies in an article in The Straits Times on 7 September 2010. It reads: "On housing, Mr Goh acknowledged that the surge of immigrants in 2007 and 2008 caught the Government by surprise. But the Government had not stopped them from coming because the booming economy needed workers". Mr Goh Chok Tong went on to say the National Development Ministry "did not provide for the sudden surge" in its housing plans.

Sir, when housing, which requires long-term planning, can be caught by surprise by a surge in population growth, what hope is there left for public transport to avoid the sudden crush? When you have a problem housing the extra immigrants, you will have a problem moving them. In fact, most of the infrastructure and essential services will suffer the same fate. So, the issue here is beyond the question of whether it is right or it is wrong to mandate the PTOs to ramp up their bus operations to cope with the rising demand. It is an issue where the right hand did not know what the left hand was doing, and the problem began to snowball to a point where this Government had no choice but to implement a $1.1 billion shock therapy to help bring back some sanity into our transport system.

I am happy to note that the Government has decided to exercise more control in bus operations. The Workers' Party has always advocated that. This will improve reaction time to meet any surge in demand for essential services caused by inorganic growth in population in the future.

The next justification by the Government on the need to help privatised and profitable operators run their bus operations is also disturbing. Both the Finance and Transport Ministers have voiced their concerns about the viability of the bus industry going forward. The Transport Minister said "the reality is that the finances of the bus industry have been deteriorating in recent years" and that "the PTOs' bus operations have been running operating losses for some time already."

Sir, it is not correct to single out bus operations as a loss-making business to justify the need to help PTOs. The operators are also given other cash cows to operate to make good money for their shareholders. Cross-subsidy is not an uncommon practice in business operations. Cross-subsidy is even more critical when it comes to essential services. It allows such services to continue even if they may become unprofitable. If the PTOs are losing some money in bus operations, the train operations and advertising revenue are more than sufficient to cover the losses incurred in the running of the buses.

I decided to find out how long the PTOs have been running losses for the past five years beginning 2007 for bus operations and how profitable the operators are as a company. For bus operations alone, SMRT made a profit of $1.5 million in 2007 but lost $20.1 million from April 2008 to March 2012. The total bus operation P&L for SMRT for the five-year period is a loss of $18.6 million. But over the same period, the company made a total of $756.5 million in after-tax profit. Although SMRT lost money on bus operations for the past four years, the amount is minuscule when compared to the total profit made from other operations. It is not easy for SMRT to run bus operations because it does not enjoy economies of scale. Its fleet size is only a third that of SBS Transit.

The picture for SBS Transit is quite the opposite. For bus operations alone, the company made a loss of $6 million in 2011 but made an operating profit of $71.4 million from 2007 to 2010. So, 2011 was the only year it lost money on bus operations for this period. Over the same period, the company made a total of $236.2 million in after-tax profit.

Sir, the case that the finances of the bus industry have been deteriorating in recent years and that bus operations have been running operating losses for some time already, does not hold true for SBS Transit. The company was running a healthy bus service with the exception of 2011. It is not a coincidence that both companies lost money in 2011. Last year was a challenging year for businesses that depend a lot on fuel and electricity to operate. Oil prices ended 2011 up 13.3% to average nearly $111 a barrel for the year, as reported by Reuters. But despite the volatility in oil prices, the most important thing to note is that both PTOs have healthy cash cows in the form of rail operations to keep their shareholders happy.

The BSEP and PTOs make strange bedfellows. One entity in this unusual partnership is willing to spend without expecting a return while the other expects nothing but attractive returns. The combination of these two entities may result in a smoother ride for commuters but not a cheaper ride. The combination of these two entities will not guarantee commuters a stay in fare increases but it will guarantee shareholders attractive dividend yield for the next 10 years.

I hope that, moving forward, the Government does not see it fit again to dish out free money to profitable PTOs. These operators are not cash-strapped to begin with, and no operator will reject free money to improve service levels. As mentioned at the beginning of my speech, I am happy that commuters can look forward to a better and less stressful public transport service. I would like to ask for more bus services to Hougang and Aljunied areas. I look forward to working with the LTA to improve bus services in the Aljunied-Hougang areas. Last but not least, I want to thank the voters of Hougang for giving me this opportunity to serve them at the national level.

Mr Deputy Speaker, Sir, our public transport system has increasing demands placed on it, both in terms of capacity, as a number of my parliamentary colleagues have mentioned, as well as expectations from the public. The operators, the regulatory agencies and the transport commission have been under increasing scrutiny. Er Dr Lee Bee Wah has mentioned the "100-day cough". It is a seductive temptation for a physician to use a medical analogy. Seeing as my colleague has brought it up, I will extend it. In the 100-day cough, there are three big challenges that a physician faces. The first is to reassure the parent of the child that everything will be okay in the end, and, second, that no medicine is going to provide you with a quick fix, and the third is that you know what is happening and you understand what is going on. The Ministry of Transport, the Minister for Transport and the LTA have my sympathies. I commend MOT and LTA for the amendments to this Bill which seek to allow significant changes to both the regulatory and financing frameworks of our public bus services, in order to make right the current gaps. The amendments clarify and strengthen the role of LTA in the private-public partnership that we have as our hybrid model and further emphasise and enhance the hybrid nature of our national public transport system. Nevertheless, I have some concerns.

Sir, the BSEP is targeted to meet the needs of bus commuters, but it has been described as an unanticipated "catch-up" measure where the provision of services will follow sometime after the demand has grown. On one hand, this is commendable in that it reflects the willingness to do what is right, to put right the problem, and to do so in a comprehensive and decisive way. Rather than looking back at why the situation has occurred – this has been discussed extensively – it is perhaps more valid to ask, looking forward, what strategies the Ministry has in general for our transport system to ensure that there is some anticipation, some building ahead of need, some provision of capacity in excess of demand. If we build capacity too far ahead, our trains and buses run close to empty for years, and we pay a financial cost. If our public transport services are bursting at its seams before we increase capacity, we pay a social cost. The Minister has described that there is a willingness to consider if the BSEP is sufficient or appropriate and for it to be reviewed in the future. Can we avoid this situation in the future?

Sir, the need for more bus drivers, and the need to increase their salaries has been brought up. Some of the public discussion has been about the suitability of recruiting a large number of drivers from overseas. Is this concern valid? Specifically, has there been an increase in the number of Singaporeans applying for the job, especially with the higher salaries? Concerns, such as the risks to the safety of commuters and other road users, have also been raised. The assumption has been that while these additional drivers are essential to the provision of a much-needed service, the large number of new drivers will be a risk that needs to be managed. Are there steps that will be taken to ensure that the safety of commuters and pedestrians is not compromised? Will the training programme for the new bus drivers be enhanced? And are there plans to address the supervisory framework for these new drivers?

More buses on the roads will be better for passengers. The services, especially those that ply the heavily utilised routes, will increase in frequency and this will ease the congestion within the buses, but what about on-road congestion? If on-road congestion were perhaps better managed, the existing bus fleet could provide a better service, and handle a higher throughput of passengers. Some, such as Mr Gan Thiam Poh, have raised the concern that there may be road congestion as a result of the increasing number of buses. I have to respectfully disagree. I do not believe that this will be a significant factor because, in truth, there will be far more cars added to our roads over the same time period, which are going to affect congestion to a much greater degree. Are there any new plans to manage traffic congestion in the near future? Given that cars are our greatest contributor to road congestion, would the Minister for Transport elaborate on the changes to the projected COE growth numbers and is he, in particular, prepared to comment at what point we anticipate reaching a point of zero car growth?

Sir, as the COEs are turned over, what consideration is given to the utilisation of COEs by our taxi services? The reason I bring this up is that taxis can be viewed, on the one hand, as a form of private transport – a private car, but one that you hire for the duration of a journey, or they can be viewed as an enhanced version of public transport – a transport service at a higher charge to meet a specific time-limited need. We can see taxis as an extension of public transport, and I believe we should. Does the Ministry? Does the Minister intend to drive – pun intended – an increase in the size of the taxi fleet? Or, alternatively, an improvement in the provision of taxi services can be made by ensuring that each taxi COE is optimally used. This is an issue because the utilisation of taxis, in terms of the number of hours a given taxi operates, is highly variable. A taxi that is sub-optimally operational has taken a COE that might be otherwise more productively used

Is there an optimum operational utilisation of a taxi, and, if so, how is this target achieved? Could the Ministry leverage on an improved provision of taxis, to fill the gaps where public transport is insufficient? Do we have enough taxis on the road, and are they being used optimally?

Sir, returning to the Bill and the BSEF, a portion of the revenue currently received by the Government will be channelled to the PTOs. Will the PTOs have a role in generating or attracting more advertisers to place advertisements? Is this a shift in their focus and role? Furthermore, should the PTOs require a loan from the Government, has consideration been given to how comparable these conditions will be to market rates? I would encourage that the conditions are supportive but not overly generous as these companies are publicly listed with their own shareholders, as has been pointed out many times. While we want to provide support so that our public transport is financially viable, we do need to strike a balance to ensure that the companies will have to be prudent and responsible.

Sir, the financing framework merits further explanation and discussion. Despite repeated reassurances from the Ministry on this subject, members of the public and of this House continue to be concerned that public money is being used to help a private company turn a profit. As has been explained by Er Dr Lee Bee Wah, the public continues to wonder if improving internal cross-subsidy would be better. Some are assuming that the operators could continue as is, without any help, and, possibly, with minimal fare increases. Some of these concerns are, of course, inflated and inflamed, some as a result of misunderstanding, as has been brought up before, a misunderstanding about the amendments to section 6, where LTA takes on the role of being the route planner and central planner, rather than leaving this to the PTOs. That has been misunderstood several times. Some of these concerns are inflamed as a result of misinformation, some of which may be deliberate. The key points, that no profit will be made as a result of the BSEP, that the assistance it provides to the operators will be calibrated and adjusted to ensure this is so, need to be explained and discussed. The public needs reassurance − reassurance that must be repeated and reinforced.

Sir, the amendments to the Bill allow LTA to take the necessary steps to deal with some major current problems affecting our bus services. They ensure that subsidies continue and that these subsidies are on the side of infrastructure and supply rather than primarily on the side of demand, and that this approach serves all Singaporeans. The amendments ensure that revenue from the bus shelters can be put to work to improve services for commuters. The amendments make explicit LTA's role as central planner as well as the provider of infrastructure. These amendments emphasise the hybrid nature of our system. They emphasise the intent to use a model of partnership between a private operator, a public planner and a public regulator to provide the best possible transport service for our Nation. Sir, I support the Bill.

Mr Deputy Speaker, Sir, let me try to respond to all the comments, suggestions and views that have been expressed, and it has been a wide range of views. It ranges from "why do", to "do now", to "do more". There have been expressions of clear, unequivocal support. There have been others that have stayed silent on this matter altogether, like Mr Pritam Singh, and there have been others who have taken a more nuanced position, like Mr Png, who welcomes it but did not quite express support for it. I understand their concerns. Indeed, I will try to take this opportunity to explain it as best as I can. But let me also assure you that there is no intention whatsoever on my part to impose the benefits of the BSEP on your residents over your objections and against your principles. So, I would be very clear on that score.

I would like to categorise the points that have been made, and try and deal with them in a few categories. I think there has been this nationalisation versus privatisation issue that has been raised by both Mrs Chiam as well as Mr Giam. Related to it, why not more competition, why not take the opportunity to look at a third operator? There have been views on the bus financials, how it stands − and I think Mr Png did a great deal of work in researching the financials of the bus industry over the last five or six years − but also questions related to why we should not have the PTOs cross-subsidise between the rail and the bus networks. There have been points that are raised about very frustrated commuters, that bus services are not up to the mark, and these are points that have been raised by Mr Gerald Giam. So, I hope to talk a little bit about where exactly we are, lest people run away with the impression that the whole system is so broken and so poor.

I want to cite, for example, the UniSIM study that is independently conducted every year, where a direct question is posed to regular commuters of both the bus and the rail networks whether they perceive bus services to have improved compared to the previous year. I shall use their response to the question to try and give an understanding of where exactly commuters are as a whole on this issue, and also to talk a little bit more about what improvements we can expect.

Lastly, I would want to try and talk a little bit about the roles of PTC versus LTA, and perhaps to address some of the points that are raised by Mr Pritam Singh, and technical issues that are related to the BSEF itself. And if I do not manage to cover all of your queries or do not cover them adequately, please raise it again and I will try my best to answer them.

Let us start with nationalisation versus privatisation, and the issue of competition. Where do we stand? Our model is one where we allow private entities to operate and provide the services because it is our belief that it is in the long-term public interest for them to be delivered and served this way. There is a profit incentive that drives higher efficiency and productivity. But ultimately it is not for the benefit of the operators themselves. It is for the benefit of commuters because they will benefit through lower fare increases, and I will talk about fare increases versus cost a little bit later when I go into bus financials. But the room for the operators to manoeuvre is not unfettered because there are a number of safeguards that are in place. Firstly, the operators do not set the fares. That is done by the PTC. Secondly, the operators do not establish the standards. Again, that is a function that comes under the PTC. Lastly, the licence is given to them for a limited and defined period. In the case of the buses, the licences will expire in 2016. That is, again, another matter that we may have to come to and talk about under bus financials.

I think it is a truism to say that, perhaps, across all areas, not just in transport, that the solution that is not adopted becomes increasingly more attractive over time and becomes the preferred solution. Indeed, it is a truism that, over time, the solution that is not adopted becomes increasingly more attractive as the solution. But before we tack and change course because the prevailing wind has changed, it is important to see what other cities and countries are doing. Are they moving towards privatisation? Are they moving towards nationalisation? Mrs Chiam and others have actually given some examples and I think it is useful to note that in many cities in the US, Europe, Australia and Asia, the move is actually towards privatisation. I give you a few examples.

For example, London. They went into competitive tendering using privatised entities, I think some time in the mid-1980s. And over the course of the next 15 or so years, cost per vehicle kilometre came down by more than 45%, inflation-adjusted. So, the lower operating cost per kilometre actually allowed services to be expanded by some 25% or so. Nonetheless, even in London where there is competition and privatised entities are running it, notwithstanding the increased efficiencies and productivity after they moved away from nationalised companies running their bus services, today, Transport for London, or the government, subsidises bus services to the tune of about £500 million annually. And this is for a population of about, I believe, eight million people, running around about 8,000 buses.

Another example, in Taipei, they have 14 private operators providing public bus services. Yet, even with all this competition, we understand from them – Minister of State Josephine Teo visited them recently – that they provide a subsidy of more than S$100 million every year to subsidise bus operations for a population of about 2.6 million people.

I will give you two more examples in addition to what I have just mentioned. This is Sydney as well as the New York, New Jersey area. Here, it is quite interesting because they have partially privatised. So, some of the services are run by private companies and, at the same time, some of the services are run by companies that are run by the transport authority. In Sydney, we have been told that actually the private companies are able to run it at about 30% less in terms of the cost. In the New York, New Jersey area, the bus routes that have been privatised have operating costs that are about 35% lower compared to the routes that the authorities are running themselves.

So, I think there is a clear body of evidence. One, that cities are shifting towards privatisation or have shifted, and at the same time that there are a number of these cities where actually, notwithstanding the shift, there is a need to provide a certain amount of subvention and subsidy from the government in order to maintain bus services at a very high level. Therefore, the question we need to ask ourselves is: why are governments subsidising private operators? Why not, as some have suggested, take it back themselves and run it? The answer must be that it will cost them even more to provide these services themselves and that, generally, efficiency-minded, cost-conscious governments are looking to have private bus operators involved when conditions allow them to do so. That is what I want to say for nationalisation versus privatisation.

I want to take this opportunity to talk about us. Since the Government is stepping in – 550 buses is a significant increase which is about 14% or so increase over the existing fleet − why not take the opportunity to introduce another operator? I think Mrs Lina Chiam was alluding to that, and it is a fair question to ask. Indeed, we stepped through the thinking whether this is an opportune time to bring about that competition and get a third operator in, and what are the pros and cons of doing so.

Let me just explain that of the 550 buses, we think that about 300 buses will go towards augmenting the existing services. To some, it is because we need the buses to come more regularly; to some, it is that the loading is nearer 95% than 85% and, hence, you need to inject buses in order to bring the loading down, and I will talk maybe a little bit about how it is measured. But you have about 300 buses injected into existing services.

You would appreciate that it is very, very difficult to have two operators providing this same service because your current operator, maybe SBS Transit, will be providing about seven buses, and then a new operator would come in to inject another one, or maybe, two buses. If the service does not deliver the expected standards, who do we hold to account? SBS Transit or the new operator? In practice, it is actually very, very difficult for existing routes to see two operators trying to provide the same service in a co-ordinated manner in order for the commuters to benefit from it.

What about the 250 buses that are going to be used to run the 40 or so new routes? Would that not be possible, because that is going to be delivered by one operator? So, a new route – if it is a feeder route – you may require five or six buses. If it is a short trunk route, maybe somewhere between seven and 10 buses and so on. Why not allow a single operator to do it?

The challenge is that we expect these routes to be geographically dispersed. So, there might be some routes in the North, some in the West, some in the East, some parallel to the MRT routes, some providing connections that do not exist to hubs -- financial, commercial, medical centres and so on. The difficulty with this geographical dispersion is: where do you site the depots? Do you have a few depots, three or four depots in different parts of the island, with the attendent increase in overheads because you need people and equipment in order to set up and run a depot properly? Or do you site a depot centrally with lower overhead costs but, unfortunately, with more dead mileage because the buses at the end of their routes, wherever they are, will have to return to this central depot to be maintained, to be cleaned and so on? It is not an easy solution to say, "I want to introduce a new operator using the BSEP." Nonetheless, I assure you that our intention is to try and make right the bus financials, and thereafter, to make sure that we then put out packages of routes that are carefully put together so that existing as well as potential new operators can tender for them.

Now, I come to bus financials. If your bus financing framework is not right, I think no new operator would want to tender for a bus route package. Let me start by saying that, today, the licences for operating the trains and the licences for operating the buses are separate. They may be held by the same two operators but they are separate in that it is not necessary for any operator to hold both train and bus operating licences. It is important to keep them separate because it is going to be very hard for me, if I want to introduce a third operator, to be able to package a new rail line together with a bus licence at the same time. And, if we expect cross-subsidies between the rail and the buses, then it is important that I am able to put this composite package together which practically is very difficult to do.

Also, it is not always the case that the rail operations can subsidise the bus operations. And therein is the danger that was raised by Dr Janil, that if you build too far ahead of time, there is a cost associated with it, a cost that eventually is borne by the taxpayers. Members would remember, about 10 years ago, the introduction of the North East Line. The North East Line was planned in tandem with housing and other urban plans for the north-eastern corridor. Back in 1996 and 1997, there were long queues for flats and MND had significant plans to increase sizeably the number of flats that are located in the north-east and, so, we went ahead, we built the North East Line and the LRTs. Unfortunately, the plans did not quite materialise. And so, in 2003, when we opened the North East Line, the ridership was significantly lower than what we had projected. And, indeed, for a number of years, that line lost money. It was actually the bus operations in SBST that was providing subsidy to the rail portion. And now, of course, as Mr Png has so rightfully pointed out, it is the reverse.

If I come back to bus financials, what is happening is that the profit margins have gone down over the years. And, in fact, last year for the first time, it was negative for both operators. The trend is as important as the absolute numbers. Mr Png talked about the SMRT over the last five years, how much they have lost, SBST only over the last year, but it is important to look at what the trend is.

For them, it is the balance of fares and costs that will ultimately give them some idea of how the bus financials and, indeed, the transport financials are. If you look at fares over the last five or so years, from 2006 to 2011, fares, cumulatively, not a single year but cumulatively, went up by 0.3%. Because of the recession, we brought down the fares. With distance fares, we did away with the transfer penalty and, over time, fares came down. And so, from 2006 to 2011, fares cumulatively went up by 0.3%. What about fuel, which is a significant component of their costs? Fuel prices went up by more than 30%, while national wages went up by more than 25%. Hence, you see the dilemma that bus operators are facing, that the fare increases are nowhere near what the cost increases have been in the recent years. Hence, that is an issue that we will need to address if we are to put the bus financials right over time, so that when I put packages of routes out for competitive tendering, there will be companies who are prepared to step in and provide the service.

Let me move on now to talk about improvements. Before I do that, I want to take time to set right this impression – if I may quote Mr Gerald Giam again – "very frustrated commuters, bus services are definitely not up to the mark". That is the impression that has been given. UniSIM does an independent study every year. This is the public transport customer satisfaction survey – done in October and released in March this year. It is done in October of each year. In 2011, their study was done after the fare increases took place. But obviously, it was done prior to the breakdowns that happened in December. Among the questions that were asked on satisfaction levels of the different parts of the transport network, commuters were asked on their perception on whether bus services have improved compared to one year ago. It is a "yes" or "no" answer. No "in between'. You cannot fudge it. It is a "yes" or it is a "no". The exercise in 2011 – regular commuters who took part – 70.2% of them said that "yes, bus services have improved compared to the previous year". Obviously, the other 29.8% said "no". In 2010, compared to 2009, 67.7% said "yes", that is, bus services in 2010 have improved over 2009.

That is not to say that there are no problems or no issues that we need to address. We know the issues. We know the problems. We know the challenges, which is why the Government is prepared to step in decisively. But I think it is proper to paint the right picture and the right picture is not massive dissatisfaction that – I quote again – "they are all very frustrated commuters". There are, indeed, some frustrated commuters. And, indeed, they vent, particularly on the new media but I do not think that those views represent the majority, not least because I use, for example, an independent UniSIM survey that has been conducted over a number of years for which we can see and follow the trends.

What are the improvements that we can expect of the BSEP? Well, firstly, the loading, we expect, will improve. Today, it is a max loading of 95%, and we are going to bring it down to a max loading of 85%, measured during the heaviest one-hour period. It is not as if all buses during that period will not exceed 85%. I do not want to give you that impression. But it is that when you measure it in the same way that we do today, over the heaviest one-hour utilisation period, you will see an improvement across the entire hour. For feeders, in terms of the regularity of arrival, we expect 95% of them to come at not more than 10 minutes for the entire two-hour period instead of the 90% for the best one-hour period today. Today, it is measured over one hour, 90%, less than 10 minutes. Going forward, with the BSEP, it is going to be for the entire two-hour period, 95% of them coming at intervals of no more than 10 minutes. There are other improvements which I will not go into because of time constraints.

Let me mention a little bit about PTC versus LTA as a regulator. The PTC has quite direct responsibilities. Let me scope it as follows: they regulate bus service levels and transport fares, and they do so with two objectives in mind: One, to keep fares affordable; and, two, to ensure the long-term financial viability of the PTOs. Keeping fares affordable, I have shared some of this information in the past. We measure the second quintile, meaning, people from the 20th to the 40th percentile, because we think that that is the appropriate set to measure against. We find that expenditure on transportation versus household income has declined from about 5-plus percent in the mid-2000s to now. It is about 3.6-3.7%. This is the percentage of the household income that is spent on transportation. What we have been able to do is to keep fares reasonably affordable and, indeed, if you compare fares to what you see in Hong Kong, London, New York and other major cities around the world, I dare say that we are actually lower than what their residents have to pay.

Why then is it so important for us to do this BSEP package? Why is it not possible for it to be funded in other ways? One, we do this programme because we want to decisively increase capacity. This is related to what Dr Janil had brought up, which is making sure that there is sufficient capacity because, otherwise, there is a social cost that we have to pay. He is right. When we put in the BSEP programme, it is in recognition that the operators, on their own, because of the bus financials, would not have been able to do so. If we wanted them to achieve this same set of standards on their own, it would take so long, because they would only introduce new buses in tandem with, if not maybe just slightly ahead of, ridership growth, that I would not be able to answer Member Er Lee Bee Wah's requests for more bus services in her constituency.

The Government recognises that even with the investment of $60 billion to build new rail lines, buy more trains, implement re-signalling, and so on, we need to decisively ramp up bus capacity so that we have a better last-mile connection because many people would take a feeder bus, rail, and maybe another feeder bus, to reach their final destination; or it is to provide better connectivity to areas that are not as well served; or it is to provide an extra alternative to those who may not wish to take the trains and would rather take a parallel bus service that would run parallel to some of the existing rail lines.

So, the PTC has that responsibility to, as I have said before, make sure that fares are affordable but also, at the same time, look to the long-term financial viability of the operators. Because bear this in mind: 2016 is the expiry of the licence for the bus operators. They have been, over the years, providing a cross-subsidy within their companies from rail to bus. For SBS, earlier days, it was from bus to rail and, now, vice versa. But legislative requirements today do not require them to do so. We do not require them to do so because these are separate licences and, as I have said earlier, if we want to be able to introduce competition in the longer term, bring in more operators to put additional pressure on the existing two incumbents, then it is necessary for us to make right the bus financials.

Let me briefly address some of the points that Mr Pritam Singh had raised – this thing about what are we investing the BSEF money in, and so on and so forth, if I got him correct. Firstly, the intention of the BSEF is actually to make sure that funds are available to buy new buses, as well as to operate them over a period of 10 years. The primary intention of such a fund is not to put aside $1.1 billion and then to try and invest them and bring returns – that is really not the purpose. But we also know that the funds are not going to be disbursed immediately, it is not going to be disbursed in one lump sum to the operators so that they can take and keep the money and use it over time. It is to be disbursed to them in order to cover the purchase of new buses as and when it happens and the operating costs of these 550 buses.

In the meantime, we need to make sure that the fund with LTA is properly invested because otherwise I can imagine that some years later, we may well be asked the same corollary question of why it was not invested in safe instruments in order to bring in some returns. But, as I have said, that is not the primary purpose of the fund. It is that, as good stewards, we ought to, in the meantime, make sure that whatever money that is in the fund is invested in safe instruments and, when the need arises, we disburse the appropriate amounts to the operators to reimburse them.

Why not claw back the $1.1 billion? This was another question that Mr Pritam Singh raised. It is back to the same reasoning over where the bus financials are. When we actually discussed this programme with the operators, contrary to your expectations that they would be really forthcoming in terms of wanting to bring on board the buses and run these services, they were very concerned. They were very concerned because they knew right from the start that there was no upside and they had to make sure that they were properly protected to make sure there was no downside for them. For us, it was the opposite. We wanted to make sure that there was no upside for them and, hence, even till very recently, there is a lot of debate and a lot of dotting the "i's" and crossing the "t's" in order to make sure that we have as definitive an agreement as possible. But I give you my assurance that this is not intended to profit the operators. I know their concerns, I know their fears, but the way we want to use this money is to make sure that the commuters benefit from having more reliable, more frequent, less crowded buses. Certainly, the intent is not for this Government to give money to the operators in order to fatten their bottomline. Not at all.

So, as I have said earlier, the new routes, as well as augmentation to the existing routes, will start in September this year. I hear already your requests to do more, and to do so now. Again, the constraint is going to be drivers. Dr Janil Puthucheary also mentioned this concern over drivers, whether they are appropriately trained for safety and so on. So, maybe I will take a little bit of time to talk about drivers. The bus operators have been able to recruit somewhat more drivers from both Singapore and, especially Malaysia, after the increase in the remuneration package. As they are close to or have already hit the quota for drivers from China and the Ministry of Manpower is not relaxing it to support the bus sector, they have confined themselves to recruiting more Singaporeans and more Malaysians. Malaysians, I think, are more forthcoming. Singaporeans are still somewhat less so, even though the numbers have increased. But in terms of training, local drivers get nine weeks of training, the foreign drivers get a little bit more. Nine weeks, I think, is a significant time, not only to familiarise themselves with several new routes that they may have to operate but also to understand the local context a little bit better, especially so if they are foreigners – the language and nuances, a little bit of the culture, and so on.

There is always a concern over safety when there is any significant increase in new drivers and I have asked the PTOs to pay special attention to this, to make sure that we operate our bus fleet as safely as possible. Today, the standard that is set for them is no more than 0.75 accidents per 100,000 kilometres. For those of us who are driving cars, you will think that over the course of your 10 years, you may drive about 200,000 kilometres, and so over the course of the 10 years, if you exceed more than one-and-a-half accidents, you would have busted this number. So, I think it is a reasonably stringent standard that we have set for the operators and I know that certainly over the last six months that the PTC audited that they did not exceed this 0.75 accidents per 100,000 kilometres. We give you the assurance that we will continue to pay great attention to safety and to make sure that bus drivers, especially the new drivers that are brought in, know what they are required to do, namely, understand the needs of commuters, particularly of the more elderly residents, and drive with due care the buses that they operate. On that note, Mr Deputy Speaker, thank you.

Order. Pursuant to Standing Order No 2(5)(d), I propose to extend the time of this day's sitting beyond the moment of interruption for a period of up 30 minutes to facilitate the completion of business. Mr Gerald Giam.

Debate resumed.

Mr Deputy Speaker, I thank the Minister for his clarifications. I have three follow-up questions on what he has said.

First, it is regarding the whole model that he was talking about where he said the profit motive drives efficiency. This may hold true in general, but not for the public transport industry. This is because of the inherent market failure in the public transport industry. As the BSEP has proven, the fact that we need to inject this whole subsidy in at this time in order to improve services is a recognition that there is a market failure in the public transport industry. The profit motive, yes, it drives efficiency, but only when there is stiff competition, when there is sufficient competition. But given our small market, true competition really is not possible.

So, the Government has said that we are introducing contestability. But contestability, we have to admit, is a poor substitute for competition. With 10- and 15-year contracts – 15 years in the case of the MRT contracts – there is not really that much incentive for them to perform in order to prevent themselves from being unseated. Who else can realistically run the PTOs? In fact, the Minister alluded in his response just now on how difficult it is to introduce new operators into the system, and I am sure the PTOs know that. So, I contend that contestability is not a major motivator of the PTOs to improve. The bottomline is: do we want to have a system where we have two profitable listed companies whose motivation is not necessarily to improve quality of service to commuters but to generate profits and to improve the dividends that they can distribute to their shareholders? They have distributed over $1 billion in dividends since 2003.

My second clarification is regarding the Minister quoting the UniSIM survey. My response to that is: if commuters are so pleased with the service, and the Government assesses that they are sufficiently pleased with the service, why is there a need to increase the QoS now? Is this not an admission that the service is not up to the mark? So, the proof is really in the pudding. Let us look at the mode share of public transport over the past few years. The LTA set a target of 70% in 2020, but, in 2004, the mode share was 63%, in 2009 it dropped to 59%. I am not sure what the mode share is right now. But obviously, we are talking about a situation where commuters are being deterred from going on public transport, and it is not a stretch to say that it is because of the poor service that they have experienced.

My last point is that I do not think the Minister addressed my question about why the Government has decided only now to decisively increase the QoS standard. Why did they not roll it in over the past, let us say, five years, and anticipate this population growth? Surely, the Government knew that there was going to be population growth. If there is a need for increased housing, there is also a need for increased transport.

Before I call on the Minister for Transport, I would like to remind Members, in your clarifications, keep it short. Do not try to make any short speeches. Minister for Transport, Mr Lui.

Thank you, Mr Deputy Speaker. I think to say that it is a market failure in the transport industry and true competition is not possible for a city of this size begs the question why there is this shift towards privatised entities running transportation across a number of cities. And I would like to hear Mr Giam's explanation of why he thinks that this trend is seen in a number of cities and whether they are all experiencing market failure, and whether operators with a profit motive in those countries are also doing commuters there a disservice, and why governments are all moving in this direction. Again, I say this: we see the best in the solution that is not adopted and it becomes increasingly attractive over time. But I think we do not see the downside. The body of evidence is that, certainly, from across a number of cities, the nationalised entities are less cost-efficient, meaning that they actually require larger subventions. Going in that direction ultimately means either the commuters pay more or the taxpayers pay more or you suffer a decline in standards. I think that is the real truth about it because there is that nexus between standards, costs and the associated issue of where your fares are.

Second point is: if the UniSIM study is so favourable, why do more? Well, I have been asked from "why do more now", to "why not do even more" to "why only now", which was actually your next question. I think the point is that this is a Government that really wants to try and improve the quality of life here in Singapore.

Whether it is better housing, better schools, more effective and more affordable healthcare and transportation, we are prepared to do so. We are financially in a position where we can do so without having to borrow and putting the costs on future generations. And, hence, therefore, the question must be that if we can improve the quality of service that a commuter can experience without passing on the cost burden to him or her or the family, why should we not do it? We have a goal to hit 70% mode share in transportation. You are right in that it has declined. I think, in part, because we also made tweaks to the COEs as well as to the ARFs and the road tax. You may recall that ARF for cars at one time was as high as 175%, and now it has been brought down to 100%. COEs were growing at 3% and then, subsequently, it was brought down to 1.5%. Hence, for a number of years, those who were aspiring to own cars were able to do so and they, indeed, found cars to be more affordable compared to what we were experiencing in the mid-1990s. For those who remember, in the mid-1990s, COEs cost $100,000, and a Honda Accord was $150,000. That was the situation then. Over the years, it came down. And I dare say that much as some of you are prepared to take public transport and that there is a general degree of satisfaction with the public transport system from the surveys and anecdotal information that has been given to us, that there is also a deep desire for many people to own their own vehicles, whether it is because they have a young family, whether it is because they are dating and they think it is an important instrument, or whether they have elderly parents that they need to fetch.

Why not do this gradually over the last five years? Well, one of the things that we have done is that over a number of years, the PTC has, on an incremental basis, improved the standards. But I think we felt that it was necessary to decisively ramp it up. And if we are prepared to put $60 billion investment in rail, it was also appropriate to make sure that we put an appropriate sum of money into the buses in order to bring about an overall improvement in the transport network in Singapore, bearing in mind that there are those who depend solely on buses or those who use buses to complement their travel by rail. And that if we can do this, then it becomes, overall, a more attractive commute to the average commuter and, hopefully, as we tighten on supply of COEs, we can shift people towards public transport.

Perhaps, I should take this opportunity to address some of the points that were raised by Dr Janil on taxis and COEs, because talking of COEs, he reminded me that he had brought up some points that I did not manage to address. For taxis, it is at the higher end of the public transport spectrum. It is not mass public transport. It is at the higher end of the public transport spectrum that allows a direct door-to-door commute. So, the pricing, the quality of service, is somewhat different. The concern is whether we are utilising the taxi fleet in an optimal manner. We have seven taxi operators today. Six of the operators, the majority of their fleet is run by a single driver. I think you will understand that with a single driver, it is not possible for them to drive 24 hours. They drive for a limited duration in the day and, hence, there are significant periods of time when the taxi fleet, I believe, is under-utilised. Therefore, it is important that we work both with the operators, as well as with the drivers themselves, to see what are the ways in which we can increase the overall availability and utilisation of this fleet. As I have mentioned during the Committee of Supply when we talked about the benefits of the QoS and the fare increases last December, this is one of the things that we are doing together with the operators and we ought to be able to finalise some of these measures soon enough.

Mr Deputy Speaker, Sir, I thank the Minister for his comments on my questions. I have two additional questions. The Minister has brought up the issue of the extended subsidies that several other comparable cities provide for their entities – I hesitate to call them nationalised models because, in truth, they are all hybridised models, they all have a public-private partnership.

My question to the Minister on this issue is: can we discuss the extent of subsidy that Singapore provides? We have previously comments on how our fares are very low and our quality of service very high in comparison to these cities, but how does our subsidy compare? In other words, are we getting value for money? Is the efficiency of our model demonstrated in the amount of subsidy that we have to provide to support this model?

Second question: the Minister mentioned how the possibility of a third bus operator was brought up as part of the review process that led to the BSEP and various other measures that have been put in place and explained why the conditions would not be appropriate to bring in a third bus operator. Now, could he give some indication as to what type of conditions there have to be in order for a third bus operator to be viable in the future?

Mr Deputy Speaker, first, before I address the comparison between subsidies in the bus industry across various cities − they are not nationalised entities in London, in Taipei and all that, they are actually run by private operators – I thought maybe it is useful for us to take a look at how we subsidise rail versus buses, and, hence, why we are doing some things like what I mentioned about the depots as well as advertising revenue. I think the point is that we actually provide quite a lot more in terms of capital expenditure subsidies to the rail – we build the infrastructure, we buy the first set of the rolling stock and, subsequently, after a period of time, the operator is required to buy this over and add to the stock, to maintain it, and so on. We provide quite a generous amount of commercial space for which they can derive non-operating revenue and, indeed, if you look at the operators today, about maybe 50% of the profits actually come from non-fare sources. So, they have grown that over the years and it has actually allowed them, where necessary, to provide a certain amount of cross-subsidy over to their primary operations.

For the buses, we have not subsidised them, if I may use that term, to a significant extent. We have allowed for the extension of the lifespan of the bus over a period of time. We have actually waived the requirement for COEs and, more recently, waived the requirement for even the public buses to pay the 5% ARF that otherwise these commercial vehicles would have to pay. So, there are a number of things that we have done for the public bus industry but, if you compare the two, I think it is clear that we provided a lot more support to and investment in the rail system compared to buses. And, hence, the points about building new depots, taking over the leases of the existing depots and leasing it to them for a nominal fee, allowing them to take a portion of the bus shelter advertising revenue compared to the past. These are different ways in which we are trying to align the kind of support given to these two industries.

How do we compare to other cities? Well, I mentioned London, for example, population of eight million, operating about 8,000 buses. If you have lived there, it is a high quality bus service that they run. Sometimes, the buses are quite empty but it comes very regularly and, indeed, I know people are certainly very pleased with that. But it comes with a heavy price. And our understanding, from people who have visited London, is that the subsidy on an annual basis amounts to about £500 million. Five hundred million pounds was the last they told us. And, hence, if you compare our BSEP, our BSEP is almost equivalent − $1.1 billion, but over 10 years. That, I think, in a sense, gives you an indication of the scale. Taipei – private operators, 14 of them, so a significant amount of competition, we believe. But even in Taipei, good quality system, we understand that they are being provided a subsidy of about S$100 million every year to do that for a population of about 2.6 million people. So, that gives you some idea of the kinds of subsidies that are being provided at different ends, in London as well as in Taipei.

On the third operator and contestability, we believe that being able to introduce more operators over time, the possibility of doing so will actually add to the competitive pressures that our two incumbents will have to face. It is not so straight-forward to make sure that we introduce competition in the right way. Because if I were to put a single route up for competition, for tendering, and say, this is a very lucrative feeder service, very profitable, I can imagine that there would be a number of operators beyond the two incumbents who would want to come in and be able to actually offer that service at a lower price compared to where we are today. But if I were to, at the same time, put up an additional individual route that is strictly non-profitable where the operator is required to provide services because of the universal service obligation, I can imagine that I would have very few or no operators coming in to tender for that.

The truth is that, today, there are both profitable routes and non-profitable routes. And within the bus industry, there is a certain amount of cross-subsidy between the profitable and the non-profitable routes. So, if you do it wrong, the danger is that you may be able to save one or two cents off the profitable routes at the expense of the deterioration in service or an increase in fares and costs for the so-called non-profitable routes. And, hence, the important thing is to put together a package of routes that will be sufficiently appealing and yet will encompass a range of possibilities in terms of profitability. I think it is also important to look at the geographical area for these routes because, as I have said, if they are dispersed across the island, it will be very, very difficult for a new operator to penetrate the market unless he already has depots, parking areas and maintenance areas for the buses. Hence, we have to make sure that we sit down very, very carefully, make right the financials for the bus industry, package the routes appropriately and then put it up for competitive tender.

Mr Deputy Speaker, Sir, I would like to make a clarification. The Minister suggested that I did not say whether I supported the Bill or not. I do support the fact that we are going to have more buses on the road and Singapore commuters are going to benefit from that. But I have reservations about some of the proposals in the Bill and, hence, I have to clarify them before I give my support. Sir, the point about loans, the Government could not provide a loan to the PTOs as opposed to a grant because the Bill allows for that. So, I would just like the Minister's clarification once more, on why the Government did not ask the PTOs for the money back after a certain period of time, because I think it was a reasonable expectation.

The second question I have is with regard to the investment of additional buses. I respect the Minister for informing the House how those investment funds would be used. Because I believe the Minister for Finance mentioned that $110 million would be disbursed on a yearly basis. Today, I have come to understand that this money, as a whole, would be put into the fund. Until the PTOs use the funds, the BSEF can be used for investment purposes. Now, would there be any difference in leaving those funds in the Consolidated Fund, rather than putting them in the BSEF until they have been used?

My final point is with regard to potential abuse of BSEF monies, and this is with regard to how these routes are packaged. The Minister has given the assurance that PTOs will not profit from the BSEF monies, but I am still not sure how the routes would be packaged in such a manner where they could profit or they could not profit. Just to make the clarification.

It is actually a reasonably complex matter because we provide them a loan to buy the buses, and then, thereafter, it is a grant to pay back the Government – if that sheds any light on this matter whatsoever. On the new routes we will introduce, our belief is that these routes are going to be non-profitable routes because if they are profitable routes, then the bus operators would already have wanted to operate them.

Let us take, for example, a route that runs parallel to an MRT line. Many people ask for it. The truth is that there are a few of these routes that are in operation today, the results are mixed. I will give you another example. On 17 December, a Sunday morning when we actually started running the trains later in order to give more time to the engineers to do a system check, we had parallel bus services for free. We ran that. It was successful. Then, when the trains started operating paid service, we continued to run the buses for free for an overlapped period of about two hours. But it was very telling that as soon as the trains were up and running, people shifted from the free buses to the paid train services - free buses versus paid train services.

So, we are going to introduce some parallel routes during the peak hours. We do not know how successful they are. We hope that they are successful so that there would be opportunities for us to do even more in this regard, but we are really not sure, and neither is the operator. The truth is that, for the 40 or so new routes that we would put into place, some of them will go to new housing developments. Usually, you would introduce a new bus route after a certain critical mass has built up, which means that those first few families who move in very early may find themselves at a disadvantage because it is not as well served as it would otherwise be in a steady state. What we are going to do with this is that, with the BSEP, we would be able to introduce these new routes ahead of the time than it would otherwise be. So, that is again some of the things that we are doing.

Why put money into the BSEF rather than in the Consolidated Fund? The Government wanted to demonstrate that it was prepared to ring fence this $1.1 billion and make it available over a 10-year period without putting the burden on, say, the next government who may have different priorities and, therefore, say that "No, I am not prepared to continue with this programme". So, you have this money, you put it aside, rather than to keep it in the Consolidated Fund. You know that you have it for 10 years; you can run the programme for 10 years. Thereafter, the Government of the day will have to review, make a commitment to see whether to continue with it or not. If they do not continue, and because the buses operate for 17- 20 years, it is not as if we will give the buses for free to the operators. They either return the buses to the Government or they buy them over. So, to that extent, we have gone into those details to make sure that, both now and over the longer term, for that period of 10 years and even beyond, the operators do not profit from this programme that we are running.

Sir, I have two questions. First, if I understand Minister correctly, we are waiting for the arrival of drivers in order to roll out this bus enhancement plan. However, last week, someone told me that he works in SMRT and he has the drivers ready. He is waiting for the arrival of the buses. So, I would like to ask Minister: when will the first batch of new buses arrive in Singapore and how many of them? The Minister did not answer my second question: if 800 buses are insufficient and we need more, will the Ministry be prepared to do more?

Mr Deputy Speaker, the Member is obviously from the "do now, do more" camp. If I refer to the Member's second question, I want to make sure that the programme is implemented properly, that it is well received on the ground, that it is delivering the results that it has promised. If the recruitment of bus drivers allows us, then we will certainly be prepared to consider expediting the roll-out of the 550 buses, paid for under BSEP, which is supposed to be introduced over the five-year period. Already, 70% of these new buses will come front-loaded within the first three years. But if it is not enough or if we can do better and there is a need to do more, then yes, I am prepared to discuss with the Minister for Finance and, hopefully, the Member would lend her whole-hearted support if we request for more funds to do so.

The truth is that to buy a new bus and for it to come in, it is probably somewhere between 12 and 18 months, depending on where you get the buses from, and whether you have option buys in place that can expedite it. But as I mentioned in COS, we have also given permission for the operators to temporarily extend the buses beyond the current lifespan that we allow them to, provided it is properly inspected and it is roadworthy. So, it is not so much dependent on the arrival of new buses as opposed to making sure that we have drivers ready and properly trained. To recruit them and then to be in a position to deploy the drivers take at least nine weeks because the training itself takes nine weeks.

I know SMRT and SBST would have been recruiting drivers over the many months and years. I would have to check with them whether, indeed, it is a case that there are drivers ready but no buses to drive because our intention is actually to allow an administrative extension of the lifespan of the buses in order to quickly introduce this to augment the existing services or into new routes because, to me, it is better to have "an old bus" than "no bus".

We are approaching 7.30 pm soon. Leader of the House, do you want to extend the time?

Resolved, That the proceedings on the business set down on the Order Paper for today be exempted at this day's sitting from the provisions of Standing Order No 2. – [Dr Ng Eng Hen].

Debate resumed.

Mr Gerald Giam. Make it short.

Mr Deputy Speaker, Minister asked for my response to what he says on the international trend towards privatisation. From the research I have done, most cities are actually not moving towards what some economists call the "passive franchise model" that we have in Singapore. They are actually moving towards more government control and government planning, where the governments control the whole network and they give out contracts to operators. In fact, in many European cities, the government just pays the operators to run the service but they collect all the fares. So, the operators do not even have any revenue risk in that. That is the model that a lot of countries are moving towards. In fact, as a country becomes more developed, it moves from the deregulated model to a more regulated model.

At the end of the day, are these being run by private operators, too? If you take away the revenue risk from them, is it not more favourable for the operators?

Sir, I would like to ask the Minister to elaborate on how the operational planning powers that would be given to the LTA explicitly would not conflict with its role as a public transport regulator.

Within the LTA, even though it is under one organisation, the regulatory part is separated from the planning and development portion, both for buses as well as for trains. The question really is, should we pull out the regulatory part altogether and put it in a different entity? That was possibly what you were alluding to in your earlier comments. The difficulty is this: let us say, if I were to use trains as an example, and possibly this subject will come up tomorrow, there are potentially three entities that are competing for the same expertise and talent – the operator, the developer who is going to build the new lines and so on, and the regulator.

Today, LTA, being both developer and regulator within the same organisation, is able to bring in young engineers who find that it is actually very exciting work. They plan, design, build the new line and then some of them can potentially be pulled out, put into the regulatory arm where their expertise in planning and developing puts them in good stead. And after a point in time, some of them can be rotated back to another line to do the same planning, development, design and so on. The concern is whether a pure regulator alone would be able to attract as well as to retain the right type of people in the face of steep competition for the same kind of expertise between the operators and between the operator and the planner and the developer. Hence, while I recognise that we should try to make sure that they are as separate as possible, I am not in favour of having separate bodies trying to attract as well as, more importantly, to retain the same talent as well as to give them the right amount of training and the expertise level in order for them to be able to do their respective jobs appropriately.

Sir, I thank the Minister for taking such pains to answer all the questions. Thank you very much. And since I am one of the last ones to ask one question, I think I did ask you a question that, if ever this amendment Bill is passed – I believe it will be – will the Minister consider setting up a committee of review consisting of some independent members of the public to oversee the funds, the control of the funds?

Actually, we have to provide an annual report to Parliament on the utilisation of the funds. This is also the answer that I gave to a written question from Mr Pritam Singh some months ago. So, there is already existing legislation that requires us to produce a report that Parliament can then consider on the utilisation of the funds.

Mr Gerald Giam. Keep it short. This will be the last clarification.

Thank you, Mr Deputy Speaker. I just want to correct myself about the revenue risk. What I meant was a fare revenue risk in that model which I am not pushing for actually. I am just trying to illustrate that there is that trend towards more regulation. In that model, the operators are just paid a certain amount to service that route.

Regardless of the fares that come in, it goes to the Government. My main point in all these is that the reason why we feel that there is a need to have more regulation and more control by the Government, is that we feel that there is a need to have the profits not going to shareholders but recycled back into the system where it contributes to better maintenance and buying more buses, where the operators or the single operator – the public monopoly – can do that, rather than giving the money to shareholders whenever it makes a profit.

Thank you, Mr Deputy Speaker. The Government does do quite a lot of what the Member is saying, which is central planning, deciding on which route, in fact to the extent of which new route to introduce when, how many buses that will require and then holding the operator to delivering the standards that are expected of them. And as I have said earlier also, we set the standards, we decide on the fares so they do not have carte blanche in order to maximise profits.

The challenge to date – again, as I said earlier – is that the bus financials have actually deteriorated over quite a period of time because the fares have not been keeping with the increases in wages or in fuel. Therefore, if you look at the trend of the profit margins, both operators are now in the negative and we have to try to make sure that we improve on this, otherwise all that we are talking about will not come to pass.

Question put, and agreed to.

Bill accordingly read a Second time.

Question proposed that the House immediately resolves itself into a Committee on the Bill.

A Point of Order. Can I confirm that we have a quorum? Thank you, Mr Deputy Speaker.

I will ask the Clerk to take a count. We will pause, and I will ask the Clerk to activate the Members to come in.

Notice taken that 21 Members were present.

Deputy Speaker can adjourn Parliament since there is no quorum.

Pursuant to the Standing Order, Mr Deputy Speaker adjourned the House without question put.

Adjourned accordingly at 7.36 pm.

16 Ms Tan Su Shan asked the Minister for National Development (a) what are the measures of success for the policy on Additional Buyer's Stamp Duty; and (b) how has the policy helped the middle or low end of the housing market.

The Additional Buyer's Stamp Duty (ABSD) was introduced last December to moderate investment demand for private residential property and to promote a more stable and sustainable market. In particular, we introduced a higher ABSD rate for foreign buyers and companies, in view of the large pool of liquidity and strong buying interest from abroad, and the relatively small size of the Singapore market.

The ABSD, together with the earlier rounds of cooling measures and the ramp-up in both public and private housing supply, has produced encouraging results. The proportion of private residential properties bought by foreigners and companies has fallen sharply from about 20% in 2011 to 7%. Private home prices have moderated significantly, rising marginally by 0.3% in the first half of 2012 compared to the 6% increase for the whole of 2011. Short-term property speculation has also fallen sharply, as indicated by the relatively low volume of sub-sales.