Hansard, Monday, 19 January 2015

1 Ms Foo Mee Har asked the Minister for Trade and Industry what is the impact of the decline in oil prices to Singapore's economy, businesses and consumers.

2 Mr Alvin Yeo asked the Minister for Trade and Industry what implications will a depressed oil price over a prolonged period have on our petrochemical sector and on Singapore's economy in general.

3 Mr David Ong asked the Minister for Trade and Industry (a) what impact will falling oil prices have on our economy; and (b) whether current adjusted prices on public utilities and at petrol pumps fairly reflect the fall in oil prices.

Mdm Speaker, can I have your permission to take Question Nos 1 to 3 together?

Yes, please.

Thank you. Global oil prices have fallen sharply in recent months on the back of sluggish global demand and strong supply conditions. Since June 2014, the benchmark Brent oil price has declined from a peak of US$115 per barrel to around US$50 per barrel recently.

Ms Foo asked about the impact of the decline in oil prices on Singapore's economy, businesses and consumers. As a net importer of oil, the Singapore economy will benefit from lower oil prices. In particular, a drop in oil prices will translate to lower electricity tariffs and fuel costs, which will directly benefit businesses and consumers.

For businesses, lower electricity tariffs and fuel costs will help to lower their input costs. This will help improve their margins and could also dampen the pass-through of business costs to consumer prices. Consumers, on their part, will benefit from lower spending on electricity and other oil-related items, such as petrol. Lower inflation in the economy could also increase their purchasing power, thereby stimulating consumption and further boosting

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the economy.

Mr Yeo asked about the impact of lower oil prices on the petrochemical sector. Overall, the sector will benefit from lower oil prices due to reduced input costs for oil-based feedstock and utilities. However, the upside of lower input costs may be limited, as prices of key petrochemical products have also fallen in tandem with oil prices.

Mr Ong asked about the current adjusted prices of public utilities and pump prices and whether they fairly reflect the fall in oil prices. The Energy Market Authority (EMA) regulates the electricity tariff to ensure that the quarterly tariff revisions fairly reflect the underlying costs of production, including fuel costs. As the price of natural gas, which is the main fuel used for electricity generation in Singapore, has fallen in tandem with oil prices, the electricity tariff has likewise been adjusted downwards. For example, between July 2014 and January 2015, average gas prices fell by 19%. As fuel costs make up around half the tariff, the electricity tariff between July 2014 and March 2015 accordingly fell by 9.3%.

Pump prices fell by 15% between July and December 2014, compared to a 41% fall in crude oil prices over the same period. The fuel component of pump prices is not determined by the price of crude oil, but the price of refined products like petrol and diesel. In addition, petrol companies also have to take into account non-fuel costs, such as land and labour costs, when setting their prices. These are some reasons why pump prices fell by a smaller percentage compared to the drop in crude oil prices.

Madam, I thank the Minister for his response. I would like to ask the Minister a few supplementary questions. The Minister has highlighted the flow-through benefits of low oil prices. I would also like to highlight that the Malaysian ringgit is also at its historic lows; and Malaysia is a country where we import a significant amount of produce. I would like to ask the Minister if he has any prediction on the downward revision of the 2015 core inflation rate, or even a possibility of deflation.

Also, so far, despite the fall in oil prices – and the Minister has shared some numbers – but I think consumers on the ground have really not seen the pass-through reduction in prices. Could the Minister explain what Government measures are in place to ensure that there is no profiteering and ensure that some cost savings are passed to the consumers, especially in terms of transport and food prices?

The last question is about people working in the oil and gas sector. Given the intense pressure on companies' bottomline, I am concerned that the job security of Singaporeans working in this sector may be bleak, if companies decide to cut staff costs to manage their bottomline. Are there any policy measures in place to mitigate this impact should this

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situation occur?

Mdm Speaker, as I have mentioned in my earlier reply, overall, there will be a slight positive impact on the economy because of the lower oil prices – because of the cost of the businesses as well as to the consumers. In terms of inflation, it will have a small benign effect; it will lower inflation. As we have indicated in our economic forecast, we expect the headline inflation to come down this year, lower compared to last year. But the core inflation will remain rather sticky because we still have a lot of economic restructuring. The high wage cost is likely to pass through to the core inflation. The Monetary Authority of Singapore (MAS) is watching the situation very carefully. We expect core inflation to remain still quite stiff, but the headline inflation will be adjusted downwards.

On the oil and gas sector, as I had mentioned just now, there is a slight positive effect because of feedstock prices. But the petrochemical and chemical prices have also come down. So, the margins remain very small and tight. The main reason is because there is over capacity in the Asian region and, therefore, competition remains very stiff. In that sense, I do not think the impact on the oil sector will be too significant. The feedback we get from the oil and gas sector – if we look at the petrochemical cluster – they benefit from the feedstock, but they are also affected by the revenue. So, I think they will be quite neutral. For the oil and marine sector – those involved in oil rigs – the impact will be more in the longer term. For the immediate future, their order books are still very strong and I think that will keep them in good stead for the next few years. But if oil prices remain low for a prolonged period, then this will affect their long-term prospects. So, for those in the oil and gas sector – which I presume the Member means the oil and marine sector, and those in oil rig construction – the prospects are okay for the immediate future and will only be adversely affected if oil prices remain low for a long time.

While the low oil prices spell good news for the Singapore economy in general, could I ask the Minister whether the low oil prices will slow down our drive towards cleaner and renewable energy?

I think our attitude towards energy conservation and alternative energy is a long-term one. This is because we are an energy-disadvantaged country and we have to diversify our energy sources. We are anticipating a global agreement on climate change and we would have to meet these obligations. These are the long-term trends. Our strategy is to meet these long-term requirements, rather than be influenced by short-term volatility in oil prices.

Ms Foo, keep it short, please.

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Madam, I would like to ask the Minister to give his thoughts regarding the question I raised in the supplementary question earlier about prevention of profiteering, because many consumers on the streets are not seeing the significant oil price reduction translating into lower food and transport prices. These are the concerns on the ground. I hope the Minister could enlighten us on whether there are measures to stop companies from profiteering.

Our main approach is to ensure that competition forces are at play. This is regulated and supervised by the Competition Commission of Singapore. In sectors where they are regulated, then, of course, we have to make sure that the regulation is transparent and the factors are clearly seen by everybody. For example, in the utilities sector, this is a regulated sector and EMA regulates this on a very transparent formula, taking into account fuel prices as well as other costs. As I have explained in my reply, this has translated into a significant drop in utilities prices.

For the other sectors, for example, pump prices, we have to depend on competition and market forces to make sure there is no profiteering.

4 Mr Ang Wei Neng asked the Minister for Trade and Industry what is the impact of the recent falling Eurodollar, oil prices and rising US dollar on Singapore's competitiveness and economy.

Mdm Speaker, the recent rise in the US dollar and fall in the Euro reflect the diverging prospects of the US and Eurozone economies. While the US economy has been improving steadily, the pace of recovery in the Eurozone remains weak.

In line with global movements in the US dollar and the Euro, the Singapore dollar has depreciated against the US dollar in recent months and appreciated against the Euro. However, such movements in bilateral currency pairs are not expected to have a significant impact on Singapore's economy. Under Singapore's exchange rate-centred monetary policy framework, the MAS manages the Singapore dollar exchange rate against a trade-weighted basket of currencies within a prescribed policy band and does not focus on any specific bilateral currency pair. This framework allows the Singapore dollar to be managed against short-term market fluctuations, while limiting the spill-overs that exchange rate volatility may have on the real economy.

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It is also important to note that the exchange rate is not used as a tool to directly manage Singapore's export competitiveness in the short term. Instead, demand conditions in our major export markets would have a more significant impact on Singapore's growth prospects. We expect the strengthening of the US economy, which underpins the appreciation of the US dollar, to be a positive factor for the Singapore economy.

As for the impact of falling oil prices, I have explained the impact on Singapore's economy in my reply earlier. While lower input costs for our exporters due to falling oil prices may also help to enhance the price competitiveness of our exports, the impact is likely to be limited as other exporters will also benefit from lower oil prices. Moreover, it is important to note that any competitive advantage derived from lower oil prices will only be temporary in nature. To enhance our competitiveness over the longer term, it is more important for us to press on with on-going efforts to help our firms improve productivity and build up their innovative capacity.

5 Mr Alex Yam asked the Minister for Defence (a) how many troops are currently deployed to support the coalition against ISIS; (b) what has been their involvement so far; and (c) whether the Ministry expects there to be requests for greater support from Singapore in the near to medium term.

Mdm Speaker, as informed to this House in November last year, the SAF will support the multinational coalition against the extremist threat posed by the Islamic State in Iraq and Syria, or ISIS.

I stated then in November the reasons for Singapore's strong stand against extremist terrorism. If I can quote, "Singapore must resolutely oppose the spread of terrorism in order to safeguard our security here. It is in Singapore's interest to support the multinational efforts against ISIS and its attempts to export terrorism to our region, whether by sending foreign terrorists to carry out terrorist operations or by radicalising regional elements who engage in violence in Iraq, Syria and subsequently their home countries. If this terrorism threat is allowed to grow and spread, innocent civilians here and elsewhere could be endangered and killed." This was in November.

Unfortunately, Members would know that in the intervening months, events in other countries have confirmed in stark terms that, regardless of geographical distances, the threat of extremists, if not addressed, can result in terrorist attacks on residents in home countries.

What radical elements like ISIS are perpetrating have nothing to do with Islam, which teaches love, compassion and amity. Unfortunately, the false extremist ideology of these

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groups has attracted fighters from foreign lands and radicalised individuals to carry out atrocious acts in their home countries against innocent civilians of all races and religions, including Muslims. An estimated 1,000 foreign fighters are joining ISIS each month. While airstrikes have degraded ISIS' oil-refining capacity and resulted in a fall in its oil revenue, ISIS reportedly continues to fund its operations from ransom money and human trafficking.

More countries have joined the coalition against ISIS because they recognise that unless the source of this radicalisation is disrupted, their citizens at home cannot be protected. During the fight against Al Qaeda and the Taliban, you will remember that bombs exploded in Bali and Jakarta. If this can happen in Indonesia, a Muslim-majority country, it can happen anywhere. All countries and their citizens are at risk from extremist terrorists. Our neighbours understand this threat and this is why Malaysia has also increased its vigilance.

More than 40 nations in the coalition are contributing military capabilities to operations against ISIS in Iraq and Syria. These countries include Morocco, Jordan and Qatar, nearby countries that are at higher risk of reprisals from ISIS. But these neighbouring countries all recognise that a greater threat will exist if ISIS grows.

The combined efforts of many countries are having an impact in the fight against ISIS. To date, a number of key ISIS leaders have been killed. Iraqi security forces and Kurdish forces have also regained about 700 square kilometres of ISIS-captured territory and halted ISIS' attempts to seize new territory. ISIS is now largely in a defensive fight to hold on to its territory and to protect its lines of communication and resupply. In Iraq, the key coalition gains have been in the positions around Baghdad, which have blocked ISIS' movement southwards, parts near Fallujah, as well as the Mosul Dam. In December, Kurdish forces launched an offensive to retake Mount Sinjar, which is strategically located as it links Mosul, the main ISIS stronghold in Iraq, and ISIS territory in Syria. In Syria, Kurdish forces are in control of the majority of Kobani, a strategic town as it lies just south of the border with Turkey.

Let me now report on the progress of the SAF's efforts, which the Member has asked. Following the announcement in November last year, the SAF sent a Needs Assessment and Survey Team to the United States Central Command Headquarters. A liaison officer has also been attached there since December last year, to facilitate planning and coordination for the SAF.

Over the next few months, the SAF will further deploy planners to the Combined Joint Task Force (CJTF) Headquarters and the Combined Air Operations Centre. We will also be sending a Pre-Deployment Site Survey team to prepare for our subsequent deployment of

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the KC-135 tanker as co-ordinated with the Task Force Headquarters.

At this early stage of our involvement, it is premature to determine if there will be further requests for greater support from Singapore to the coalition.

Madam, I thank the Minister for his response. It is important that the SAF and Singapore have committed ourselves to this important effort to target and combat ISIS.

As the Minister has mentioned in his preamble, some recent tragedies in different countries, including, most recently, in Paris and Belgium, have been linked to these countries' participation in the fight against ISIS. With regard to this, does the Ministry detect any heightened risk to Singapore since our early deployment and what are some of the efforts to prevent this from occurring in Singapore?

Madam, it is an important question but the appropriate agency and the Ministry to do internal assessment for our security would be MHA and I would request the Member to ask the Deputy Prime Minister. But I have this to say. As we said to the religious leaders whom the Prime Minister, the Deputy Prime Ministers, the Foreign Minister and myself met before all these attacks, firstly, you cannot guarantee Singaporeans that such attacks would not occur in any country, and all of us know that. And the incidents in general have gone up, particularly because you had small groups, even lone wolfs, acting independently, being influenced by what they read, the false ideology they are exposed to. It is well-nigh impossible for any security force in any country to be able to monitor every citizen.

Our greatest challenge, indeed, is that if an attack occurs, what happens to the unity which we have forged over many years, now 50 years of our Independence? Will it fracture, will there be suspicion? Will there be reprisals? And this is what we must be focused on.

I think we have done a lot to build unity. Whether that unity can withstand such attacks if they occur, we must not let it and we must continue to use this time not only to increase our vigilance and to ask our citizens, each citizen, to also be vigilant, our security forces to be vigilant, but also to ask the community to come together and withstand such false ideology and stand together, if ever such an attack occurs.

6 Mr Ang Wei Neng asked the Minister for Foreign Affairs whether he can provide an update on the results of the Environmental Impact Assessment conducted by Malaysia in

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respect of the land reclamation project in the Straits of Johor.

(for the Minister for Foreign Affairs) : Mdm Speaker, I believe the hon Member is referring to the Forest City reclamation project by Country Garden Pacificview Sdn Bhd and the R&F Princess Cove reclamation project by R&F Development Sdn Bhd in the Straits of Johor. Singapore remains committed to working with Malaysia to address our concerns over Malaysia's reclamation projects in the Straits of Johor that could have potential transboundary impact on Singapore.

As you are aware, we had on several occasions conveyed to Malaysia our concerns and requests for more information, including the Environmental Impact Assessment (EIA) reports, on these reclamation projects. Singapore also recently held consultations with Malaysia on this matter at the 28th meeting of the Malaysia-Singapore Joint Committee on the Environment (MSJCE) and 27th Malaysia-Singapore Annual Exchange of Visits (MSAEV) held in Malaysia from 24 to 25 November 2014.

Malaysia had responded with some general information on the reclamation projects and promised to share all other information, including the EIA reports, once its internal processes are completed. At the consultations, we exchanged views with Malaysia and sought further clarifications on these works. We also reiterated to Malaysia that both countries are obliged under general international law and, in particular, the United Nations Convention on the Law of the Sea (UNCLOS), to undertake and share EIA reports on all works that could have transboundary impact, prior to the commencement of such works.

Singapore was informed that Malaysia's internal processes regarding the EIAs have yet to be completed. We were also informed that Malaysia had ordered these reclamation works in Johor to be suspended. Malaysian Deputy Minister of Natural Resources and Environment Dato' Sri Dr James Dawos Mamit subsequently said it would take at least three more months for the finalised EIA reports to be ready. His comments were reported in the TODAY newspaper on 29 November 2014.

More recently, it was reported in the media that the reclamation projects have been approved by the Malaysian Department of Environment. However, Singapore has yet to receive the Malaysian government's official response on this issue, including the finalised EIA reports. We are seeking clarification from Malaysia and have reiterated our requests for Malaysia to provide the finalised EIA reports and all relevant information expeditiously, prior to the commencement of such works.

I thank the Second Minister for the reply but, apparently, the media from both sides of the Causeway has reported that Princess Cove's developer,

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Guangzhou R&F Properties have engaged a Malaysian-based environmental and hydraulic consultant Dr Nik & Associates to carry out a detailed environmental impact assessment, and it was reported that EIA had concluded that the reclamation will not be contributing too much negative impact to its environment.

I am not so sure if the Second Minister has clarified this report with the counterpart. In addition, it was also reported in the press that the outermost point of the reclaimed land of the Princess Cove project will only be 290 metres away from the Singapore border. Two hundred and ninety metres is a relatively short distance, less than six laps of an Olympics-sized swimming pool, so many average swimmers could easily swim that distance.

Hence, does such a close proximity between the Johor's reclaimed land and Singapore's borders pose a border security threat to Singapore?

Mdm Speaker, I would like to thank the Member for the supplementary question, but I believe that I have answered the question in my reply that we have not received the report and we are working with our Malaysian counterparts to obtain the report as soon as we can, and we will study the report seriously.

Mdm Speaker, I would like to ask the Minister whether the Singapore side will be doing our own independent environment impact study, looking at the whole project.

Yes, we will definitely be studying very carefully but there is information that is required of Malaysia, so we are working with our counterparts to get the necessary information before we can do a thorough study.

Mdm Speaker, as the Member of Parliament for Yew Tee division, we have quite a lot of biodiversity sitting within our division and this project would have a major impact on some of them. Therefore, my question to the Second Minister would be, if this project would go ahead unilaterally, is there anything that the Singapore Government can do to stop this project from proceeding without the conclusion of the EIA?

As I have mentioned in my reply, we would always work very closely with our Malaysian counterpart; there are prescribed international laws, including UNCLOS, that describe what countries should do when there are actions that have a transboundary effect on another. So, these are and have always been our modus operandi, that we would like to work according to international legal framework.

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But I think it is too premature to suggest our counterpart will do one way or another. I think at this point in time, we would just like to reiterate that we prefer to work closely with them, getting the report from them, getting the information from them and sharing our studies with them as well. As I had mentioned earlier, there have been several meetings, and I think our counterpart has been forthcoming, they have agreed to give us the report, so let us just go according to the plan.

Supplementary questions, Madam. I would like to ask the Second Minister: what is the internationally accepted protocol for such a reclamation project, and whether there is any agreement between Singapore and Malaysia with regard to such reclamation of land? I recall that Malaysia made a lot of noise when we did our reclamation. So, what was the agreement or understanding that we have forged with them?

Mdm Speaker, I thank the Member very much for the supplementary questions. There is agreed protocol and I think both countries are committed to work according to this protocol. The Malaysians have agreed to let us have the EIA report. So, we are waiting for that report.

7 Mr Gan Thiam Poh asked the Minister for Transport with regard to the ongoing 2014 fare review exercise by the Public Transport Council (PTC), whether the PTC will consider a reduction of transport fares as a result of the fall in oil prices since June 2014.

Mdm Speaker, the fare formula is pegged to changes in the Core Consumer Price Index, Wage Index and Energy Index over the preceding year and reflects the operating cost structure of the public transport operators. So, the Core Consumer Price Index and the Wage Index will each account for 40% of the fare formula, while the Energy Index will account for 20%. For the ongoing fare review exercise which we began in November 2014, we are looking at changes in the indices in the year 2013. It is important to remember that while we started in November 2014, we used the data and indices in the year 2013.

Energy and fuel costs are reflected in the Energy Index component, as mentioned earlier, which accounts for 20% of the fare adjustment quantum. The value of this component for the on-going 2014 fare review exercise is negative 12.6%, due to lower energy prices in 2013.

However, the Core Consumer Price Index and Wage Index, which make up the remaining 80% of the fare adjustment quantum, had gone up in 2013, and they are plus 1.7%

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for the Core Consumer Price Index and plus 4.3% for the Wage Index.

Taking these changes in the indices into consideration, the fare adjustment quantum for the year 2014 yielded by the formula is negative 0.6%. So, for 2014, using the index indices in 2013, the formula yielded negative 0.6%.

Some of you may recall that in the last fare exercise, the fare adjustment quantum was 6.6%. However, it was assessed that 6.6% would be too much of an increase in one go, and the Public Transport Council therefore decided that it would implement only a 3.2% increase in the 2013 fare review exercise and carry over the remaining 3.4% to the on-going 2014 fare exercise.

So, when we add this year's negative 0.6% to the carried-over 3.4%, we get the fare adjustment quantum of 2.8% for the ongoing fare review exercise. If I put it another way, supposing we had implemented the full 6.6% fare adjustment quantum in the previous fare review exercise, and we did not carry over 3.4%, then, indeed, we would have a fare adjustment for this year that is negative, and it would be negative 0.6% this time round.

If I look ahead to the next fare exercise, and this is the fare exercise that we will conduct towards the end of this year, called the 2015 Fare Review Exercise, and this is using the data from the full year of 2014, the drop in 2014's energy prices could possibly translate to a negative fare adjustment. Based on available data, and we do not have the full year's data as yet, I would have to say that it could be in the region of negative 1%.

What I have just provided are the numbers according to the fare formula. We will have to leave it to the Public Transport Council to assess the public transport operators' applications for fare increase, the fare adjustment quantum as given by the formula, and the affordability of public transport for Singaporeans, amongst other things, and decide on the fare adjustment.

8 Mr Ang Wei Neng asked the Minister for Transport whether the Ministry is considering adjusting the Vehicle Entry Permit (VEP) fee on foreign vehicles entering Singapore in view of Malaysia's imposition of a similar VEP fee for Singaporean vehicles entering Johor.

Mdm Speaker, Singapore's Vehicle Entry Permit (VEP) fee seeks to equalise the cost of owning and using a foreign-registered vehicle

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in Singapore, with that for a Singapore-registered vehicle.

Malaysia's proposed vehicle entry levy, on the other hand, appears to be more akin to a toll on foreign-registered vehicles for revenue purposes. If so, we will consider matching in some form after the details of the levy are confirmed, including whether it is imposed only at Malaysia's border with Singapore or at all of its borders.

9 Ms Tin Pei Ling asked the Minister for Health in respect of increased expenditure in the public healthcare sector over the last five years (a) what percentage has been spent on (i) direct clinical services and (ii) administrative overheads respectively; and (b) how does the Ministry ensure equity of resource allocation among the various institutions.

(for the Minister for Health) : Mdm Speaker, the bulk of the expenditure in the public healthcare sector goes directly to medical and patient services. About 15%-20% of the public hospitals and institutions' expenditures are attributable to administrative functions, such as corporate services, human resource, finance, and IT. This is similar to other countries such as England, Canada and the Netherlands, and is lower than the United States which is reported to spend at least 25% of hospital costs on administration.

We are mindful of the need for our public healthcare institutions to keep administrative costs low and deliver healthcare services efficiently. This will help ensure that healthcare remains affordable and sustainable in the long term.

Ms Tin also asked about the allocation of resources among the institutions. The Ministry subvents the public healthcare institutions with block budgets. This is determined based on several factors, including workload, type of services provided, and the complexity of the medical conditions each institution has to manage. The block budget for each institution is reviewed regularly to take into account advancements in medical care, inflation, as well as the institution's workload and patient profile.

We will continue to refine the resource allocation to ensure that our public healthcare providers deliver services efficiently and achieve good health outcomes for Singaporeans.

Thank you, Mdm Speaker, and I thank the Parliamentary Secretary for the answer. I hear from the Parliamentary Secretary's reply that factors taken into account for the allocation include patient volume and workload. May I ask how will MOH ensure that the KPIs set in public hospitals will be in such a way that they

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would not drive unintended behaviours? For example, encouraging or perhaps pressuring patients to take on more procedures or more expensive procedures than necessary.

Madam, I would like to thank Ms Tin for her supplementary question. When we look at the performance of institutions as well as the hospitals and doctors, we have a holistic performance indicator. We recognise them for the things that they do, including the productivity of the institution and of the doctors as well, including the kind of clinical services that they do as well as teaching, research and administrative duties that they carry out. So, at the holistic level, we want to ensure that our stakeholders do the best for the patients and for the medical area that they are looking at.

At the MOH level, we do costing exercise where we work very closely with the institutions to ensure that our legislative framework is robust and, at the same time, we are able to meet the needs of the patients. On the other hand, at the institution level, each institution has its own governance framework. Maybe some of them would look at setting up an accreditation committee, peer review and even before the operation is carried out, there are pre-operation conferences to ensure that we take the appropriate treatment measures that set the best outcome for our patients.

Beyond the KPIs and budgetary framework, I would like to share with Ms Tin and Members that being doctors, they are professionals. Different doctors would have different opinions. So, I would like to urge patients to also refer to their doctors so that they can have second or third opinions, so that among doctors, they can talk to one another, discuss what would be the best treatment procedure for the patients so that they can provide the best outcome for them.

Mdm Speaker, supplementary questions, please. With respect to the 15%-20% of the budget directed towards administrative cost: firstly, is there a rising trend or a falling trend, and would MOH have some form of target and, if so, what is being done to meet that target?

Essentially, if you look at the international benchmark, there is no set or widely accepted benchmark around the world. What we have looked at are some basic and common benchmarks and the figures for each year vary for the different types of work. We feel that our current approach of 15%-20% is appropriate at this point in time. Nevertheless, as I had mentioned earlier, we will do our best to see how we can facilitate the process of working efficiently – and I think at the heart of the matter is always to meet the needs of our patients – because we want to take care of the patients and give them the best services and outcomes.

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Thank you, Mdm Speaker. I echo the hon Member's concern in his question. I would like to ask the Parliamentary Secretary as regards to not about just the trend of spending this amount of money on the administration but the headcount for administration. From what we can observe, the headcount for the administrative non-medical personnel seems to be growing much faster compared to the medical personnel in the hospitals.

Madam, I would like to thank the Member for the question. From his observation, he finds that the headcount has increased. With the services that we render to our people and with the ageing population, you would expect that there may be increases in the headcount. What is important is that while we try to reach out to our people in a manner that gives them the best option, we are also using technologies to see how we can facilitate treatment as well as the outcome for our patients.

So, we are mindful of the increases, if there are any, but like what I said earlier, there is no common track if you look at the different institutions that are available. What is key is how we can operate efficiently but not at the expense of our patients' needs.

10 Dr Benedict Tan asked the Minister for Health in view of the acute shortage of doctors in certain specialities in our public hospitals and the opening of new public hospitals in the coming years, whether he will consider introducing a conditional specialist accreditation scheme that accredits foreign medical specialists to practise in Singapore, on the condition that they practise only in public hospitals and in specialties where we have an acute shortage.

(for the Minister for Health) : Mdm Speaker, the Specialists Accreditation Board and the Singapore Medical Council already have such a scheme in place. Foreign medical specialists who are recruited by the public sector hospitals must first be accredited by the Specialists Accreditation Board before they are conditionally registered with the Singapore Medical Council.

Conditional registration requires such specialists to fulfil a supervision period in an approved institution. All the public hospitals are approved institutions to hire such specialists and they can make use of this scheme to manage their medical manpower requirements. Majority of these specialists can be fully registered upon satisfactorily completing the conditions of their conditional registration. However, a small minority will have other restrictions or conditions imposed on their registration and these will remain conditionally

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registered. This scheme is applicable to all specialties.

Mdm Speaker, I thank the Minister of State for the answer. Currently, we have a lot of new and large hospitals coming on stream and that requires manpower. There is also concurrently an outflow of doctors into the private sector. On the whole, we have a shortage of doctors in the public sector and I know of reputable doctors from overseas who have got a very public service ethos who would be happy to work in Singapore. The problem is that even with their credibility and reputation, they have been denied accreditation in Singapore.

Therefore, I suggested this scheme whereby, unlike the current scheme, the doctors that are accredited to work in Singapore are limited only to the public sector, indefinitely. The current scheme I think allows the foreign doctors to go into the private sector after being supervised for two years in the public hospitals. Can the Minister of State elaborate on that?

I would like to thank the Member for the supplementary questions. I understand Dr Tan's concerns. There are certain specialties where the specialised training programmes are not standardised internationally and the training quality as well as the duration of the training may vary between countries, thus making it very difficult to establish equivalence.

However, such applicants can practise as non-specialist doctors, for example, as staff physicians, and application for specialist accreditation can be re-assessed after a period of working in Singapore. For other substantive applications where a specialist training committee's support is strong, the Specialists Accreditation Board can review the appeal on a case-by-case basis.

I would like to thank Dr Tan for the comments as well as the suggestions and I would appreciate if Dr Tan can highlight any such cases worthy of consideration to MOH and we will be happy to look at them.

Mdm Speaker, I would like to ask the Minister of State: in the last few years, what percentage of the foreign doctors who are registered in Singapore, subsequently, when they get their full accreditation, leave for private practice straightaway? And what is the percentage who stay within the public hospitals? Does the Minister of State have the information?

Secondly, with regard to the recognition of foreign doctors, is there any bilateral agreement with the other countries that we have to recognise their doctors and for them to

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recognise ours?

I would like to thank the Member for the supplementary questions. I do not have the figures at hand but I would like to highlight that there are currently about 4,500 specialist doctors registered with SMC, of which only about 5%, a very small percentage, are under conditional registration. Within this group, there are only about six in the private sector and the rest are in the public sector.

With regard to whether such foreign doctors do go out into the private sector after they have fulfilled the mandatory period of conditional registration, I believe we have the figure but I hope that the Member can file a separate Parliamentary Question so that we can give him a more complete answer.

11 Ms Kuik Shiao-Yin asked the Minister for Social and Family Development what measures does the Ministry take to ensure that (i) all handicapped Singaporean children receive equivalent help, including those with single mothers who will not benefit from Handicapped Child Relief, Working Mother's Child Relief and Grandparent Caregiver Relief; and (ii) all Singaporean children are given an equivalent head start since those with single mothers do not benefit from the Child Development Account and Baby Bonus.

12 Ms Kuik Shiao-Yin asked the Minister for Social and Family Development (a) how does the Ministry ensure that single mothers who earn enough to be disqualified from low-income benefits are given support to continue working to achieve and sustain self-sufficiency; and (b) whether maternity leave for single mothers can be extended from eight to 16 weeks, as available to married mothers, so that all Singaporean children benefit from equal foundational care.

Mdm Speaker, may I have your permission to take Question Nos 11 and 12 together?

Yes, please.

Mdm Speaker, education and healthcare support are important to the growth and development of young children. Working mothers also need help in managing their caregiving responsibilities over their young children. The Government recognises these needs and provides a range of support in these areas, regardless of the marital status of the children's parents.

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For example, all mothers, regardless of whether they are married, are eligible for infant care and childcare subsidies. The Foreign Domestic Worker levy concession is also extended to all parents of children aged below 12, including single mothers. These help to keep care for young children affordable and enable mothers to continue to work to achieve self-sufficiency. In addition, all working mothers are eligible for childcare leave before the child turns seven years old and extended childcare leave when the child is seven to 12 years old.

To give our children a good head start, Government-funded education programmes and support in our pre-schools, early intervention centres, mainstream schools and special education schools are extended to all children. A higher level of assistance is provided to children from lower income families or those with developmental delays or special needs. Again, such support is provided independent of the marital status of their parents.

There are, however, some benefits that single mothers do not currently benefit from, such as eight additional weeks of paid maternity leave and tax incentives. These additional benefits are given to encourage and support parenthood within the context of marriage. This is the prevailing societal norm in Singapore and one which we seek to reflect and preserve.

13 Mr Seah Kian Peng asked the Minister for Social and Family Development whether the Ministry can consider extending the consolidated application form for casino self-exclusions used for foreign workers to that for local workers and religious organisations to enable the signing up of groups of citizens using the same consolidated application form.

Mdm Speaker, the National Council on Problem Gambling (NCPG) administers a self-exclusion system for individuals who wish to voluntarily exclude themselves from the casinos.

Today, Singapore residents can make an application online using their SingPass accounts, which is a fast and effective way to exclude themselves. To make the process more convenient to those without online access, since September last year, NCPG has made available an option for applicants to mail in hardcopy applications. These forms are available at community organisations that provide problem gambling counselling and help services, the casinos, jackpot rooms in selected clubs and the NCPG website. NCPG is also making efforts to make the forms available at more locations.

For foreign workers who have no SingPass accounts, NCPG has provided the option of group submission. This is done through the Work Permit Online account where employers

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submit a consolidated application form bearing the signatures of the applicants.

Self-exclusion must be premised on individual decision, ownership and responsibility. The NCPG will work with employers and other relevant social civic organisations to assess the feasibility of having group applications, while preserving the principles of individual decision, ownership and responsibility.

Mdm Speaker, I thank the Minister for the reply. The basis of my question is really that the current consolidated application form for foreign workers is good, but I would like the Ministry and Casino Regulatory Authority (CRA) to consider making a form similar to this one in my hand, that could be extended to locals or Singaporeans. It may be done at the workplace, it may be done in different groups and it may be done in churches, temples or mosques, but this is still on the basis of the self, the individual, wanting to be excluded but just simply making it easier.

Yes, the forms are online, you can log on with SingPass. But my driving principle is: can we make it easier? If we make this available for foreign workers, can we make the same easier for locals?

I have in front of me also the local application form for self-exclusion and for foreigners. Even then, for individuals, the local form requires a few more columns to be filled. Can we make it easier? Can we make it simpler? For those who want to, I think we should make it easier. We do know that if they are excluded, the implications, going forward, would be fewer and better for Singapore.

So, I hope the Minister can consider, firstly, making this consolidated form for foreign workers available for Singaporeans. The Minister may decide whether it could be done at the workplace or at religious institutions or, for that matter, any groups. Secondly, can the Minister consider making the current self-exclusion form for locals even simpler. There are three areas which I find are unique to Singaporeans. We have to indicate race, religion —

Mr Seah, we got the three areas. Thank you very much.

Mdm Speaker, the short answer to both of Mr Seah's suggestions is yes. As I have explained in my answer, we are prepared to work with employers and other relevant organisations to assess and design a form that can allow for group applications. But it must still be premised on the basis of individual ownership, responsibility and individual decision. So long as we maintain these three principles, we will make it as simple as it can be so that the people who are signing up know what they are signing up for, so that in the event that they want to withdraw themselves for whatever reason, they are also conscious of the

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fact and they take individual responsibility.

Madam, I would like to go one step further than my colleague Mr Seah. The current system is based on self-exclusion from the casinos. So, if you do not want to enter, you opt out. Would the Minister consider a self-inclusion scheme whereby you are automatically excluded and you apply to opt-in only if you really want to visit the casino? Would the Minister consider that?

Mdm Speaker, today, we have both self-inclusion and self-exclusion. Self-exclusion is for individuals who want to exclude themselves. We also have third-party exclusions where family members may take up a family exclusion order against the person concerned. We also have other forms of third-party exclusions whereby some people, for example, if they are on financial assistance, are automatically excluded. So, this is the exclusion clause.

I think the Member's inclusion clause means that those who want to include themselves in this today, they have to pay an entrance fee. So, that would be how they include themselves. Is that what the Member meant? So, we charge them for going in. Is that what the Member was referring to?

I do not mean the $100 scheme. Since the Ministry or the Government is spending so much money on the demerits of gambling, problem gambling and so forth, so I think it can be assumed that gambling or casino entry is really not something that is encouraged. Therefore, since it is not really encouraged, then why not just have a scheme whereby everybody is excluded from entering the casino and, if you want to be included, then sign up for an opt-in scheme, changing the assumption of the current scheme we have today in our country?

So, Ms Phua, you are suggesting an opt-in scheme plus pay $100?

Yes.

So, Minister, please.

I thought you opt-in because you pay $100; if you do not opt-in, you do not pay $100. If you go and buy the ticket, you pay $100, you opt in. The Member is asking for one extra step. That means, when you buy the ticket, you opt in, and then you pay $100. That would be the same as buying the ticket at $100. Or is the Member suggesting – I just want to clarify – that we have a membership scheme, which I think the Member is not

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suggesting?

It should not be so easy that if you want to enter, just go to the counter and pay up $100. I think if something is not encouraged, why not just opt everybody out of it as a natural exclusion and, if you want to enter, then you go and apply for what Mr Seah Kian Peng has recommended?

Let me try to clarify this with the Member offline because I would have thought that, today, if you want to go in, you have to pay $100 and that is your act of inclusion. But the Member is suggesting that, on top of paying $100, you get an extra form to apply for inclusion.

And then, pay $100 to enter.

So, both?

Yes.

I see.

So, would the Minister consider that?

I am just trying to think through the mechanics of this. Let me take this back and think through the mechanics of the Member's suggestion. But I just want to clarify that the Member is not suggesting a membership scheme when she talked about having an "opt-in" scheme. Because, personally, I will not be very supportive if you say that there is a term membership or opt-in scheme where, once I sign that, then I can go anytime I want. I do not think the Member is suggesting that.

There are schemes that are based on either one – opt in or opt out. For the human organ donation scheme, for example, everybody is in unless they want to opt out. So, I guess I am suggesting schemes like these.

In other words, the Member is suggesting all Singaporeans are prohibited unless they sign something to opt in, plus they pay $100. So, Minister, that is the point she wants to ask you to consider. So, Minister has said he will think about it. Now, we move on to Mr Seah Kian Peng.

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I just want to seek a clarification from the Minister. He mentioned that there is already a form and is prepared to work with groups for Singaporeans to be excluded from entering the casinos. I just want to clarify that that would be a similar form like this form in my hand that will come up as a result, allowing, whether it is at the workplace, churches, temples, mosques to organise their members to fill up this simple form for the individuals to be excluded as a whole and not singly.

Whether the form is exactly the same, I think we can work on it. By and large, the philosophy is that whoever opts to be excluded, they can opt-in to be excluded. Whoever chooses to be excluded may do so, so long as the application is premised on the principles of individual responsibility, accountability and individual decision. Whether it is all in one form or the organisation can help us distribute a set of forms to each individual and then we put it together for submission, I think those are mechanics that can be worked out. But as a philosophy, if an organisation – be it a church group or an employer – wants to conduct a session to encourage his or her employees or members to come and collectively sign up together, even today, we have no objection to such a practice.

In fact, some organisations already do that. They may not have one consolidated form, but they will give out the forms individually to their members – and we have seen that before – whereby they compiled them and passed them on to us.

So, philosophically, no difference. The issue is just how to simplify the amount of information gathered, bearing in mind that the person always makes a conscious decision because, subsequently, if the person decides to withdraw himself or herself from the scheme, then there is a basis for us to act.

Mr Gan Thiam Poh, last question.

I have a supplementary question for the Minister. May I ask whether the Ministry keeps track of Singaporeans who are excluded but travel overseas to gamble?

May I clarify: when the Member said we take care of those people who travel overseas to gamble, what does he mean? Oh, how do we keep track of people who go overseas and gamble if they have excluded themselves? Unfortunately, at this point, I must admit that I do not have jurisdiction beyond Singapore even if I would like to.

I understand what the Member means. On a more serious note, I think for those who have excluded themselves, whether it is local or overseas, the question is whether we can

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have the proper family and community support structures to help them kick the habit.

For very determined or pathological gamblers, they can always find some ways to circumvent this. But if we can have the family and the community all playing a part to try and come together to help the individual, then I think we will have another layer of defence rather than just depending on a policing system to do that. Increasingly, in the new forms of gambling, we are most concerned about not just terrestrial gambling, like casinos or gambling dens, but the issue of cyber addictions. We are most concerned about that.

14 Prof Tan Tai Yong asked the Minister for Education (a) how many external providers conduct sexuality education programmes in schools currently; (b) how many of these providers are paid a fee and how many do so free-of-charge; (c) whether there is a difference in feedback and evaluations from the students for the paid versus free programmes; (d) in view of it being more than five years since the Ministry engaged external providers for sexuality education programmes, whether it will conduct a review on this practice and will the practice continue in the future; and (e) how much has the Ministry spent on engaging external providers for such programmes since 2009.

(for the Minister for Education) : Madam, MOE Sexuality Education is taught by selected teachers trained in sexuality education. Schools may engage external providers to conduct supplementary sexuality education programmes, based on the needs of their students.

In 2014, seven schools engaged four approved external providers for $20,000. There were no free-of-charge programmes from 2011 to 2014. Since 2009, schools spent an estimated amount of $460,000 on such supplementary programmes, an average of $8 per student.

MOE has a stringent vetting process to select suitable external providers, trainers and relevant programmes for sexuality education in schools. Teachers sit in to observe the programme and provide feedback to MOE on the quality of the trainers and the relevance of the programmes. Schools also collect feedback from their students. MOE audits schools to ensure that the programmes are delivered according to what has been approved. MOE is in the process of reviewing the system of external providers. This is part of the regular review process.

During one such review, MOE had in 2011 decided that the four-hour Relationship Module which was conducted by external providers for first-year pre-university students would cease from 2015. To streamline and reduce overlaps, some of the more important

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learning objectives were incorporated into the revised 2015 Sexuality Education curriculum taught by MOE teachers.

I thank the Senior Minister of State for her answer. I seek a further clarification. According to the MOE Framework for Sexuality Education, the community is a critical partner in this whole process. Am I to understand that the use of services by external vendors constitutes part of that community partnership or is it simply a form of outsourcing?

The majority of the programmes are actually taught by MOE-trained teachers. The external vendors are used or engaged by schools on occasions where it is not within the scope of what the MOE teachers are teaching. And this is usually when the external vendors have a particular expertise. For example, pornography, the cyber aspects, such as cyber safety, influence of the media, are areas which you may go to an external provider for. And also Sexually Transmitted Infections (STIs)/HIV prevention is best done by those who are medically trained, who are experts in this area.

When the schools talk about community, what we really mean is the entire support system behind this because part of it also has to do with values, the approach, your beliefs and what your parents feel is appropriate for you. So, in that broader context, the community has a part to play.

I thank the Senior Minister of State for her clarification and answer. Earlier on, the Senior Minister of State mentioned that one area in which you would engage external providers would be in the areas of the cyber safety aspects. Recently, we had a case where 31 children were sexually groomed, for example. It was quite surprising to me. It seemed that the first 30 did not know that this was an issue until the 31st one happened and then the person was caught.

So, does the Senior Minister of State think that this could be enhanced and whether our programmes on cyber wellness also include sexual grooming and whether we can strengthen that, so that the kids are more aware in terms of the dangers in the near future?

This is more of a question of effectiveness and whether we can strengthen this aspect with our private providers and whether this should instead be in-sourced, given the dangers.

I thank the Member for raising this important topic. We would agree certainly that there is room for it to be strengthened. With children, there is a range of ages, so, obviously, what a Primary school child might understand would be quite different from somebody who is in Secondary school or at Junior College level. And at all stages, it is

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age-appropriate.

Our general approach is that, where possible, we would like it to be taught by MOE teachers but in areas where it needs a certain external expertise, especially when it comes to cyber wellness, understanding behaviour on the Internet, understanding how people can fall prey to predators on the Internet, sometimes you need external expertise for that. The Member's broader point about the need to strengthen this area and to ensure that our children are safe, that is taken on board and, in fact, safety in the sexual context is something that MOE takes very seriously.

15 Dr Lim Wee Kiak asked the Minister for Trade and Industry in respect of recalcitrant retailers indulging in unethical sales practices (a) what is the Ministry doing to step up enforcement against such offenders; and (b) whether the Ministry will consider (i) enhancing the penalties for such offenders and (ii) barring the convicted owners of these companies from registering any new business for a period of time.

16 Mr Lim Biow Chuan asked the Minister for Trade and Industry whether the Consumer Protection (Fair Trading) Act can be amended to allow a specified body to take up criminal prosecution against errant traders and their directors or proprietors for breaches of the Act.

17 Er Dr Lee Bee Wah asked the Minister for Trade and Industry in light of complaints against dishonest retailers in Sim Lim Square (a) whether the Ministry will consider enhancing the penalties against such business practices under the Consumer Protection (Fair Trading) Act; (b) whether joint action by the Ministry and the police will be taken against these businesses; and (c) what other recourse is there for consumers who have been cheated apart from reporting to the Consumers Association of Singapore (CASE).

18 Ms Denise Phua Lay Peng asked the Minister for Trade and Industry in light of the highly publicised cases involving a mobile phone retailer in Sim Lim Square and two tourists (a) what are the options available and what steps will the Ministry take against these errant retailers; and (b) what will the Ministry do to reduce similar incidents of unfair and bullying business tactics applied by errant traders, especially on tourists, in Singapore.

19 Mr Liang Eng Hwa asked the Minister for Trade and Industry (a) whether the existing consumer protection and fair trading laws are adequate to deter unfair trading practices by errant retailers; and (b) whether enforcement and investigative powers can be stepped up

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to take recalcitrant errant retailers to task.

20 Ms Irene Ng Phek Hoong asked the Minister for Trade and Industry (a) whether the bad publicity arising from errant retailers in Sim Lim Square has affected the international reputation of Singapore as a tourist destination and shopping hub and, if so, how; (b) what stern actions can be taken against such retailers promptly when reported; (c) whether the existing laws are adequate to protect consumers against such errant retailers; and (d) whether there are mechanisms to check or ban errant retailers from setting up shop under different names.

21 Mrs Lina Chiam asked the Minister for Trade and Industry (a) whether the Ministry keeps track of consumer complaints received by CASE; (b) if so, what is the total number of CASE complaints received in the last 10 years against errant retailers at Sim Lim Square, Lucky Plaza and People's Park Centre; (c) what is the total number of successful remedies accorded to consumers against errant retailers at the three shopping malls for defective goods covered under the Consumer Protection (Fair Trading) Act; and (d) whether the Ministry will consider publishing a blacklist of recalcitrant retailers at airports and major commercial hubs.

22 Mr Hri Kumar Nair asked the Minister for Trade and Industry whether the Ministry will consider establishing a consumer protection agency to investigate and enforce consumer protection laws in Singapore.

23 Mr Yee Jenn Jong asked the Minister for Trade and Industry whether the Government will consider legislation or regulations to give more teeth to Government agencies and management corporations of retail spaces to tackle errant retailers.

(for the Minister for Trade and Industry) : Mdm Speaker, with your permission, could I take Question Nos 15, 16, 17, 18, 19, 20, 21, 22 and 23 together, please?

Yes, please.

The Government's approach to consumer protection is based on promoting fair trading among retailers and helping consumers to make informed purchasing decisions. This approach has benefited consumers and businesses, as the vast majority of our retailers are legitimate businesses who want to serve their customers well and have also established practices to resolve consumer complaints.

Unfortunately, there is a small number of errant retailers who engage in unfair trading practices to take advantage of their customers, both local consumers and tourists. We need

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to take action against such retailers who affect consumer confidence and dent Singapore's reputation.

Currently, the majority of consumer complaints are handled by CASE and are resolved through discussion or mediation between the parties, or by consumers going to the Small Claims Tribunal (SCT) to seek financial compensation and, over the past three years, CASE has received about 2,000 complaints against retailers in Sim Lim Square, Lucky Plaza and People's Park Centre. So, 2,000 complaints in Sim Lim Square, Lucky Plaza and People's Park Centre; only three of the malls. CASE has followed up on these complaints and mediated 1,400 cases.

The Government will work with CASE and SCT to streamline the existing claims process so that quicker action is taken to help consumers obtain compensation. We will also review the relevant legislation to strengthen the enforceability of rulings by SCT.

And civil cases, including recent incidents involving some retailers at Sim Lim Square, will be investigated by the Police under the Penal Code. Retailers who are found to have engaged in activities involving cheating, fraud or intimidation will face criminal prosecution in Court.

CASE and the Singapore Tourism Board (STB) are empowered under the Consumer Protection (Fair Trading) Act (CPFTA) to seek injunction orders against errant retailers through the Courts.

The Government will review the legislation to strengthen the provisions so that quicker action can be taken to deter unfair trading practices and prevent errant retailers from side-stepping the restrictions under the CPFTA by forming new companies. We will study the option of appointing an agency to undertake the investigation and enforcement functions. So, as part of the review, we will study the best practices and experiences of other jurisdictions, including Hong Kong and Australia, and conduct further consultation with stakeholders.

We will conclude the review and move the necessary amendments this year. While I caution that whilst we are trying to strengthen the law, putting in harsh penalties, we have to strike a balance between the consumer and the businesses as well. We do not want it to affect unnecessarily the good on the majority of the retailers, some of whom are very micro enterprises or merchants in the heartlands.

It is not necessary to put up displays at Changi Airport, as this would give visitors the wrong impression because the vast majority of retailers in Singapore are bona fide. They are

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good retailers. It is also more appropriate to tackle these issues at the local level. For example, CASE and STB have been working with Sim Lim Square's Management Council to provide the public with more information about complaints against specific retailers. The Management Council is also looking at ways to enhance their landlord's tenancy agreements and raise service standards of retailers at Sim Lim Square, in consultation with CASE. I meet with them periodically to find out about the progress in Sim Lim Square.

Improving consumer protection and protecting fair trading require the collective efforts of the Government, CASE, consumers and industry players. In reviewing the legislation, MTI will take a balanced approach to protect the interests of consumers. MTI will continue to work with CASE and industry players to step up consumer education efforts, to enhance consumers' awareness of their rights and help them make informed buying decisions.

Mdm Speaker, if I may just declare my interest in this matter as the President of CASE. May I ask the Minister of State: currently, the Police seem to be very reluctant to follow up on some of these complaints lodged by consumers or tourists to investigate. What happens now is that the Police refer all such complaints to CASE. As the Sim Lim Square saga has shown, some of the acts of the errant retailers are quite criminal in nature, in the sense that they charge for "unlocking fee" and "in-house insurance".

Until the review is completed, can I ask the Minister of State what other actions can we undertake to protect consumers? What we do not want is a repeat of a similar situation like the Sim Lim Square saga. The Minister of State said that the review is likely to be completed at the end of the year. For the next 10 to 11 months, what kind of protection can be afforded to consumers or tourists alike?

I did not say "end of the year". It will be earlier than end of the year. It will be within the year. We are already halfway through the review. We intend to expedite this and complete it as soon as possible. Because every day, there are buying decisions, selling decisions and practices. We have to ensure fair practice.

On the issue of the Police, there must be a process where, first, we must create enough awareness and heighten awareness about the errant retailers within the mall. We have to work with the mall very closely to do that. Secondly, timely engagement when something happens. So, that is when you need CASE and for the mall and CASE to work together to monitor all these different complaints. There may be more complaints for one shop, or maybe it is complaints about several shops. We have to address this. So, engagement is extremely important. Once you have engaged them, you need to gather evidence – whether there are elements of fraud or more severe elements of intent where you know that there may be criminalities involved. That is where the Police can be involved to gather further evidence under the Penal Code, to say what else and what other action we can undertake.

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There must be a proper process.

That is exactly why we are looking into these different areas – education, case process, timely enforcement and engagement, where something needs to be coordinated. We are thinking about looking at additional resources, whether in the form of a unit or an agency, or an existing current organisation. We are figuring out what is the best way to do it efficiently and effectively to coordinate this effort. Then, we can address the issue completely.

I would like to thank the Minister of State for the reply. While I agree that, yes, we need to take a look at the processes, I am glad that the Ministry is doing the review now. May I ask a few supplementary questions? One, who is doing the review; who is the review committee? Two, how is the review being done now? Three, the Minister of State mentioned earlier on that the review could be completed by the end of the year and now he says it would be earlier. So, when will the review be completed? Four, will there be a public consultation when the Ministry does this review? I think consumers are looking at this very closely.

This is a matter of urgency. We do not have to set up a committee to review an issue. Immediately, we pulled all the stakeholders in and we started working on it. Those involved include inter-Ministries in the Government – MHA, MinLaw as well, AGC and the mall operators in getting their feedback. We have involved CASE as well. Mr Lim Biow Chuan himself is personally involved. I have just mentioned all these stakeholders in the review.

For the question on when, it definitely will not be at the end of the year. I do not foresee that we will complete this review too late. I will set a target that before the middle of this year, we want to finish the whole review and also recommend the amendments. As for public consultation, definitely. In order to make amendments to the Act, we need to consult not just with CASE but also with the merchants and with the mall operators as well so that you can get greater acceptance before you can recommend any amendments.

Mdm Speaker, I would like to congratulate the Minister of State on his ability to count, at least until 23. Supplementary questions – I appreciate that he is thinking of setting up the agency and I fully support the setting up of that agency. Is the Ministry thinking of criminalising certain breaches of consumer contracts? And what is the scope of the agency? Is it likely to govern all consumer contracts or just certain kinds of consumer contracts?

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I thank the Member. I can count from one to 15 as well. For the query on criminalising, it is not about the contract but the Consumer Protection (Fair Trading) Act and whether we put criminal penalties within the Act and whether these are severe enough, whether we can define the severity and whether we want to do that. We are still considering because one of the important points of consideration is how would it affect the merchants and businesses. You do not want it to open up so much such that in any small little case, it will all come up. And then the Police and every investigation officer would gather evidence and this would affect the business operations as a whole. The majority who are good retailers will be affected as well.

So, that is under our consideration right now. As to the scope of it, as you know, the CPFTA covers all things you buy and sell in the retail sector. We are not just talking about selling electronics but every other thing. So, we have to consider it very carefully. If we want to bring in harsh penalties, what would that mean? The question would be, if we put an injunction through, and that injunction happens to be there and we publicise it, it is against the entity. Today, we already foresee that the operator himself can side-step the matter and form another entity. That is something we are considering very carefully – to look at injunctions that effectively cover the whole scope that he would not be able to set up any entity.

Madam, the Minister of State mentioned enforcement. I agree that is the key to eradicating unethical sales practices. I would like to ask the Minister of State whether we could consider letting the enforcement officers come in, disguised as a mystery shopper, so that they can do some form of audit or check on some of the retailers that you receive numerous complaints about. We have to be proactive in some operations to see whether they are cases of unfair practices or misleading sales practices. So, whether some of these enforcement officers, when they receive information, can take immediate action?

I believe with my own sense that it is part of the investigation and evidence-gathering process, where you do something like a mystery shopper kind of work to gather evidence. On whether it is necessary to do so, first, you have to decide if this problem or complaint has the element that raises a reasonable doubt that something needs to be done further, we need to gather more information. That is when we can carry out these mystery shopper tests. But I would also encourage the mall operators to work with the retailers. At times, they also need to do these mystery shopping tests to assess their service levels. This is something that they may want to do and not necessarily just to detect whether there is fraud or not. So, depending on the case and how severe the case and the complaint are. I believe as part of the investigation process, there may be enforcement officers going down to gather evidence in different ways. That could come later, as we discuss about the

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whole process.

First, I want to commend the Minister of State for not just his ability to count but really doing very good work on the ground. My merchants at Sim Lim Square have given very good feedback. So, congratulations for that. The Minister of State had mentioned that the proposed legislation will be completed in the middle of this year. But that leaves at least a few more months. I am wondering if the Minister of State could consider some interim measures for the next few months, before the proposed legislation is out. Perhaps, Police presence in civilian attire so that victims can report very easily at the focus areas you mentioned – People's Park, Sim Lim Square and Lucky Plaza. Implementing some of these interim measures will be in order.

Absolutely. We have to do something right now in the interim before we complete the study. Even after we have completed the study and making the recommendations and amendments, it would take time. So, right now, we are working closely with the affected malls, the operators. We are working with Sim Lim Square and the Management Council very closely. They are implementing certain measures within the mall, firstly, contractual obligations between the landlord or the shop-owners as well as the tenants. There are some clauses in the agreements. This was recommended by CASE: putting a clause there to make sure there is compliance with CPFTA.

Secondly, we also want to heighten awareness about those errant retailers within the malls. We want to make sure that there is a wider spread. We are working with CASE to do that, to engage all the mall operators as well as retailers in proper education and proper training.

We are also trying to look at all the complaints, monitor the complaints and where are they coming up from. Each year, we are getting an average of about 4,000 complaints. If we are getting that kind of complaints – and the tourists, on average, make up about 15% or so of the complaints – then, there is an issue where we are not just having to manage local consumers, but looking at making sure that the tourists will continue to come and we would not dent our own reputation. In the mean time, CASE will play a critical role in education, in working with the malls to do that. MTI is engaging the malls to make sure that, on the policy side, we are looking at the relevant policies and laws, to see what are the other things that we can do.

The Police are definitely involved, but I think there is going to be a first line and second line of response. In the first line, it is very important that we have the data and the information and the complaints and that these statistics and information are available and sufficient and enough for it to be assessed that there is an issue. If there is an issue and an element of criminality, that is when we will escalate to the Police to look at the case and

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gather further evidence. That is how the Police will be involved. Each time there is an issue, say something happens in a shop and CASE is involved, then, there will be an engagement officer from CASE or somebody, to talk to retailers. There is a process to help the consumers to make their complaint. When they go to CASE, they have two choices. One, is mediation, where CASE can advise them or recommend, depending on their case, that they go to the Small Claims Tribunal to make their claims.

24 Mr Lim Biow Chuan asked the Deputy Prime Minister and Minister for Home Affairs in the light of complaints against errant retailers at Sim Lim Square, whether the Police will carry out investigations into each complaint and take appropriate prosecution action against errant retailers who have cheated tourists and consumers so that the reputation of Singapore can be protected.

(for the Deputy Prime Minister and Minister for Home Affairs) : Mdm Speaker, when a report or a complaint is received by the Police, they first assess the information provided and they exercise their powers of investigation under the Criminal Procedure Code only if the information suggests that a criminal offence has been committed, for example, cheating. If not, Police will advise the complainants to pursue alternative means of redress, for example, filing a civil claim or seeking a Court injunction.

If it appears that a criminal offence has been committed, the Police will investigate and assess the evidence gathered, in consultation with the Attorney-General's Chambers (AGC), to decide on the action to take. The AGC has the final prosecutorial discretion on whether to press charges against the offenders in Court.

The Police investigations into the recent Sim Lim Square cases are ongoing and I am unable to comment further on that matter.

Order. End of Question Time.

[Pursuant to Standing Order No 22(3), written answers to questions not reached by the end of Question Time are reproduced in the Appendix, unless Members had asked for questions standing in their names to be postponed to a later Sitting day or withdrawn.]

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"to regulate the supply and consumption of liquor at public places, and to make consequential and related amendments to certain other written laws",

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.

"to make provision for deep seabed mining, and for connected purposes",

presented by the Minister for Trade and Industry (Mr Lim Hng Kiang); read the First time; to be read a Second time on an available Sitting of Parliament on or after 2 February 2015, and to be printed.

"to provide for the MediShield Life Scheme and matters related thereto, and to make consequential and related amendments to certain other written laws",

presented by the Minister for Health (Mr Gan Kim Yong); read the First time; to be read a Second time on the next available Sitting of Parliament, and to be printed.

"to facilitate the resolution of community disputes by providing for a statutory tort for community disputes and for the establishment of Community Disputes Resolution Tribunals to deal with such disputes, and for matters connected therewith, and to make consequential and related amendments to certain other written laws",

presented by the Minister for Culture, Community and Youth (Mr Lawrence Wong); read the First time; to be read a Second time on the next available Sitting of Parliament on or after 2 February 2015, and to be printed.

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[(proc text) Order for Second Reading read. (proc text)]

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

Madam, the pawnbroking industry caters to the needs of individuals who require short-term financial relief and possess assets that can be offered as collateral. The pawnbroking industry has grown significantly since the last set of substantial amendments to the Pawnbrokers Act was moved in 1993. The number of pawnbrokers has increased from 57 in 1993 to 204 in 2013. The aggregate value of loans granted by pawnbrokers has also increased more than six times, from $856 million to $5.47 billion, during the same 20-year period. In view of these developments, it is timely to update our legislation to ensure that the regulation of pawnbrokers keeps pace with the industry's evolving business practices and the needs of pawners. Given the comprehensive nature of the amendments, the Pawnbrokers Bill repeals the existing Act and re-enacts a new Pawnbrokers Act.

The key features of the Bill can broadly be divided into five categories, as follows: first, enhancement of the licensing requirements for pawnbrokers; second, refinement of the processes relating to pawn tickets; third, retention of key consumer protection provisions; fourth, removal of the existing pawnbroking auction system; and fifth, measures for the prevention of money laundering and for countering the financing of terrorism. I will discuss each part in turn.

Let me begin by discussing the enhancement of licensing requirements for pawnbrokers. Presently, pawnbrokers are required to hold a licence for carrying on their business, with it being an offence to act as a pawnbroker or to hold oneself as being in the business without a valid licence. The current licensing criteria for pawnbrokers include satisfying the Registrar that the applicant is, amongst other conditions, of "good character" and "a fit and proper person" to hold the licence. The Bill enhances the licensing requirements for pawnbrokers in the following ways.

First, the Bill imposes new statutory duties on licensees, such as the duty to maintain a minimum paid-up capital of $2 million for the first branch and $1 million for every subsequent branch; and to appoint an auditor to conduct an annual audit of their business. In addition, the amount of security deposit which licensees are required to furnish will be

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raised from the current $20,000 to $100,000. This is expected to enhance the pawnbrokers' compliance with the regulations.

Second, the licensing requirements will be made more stringent. For example, under clause 10 of the Bill, the Registrar will now have the power to refuse to grant or renew a licence if, amongst other matters, he is of the opinion that the director or the manager of the applicant is not a fit and proper person to carry on or manage the applicant's business; or a substantial shareholder of the applicant has carried on the business of pawnbroking within or outside Singapore in a way that renders him unfit to hold a licence. In addition, the Bill makes it an offence for a person to become a substantial shareholder, or be appointed as a director or manager of the licensee, without the Registrar's prior approval.

Third, the Bill enhances the Registrar's enforcement powers to allow for more effective regulation of pawnbrokers. For example, the Registrar will be granted powers to order a person to produce relevant information or documents in that person's possession, for the purpose of determining whether the Act has been breached. Where a licensee is convicted of an offence under the Bill, the Registrar will also have the power to: suspend the licence or vary any condition of the licence, or both; or revoke the licence. In addition, the Registrar may order the licensee to pay a financial penalty of up to $20,000 per breach, subject to a cap of $100,000.

I now move on to the refinement of the processes relating to pawn tickets. Presently, the Act requires a pawnbroker to issue a pawn ticket to the pawner when taking a pledge in pawn. The pawner needs to present the pawn ticket to the pawnbroker in order to redeem his pledge. Where a pawn ticket is lost or destroyed, the Act currently requires the pawner to go through the process of: first, going to the pawnbroker to obtain a printed form of declaration; second, making a statutory declaration before a Commissioner for Oaths or a Notary Public; and third, delivering the declaration to the pawnbroker within three days after the pawnbroker had initially provided the printed form of declaration to the pawner.

There has been feedback that the current process is cumbersome and pawners have to incur an additional cost when making the statutory declaration. The Bill simplifies the process of obtaining a replacement ticket by allowing such an application to be made to the pawnbroker without the need to make a declaration before a Commissioner for Oaths or a Notary Public. The pawnbroker will only need to make reasonable inquiries to satisfy himself of the truth of the matters stated in the application and that the applicant is entitled to redeem the pledge. Once he is satisfied, he will issue a replacement ticket to the applicant directly and cancel the existing pawn ticket. To minimise the risk of this simplified procedure being misused, it will be an offence for any person to knowingly make or use a false statement in the application to obtain a replacement pawn ticket.

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In addition, the Bill introduces a new provision allowing pawners to sell their pawn tickets to pawnbrokers, who are currently prohibited from purchasing pawn tickets. This provision will help to create a more competitive market as, for example, a pawner will now be able to sell his pawn ticket to another pawnbroker who may be willing to offer a more attractive price for the ticket.

Let me now discuss the key consumer protection provisions that are retained in the Bill.

Under the current Act, the pawnbroker's interest rate is capped at 1.5% per month, and any breach of this cap is an offence; and the minimum redemption period for pledges is also set at six months. These safeguards, which exist to protect the pawner, remain unchanged under the Bill.

Where a pledge has been damaged as a result of fire or is lost, the Act currently requires the pawnbroker to compensate for the value of the pledge, with the compensation amount being set at 1.5 times of the loan amount. The right to compensation in such situations will be retained in the Bill. However, the compensation will be pegged to the value of the pledge instead of the value of the loan. The reason for this is that it will be fairer to the pawner, as there could be situations where the pawner takes out a loan that is substantially lower than the value of his pledge. Thus, under clause 60 of the Bill: where the pledge is lost, the pawnbroker must provide the pawner with compensation for the value of the pledge as determined by the valuation provided by the pawnbroker at the point of pawning; and, where the pledge is damaged, the pawnbroker must allow the pawner to choose between obtaining full compensation for the value of the pledge, or having the pledge returned to the pawner along with partial compensation for the reduction in value of the pledge resulting from such damage.

The Bill also proposes the removal of the existing pawnbroking auction system. Customers provide pledges as security for pawnbroking loans. If the loans are redeemed, the items pledged are returned. When the loans are unredeemed, the pawnbroker gets to realise the pledge in satisfaction of the loan.

Mdm Speaker, the Act presently provides two ways for dealing with unredeemed pledges.

Where the pledge is pawned for $50 or less, it becomes the pawnbroker's property at the end of the time allowed for redemption.

Where the pledge is pawned for more than $50, such pledges currently have to be disposed of by sale at an auction. The pawner is entitled to any surplus generated from the

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auction. This surplus refers to the proceeds of the auction sale of the pledge, after deducting the pawner's outstanding debt and the auction expenses.

At present, the pledges for about 95% of pawnbroking loans are redeemed by pawners. For the remaining 5% of unredeemed pledges which are subsequently put up for auction, up to 90% of such pledges are normally uncontested at the auctions and would, therefore, yield no surplus to the pawners. However, the cost of holding the auctions adds to the pawnbrokers' business costs and this is passed on to all pawners, including those who redeem their pledges and those who do not receive any surplus from the auctions.

The Bill, therefore, proposes to replace the auction system with one as follows: upon expiry of the redemption period, which is at least six months, if the pledge is unredeemed, the pawnbroker must issue a notice of intended forfeiture within two months of the expiry date. This will give the pawner one last chance to redeem the pawned item. If the pawner does not do so, the unredeemed pledge will be forfeited to the pawnbroker one month after the issuance of the notice of intended forfeiture. Once the pledge is forfeited, ownership of the pledge will vest with the pawnbroker and the pawner's debt will be correspondingly expunged.

With the competitive pawnbroking marketplace, this change ought to benefit pawners as pawnbrokers could possibly pass on the resultant cost savings to pawners. These may be in the form of offering lower interest rates or higher loan-to-valuation ratios for the pledges.

To safeguard the pawners' interests, the Bill requires the pawnbroker to provide an indicative valuation of the pledge to the pawner at the point of pawning, as well as to provide a fresh indicative valuation to the pawner at the end of the redemption period. This will allow the pawner to compare indicative values from different pawnshops and allow the pawner to assess which pawnshop offers the best value for his pledge. This will enhance transparency and enable pawners to make better-informed decisions.

Mdm Speaker, the Bill also introduces a new obligation on pawnbrokers to implement adequate programmes and measures to prevent money laundering and counter the financing of terrorism. This is part of Singapore's ongoing efforts to ensure compliance with international standards and is aligned with the practices employed by other financial sectors in Singapore. Under the Bill, the key duties imposed on pawnbrokers include a duty to conduct due diligence checks on customers and a duty to file reports on any suspicious transactions or circumstances. Mdm Speaker, I beg to move.

Question proposed.

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Assoc Prof Fatimah Lateef.

Mdm Speaker, I stand in support of the Bill. I do have a few clarifications to make: firstly, pertaining to the Removal of the Auction Process. Currently, the public auction process is the only transparent part of the transaction and interaction with pawnbroking, in addressing unredeemed pledges. Due to this, any excess, over and above the interest, auction and administrative fees, may be returned to the pawner. Scrapping the auction process will also not likely be able to ensure pawners lower interest rates or higher loan-to-valuation ratio, as it may be intended to. One of the main reasons for this is that offers may vary quite significantly among different pawnbrokers in practice.

Secondly, in clause 21, it is stated that the "licensee must not carry on the business of pawnbroking at any place other than the licensed place of business". Can the Minister please help us understand the underlying reasons for this and also clarify if the pawnshop owner is allowed to meet and perform transaction with their clients outside their shops, for example, meeting their clients, usually their regular clients, outside their business premises?

Thirdly, in Part 3, clause 48, it is stated that "a pawnbroker must, before taking goods in pawn, give the person offering to pawn the good a valuation of the goods offered to be pawned". As we are reviewing this business, can I ask the Ministry if the wide variations that will be obtained on such valuations be acceptable? This is because current valuation details do not adequately identify the items, especially jewellery items. They may not reflect the prevailing market value and thus the quotes may vary as well. Perhaps, the use of better descriptors or photography may be considered. This will also help us get evidence, to ensure the exact same item is sold as unredeemed pledges, after the period of expiry.

Fourthly, Madam, there is mention of the pawnbroker providing ongoing programmes to train employees on policies and procedures with reference to Part 5, clause 74. Can I enquire if the Ministry will assist in centralising some such training, for example, under WDA? This can certainly help with standardisation and maintenance of a certain quality of the training provided as well. It is also a step to help enhance the practices of the people involved in the industry.

Fifth, on the changes related to the licensing of pawnbrokers, some that I had spoken to have requested briefing and explanation on the various classes and eligibility, as well as requirements. In the same context, can I also clarify with the Senior Minister of State if there are any Islamic pawnbroking businesses in Singapore currently and, if so, will they be briefed

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separately as well?

Madam, I support the removal of the statutory declaration as many who are involved in the transactions are our senior citizens and they really do not understand and are unfamiliar with the complex processes and the algorithms they have to go through.

All in all, Madam, I feel that it is good to have some structure and regulation introduced into this industry. After all, it is also about protecting the pawners and upholding their rights. I support the Bill.

This Bill seeks to update the Pawnbrokers Act which was last amended in 1993. Amongst others, it removes the existing auction system, requires pawnbrokers to provide an indicative value of a pledge to the pawner at the point of pawning and at the end of the redemption period; and raises the minimum paid-up capital of pawnbrokers for the first outlet and for each subsequent branch. Mdm Speaker, I support the Bill. I am concerned though about the rise in the number of pawnshops and in the total value of pawnbroking loans in recent years.

The number of pawnshops has grown from 114 in 2008 to 217 as at June last year. The value of pawnbroking loans rose more than three times, from $2 billion in 2009 to a peak of $7.1 billion in 2012. Many of the pawnshops are in the HDB heartlands. In an earlier Parliament reply, we were told that HDB does not generally limit the number of shops of each trade and leaves it to market forces to determine the trade mix of shops, including for pawnshops.

Market forces have, indeed, led to the rise of the pawnbroking industry. In our geographically small island state with some 217 outlets, access to pawnshops for a quick loan is easy. This has prompted some journalists to cast the spotlight on our pawnbroking industry which now has three publicly-listed pawnbrokers as key players in the market. A Bloomberg report in June last year titled "Rolex for casino cash fuels Singapore pawnshop growth" highlighted stories and statements by industry players about the rise in pawnbroking activities driven by gambling. The report, as well as other reports, also pointed to soaring living costs as another reason for Singaporeans to turn to easy credit sources, such as pawnbrokers, to cover their living expenses.

Mdm Speaker, there is very little data available on the profile of pawners. The Ministry has said that it does not track the reasons for non-redemption of pledges. While the overall percentage is small at 5%, 5% of four million valuables pawned in 2012 works out to around

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200,000 items that were unredeemed and had to be sent for auction. We do not know the reasons. We do not know how many of these 200,000 items were from pawners who repeatedly failed to redeem their valuables. We also do not know the reasons for these non-redemptions. I would like to call for a more detailed study on the profile of pawners and on the industry. In particular, we should look at those who do not redeem their valuables, to understand the underlying reasons. In order not to become a society with excessive pawning, the study can also look into the appropriate number of outlets in each neighbourhood, and whether the level and content of advertising should be subjected to some form of controls. I believe better data would be helpful to help look into the underlying causes of the rapid rise in the pawnbroking trade and how we can tweak the Pawnbroker's Bill in future to continue to keep pace with this industry's changing landscape.

Mdm Speaker, it was revealed in July last year the number of pawnshops grew to 204 from 163 in 2010 and the pawnbroking loans granted last year was $5.5 billion. In the same period, 95% of the pledges were redeemed. It is, indeed, a very lucrative business for the pawnshop industry.

The Pawnbrokers Bill provides the legislative basis for regulating pawnbrokers in Singapore with updated laws governing the pawnbroking industry to ensure they remain relevant, keeping pace with changes in the moneylending and financial industry in general.

MinLaw has proposed further amendments to the Bill, such as removing the auction system, improving protection for pawners, strengthening governance of the pawnbroking industry and updating technical changes to various provisions in the Act.

I support the Bill generally but wish to seek clarifications and make proposals for the Minister to consider. Can the Minister clarify why there is a need to remove the existing auction system when there were only 5% unredeemed pledges last July? How does it result in cost savings for pawnbrokers to benefit pawners through getting a higher valuation upfront from the pawnshops?

Clause 61(1), under forfeiture and effect, I would also like to propose for the Minister to consider giving a longer extension period of three months from the date of the notice to redeem their pledge before pawnbrokers take action. It is only fair the pawners be given time to find a way on how to redeem their pledge as these belongings may have a lot of sentimental value and attachment to them, some of which items cannot be duplicated in the market and would be lost forever. In the old days, I would see women crying when they lose their valued belongings, for example, a heavy gold bangle given as a dowry, just because of

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their inability to redeem them.

Pawnbrokers will be required to provide an indicative valuation of a pledge to a pawner twice – at the time of pawning and at the end of a redemption period. I would like to propose that pawnbrokers use the service of a certified gemologist or a certified valuer to give a fair appraisal of the valuation of the pledge for optimal value, which is also a service to the public.

Pawnbrokers are required to maintain a minimum paid-up capital of $2 million for their first branch, and an additional $1 million for every subsequent branch. The security deposit which licensees are required to furnish is $100,000. Could I ask the Minister, does the Bill also mandate insurance cover against burglary or fire within the pawnbrokers' premises for storage of pledges?

Will the interest rate be capped lower than the 1.5% per month after the removal of the existing auction system, as pawnbrokers are likely to pass on the resultant cost savings which may be in the form of lower interest rates?

Finally, will the Minister consider introducing online pawnbroking, as done in the US since 2009?

Madam, we have an online gambling Bill, but should there be another schedule for online pawnshops under the Pawnbrokers Bill in future?

Thank you, Mdm Speaker. The new Bill comes on the back of recent developments to Singapore's pawnbroking scene. The industry now has a softer image. New pawnshops are modern, brightly-lit and inviting – a sea change from the intimidating grilled storefronts some of us will recall. Pawnbroking is also on the rise. I will not recite or repeat the statistics that have been recited in this Chamber but, clearly, the business is booming.

Is this something we ought to be concerned about? Arguably, pawnbroking loans, being secured loans, pose less of a risk to the customer or pawner. The pawner cannot borrow beyond his means as he is limited by the value of the collateral. Also, should he be unable to make repayment, he forfeits the pawned goods and that is the end of his debt. There is no danger of the debt snowballing and affecting his other assets. Yet, we should not overlook the fact that there may be troubling reasons why more are seeking quick cash or short-term loans. More could be under financial strain, forcing them to pawn their belongings to make ends meet. Or, credit may be too difficult to obtain from moneylenders and financial

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institutions. Accordingly, I would like to ask the Ministry whether the Ministry has data explaining the surge in pawnbroking activity. Also, what is the Government doing to monitor the situation?

Moving on to the specifics of the Bill, I would like to raise several points for consideration and clarification.

The first has to do with the removal of the auction system. The intention behind this is to enable cost savings to be passed on to pawners. However, one consequence of this change is that pawnbrokers are no longer obliged to return any surplus from the realisation of the pledge to the pawner. Instead, they keep the surplus. That being the case, pawnbrokers may be incentivised to give unfairly low valuations because any surplus goes straight into their pockets. To some extent, competition between pawnbrokers for business may reduce such practices. Still, there is a danger that low valuations may become an industry-wide phenomenon, erasing the intended cost benefit to the pawner. What are the measures in place to ensure fair business practices?

Further, it appears from the proposed section 48(3) and section 62(2) that a pawner or third party who has suffered loss can claim against the pawnbroker if it is shown that the pawnbroker did not act in good faith or did not take reasonable care in giving the valuation. Can the Minister clarify what this means and how this may be demonstrated?

My second point concerns section 60. If the pawnbroker loses or damages the pawned goods, the pawner is entitled to be compensated with reference to the valuation at the time it first took possession of the pledge and that is set at section 60(5). However, the value of the goods may have increased or decreased since the point of pawning. Concerns of fair valuation aside – keeping in mind the incentive to give low valuations – surely, the loss suffered by the pawner is more accurately represented by the goods' valuation at the point of redemption. After all, this is the value of the goods the pawner would have received had it not been for the pawnbroker's default. This provision also lends itself to abuse. Where the value of the pawned goods has risen – say, in the case of gold bar or jewellery – an unscrupulous pawnbroker may pretend to misplace the goods and then later sell them off. The pawnbroker benefits from doing so as it only compensates the pawner the amount of the valuation at the point of pawning. In view of this, could the Minister explain the rationale behind section 60(5)?

Next, a similar complication arises under section 65. This section governs the pawnbroker's wrongful realisation of the pledge. Once again, the pawner is entitled to be compensated with reference to the valuation at the point of pawning. According to section 65(1)(b), if this valuation is lower than the loan and profit secured by the pledge, the loan and profit are extinguished. But, the amount actually realised by the pawnbroker in selling

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the pledge may be higher than the valuation. There may be a surplus. Does this surplus go into the pawnbroker's pocket? If so, this again rewards pawnbrokers who deliberately give low valuations and then wrongfully realise the security.

[Deputy Speaker (Mr Seah Kian Peng) in the Chair]

To say that the pawnbroker has no property to pledge is not an answer, as he may have onward sold it to third parties. Neither does a pawnbroker, who wrongfully realises a pledge, commit an offence. It appears that the existing offence under section 33(g) of the existing Act has been removed in the Bill. What is the rationale behind removing this offence? I hope the Minister will clarify this issue as well.

Fourth, a point on section 67 which seeks to protect the rightful owner of the goods that have been wrongfully pawned. Under section 67(4)(b), in the absence of a Court order, a pawnbroker may choose whether or not to deal with the pledge. This is so even when there is a dispute pending between different persons who are claiming to be the owner of the goods. It is questionable if giving pawnbrokers this discretion truly protects the rightful owner.

A pawnbroker that refuses to deal with the pledge cannot charge interest on the loan in section 67(6). Consequently, rather than continuing to store the goods, a pawnbroker will likely allow its redemption or sell it off. Perhaps, the purpose of this section would be better achieved if the pawnbroker is prevented from dealing with the pledge for a fixed period upon receiving notice. This would give the rightful owner sufficient time to obtain a Court order. This protection is especially important where there is sentimental value attached to the wrongfully pawned goods, as in the case of a family heirloom. In such cases, monetary compensation would not suffice.

Fifth, some points of clarification on section 66. Subsection (4) is unclear as to what the pawnbroker must do after receiving an application from a person who claims to be entitled to redeem a pledge but does not have a pawn ticket. What "reasonable inquiries" are pawnbrokers expected to carry out? Would cross-referencing the applicant's details with its own records suffice? Additionally, section 66(7), which is similar to section 67(5), is unclear. I would like to clarify in what instance the pawnbroker will receive immunity when he omits to do something. It is a very strange way of drafting the Bill, in my view.

My final point is a practical one. Part 5 of the Bill introduces a new obligation for pawnbrokers: to develop and implement measures to prevent money laundering and

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terrorism financing. This is a timely move, given the growth of the pawnbroking industry. My concern is that the Bill's requirements, which are understandably complex and numerous, may be challenging for smaller pawnbroking businesses to implement.

For example, under section 74(2)(a)(i-ii), a pawnbroker must "take appropriate steps to identify, assess and understand the money laundering and terrorism financing risks" in relation to its pawners and the jurisdictions which its pawners are from or in. Pawnbrokers may not know what steps are needed to be taken or where to begin. In fact, these requirements are even difficult for banks or lawyers and other professionals who are expected to have money laundering regulations or systems in place. As such, I would like to ask whether the Ministry will assist pawnbrokers to understand what they need to do and help them implement such systems.

Senior Minister of State Indranee Rajah.

Mr Deputy Speaker, I thank Members for their support of the Bill and would like to address the comments and queries that they have raised.

Mr Hri Kumar, Mr Yee Jenn Jong and Mrs Lina Chiam had talked about the increase in the number of pawnbroking loans, as well as the number of pawnbrokers. The increase in the value of the loans disbursed by the pawnbroking industry depends on two things: First, the demand for credit; and second, the price of gold, the reason being that most pledges are actually gold items and the price of gold has increased significantly over the past five years. Therefore, we think that there is a strong correlation between the increase in the price of gold and the increase in the value of pawnbroking loans.

With the corresponding increase in the total value of the loans, there have been new entrants to the industry and an increase in the number of pawnshops run by chain operators who may be benefiting from economies of scale. The industry, as a whole though, has been law-abiding and there are few complaints about pawnbrokers.

We have, nevertheless, retained key provisions to protect consumers which are, as I mentioned earlier, that the interest rate continues to be capped at 1.5% per month and that any breach of this cap is an offence and the minimum redemption period of pledges is set at six months. MinLaw will continue to monitor the industry closely.

I move on now to the next point which was raised by Members and, that is, the removal of the auction system. This was raised by Assoc Prof Fatimah Lateef, Mrs Lina Chiam and Mr

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Hri Kumar. As mentioned in my speech earlier, actually, 95% of pawnbroking loans are redeemed by the pawners. We are really talking about the remaining 5%. And of the 5% that are not redeemed, 90% are uncontested and, as I mentioned earlier, therefore, yield no surplus to the pawners. We are actually talking about 10% of the 5%. The benefits of the auction system are enjoyed only by a very small number of pawners who might receive a surplus from the auctions.

On the other hand, the high costs of running regular auctions are borne by all the pawners. The pawnbroking industry is competitive and pawners are able to easily shop around for the best deal. So, there is a strong incentive for pawnbrokers to pass on cost savings to pawners and the new system will also require pawnbrokers to send pawners a notice of forfeiture. The notice will provide a valuation of the pledge as at the time of this issuance and the fresh indicative valuation will enable the pawner to make an informed decision about whether or not to redeem the pledge.

Assoc Prof Fatimah Lateef also inquired about the valuations provided by the pawnbrokers and asked us to consider the use of better descriptors or photographs as valuation details may not adequately identify the items. Before the item is pawned, the pawner will furnish the pledge to the pawnbroker to obtain the valuation. After the item is pawned, the pawnbroker will be required to issue a pawn ticket that contains information, such as a fair description of the pledge, including any manufacturer's serial number or other identifiable mark. This is, therefore, not necessary.

There were also other queries on valuations, such as whether wide variations in the valuations obtained would be acceptable, whether pawnbrokers might be incentivised to give unfairly low valuations and whether someone may claim against the pawnbroker if the pawnbroker did not act in good faith or take reasonable care in providing the valuation.

Strong competition in the pawnbroking industry will act as an effective check against pawnbrokers providing depressed valuations, since pawners will be able to shop around for the most favourable deal. With redemption rates at over 95%, there is little incentive for a pawnbroker to offer a depressed valuation at the time of taking the goods in pawn. A depressed valuation will mean a smaller loan can be extended. A depressed valuation provides a strong incentive for the pawner to sell the pawn ticket to another pawnbroker who will then redeem the pledge. Pawnbrokers who consistently offer depressed valuations are also likely to suffer reputational damage and may very well go out of business in a competitive industry.

Further, as Mr Hri Kumar noted, the pawnbrokers may be liable for any loss or damage suffered by the pawner or third party as a result of relying on the valuation provided by the pawnbroker if he did not act in good faith or take reasonable care in providing the valuation.

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Pawnbrokers will, therefore, have strong incentives to ensure that the valuation reflects the market value of the pledge. If the valuation is challenged, the Court will ascertain whether the pawnbroker had acted in good faith or had taken reasonable care in giving the valuation. The Court will examine all the relevant factors, such as the manner in which the pawnbroker had conducted the valuation and the level of skill or expertise involved. In this regard, it is no different from any other type of dispute where the value of an item is disputed and the Court has to take into account all relevant factors to see whether the valuation given was a fair and proper one.

Mr Hri Kumar also asked about the rationale for pegging the compensation to the valuation provided by the pawnbroker at the point of pawning. Pawnbrokers have strong incentives to ensure that this valuation reflects the market value of the pledge. This valuation also reflects the value that both parties had agreed on when entering into the transaction. Pegging the compensation to the value of the pledge at the time of redemption could also result in lower compensation for the pawner since the value of the pledge may have decreased.

Mr Hri Kumar asked, where the pawnbroker has wrongfully realised the pledge, whether the surplus goes to the pawnbroker and what the rationale was for removing the offence of dealing with any pledge in any manner that is not authorised by the Pawnbrokers Act. Where there is a surplus arising from the pawnbroker's wrongful realisation of the pledge, the pawner may file a claim against the pawnbroker to recover the surplus. Where such wrongful realisation of the pledge involves criminal misconduct, the persons involved may be effectively dealt with under the Penal Code or other relevant criminal statutes.

There were also a number of questions about the protection of rightful owners of goods wrongfully pawned. Mr Kumar asked whether the pawnbroker should be given the discretion to deal with the pledge after receiving a notice from a person who claims to be the rightful owner of goods that were wrongfully pawned. Clause 67(4)(b) of the Bill provides the pawnbroker with the option to deal with the pledge as he deems fit in such circumstances, if there is no Court order relating to the pledge. Where the pawnbroker proceeds to deliver the pledge to another party who is not the rightful owner, the pawnbroker may be liable for the tort of conversion under the common law. However, the clause also enables the pawnbroker to refuse to deal with the pledge for a period of three months after receiving the notice without being liable for any loss or damage caused. As Mr Kumar observes, this period of three months will give the rightful owner sufficient time to obtain a Court order relating to the pledge.

With regard to the replacement of pawn tickets, Mr Kumar had asked what "reasonable inquiries" the pawnbrokers are expected to carry out. The example Mr Kumar provided of cross-referencing the applicant's details against the pawnbroker's records is one way in

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which the pawnbroker may satisfy the test of making "reasonable inquiries". Where the applicant is not the pawner, the applicant may be asked to provide receipts as evidence of the purchase of the pledge. In this regard, it also should be noted that any applicant who makes a false claim is committing an offence under the Penal Code. In addition, I confirm that clauses 66(7) and 67(5) will only protect the pawnbroker from any loss or damage where it has done or omitted to do anything in accordance with their respective clauses.

Assoc Prof Fatimah Lateef asked about the licensing conditions for pawnbrokers, what the rationale was for not permitting a licensee to carry on the business of pawnbroking at any place other than the licensed place of business and whether a pawnbroker can meet or perform transactions with their clients outside their business premises. As pawnbroking transactions involve cash and valuable items, pawnbrokers are not allowed to conduct their business outside their licensed place of business for security reasons. You can imagine what would happen if a big diamond ring was displayed in the middle of a coffee shop and somebody is claiming that this cost $200,000. It is not a very good idea. In deciding whether or not to grant a licence, the Registrar considers whether the pawnbroker has put in place adequate security measures at his place of business, such as by installing CCTVs and security alarm systems.

Assoc Prof Fatimah Lateef asked whether pawnbrokers could be briefed about the new licensing conditions. The Registry of Pawnbrokers did, in fact, conduct a briefing on the Bill to the industry in November 2014, including on the new licensing requirements. Individuals with further queries may contact the Registry for assistance.

On money laundering and countering the financing of terrorism, in response to Assoc Prof Fatimah Lateef and Mr Hri Kumar, I would say these measures to prevent money laundering and terrorism financing are similar to those imposed in other financial sectors in Singapore, such as the banking sector, and the Ministry will work together with other relevant Government agencies to see how best to provide guidance to the industry.

Assoc Prof Lateef asked how many Islamic pawnbroking businesses there are in Singapore currently and whether they will be briefed. There are currently no licensed Islamic pawnbrokers in Singapore. The Registry of Pawnbrokers has not received any application to set up an Islamic pawnbroking business. And if there were to be any, Islamic pawnbrokers would be subject to the same regulations as other pawnbrokers in Singapore.

Mr Yee Jenn Jong had inquired about the various reasons for people taking up pawnbroking loans and also referred to cost of living and other expenses. In response, I would make a number of points. Pawnbroking loans are secured loans. The pawner needs to furnish items of personal property as collateral in exchange for a loan from the pawnbroker. So, in this regard, the amount of loan the pawner can take up is limited by the value of his

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collateral and, given the nature of pawnbroking loans, it is unlikely that the increase in the number of pawnshops would result in people over-extending themselves in credit. This is in response to his comment about the number of pawnshops there are.

The Registry of Pawnbrokers does not impose a cap on the number of pawnshops at any locality. People pawn items for various reasons and not necessarily for the purpose of gambling. Ultimately, individuals have to take personal responsibility for their finances. They should not gamble or borrow beyond their means.

In response specifically to the point that Mr Yee raised about cost of living, I think that what we should do is look at two groups of people: those who really cannot afford and whose income does not allow them to meet their expenses; and those whose income does allow them to meet their expenses but, for various reasons, they over-extend themselves. For those who have over-extended themselves, then, of course, it should be important that they should review how they used their finances and spend within their means.

But for those who are genuinely in need, this Government has always been ready to assist and the Government does, in fact, provide assistance. There are subsidies for education, healthcare, housing and childcare. There are GST vouchers which include cash, rebates to offset utility bills and a top-up to the CPF Medisave account. There are service and conservancy charges rebates. There are programmes and schemes for persons with disabilities. There is a Community Health Assist Scheme. There is the MOE bursary and financial assistance scheme. There are the CDC, CCC bursary, CPF housing grants, Workfare Income Supplement, ComCare assistance, Medifund and Public Assistance. So, for those, it would not be necessary for them to take their items to pawn. They should actually tap on these Government assistance schemes which are put in place specifically to assist those of low income and who are in need of help.

Are there any further clarifications from Members for the Senior Minister of State? Mrs Lina Chiam.

I thank the Senior Minister of State for all the answers. I would like to ask the Senior Minister of State about online pawnshop broking. Is it possible that Singapore can establish one?

May I clarify with the Member whether the Member is suggesting that we should have online pawnbroking? Or is the Member saying we should not have online pawnbroking?

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I just want to know whether the Senior Minister of State would consider introducing online pawnbroking, as is done in the US since 2009, in future.

Well, I think that one of the things we would have to do is to look at this in the context of the comments which the Members have raised. I think three Members – Mrs Chiam, Mr Yee and Mr Kumar – have stood up to express concern about the surge in the number of pawnbroking loans. And as I have explained, that is really related to the demand as well as the price of gold, but I think the underlying concern was that it is actually whether or not people might over-extend themselves in credit. So, even as the pawnbroking industry stands as it is today, I have had queries from three Members on whether that is something we should be concerned about. So, we think that the state of the industry, as it is today, can be addressed by this Bill and we would be very cautious before we would want to go with any online pawnbroking.

The short answer is, at the moment, it is not under consideration. It is something we would have to review and think about very carefully because we have to keep a balance between ensuring that there is enough credit available for those in need and, at the same time, not making it so easy that people over-extend themselves.

I thank the Senior Minister of State for her responses. Can I clarify something she said? She said that the loan extended will not exceed the valuation and I am not sure that there is a provision in the Act for that. The reason why I am concerned about low market valuations or artificially low valuations is simply this – if I could just illustrate with an example. If the pledge is worth $120 and the pawnbroker extends a loan of $100, he may be incentivised to provide a valuation of $80. So, when a pawner comes to redeem, he has to redeem $100 loan plus a profit. But if the pawner has to sell the collateral, he gets $120 because that is what it is worth. But if he loses the item or destroys the item or misplaces or does something wrongful with it, he only compensates the pawner $80. That is my concern about artificially low valuations – where, if the valuation is low enough, it provides the incentive for the pawnbroker to actually not do his job properly.

Insofar as market forces are concerned, I do not think that is going to be a right answer because, where the pawner is concerned, he is only looking at the amount of loan he gets and not so much the valuation which the pawnbroker gives him.

With respect to the question, where Mr Kumar suggested that the loan extended would exceed or would not exceed the valuation, can I just clarify that first point?

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The loan extended may well be below the value of the pledge but above the valuation in writing which the pawnbroker gives him.

I think it is not possible to micro manage each transaction. So if you look at it from a broad basis, generally speaking, he would have known the pawnbroker would not have an incentive to depress the loan amount too much because it is possible for the pawner to go to another pawnbroker. If it is something that falls within a reasonable range, the pawner may well be happy to live with it. When you have an item, you would not necessarily go to the first pawnbroker – it is open to you to go to other pawnbrokers and see what is the best deal that you can get and our assumption is that people will actually work on this premise. We will see how the system goes, but if it turns out that there are abuses of the nature that Mr Kumar describes, then it may be necessary at a later point to intervene. At the moment, based on what we see, we think that this would be a workable system, but we will monitor and review.

Mr Deputy Speaker, I would like to thank the Senior Minister of State for a very detailed reply, especially on how Singaporeans can cope with the cost of living.

I noted that in the previous replies by the Ministry on this topic, they said that they did not track the reasons for non-redemption. There were also various reports, some of which I have cited, that quoted industry players saying how pawners were using their valuables to get cash for casinos and gambling, as well as to cover cost of living. I would like to ask the Senior Minister of State if the Ministry would like to more conclusively reply to all these comments by having a more detailed study about the reasons behind all these non-redemptions and about the profile of the pawnbroking industry.

It is a little difficult to track this kind of information because when a person goes to pawn an item – if he pawns it – and then you do not know at that point of time whether or not he is going to redeem it. So, you will only know when somebody has not redeemed it when he has not redeemed it. And then it would be a question of asking the pawnbrokers for the details and, even then, you will have to go and track down the person and say, "Why did you not redeem this piece of jewellery?" "What is the reason for not doing so?" You can see the kind of logistical difficulty that you would have in doing that. That is one of the reasons why we have not been able to track this.

We will take note of Mr Yee's request but, at the present time, we are really talking about 5% which goes unredeemed and the reasons that were given are largely anecdotal. We will look at it and keep Mr Yee's request under consideration but, as I have said, logistically, it is very difficult to pinpoint with mathematical accuracy what are the exact

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reasons people do not redeem.

There are no further clarifications.

[(proc text) Question put, and agreed to. (proc text)]

[(proc text) Bill accordingly read a Second time and committed to a Committee of the whole House. (proc text)]

[(proc text) The House immediately resolved itself into a Committee on the Bill. – [Ms Indranee Rajah]. (proc text)]

[(proc text) Bill considered in Committee (proc text)]

[Deputy Speaker (Mr Seah Kian Peng) in the Chair]

The citation year "2014" will be changed to "2015", as indicated in the Order Paper Supplement.

Clauses 1 to 86 inclusive ordered to stand part of the Bill.

The First to Fourth Schedules inclusive ordered to stand part of the Bill.

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

Order. I propose to take the break now. I suspend the Sitting and will take the Chair at 4.15 pm.

Sitting accordingly suspended

at 3.55 pm until 4.15 pm.

Sitting resumed at 4.15 pm

[Deputy Speaker (Mr Seah Kian Peng) in the Chair]

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[(proc text) Order for Second Reading read. (proc text)]

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

Sir, the proposed changes to the Industrial Relations Act, or the IR Act, are intended to better meet the needs of our professionals, managers and executives (PMEs), as well as help employers and unions to work together to more effectively engage this growing group of employees. We will be strengthening an already strong and constructive tripartite partnership, and making it more inclusive.

The IR Act, sets the landscape for harmonious labour-management relations. The law helps to prevent and settle trade disputes by collective bargaining, facilitates conciliation and arbitration and helps to provide for tripartite mediation of individual disputes. Over the years, it has allowed us to meet the growing needs of all our workers. At the same time, it ensures that our companies remain competitive and agile so that they can respond to the changing business environment and, thereby, benefiting everyone.

Sir, we know that the profile of our workforce is evolving. PMEs now form more than 30% of our workforce and this proportion is expected to increase further as Singaporeans become better educated and aspire to better jobs.

As such, we need to see how this group of employees can be better represented at the workplace and how we can better embrace them into the tripartite process. At the same time, we need to see how employers can better work together with unions to engage these employees. The tripartite partners agreed that we would do this in a measured and sensible way without undermining labour market flexibility and management prerogatives on issues which the unions can enter into negotiations with management.

To enable this, the tripartite partners have taken the approach of gradually broadening the options for workplace representation for PMEs. This journey started way back in 2002 when we amended the IR Act to allow rank-and-file unions to represent employees in managerial and executive positions on an individual basis for limited matters. In 2011, we introduced further amendments to provide for a tripartite mediation mechanism to assist PMEs in non-unionised companies in resolving individual disputes with their employers.

In the last two to three years, the Government has also undertaken a broad review of our laws and institutions to see how we can better meet the changing needs of our workforce.

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As a result, we updated the Employment Act last year to deepen protection for managers and executives earning up to $4,500. We also plan to set up an Employment Claims Tribunal to provide all employees, including PMEs, with an expeditious and affordable dispute resolution mechanism and strengthen the tripartite mediation mechanism we introduced in 2011.

In 2012, alongside the review of the Employment Act, the tripartite partners agreed it was timely to review the IR Act to see how unions can play a role to better represent the needs of these PMEs. The amendments we are proposing today seek to build on these changes to further strengthen the channels of union representation for PMEs and provide them with a wider set of options for union representation. I shall refer to these workers as "executives" henceforth for alignment with the terminology in the Bill. They are the result of extensive consultations with the public as well as more than 4,000 employers and union leaders at various platforms.

A Tripartite Consultation Workgroup with employer and union leader representatives was also set up to study issues relating to amendments in the IR Act and to develop tripartite understanding and guidelines to guide implementation on the ground.

The two main changes addressed in this Bill are, firstly, extending the scope of union representation on a collective basis for executives; and secondly, expanding the scope of limited representation on an individual basis to re-employment matters.

I will elaborate on each of these in more detail. The first key amendment proposes to remove the legal barrier for rank-and-file unions to represent executives collectively. Executives presently cannot be collectively represented by rank-and-file unions. This prohibition was introduced in the context where the large majority of employees were traditional rank-and-file workers and executives then constituted a very thin but senior layer of the workforce of a company. There were concerns that representation of such workers by rank-and-file unions would give rise to a conflict of interest and undermine management effectiveness.

Since then, our economy has evolved and the educational profile of our workforce has improved – it has changed quite dramatically and will continue to change. There is now a much greater variety of jobs, especially at executive levels, from entry-level jobs to senior management roles. Recognising that rank-and-file unions have played an effective role to help rank-and-file members address their workplace issues, the tripartite partners recommended to provide an additional option for executives, particularly the more junior ones, to join rank-and-file unions for collective representation if they wish. This is an extension of the 2002 amendment where executives were allowed to be represented by

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rank-and-file unions on an individual basis for limited matters.

Some employers are concerned that such representation may give rise to a conflict of interest and undermine management effectiveness. To address this concern, we will continue to exclude executives with certain responsibilities from joining the rank-and-file unions for collective representation. These include executives:

who are employed in a senior management position;

with substantial responsibilities for hiring, firing, promotion, dismissal and disciplinary duties;

who represent employers' interest in union-management matters;

those with access to confidential information, such as payroll and budgeting information; and

whose union affiliation would give rise to a conflict of interest.

The tripartite partners have discussed a few criteria to be used to determine eligibility for collective representation, such as salary levels and workforce distribution, but they recognise that company structures and pay scales differ widely across industries and between organisations. The partners thus agreed that job function or responsibility is probably the most relevant and practicable criterion for determining eligibility, as it directly addresses employers' concerns of conflict of interest and loss of management effectiveness. This approach will also be able to take into account the organisational structure and circumstances of different industries or organisations. This is similar to the criterion for limited representation and tripartite mediation for executives within the IR Act itself.

The second key amendment in this Bill proposes to expand the scope of areas which the rank-and-file unions can represent executives on an individual basis to include matters relating to re-employment.

Sir, currently, rank-and-file unions can represent executives on an individual basis in four limited areas, specifically, firstly, breach of individual contract of employment; secondly, retrenchment benefits; thirdly, unfair dismissal and, fourthly, victimisation. This provides executives with an additional and lower cost alternative to settle their employment disputes through union and management negotiations.

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While the tripartite partners have proposed extending the scope of collective representation of executives by rank-and-file unions, there is still value in retaining the limited representation framework which I have just mentioned. Employers have given feedback that reward systems for executives have evolved to be relatively individualised and not all executives will desire to be represented collectively. In addition, not all existing rank-and-file unions may be prepared or given recognition to full collective representation immediately.

To further broaden executives' options for workplace representation, the tripartite partners have recommended expanding the scope of the limited representation framework to include matters relating to re-employment after retirement.

Firstly, the denial of re-employment to an employee on the ground that the employee does not satisfy the re-employment eligibility criteria.

Secondly, the denial of re-employment to an employee on the ground that the employer is unable to find a vacancy in his establishment which is suitable for the employee.

Thirdly, the reasonableness of the terms and conditions of any re-employment offer made by the employers.

Lastly, the reasonableness of the amount of any employment assistance payment offered to an employee.

In addition to the two key amendments that I have elaborated on earlier, this Bill also proposes some amendments to improve the functioning of the Industrial Arbitration Court by allowing for flexibility on the number of employer and employee panel members which the Minister for Manpower can appoint to hear industrial disputes, as well as increasing the duration of appointment of such panel members from one to two years.

Sir, in view of the two earlier proposed amendments, consequential amendments to the Retirement and Re-employment Act and the Trade Unions Act are required. In the case of the Retirement and Re-employment Act, the amendment is to allow the unions to also represent executives under the limited representation framework in proceedings before the Commissioner for Labour on re-employment claims. Amendments to the Trade Unions Act are also required so as to enable rank-and-file unions to represent executive employees, except executive employees with certain responsibilities, for collective bargaining.

The Bill is proposed to come into effect on 1 April 2015. To supplement the proposed amendments, we have released two sets of Tripartite Guidelines at the Singapore Tripartism

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Forum's Industrial Relations Seminar in November last year to help prepare unions and employers early so that they can address their concerns about how they should adapt to the proposed amendments. These guidelines are the result of the extensive efforts of the Tripartite Consultation Workgroup I mentioned earlier.

The first set of Tripartite Guidelines on Extending the Scope of Union Representation for Executives spells out the various options for representation of executives and provides supplementary criteria for unions and companies to negotiate on the level of executives in the organisation eligible for collective representation so that both parties can move at a pace that they are comfortable with. The second set of Tripartite Guidelines on Expanding the Scope of Limited Representation for Executives is an update of the existing guidelines in relation to the limited representation framework, where individual re-employment disputes are included as an additional area for negotiation between employers and unions.

Following the various consultation sessions the Ministry had with employers and union leaders, there was a tripartite agreement that while the guidelines should provide clarity, they should also not be overly prescriptive. This is to allow flexibility at the implementation level for employers and unions to work out the modalities that best suit the needs of executives and the organisational circumstances.

I know that, in many cases, we would all like clearer and more precise directions, but the nature of the space is not homogenous. Therefore, you do need a level of flexibility and, with that, we need to create that space so that the partners can negotiate and discuss what these details might be and for them to proceed from that point on. I am happy to note that the Workgroup members took this into consideration in developing the tripartite guidelines and, as a result, these guidelines have broad tripartite support.

In this regard, I would like to urge employers and unions to consider the various options available to them by openly sharing, discussing and understanding each other's concerns and needs and to work out a suitable arrangement. The guidelines will take effect together with the commencement of these amendments to the IR Act.

Mr Deputy Speaker, we started this very important journey to provide greater scope for representation for executives as far back as 2002. We have, over the many years, built up a very strong tripartite partnership here in Singapore. We do intend to keep to that. The basis on which we have established that successful partnership, we intend to continue with that. But the space is also evolving; the economy is evolving; the workforce is evolving and, therefore, we need to find a new formulation that can continue on this trajectory.

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The legislative amendments that I have proposed will offer more options for union representation of executives at the workplace, because we do have many more executives in the workplace today and it will continue. It will allow us to harness established channels under the IR Act for employers, executives and unions to engage in dialogue to resolve any industrial disputes.

I would like, in particular, to thank everyone who has contributed to the review, especially NTUC, SNEF and Members of this House, as well as the members of this Workgroup, for their contributions in developing the guidelines. MOM will continue to work with our partners, NTUC and SNEF, to communicate the IR Act changes and the tripartite guidelines to employers, unions and employees, to ensure that the proposed amendments are implemented in a way that creates a win-win outcome for both employees and employers, as we have done so over the many years. We are confident that the proposed amendments will make our tripartite model even more inclusive. It will strengthen Singapore's model of tripartism and benefit employees, unions and employers. Mr Deputy Speaker, Sir, I beg to move.

Question proposed.

Mr Patrick Tay.

I rise in strong support of the Industrial Relations Amendment Bill. I declare my interest as a member of the tripartite workgroup for the review of the Employment Act, as well as the IR Act. Representing NTUC and the Labour Movement, we discussed, consulted widely, reviewed, negotiated and promulgated this deck of changes with our tripartite partners, MOM and the Singapore National Employer's Federation. I must say that the discussions and negotiations were robust. We also worked out and issued a deck of tripartite guidelines which were issued shortly after the First Reading of this Bill.

If we take a closer look at our Singapore workforce profile, it is changing rapidly. The number of PMEs in our workforce now stands at 31.1%. Resident PMEs currently stand at 638,500. We expect this percentage to increase exponentially, with more embarking on tertiary qualifications and taking on executive jobs and becoming knowledge workers. Many of the new employees hired in our unionised companies these past years have Diploma and above qualifications. Many of the new jobs created require knowledge workers or PMEs.

In light of this change and development, it is imperative for NTUC and the Labour Movement to push for this review of the IR Act, a piece of legislation promulgated in 1965,

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to ensure we stay future-ready and relevant to our workforce and membership. In fact, I submit that it is in the interests of our tripartite partners to support this move to be inclusive and bring PMEs into the tripartite framework so as to fortify tripartism in Singapore and ensure it stays strong, relevant and continues to be the unique selling proposition for Singapore.

The introduction of individual limited representation of executives in 2002 and the setting up of the tripartite mediation framework in 2011 have been two key milestones in bringing PMEs into our fold and extending union representation to them. However, in this Amendment Bill, I cannot but underline the two key changes in this Amendment Bill which are landmark changes in our journey to reach out to and serve the PME populace in Singapore.

The first change is a watershed change to allow trade unions whose majority membership consists of non-executive and non-managerial employees, commonly referred to as rank-and-file unions, to be allowed to collectively represent PMEs.

The second change is the addition of re-employment as another head of claim under individual limited representation. These changes are by no means technical changes but are substantive changes, as our unions will be able to stretch their scope of representation and ensure that the welfare and interests of all workers, including PMEs as well as mature PMEs, can be looked after and that they can be collectively represented by unions. Except for certain excluded categories due to conflict of interests principles, there will not be a salary ceiling nor prescribed percentages and proportions to specifically curtail collective union representation of PMEs.

Supporting these changes, I would like to seek the Minister's clarifications on some questions which I hope he can explain and elucidate so as to aid the practice of industrial relations after these changes are passed as law.

In fact, one of the biggest challenges with coming up with the new provisions, as well as the set of tripartite guidelines, is how to best define the term "executives" and, consequently, where to draw the line of exclusion from union representation. Section 17(3) provides for some excluded categories of workers from this new collective representation of PMEs by our affiliated unions. I wish to confirm that the intention is to only exclude those who are in senior management positions or carrying out functions that would genuinely create conflict.

I ask this because the excluded categories are the same as those excluded under individual limited representation. When limited representation was introduced in 2002, the

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Minister said in Parliament that the Government accepted the Tripartite Committee's recommendation that "senior management staff and certain core management personnel could not be represented. These included those involved in hiring, firing, promotion, dismissal and disciplinary duties; those with access to confidential information, such as payroll and budgeting information; those who represent employers' interest in union-management matters and those whose union affiliation would give rise to conflict of interest."

To ensure the Labour Movement and tripartism stay relevant, inclusive and representative of the workforce, we want to confirm that for every organisation, this is but a small core group only and does not extend too far downwards. This is particularly so as with flatter organisations and matrix reporting, as many employees these days become indirectly involved in supervising and appraising staff at all levels. We should aim to cut off the top and senior management only and not all other managers and executives or else this change will not be impactful and progressive.

I am glad to note that the tripartite guidelines state that employers and unions may mutually agree to use a proportion of executives in the company and certain salaries as proxies, to determine eligibility for collective representation. More importantly, company structures and staff composition vary and, so, we urge employers and companies to be proactive, open and enlightened in approaching the implementation of this set of changes.

By the same token, section 30A(2)(b) further states "performs or exercises any function, duty or power which includes decision-making, or the power to substantially influence decision-making, on any industrial matters, including the employment, termination of employment, promotion, transfer, reward or discipline of other employees". We would want confirmation from the Minister that this excludes mid-level PMEs who have some supervisory functions and give input for appraisals, hiring, firing and so on such that they, too, can be represented.

I also seek clarity on the final category under section 30A(2)(e) – "performs or exercises any other function, duty or power which may give rise to a real or potential conflict of interest if he is represented by the trade union". I wish to ask the Minister how far this extends. Could we have some examples of what it is meant to cover?

In the area of recognition of a trade union to represent PMEs, I also ask the Minister to confirm that the union only needs to seek recognition for the new grades of executives that it seeks to represent collectively and that this is separate from and does not affect the recognition already obtained for the rank-and-file employees as such.

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Across our affiliated unions, we have started outreach to PMEs and I am very glad to share that many in senior and top management positions have joined us as union members to enjoy our full range of PME benefits, short of collective representation. We continue to organise and recruit those in senior and top management as union members and I am glad our tripartite partners support that. Mr Deputy Speaker, in Mandarin.

(In Mandarin): [Please refer to Vernacular Speech.] PMEs makes up one-third of the workforce. Going forward, this percentage will continue to rise.

The Industrial Relations (Amendment) Bill will bring about three main benefits:

First, the Bill will enlarge the scope of union representation to allow more PMEs to have collective representation and more bargaining power; second, limited representation will include re-employment issues which will provide better protection to the older PMEs; third, the set of amendments will make the IR Act more inclusive and it is a very proactive and delightful development by bringing more PMEs within the tripartite framework.

I have three wishes. First, I urge employers to support unions in their extension of the scope of representation; second, I hope that more PMEs can join the union as a member, so as to enjoy better protection and benefits; third, I hope Singapore's unique tripartite relationship would continue to strengthen and be ready to adapt to future changes in the workforce and the workplace.

(In English): In conclusion, I applaud this set of amendments to the IR Act and thank our tripartite partners for their support. I look forward to our affiliated unions and unionised branches enlarging their scope of representation and bringing even more PME members within their membership.

In our journey towards staying relevant and outreaching and advocating for PMEs, we, in NTUC and the Labour Movement, will continue our endeavour and efforts in representing the rank-and-file as they continue to be the lifeline of our workforce. In fact, with this set of amendments, the current dichotomy between the rank-and-file and PMEs will become increasingly irrelevant as we aim to serve all collars of workers.

I urge and encourage all employers to support unions in their extension of scope of representation and help ensure PMEs are brought within tripartism through union representation and support. This will also further enhance our labour-management relations and build a workforce which is represented, motivated, productive, future-ready and future-proofed.

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I call for PMEs in Singapore to embrace and take full advantage of this change by joining as union members and becoming a part of the Labour Movement of Singapore. I strongly support this Bill.

Mr Deputy Speaker, I rise in support of the amendments to the IR Act. History has shown that strong, responsible unions are essential to industrial fair play. Without unions, industrial relations could be wholly one-sided. The unions in Singapore have played a critical role to set the standards across the board in wages, employment benefits and working conditions. It is said, "If you are making a decent salary in a non-unionised company, you owe it to the unions. One thing that corporations do not do is to give out money out of the goodness of their hearts".

Given the changing profile of our workforce, the PMEs today will be the rank-and-file workers of tomorrow. The proposed amendments will allow the unions to remain relevant. With an increasing number of PMEs, the future direction for the Labour Movement is to get them organised and their union rights recognised by their employers as a condition precedent to creating a fairer workplace environment.

Mr Deputy Speaker, this amendment will allow the unions to give the PMEs a greater level of protection over their workplace rights. In the past, it was assumed that PMEs have the financial capability to engage their own lawyers for any employment matter disputes but the reality is that many junior PMEs may not have the financial ability to undertake their own legal recourse, leaving them in a very vulnerable position. The ability for unions to represent PMEs will create a workplace environment that promotes greater transparency and fairness to resolve employment related disputes.

Let me share the experience of my union, Building Construction and Timber Employees Union (BATU), with one of our unionised companies. The company underwent a major renovation. BATU had worked closely with the management on the deployment and transfer of the employees, many of whom were our union members. The management also allowed the union to negotiate on behalf of the junior PMEs as well, probably because many of them were our union members and there was no concern about conflict of interest.

While management exercised flexibility in this area, however, on matters related to annual increment (AI) and variable bonus (VB), the management went by the book and stated that the settlement for AI and VB was only applicable to the rank-and-file covered by the Collective Agreement (CA). Half of our junior PME union members were affected. The PMEs in different departments were given different quantums of payment. Needless to say,

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workers' morale was affected. With the proposed amendments, hopefully, we would see less of such cases and improve the quality of workplace treatment to one that is fair to workers and where issues of probable conflict of interest could be better managed.

The amendments would also allow the unions to have a bigger pool of capable members, including PMEs, that the union could tap on to enhance union leadership. In BATU, we had experienced a situation where one of our key branch officials was asked to step down from the union committee after he was promoted to a junior manager. He could only be a union member even though the members wanted him to continue as a union leader. Even though he had no real managerial or executive responsibility and could have continued serving in the union committee without any conflict of interest, the management was resolute in their refusal to allow him to continue in his capacity as a union leader.

Mr Deputy Speaker, there are potential PMEs who are union members that could provide strong leadership to the union. While I understand management's concerns with regard to allowing PMEs to join rank-and-file unions because of possible conflict of interests, however, allowing PMEs to be union leaders can promote a harmonious workplace environment between PMEs and the rank-and-file workers.

In one of our unionised companies, the branch chairman was a PME and he was not covered under the CA but the management allowed him to continue to be the branch official. As the branch chairman, he negotiated on the CA and AI for the rank-and-file workers and attended to their workplace grievances in the company as well. In this case, our PME union official was very clear on what would be good for the management and what would be fair to the workers. He was able to achieve a win-win outcome for both parties and, hence, helped to maintain a harmonious labour-management relationship. With the proposed amendments, I foresee unions benefiting from having greater clarity on the PMEs who could be roped in to be part of the union leadership.

Mr Deputy Speaker, the proposed amendments would also promote greater ease and efficiency for unions and management during CA negotiations. In one of our unionised companies, the management allowed the unions to represent the rank-and-file workers and junior PMEs as well, but insisted on separate CAs to minimise any potential conflict of interest. Even though BATU suggested to work towards one CA, as many of the PMEs have no managerial or executive responsibilities and were earning below $4,500, we faced strong objections from the management. The merger could have benefited all parties in terms of a common negotiation and allow for a more fruitful outcome, but the "no consent" by the management stalled the efforts for a combined CA. With the proposed amendment, we expect the above obstacles to disappear and the grey area on PME eligibility for union representation to diminish.

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While I support the proposed amendments, I would like to suggest that MOM reconsider the guidelines on excluding salaried staff that have access to confidential information, such as the budget and finances of the company, or the salaried and personal records of other rank-and-file employees. There are instances where the staff are often tasked with mere processing and the nature of the job is mostly administrative. As such, they may stand to lose out more from being excluded from the CA, especially so as they may not be earning much to begin with. While I understand the concerns of including such staff, we should try to push to include rather than exclude as many as possible. Mr Deputy Speaker, in Malay, please.

(In Malay): [Please refer to Vernacular Speech.] The amendments to the IR Act will allow more PMEs to be represented by the unions during the collective agreement negotiations, as well as in the prevention and resolution of disputes at the workplace.

Among the amendments proposed to the IR Act is for the unions to represent PMEs on issues related to re-employment practices. Presently, many workers, including those who are PMEs, are still healthy and wish to continue working. With this amendment, if employers do not allow a PME who is a union member to continue working when the worker reaches 62 years old, the union can initiate discussions with the employer to ensure that the justification or compensation given is reasonable.

(In English): The profile of our labour force is changing. While rank-and-file workers have been the backbone of the Labour Movement, the rising numbers of PMEs are a force to be reckoned with. To be free, employees must be given a choice, regardless of whether they are rank-and-file workers or PMEs. To have choice, they must retain in their own hands the right to union representation and be part of the union family. I support the Industrial Relations (Amendment) Bill.

Mr Deputy Speaker, thank you for allowing me to speak on this Bill. I do wish to highlight my interest as I am also the Managing Director of an MNC operating in Singapore.

PMEs make up more than 30% of the workforce in Singapore and employment of PMEs is growing faster than that of non-PMEs. Based on the latest Labour Force Report in Singapore 2013, the profile of PMEs reflects the higher educational profile of PMEs and the median age of PMEs is 41 years of age, with professionals the youngest at 37 years. With the growing proportion of PMEs in the workforce, it is, therefore, important that there be

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consideration given to how the interest of this group of employees is to be represented.

To address concerns of conflict of interest and the undermining of management effectiveness of employers, currently only executive unions can represent employees in managerial and executive positions on a collective basis. The amendment Bill to the IR Act is recommending that constraints for collective representation for executive employees by the rank-and-file (R&F) unions be removed.

To prevent conflict of interest, I support the recommendations in the amendment Bill to exclude executive employees with specific roles and responsibilities from collective representation by rank-and-file unions. These include: executive employees in senior management positions who have a substantial decision-making role on industrial matters – someone who represents the employer in industrial negotiations; executive employees that have access to confidential, budget and financial information, including HR data; roles which perform or exercise any function or duty of power that may give rise to conflict of interest if they were represented by the trade unions. These are real conflicts of interests as they impact policies, they impact decision-making in an organisation and it does undermine the effective operations of the organisation.

Sir, we will all agree that PMEs are a heterogeneous group and have varied interests. I am recommending that guidance to employers on benefits for collective representation needs to be considered at the company or the firm level rather than across an industry or job roles. PMEs have varied job scopes and responsibilities. Therefore, to try to classify collective representation of PMEs within an industry would be difficult. To do it by job title may also not be viable. This is especially the case for global companies as their HR policies and benefits are determined at a global level while taking into consideration the local laws in the country of operation.

The Tripartite Guidelines on Expanding the Scope of Limited Representation for Executives, which was released on 26 November 2014, indicates that apart from using specific responsibilities, unions and employers may agree to adopt salary level as a proxy to determine eligibility. I suggest that rather than focusing on how much PMEs are paid, as responsibilities may be very different, it may be more appropriate to look at other factors or concerns impacting the role, for example, the hours of work, work flexibility and performance. Employers and unions should ensure that there is a framework of performance for employees and how performance is assessed. With regard to employee performance, to ensure that executive employees' interests are considered, employers need to have a clear process for performance feedback and management for executive employees. Feedback on performance must also be given to executive employees in advance and not only at the point of notification for dismissal.

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While the Tripartite Guidelines indicates that the rank-and-file unions may represent its executive members individually for dismissal without cause and excuse, employers should still have the right to terminate for compliance, misconduct and poor business outlook and prospects.

The recommendation of the tripartite partners also indicates the expansion of the scope of limited individual representation for executive employees to include re-employment benefits. Given the profile and growing proportion of PMEs in the workforce, the question I am asking is: should re-employment be included for collective representation? Should unions and employers be negotiating a framework whereby the conditions or considerations for re-employment are outlined for PMEs? This may then minimise disputes regarding re-employment for executive employees.

I do want, however, to sound a note of caution. While it is important to take care of the interest of PMEs as they are a growing proportion of the workforce, the concerns of employers with regard to management effectiveness being undermined with increased union representation of executive employees cannot be ignored as this will impact decision for placing operations in Singapore and, ultimately, jobs.

The Bill does try to address some of these concerns by outlining the scope of union representation by excluding executive employees with specific responsibilities as outlined earlier. The Tripartite Guidelines do supplement this by clarifying participation of executive employees in industrial actions. Taken together, there is some clarity to employers on the scope of representation, as well as the participation in industrial actions for executive employees.

For management effectiveness, the amendment to the IR Act does make it not an offence for employers to require, as a condition for appointment or promotion of an executive employee with the specific responsibilities outlined, that the individual is not permitted to assume office or be a member of the rank-and-file union.

Once the Bill has been passed, it is important that the Tripartite Panel consider putting in place timeframes for the dispute resolution process. This will ensure that executive employees' concerns are dealt with expeditiously and with efficiency. In addition to building timeframes for efficient dispute resolution, I suggest that the panel consider the dispute mechanism so as to find the most effective way to resolve employee and employer concerns. As discussed earlier, the concerns of PMEs are varied and complex and trying to classify concerns by PME roles or across an industry may not be feasible. The recommendation is that concerns be taken at a company level.

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Ultimately, for the amendments to be effective, the unions will have to convince both PMEs, as well as employers, of the benefits of increased representation. Sir, with the above considerations, I support the Bill.

Mr Deputy Speaker, Sir, today, the lines between rank-and-file workers and PMEs are blurring. I am not referring to inflated job titles but, indeed, the scope of work of a blue-collar worker versus that of a white-collar worker is no longer as clearly defined as before. In some cases, the way workers are categorised into PMEs or rank-and-file by firms may not truly reflect the actual work done or responsibility held.

In the current context, the work of a worker may change or be enhanced or expanded over his employment term. He or she may also be given greater autonomy to execute more important tasks. Many rank-and-file workers have also upgraded their skills and progressed to more senior positions and hold greater responsibilities.

The IR Bill amendments in 2002 allowed for limited representation for executives by a rank-and-file trade union. This latest amendment to the Act is a timely one. As indicated by several other speakers earlier, the statistics are showing that the demographics of the Singapore workforce are changing very quickly. More than one in three employees is a PME today and we will expect to see by 2030 two in three being PMEs in the workforce.

Today, the current workforce is made up of different groups of workers. Some within the existing group of rank-and-file workers are moving up the ranks, with better skills acquired and experience accumulated and educational qualifications obtained over the years. There are also increasingly more new entrants to the workforce who have tertiary education.

I would like to declare my position as the Executive Secretary of the Education Services Union (ESU) which, today, represents five out of every eight private education workers. Of those members that we represent, more than half have tertiary qualifications. Being knowledge-based workers, the private education sector is one where we expect to see more PMEs joining this particular workforce. Within the rank-and-file category, we also know of many union members who have upgraded and advanced in their careers. To this end, I also represent the Singapore Shell Employees' Union (SSEU) and many workers there share the same trend. The revisions to this Bill are, therefore, timely and responsive to their needs.

Many workplace issues faced by our junior or mid-level PMEs are no different from those experienced by rank-and-file workers. In our experience, we have encountered several

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who have got workplace grievances, such as disputes over employment terms or retrenchment issues in his or her course of work.

According to MOM's Labour Market report for the third quarter of 2014, PMEs made up two in three of the residents who were laid off. Over at the NTUC Devan Nair Institute for Employment and Employability, we see more PMEs seeking career coaching and placement help. This was previously mostly serving our rank-and-file workers but more and more PMEs are requiring assistance at the workplace.

Under existing laws, unions can assist PMEs individually in the areas of retrenchment, unfair dismissal, breach of contract and victimisation. The amendments in the Bill will allow our PMEs to be represented as a group by our rank-and-file unions which will also be able to individually represent them, if they face re-employment issues.

The amendments in this Bill not only set up a useful framework but also guide the tripartite partners to work out the terms of reference, the working mechanism, the facts to be surfaced in terms of disputes and areas where the stakeholders will have to do more work, rather than just depending on the Bill to set up all the required efforts to be done.

For the amendments to work effectively, we have to go back to basics. In Singapore, we have strong fundamentals that are built on tripartism. The tripartite partners – the Government, employers and the trade unions – have established trust and forged close working relationships over the years. We share a common vision to achieve continued sustainable growth and a better quality of life at the workplace for our workers.

Mr Deputy Speaker, Sir, our strong tripartism ensures that implementing and educating stakeholders on the intent of such amendments will be executed effectively. Together, we have seen through several major initiatives, such as the re-employment policies and managing excess manpower during the last economic crisis in 2009. Our tripartite partners have been able to navigate the changes together and work out a set of guidelines to aid in the smooth implementation of any challenges and new policies that will benefit the workplace.

In my experience, some employers have shared that they are worried about how the new amendments may constrain their business operations. One way to address their concern is to ensure that they have a clear and good understanding of what the amendment in the Bill serves to do, to look at the spirit of the law and to work with the tripartite partners to ensure that their line supervisors, HR and senior management understand this particular amendment.

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Employers can also work together with the unions to develop and enhance their existing employment contract and terms. With fairer and more reasonable contract and better workplace practices, this will bring about a higher level of trust and transparency between the employer and employee, whether they are rank-and-file or PMEs. In this way, I believe that companies will continue to thrive because they can engage their PME staff better or work through issues together in a harmonious manner.

It is imperative that we continue to work together as unions, employers and the Government to expand the areas where we can better look after the needs of our workers. In supporting this Bill, I believe the tripartite partners will demonstrate the resolve to move positively in the right direction and strengthen our collective competitiveness. Mr Deputy Speaker, Sir, with that, I support the amendments to the Bill.

Punggol East): Thank you, Sir. According to Singapore Workforce 2014 by MOM, the number of resident PMEs has increased by an average of 4% per annum over the past 10 years. Today, PMEs comprise about 31% of the workforce and this number is expected to continue to grow. With the growing proportion of PMEs in the workforce, amendments made in this Bill to provide better protection for more workers are thus welcomed. I have two clarifications on the Bill.

The first one, according to section 17(3), there is limited representation for executive employees. This could possibly include employees who are in junior or mid-level management, with job functions that include managing, directing, legal, human resource and finance.

What could these employees do when they want to seek redress? Given that employees in Singapore could be multitasking within the company, this could lead to many employees having limited representation under this Bill. This could also lead to contractual manipulation by employers to restrict their employees' rights. What can be done to prevent this?

In addition, is there any person or class of persons which the gazette had declared not to be employees for the purpose of this Bill? For class of persons with limited representation under the Bill, should their occupation not be stated explicitly in the Gazette or the Act itself to avoid confusion and surprises? What can the Ministry do to help employees make an informed choice when accepting a job offer or taking on additional job scope? What does the Ministry intend to do to generate more awareness among employees about this Bill, especially those with limited representation?

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Next, this Bill also excludes trade unions which have not been given recognition by an employer to act on behalf of employees. In order to know if there is adequate representation, how many trade unions have applied to be accorded recognition by employers and how many have successfully done so?

In conclusion, I look forward to the Minister's clarifications on the points raised.

Mr Deputy Speaker, in Tamil, please.

(In Tamil): [Please refer to Vernacular Speech.] I thank the Deputy Speaker for the opportunity given to me to take part in this debate. I am glad and honoured to speak and share my thoughts on this important issue which is close to my heart and the hearts of my fellow unionists in the Labour Movement.

Sir, every job has its own professionalism and not many colleges and universities teach about running a union and the closest is the Human Resource Management (HRM) course taught in UniSIM. Many rank-and-file union leaders have pursued their career in HRM and have even gone further to foreign universities to master this subject. Indeed, Sir, this job requires passion more than knowledge.

With the changing demography in many parts of the world, developed and developing nations are seeing more executives and managers in their workforce. Singapore is not spared either. Our statistics shows there are more professionals, managers and executives in the workforce. When faced with a dilemma in a legal issue, people approach a lawyer. Similarly, when employees in whatever position they are in in the company want assistance on work-related issues, they also want a professional to handle their grievances.

The union leadership covering the majority of the workforce will be relevant in solving issues and managers and executives can provide leadership to the Labour Movement. With this amendment to the IR Act, many stand to benefit from the coverage of the union and many are now deprived of that. To my knowledge, there are companies who provide benefits below the Employment Act for those beyond the coverage.

Sir, unions were representing about 80% of the workforce in the past. With this new amendment, unions will be representing close to the past percentage. With the influx of professionals, managers and executives, the rank-and-file members will stand to benefit with their expertise.

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Mr Deputy Speaker, Sir, to-date, many PMEs are not informed of the reason for their retrenchment, termination and dismissal. With these changes in the law, they will be covered for re-employment, in addition to the four areas in the past. This is most welcomed by the PMEs and the Labour Movement.

(In English): As Singaporeans aspire to study further and start their working lives as PMEs, they will heave a sigh of relief that our laws will look after them in the most important aspect of their careers. They also know that they can seek help from a professional unionist when the need arises.

Mr Deputy Speaker, Sir, I commend the good efforts of the Ministry. Our challenge now is to work together as tripartite partners to change the mindset on the ground. I am encouraged that the public sector will lead by example. The rest of us should not wait. We can all play our part. Let us all change together.

This amendment Bill portrays a strong tripartism which many nations are envious of. Sir, I support the Bill.

Mr Deputy Speaker, Sir, thank you for allowing me to join this debate. Sir, since 2010, the Government has made tremendous efforts to rationalise the structure of the labour force to ensure that it is placed on a more sustainable footing. The move away from excessive reliance on foreign manpower has been at the centre of such efforts. I have been particularly heartened by the Government's decision to take the hard choice of keeping to a consistent line on the gradual pace of increasing foreign manpower levies. I have no doubt that such a policy will stand us in good stead in the long run.

Limiting the growth of foreign manpower has been a necessary if difficult move, but will not, by itself, be sufficient to produce the transformation of the labour force we need as rapidly as we would like.

Sir, the transformation can be quickened by creating a more conducive climate for change as well as deepening the extent to which labour market participants can involve themselves in that change.

Hence, apart from just focusing on foreign manpower limitations, the Government has also worked on other fronts, including encouraging increased labour force participation of older workers and women, promoting continuing education and training and emphasising

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the deepening of skills before the pursuit of qualifications.

In 2012, in recognition of the ageing of our workforce, a new re-employment law was introduced.