Hansard, Monday, 6 January 2020

1 Mr Saktiandi Supaat asked the Minister for Trade and Industry (a) how will the US-China Phase 1 Trade Deal impact Singapore's economy; and (b) how can local manufacturers that export parts for US goods leverage on the new agreement to boost their businesses.

2 Mr Saktiandi Supaat asked the Minister for Trade and Industry in light of local exports declining in the past nine months (a) how many businesses and employees have been affected in the past year; (b) whether outreach has been made to businesses to assess the impact and assistance they may require to stay afloat; and (c) what progress has been made on efforts to expand our export market in the past year.

Mr Deputy Speaker, Sir, may I have your permission to take Question Nos 1 and 2 together, please?

Yes, please.

I will group the answers into two parts: first, global developments and their potential impact on Singapore's economy; second, the Government's strategies to grow Singapore's economy and create good jobs for Singaporeans.

Twenty-nineteen was a volatile year for the global economy. The IMF downgraded the 2019 global growth forecast five successive times – in each of its quarterly reports since October 2018 – to 3.0%, down from the 3.6% achieved in 2018. Fortunately, the global economy avoided several worse scenarios including an all-out trade war between the US and China, but downside risks remain. As a small, open economy, Singapore was affected by these macroeconomic conditions. Our non-oil domestic exports declined by 10.1% on a year-on-year basis between January and November 2019. Advance estimates show that Singapore’s economy grew by 0.7% in 2019, slower than the 3.1% recorded in 2018.

Looking ahead, MTI expects Singapore's GDP growth to pick up modestly to between 0.5% and 2.5% on the back of a slight uptick in global economic growth and a gradual recovery in the global electronics cycle. Even though we are cautiously optimistic, there remains several uncertainties in the global economy.

The biggest uncertainty is the relationship between the US and China. This is the most important bilateral relationship for both countries, and indeed for the entire world. We welcome the announcement of the Phase 1 trade deal, especially the cancellation of further tariff hikes in December 2019. Averting further trade tensions is positive news for all countries. We hope that this is the first step towards putting the relationship back on a stronger footing. We look forward to learning about the details of the Phase 1 deal on 15 January 2020, and working with both countries to grow our economies.

Another uncertainty pertains to Brexit, for the UK and the European Union are collectively our third largest trading partner in goods, and our biggest trading partner in services. Mr Seah Kian Peng had filed a Parliamentary Question (PQ) for the next sitting on the implications of Brexit on Singapore and Singaporean companies. I would like to take this opportunity to address Mr Seah's question as well. Based on the terms of the draft Withdrawal Agreement, the immediate impact of Brexit is likely to be limited. This is because, until 31 December 2020 at the least, the UK will functionally be treated as an EU Member State and remain a party to the EU's international agreements, including the EU-Singapore Free Trade Agreement (EUSFTA) which had just come into force. However, this may change depending on what the UK Parliament decides in these coming weeks. In addition, what happens after 2020 has not yet been determined. Singapore is therefore working with the UK on an economic agreement to maintain continuity in our economic relations after the EUSFTA no longer applies to the UK.

I wish to remind Members that these uncertainties are not unrelated. What is happening between the US and China, the UK and the EU, and other economies like India, Chile and Hong Kong, are manifestations of a deeper unhappiness over the inequitable distribution of gains from globalisation, and a concern that tomorrow will not be better than today. This is why the multilateral trading system – which has underpinned decades of economic integration and free trade – is itself under significant stress.

Since 11 December 2019, the WTO's Appellate Body has been non-functional because there are not enough appellate judges to meet the quorum. The WTO's appellate function is an existential one for the multilateral trading system, because it ensures the robust enforcement of multilateral trade rules. Without this binding and neutral mechanism to resolve trade disputes, the risk of a fragmented trading system will grow. There will be severe consequences for all WTO members, including Singapore, should trade, talent and data flows become disrupted. The strategic question confronting the world is whether we continue to turn inward and less open, or we find a new balance that enables economies to remain open and connected, while ensuring that our people benefit equitably from such integration.

Apart from these challenges, there are also unanticipated issues that may affect the global economy, such as the situation between the US and Iran. Any escalation between the two countries may portend further instability in the Middle East which could have negative implications on the global economy, including Singapore.

I should add that this is not all doom and gloom for the world. There are also many exciting opportunities to harness. For example, the digital economy is a major opportunity for us in Singapore. Digitalisation enables small countries like Singapore to transcend our size and geography, and helps our enterprises to penetrate new regional and global markets. Within Southeast Asia alone, the digital market is estimated to exceed US$300 billion by 2025 – almost the same size as the current Singapore economy and right at our doorsteps! And although the IMF has downgraded the global growth forecasts, Asia remains a bright spot with growth estimated at 5.1%.

In sum, there will be both uncertainties and opportunities in the year ahead. It is incumbent on us to ensure our ship is seaworthy, set our sails to catch the wind. The Government will help Singapore businesses navigate the challenges and seize the opportunities. This includes helping Singaporean companies to expand into overseas markets, as well as providing customised support for companies to press on with productivity improvements, innovation and the training of our workers.

Singapore has to adopt a long-term perspective in our economic strategies, even as we tackle the short-term headwinds. Allow me to elaborate on three strategies that the Government has taken to grow our economy and create good jobs for Singaporeans.

First, we are strengthening Singapore's fundamentals to distinguish ourselves amidst the uncertainties.

In July last year, I shared with Members some of the factors that have enabled Singapore to stand out from the competition. Our stable political environment and united leadership empower us with the capacity to plan for the long term; the rule of law and pro-innovation regulatory environment provide certainty for businesses to thrive; our superior connectivity with the rest of the world allows us to look to the world for opportunities; our strong tripartite partnership and a skilled workforce that continually upgrades and generates new ideas, acquire new skillsets and knowledge that can redefine what is possible for a country with no natural hinterland.

The international community recognises these strengths. This is why the Economic Development Board (EDB) has attracted more than $8 billion of investment commitments in 2019, despite the global economic uncertainties. These investments are in high value-added sectors, such as electronics, aerospace and pharmaceuticals. I have not included investments from other sectors in the above figure, such as the $9 billion expansion plan for the two integrated resorts. These investments will create many good jobs for Singaporeans, and they reflect the global business community's confidence in our future.

Moving forward, we will continue to deepen our linkages with key markets, and transcend our geographical boundaries by pushing into new dimensions of connectivity that include the flows of data, talent, ideas and technology.

Second, we are helping Singapore companies and workers to internationalise and turn the world into our hinterland. The preconditions are in place, thanks to our excellent connectivity and our extensive network of 25 FTAs with 64 trading partners, which collectively account for more than 85% of global GDP and more than 90% of Singapore's trade.

Last year, as of September 2019, we gave out 800 companies grant support for their foray into overseas markets through the Market Readiness Assistance (MRA) scheme. In the same period, about 1,700 companies were supported in growing their businesses both domestically and overseas through the Enterprise Development Grant (EDG) programme in the areas of capability development, market access and manpower development for internationalisation.

These transformation efforts have translated into higher pay and better career progression opportunities for our workers. As businesses grow, they will create more good jobs for Singaporeans. To further strengthen the linkage between enterprise transformation and benefits to our workers, we will include commitment to worker outcomes as a mandatory condition for companies that apply for EDG funding from 1 April 2020. These outcomes may include wage increases, job creation, job-redesign, or hiring of older workers. It will reinforce our message of building an economy that is both pro-enterprise and pro-worker.

Besides the EDG, there are also employee-specific schemes like the Professional Conversion Programme (PCP) to help mid-career PMETs reskill and embark on new careers, and the Global Ready Talent (GRT) programme to equip workers with skills relating to internationalisation. Through these programmes, we hope to prepare more Singaporeans to compete and succeed across the region and in the world.

The Government will announce further initiatives to help our businesses transform and build stronger capabilities at this year's Budget.

Third, we are pursuing new growth opportunities. Through the work of the Future Economy Council (FEC) and the Industry Transformation Maps (ITMs), we are developing new industry niches in areas such as additive manufacturing, robotics and sensors. These build on our existing strengths in sectors such as electronics and precision engineering, and will enhance Singapore's position in the global value chains.

We are also partnering industry players to develop new capabilities in promising growth areas such as agri-food, urban mobility and precision medicine. For example, we will be establishing the Agri-Food Innovation Park (AFIP) in Sungei Kadut, to bring together high-tech farming and R&D activities in areas such as urban agriculture and aquaculture. Through this, we hope to create new career opportunities and grow a new generation of technopreneur farmers.

To capture opportunities in the digital economy, Singapore is co-leading the WTO Joint Statement Initiative on E-Commerce or JSI. The JSI will establish multilateral rules to help companies navigate the complex e-commerce landscape. We are exploring deeper collaborations with key economic partners like Chile, Australia and New Zealand, through a new generation of "digital economy agreements" to open up more opportunities for our companies.

Mr Deputy Speaker, Sir, as a small country, Singapore cannot completely insulate ourselves from ups and downs in the external environment. But there are steps that we can take to strengthen our economic competitiveness and build stronger capabilities in our enterprises and workers. Our success has always been predicated on our will to make the best of what we have, and our resolve to turn adversity into opportunity. If we continue to stay united and work together as one people, we can all look forward to a brighter tomorrow for all of us.

Mr Deputy Speaker, I would like the Minister for answering both questions and covering a wide range of topics with regard to those questions. I have two supplementary questions.

One, can the Minister share, in his view or MTI's view, whether the US-China tensions will continue to ease off in 2020 and whether it will still continue in terms in the tensed landscape as well as what its impact will be on Singapore companies?

Second, the Minister mentioned about multilateral agreements that will continue to be beneficial for the world. Can the Minister share with the about the Regional Comprehensive Economic Partnership (RCEP), whether there are any developments on that front and how Singapore playing on that front and whether Singapore can benefit?

Mr Deputy Speaker, Sir, let me first take the question on the US-China tensions. We are encouraged by the conclusion and the impending signing of the Phase 1 agreement between US and China. I have spoken to both my counterparts in US and China. I think the significance of the deal goes beyond just the lines of agreement and the specific line items in the agreement. I think both the US and China are very clear that this is a basis for them to establish the strategic trust between both countries because a deal is a deal.

More important is how we implement the deal and along the way, there will be further negotiations between them. And I am quite certain of that. So, we are cheered by the conclusion of the Phase 1.

But having said that, we are very clear – and I think both the US and China are also very clear – that the challenges between the two countries go beyond the trade numbers. They have differences between themselves; how they see they should structure their economies in terms of subsidies; they have differences in how they see trade relationships; they have differences in how they see the subsidies for their technology, research and development, so on and so forth. So, there are deeper structural issues that have to be settled between the US and China. I think that we will have to wait for the strategic trust to be built up for them to move on to the next step of their agreement.

Given the political dynamics in the US in 2020, we can also expect some surprises along the way.

So, while we are cautiously optimistic, we are cheered by the trade, the Phase 1 trade deal, I think there are many other issues that still need to be resolved in time to come between the US and China.

On the second question, on RCEP, last year at the Asean Leaders' Summit, the 15 RCEP countries have essentially concluded all the tax-based negotiations. There are a few outstanding, bilateral market access negotiations between some of the RCEP countries. The leaders of the 15 countries have given their commitment to sign the agreement in Vietnam in 2020 and all the officials are working hard to realise that. In fact, the legal scrubbing for the text have commenced and our team is currently now in Jakarta working with our counterparts on that.

The door remains open for India to join RCEP and I think that is the common position for all the 15 member states. I think every one of the 15 member states would welcome India's continued participation. We have continued to keep India in the loop for all the discussions and also the legal scrubbing.

Mr Pritam Singh.

Question No 3, Sir.

There has been a request to take Question No 3 and Question No 4 together, so Minister for Manpower will answer Question No 3 and the Minister for Trade and Industry, Question No 4. And we will take the supplementary questions immediately after the response to Question No 4. Minister for Manpower.

3 Mr Pritam Singh asked the Minister for Manpower (a) whether the Ministry will detail the number of new jobs filled by Singaporeans, PRs and foreigners respectively for each industry covered by the Industry Transformation Maps (ITMs) henceforth; and (b) whether it can provide these statistics for each ITM since the inception of the respective ITMs to date.

Thank you, Mr Deputy Speaker. The 23 Industry Transformation Maps (ITMs) were launched progressively from late 2016, with the majority launched in 2018. Changes in workforce profile depend on a variety of factors which can be structural or cyclical in nature. To assess the impact of ITMs, it will be more meaningful to look at employment outcomes over the medium and long terms.

Nonetheless, we can look at employment change across the 23 ITM sectors from 2015, before the launch of ITMs, to 2018. Between 2015 and 2018, total employment in these sectors, excluding foreign domestic workers grew by 19,500. This was made up of: (a) an increase in employment of Singapore Citizens (SCs) by 39,300; (b) increase in employment of Permanent Residents (PRs) by 8,600; and (c) a decrease in employment of foreigners by 28,500.

These numbers are encouraging because we have been making the effort to secure jobs for Singaporeans. We are making progress on this front. Singaporeans have consistently worked hard to update our skills and stay relevant. Between 2015 and 2018, the training participation rate of the resident labour force aged from 15 to 64 increased from 35% to 48%, which shows that more Singaporeans are upgrading and updating their skills. From 2016 until September 2019, Workforce Singapore and NTUC's Employment and Employability Institute (e2i) have also helped 93,000 locals move into new jobs through the Adapt and Grow initiative.

4 Mr Leon Perera asked the Minister for Trade and Industry (a) what is the contribution of Total Factor Productivity (TFP) to GDP growth in each of the past 10 years; (b) what has been the growth in TFP in each of the past 10 years; (c) how does Singapore's TFP performance compare to that of other developed countries; and (d) what drivers and restraints of Singapore's recent TFP growth has the Ministry identified.

Mr Deputy Speaker, Sir, let me take Parliamentary Question No 4.

Between 2008 and 2018, Singapore's Total Factor Productivity (TFP) grew by 0.5% per annum. This is about 12% of our GDP growth of 4.5% per annum over the same period. Since 2016, TFP growth has increased to 0.9% per annum or around 27% of GDP growth.

Singapore's TFP performance was stronger than or comparable to most OECD countries. Between 2008 and 2018, France's TFP rose by 0.3% per annum, while Finland's TFP growth was 0% per annum. TFP growth in Germany and in the United States were similar to ours, at about 0.5% per annum.

The pick-up in our TFP growth in recent years can be attributed to our economic restructuring efforts, which are important to raise productivity and to transform our industries through innovation and internationalisation. Initiatives like SkillsFuture to upskill our workers and support lifelong learning would have also contributed to this.

Transforming our economy and raising TFP are long-term efforts. We are making progress, but we must continue to focus on these areas in the years ahead, building on the strong tripartite partnership between Government, employers and the Labour Movement.

Mr Pritam Singh.

Thank you, Mr Deputy Speaker. A few supplementary questions for the Minister of State for Manpower. The first question pertains to the data that was shared. The Parliamentary Question seeks information for each of the ITMs – I understand Minister of State said that the ITMs are launched in different years so it would be more useful to provide data in a certain manner. But, there is information provided for Singaporeans, PRs and foreigners between the years 2015 and 2018. Within these years, which ITMs is the Minister of State referring to vis-à-vis the numbers: 39,000 Singaporeans, 8,600 PRs and 28,500 foreigners. So, which ITM is the Minister of State referring to?

The second question is the statistics for Adapt and Grow, regarding the 93,000 locals. I understand "locals" would mean PRs and Singaporeans. Can the Minister of State confirm that? Can he also share the number of Singaporeans and PRs on Adapt and Grow between these years.

My third question pertains to how information on the ITMs is presented. The roadmaps are not consistent in terms of jobs for Singaporeans, PRs or foreigners, for example. I will give you an example. Construction ITM, if you go on the respective YouTube channels and you see reference on construction, it is very clear, good jobs for Singaporeans, no two ways about that. You go to the Retail ITM, they talk about a future-ready workforce and a professional and skilled workforce. Ostensibly, this would mean a whole range, beyond Singaporeans. Infocomm and Media ITM talks about creating new PMET jobs, 13,000 new PMET jobs and it goes on. So, every ITM is different; understandably so, but will the Ministry in future, in going forward, present that data very clearly for each ITM? PRs, this many; Singaporeans, this many. And there are obvious reasons for this. The conversation becomes more fact-based and you do not have a corrosive conversation about Singaporeans losing jobs to foreigners and so on.

Sir, I thank the Member for his questions. The ITMs relate to all the 23 ITMs that you asked for. As I mentioned earlier, the ITMs were only launched in 2016 with the majority of them coming on stream in 2018. The data is still preliminary, so it will take time. It is more meaningful and impactful to measure them as we talked about medium term and long-term developments. Many of these developments are transformative, we are transforming industries, we are transforming companies, doing job redesign, so, it will take time. But the initial indicators look promising. But I do agree and that is why we have not gone into detail yet because it will take some time to stabilise the data.

Currently, MOM provides employment statistics by local-foreigner breakdown in broad sectors: Manufacturing, Construction and Services in our annual market labour report. Those are already available; data between local and foreigner breakdown.

Currently, we need to also follow industry classification of employment statistics which follows statistical standards aligned to international convention and ensures compatibility with employment statistics that we have published in previous years so that it becomes meaningful. It is not just meaningful to put out statistics but you have to also put out comparability. So, we are making progress, but there is still a lot of work to do as we transform. It will take time for data to stabilise and it is something that we can look to and study how we can present this better in the medium and long term. So, I take the Member's point.

Sir, perhaps I can ask three further questions on this matter of ITMs. Firstly, have the ITMs made any impact on our economic growth and our job creation? Secondly, have the economic growth and job creation benefited Singaporeans? And thirdly, have the economic growth and job creation benefited Singaporeans more than foreigners?

Mr Deputy Speaker, Sir, let me address Mr Liang Eng Hwa's three questions holistically. That is the reason why I think it is useful for us to consider both the ITM question and the Total Factor Productivity question together, because all these questions pertain to our strategies to grow our Singapore companies and create good jobs for Singaporeans. Mr Pritam Singh alluded to this issue of the benefits – in fact, asked by Mr Liang Eng Hwa as well – the benefits of our growth towards Singaporeans and on Singaporeans.

Let me take the second question first, which is fundamental. Have economic growth and job creation benefited Singaporeans? And more importantly, as Mr Liang Eng Hwa asked, have economic growth and job creation benefited Singaporeans more than foreigners?

Mr Deputy Speaker, Sir, the short answer to both questions is a resounding yes. This Government puts Singaporeans at the heart of everything we do. We pursue growth not for growth's sake alone. We pursue growth so as to improve the lives of Singaporeans. I believe Singaporeans understand and support the Government's position.

At the same time, we must acknowledge the anxieties that lie behind the Members' questions.

Responsible political leaders must try to allay those anxieties, not prey on people's fears for political advantage. We have all met Singaporeans who are concerned about the future, especially in times of economic uncertainties. Some may have been displaced and are looking for a new job, others may still be employed but are wary and worry whether they are ready for the future.

In short, we have many Singaporeans who worry whether tomorrow will be better than today.

To all fellow Singaporeans, I will say this: we understand your worries and we will walk this journey with you. The Government will always have your backs. This is why we have invested so much in SkillsFuture and programmes like Adapt and Grow and the Professional Conversion Programmes. This is why continuing education has been our priority. If we take 20 years to prepare for our first job, it is not enough for us just to assume that the next 30, 40 years of our career lifespan, we do not need any fresh new injection of training and skills.

We do all this to help Singaporeans to prepare for future jobs so that those currently employed can remain future-employed. And as I have always said when I was in NTUC, we are not satisfied to put today's unemployed into today's job. Neither are we satisfied to put today's unemployed into tomorrow's job. We want to prepare tomorrow's unemployed, put them into tomorrow's job, ahead of time.

We are also aware that mature Singaporeans in the middle of their careers may be more anxious about the future. Many of them may not have done any upgrading since they started working 20 years ago after their studies. And I want to assure this group of Singaporeans that the Government will do more to support them in staying skilled and employable, not just for now but also for the future. We will talk more about this in the Budget. It is not just about lifelong employment; it is about lifelong employability.

The crux of the Members' questions is this: have we gotten the local-foreigner workforce balance right, not just in terms of quantity but also in terms of quality? These are questions that the Government and our economic agencies constantly ask ourselves. Too few foreign workers, especially PMETs with skills required for our growth sectors, mean that our businesses cannot seize the opportunities out there and, in the process, create better jobs for all Singaporeans. Too many and there will be a push-back, especially if Singaporeans feel unfairly treated. It is a never-ending balancing act with difficult trade-offs. I often ask Singaporeans when I meet them: if we can only bring in one more foreigner to complement the Singapore workforce – one more – who will we bring in? Someone who is above our national average or someone who is below our national average?

The most memorable answer that I have ever been given was by a young student. He told me, "Minister, Sir, the answer is simple. Bring in the above average one to grow the economy, but below me." This summarises the fears, concerns and aspirations of our people.

We know we need the above average foreigner to complement our domestic workforce so that we can build a more competitive economy and to provide better jobs and better pay for all Singaporeans. But we also know that foreigners will compete with us and we need to provide some safeguards for our people. This is an evergreen challenge. How do we grow our existing companies and bring in new investments that can create good jobs for Singaporeans?

Let us suppose a Singaporean worker is earning $5,000 today. And we have an option to bring in a new investment that will create two new jobs: one paying $7,000 and another paying $10,000. The Singaporean can only get the $7,000 job today because he does not yet have the skill or experience for the $10,000 job. Should we take the investment?

The Singaporean may feel frustrated. He may think that he is being unequally treated because the foreigner earns more than him now. We understand these sentiments. We also want the $10,000 job to go to the Singaporean. But if we do not accept that investment for this reason, it will go elsewhere and both the $7,000 and $10,000 jobs will disappear from Singapore. The Singaporean will continue to earn $5,000 and he will have fewer opportunities to rise to a higher paying job. But what is even more important is that his son or daughter currently in school receiving one of the best education in the world will not be able to aspire to the $7,000 or $10,000 job. So, which is the better outcome and what should we do and do right by Singaporeans, not just for this generation but for the next?

Now, is this story very far-fetched? No. It has happened before. Indeed, in every generation throughout our history as an independent nation. We can learn from how the previous generations deal with this challenge and dilemma. In the 1970s, this happened when we went out to attract the electronics industry. Over a span of three years, the first three semi-conductor companies in Singapore – National Semiconductor, Fairchild Semiconductor and Texas Instruments – created more than 7,000 jobs, but our people did not get the best paying jobs immediately. They certainly did not get all the best paying jobs immediately.

Indeed, many of our Pioneer and Merdeka Generation Singaporeans worked under higher paying foreigners. This was because, at that point in time, we lacked the skills and experience to take the highest paying jobs. But we did not reject those investments as a result. Instead, we worked hard. We learned, upgraded our capabilities, but at no time did we fear. And in time, we took over many of these higher paying jobs, including the better trained and educated children of the Pioneer and Merdeka Generations. Many of those early engineers and technicians went on to become senior executives in this sector and, in turn, they mentored a new generation of Singaporean technicians and engineers in the semiconductor industry that we have today.

Today, the same thing is happening in the ICT and software industries. ICT and software will underpin many other industries that we desire to have in the future – banking, finance, advanced manufacturing, artificial intelligence, precision medicine and so forth. They all need highly specialised skills and knowledge.

When global companies like Google, Grab and Facebook invest here, the reality is that we do not have enough Singaporeans with the relevant skills and experience to fill all the jobs they are going to create. We have raised our intake of Computer Science students in our Universities in recent years, but there is a limit to further increases. Not every student has the interest or aptitude to study computer science and we also need to groom talent in other sectors for our economy.

Young Singaporeans who are coming out from Universities and Polytechnics to join these new companies are better educated and have much better opportunities than the previous generations before them. Colloquially, as we say, our future generation does not need to take over the jobs of the previous generation, earning the salaries of the previous generation. So, do we go out and attract these investments like Google, Grab and Facebook not just for this generation, but, more importantly, for the next generation?

What should our choice be? I say we go for it. Land the investment first, just as our previous generations did in the electronics industry. Create those jobs in Singapore first. Otherwise, we will lose the $7,000 job and we may never get the $10,000 job. Work hard, train our people, upgrade our skills to take over that $10,000 job as soon as possible. But do not exploit the sentiments to create envy, anger and frustration towards that foreigner who is now taking the $10,000 job.

I ask the House, frankly, do we agree with this approach? Do we hold that we should reject the investment on the grounds that the investment will result in more foreigners in Singapore and some earning more than Singaporeans in the same company? Would we reject the investment from Google, Grab and Facebook?

I think most Singaporeans understand and accept why we cannot reject such investments on that basis. Singaporeans are fair-minded. What Singaporeans want is a fair chance to get that $10,000 job as time goes by, if not as soon as possible. What Singaporeans do not want are unfair employment practices where Singaporeans are passed over for non-meritocratic considerations. The Government understands these concerns and we stand together with fellow Singaporeans on this matter.

This is why MOM has the Fair Consideration Framework and is continually updating the system to ensure a fair, level playing field for Singaporeans. This is our commitment to Singaporeans. MTI and our economic agencies will watch over the enterprises to get them to train up and groom Singaporeans as part of this commitment to Singapore. I believe the vast majority of our companies know the deal. They play ball. They groom Singaporeans not just because we asked them to but because it makes business sense for them to localise and avoid concentration risks for business continuity as well as to grow the Singapore eco-system and win the support and respect of fellow Singaporeans and for generations of Singaporeans to come. That is how successful enterprises have done well in Singapore.

However, we do know that there are some black sheep amongst the enterprises. Their employment practices must change. If not, we will come down hard on them. They know this. We have taken actions against them and we will not hesitate to do so again.

Businesses also understand the need to be responsible employers. They keep asking the Government to relax the foreign workforce controls because they want to expand their businesses. They tell us that they cannot get enough Singaporeans to do all the jobs available. Our answer to them is simply this: work with us. Help us to manage the sense of fair play and opportunity for all Singaporeans. Our businesses understand this and they are responding.

This Government is on the side of all Singaporeans. We will grow our economy and attract investments to create many good jobs for Singaporeans. We will continue to devote resources to help our people stay competitive through lifelong learning and skills upgrading so that they can continue to stay relevant and move into higher paying jobs.

Unlike other countries, Singapore does not need to fear competition and Singaporeans do not need to fear competition. We know we have to remain open to the world. We know that a Singapore that is closed in cannot survive. We have the resilience to overcome challenges and the means to help ourselves. And this is important. We have the means to help our workers. Not every country can say that. Not many countries have the political mandate, the political will or the necessary resources to do that for their workers. That is why their workers push back against global integration, trade liberalisation and so forth.

But we are different. And we can continue to distinguish ourselves through our tripartite partnership to make sure that our workers are never left behind, that while we seize these new opportunities, our workers will have every opportunity to get that $10,000 job as soon as possible. So long as we have the drive and stay united as one people, building on the strong tripartite partnership, we will win together as Team Singapore.

Overall, this balanced approach has worked for Singaporeans. Between 2015 and 2018, local employment increased by nearly 60,000 for the whole economy. The PMET share of local employment increased to 57%, one of the highest rates in the world. It means that for every 100 locals in the workforce, 57 of them are in PMET jobs, one of the highest in the world. And the trend is continuing to grow in that way because we understand the aspirations of our next generation. If 70% of our people are going to graduate with degrees and diplomas, you can see the tremendous pressure on the aspirations for the next generation.

Our youth unemployment is amongst the lowest amongst the advanced economies, a testimony to the fact that our education system is providing the right foundation for our people to take up those jobs that are being created in the new economy. This is not something that happens naturally in every country. In fact, in many other countries, many of them in the Asia Pacific, you will see youth unemployment as one of the most significant challenges for those countries.

What about growth in earnings? Growth in real average monthly earnings for employed local workers was 3.2% per annum during this period, higher than the 2.4% per annum in the preceding three years, higher than most advanced economies such as the US, which is 0.5%; Japan, 0.8%; Germany, 1.2%. We are at 3.2%.

But let us not be complacent. It requires a lot of hard work, and a lot of hard work on the Industry Transformation Maps (ITMs) as well.

ITM is a system that we put in place for us to pool together companies, trade associations, unions, Government, research institutions – all five partners – coming together to transform the industries. Because the old way of competing just by increasing the factor input of labour and capital can only go so far.

The next lap of our economic development will require us to increase our productivity, not through the injection of capital and labour, but through innovation, the revamp of our business model, internationalisation, the economies of scale that we can achieve through expanding our economy, not just in Singapore but beyond. All these are important work for us to work together to use the ITM as the platform to raise the total factor productivity so that our workers can continue to enjoy sustainable real wage growth in the years going forward.

So, Mr Deputy Speaker, Sir, I hope that I have given a comprehensive answer on the questions that both Mr Pritam Singh and Mr Liang Eng Hwa asked. The answer is yes. We have done the right things by getting that balance right and the Government will continue to calibrate this balance carefully. That balance is struck by considering three factors: the needs of our industries and enterprises, the needs of our workers of this generation and the opportunities for our children in the next generation. If we get this balance right, as we strive for this Goldilocks balance, we must firmly reject extreme positions, one extreme position being to open the floodgates and drown Singaporeans. But neither can we take the other extreme position to close our borders and reject foreigners in our workforce.

Above all, in this House, we must firmly reject efforts to stoke anti-foreigner sentiments by spreading falsehoods or creating invidious comparisons out of context. This is not the kind of politics we want – with far-right parties in the European continent stirring hate and fear against foreigners for political advantage.

This is not how Singapore transformed ourselves from Third World to First, and this is not how a confident and capable Singapore should face the future. Yes, the future will pose many challenges. But the future will also pose many exciting opportunities. We will continue to work with Singaporeans to steer the Singapore ship through the stormy seas and we will make sure that we will not allow opportunists to stir fear and hatred amongst ourselves.

The real competition is not between the Singaporean versus the PR here versus the foreigner here. The real competition is Team Singapore comprising Singaporeans, PRs and foreign workers here, competing with the rest of the world to give our fellow Singaporeans the best chance possible to win not just in Singapore but across the entire globe, that the wages of our Singaporean workers will continue to grow faster than the rest of the other people in other countries. On that note, let us work together to go through these difficult moments.

I have two supplementary questions for the Minister of State for Manpower and one supplementary question for the Minister for Trade and Industry.

Firstly, on the massive number of jobs created because of the ITMs. My two questions – firstly, as we create all these jobs, how do we ensure we level the playing field to ensure that the firms that create these jobs consider Singaporeans fairly? The second question is: now that we have the Fair Consideration Framework (FCF) as well as other employment pass criteria in place and the FCF has started since 2014, is MOM considering reviewing it and looking at tighter measures to ensure that recalcitrant companies who do abuse that, are watched carefully?

For the Minister for Trade and Industry, can I have his assurance – and I also urge him – that as we plan our strategies to attract investments and as we plan our winning moves for the future, can we ensure that our various economic agencies put Singaporeans – not just jobs for Singaporeans but quality jobs for Singaporeans – front and centre in all their strategy papers?

Mr Deputy Speaker, our manpower policies have benefited many Singaporeans over the years. We have also benefited from the international trade flows and international flows. As shared by the Minister for Trade and Industry earlier on, the calibrated flow of foreigners to supplement our workforce has also been useful, especially as it takes time to build skills that emerging industries need. I use the term "calibrated workflow" because we know – and the employers also know – that it cannot be free flow. We use a combination of policy levers to manage the outcome of foreign manpower and to safeguard good employment outcomes for our people. For example, we raised the S Pass minimum qualifying criteria in 2019 and 2020 as well as the Employment Pass minimum qualifying criteria in 2017. This helps us keep pace with rising local wages and enhance the foreign workforce complementarity to the local workforce.

We are also reducing the Services sector dependency ratio ceiling (DRC) and S Pass sub-DRC over 2020 and 2021 to push businesses to become more manpower-lean and improve job quality. As a result, local PMET employment, as the Minister has shared, has risen. The PMET share of local employment rose from 54% in 2015 to 57% in 2018. Citizen unemployment is 3% in 2018 and has averaged 3.1% since 2015. We have also seen growth in median income at 3.8% per annum since 2015, which is higher than the 3.3% in the preceding three years.

So, I think it is important that as we look at these outcomes, while we talk about headline outcomes, it is also the individual work that we do on the ground, like the Adapt and Grow where we manage, support and help job-match Singaporeans to all these new jobs. These are also important aspects in which all these things play a role on how we upgrade our workers, how we invest in them, how we put in place infrastructure to ensure that our workers are trained to sufficiently perform in these jobs. It is this combination of small efforts that we have on the ground that contributes to the overall outcomes.

To the Member's question on how to keep the playing field fair, Sir, we also take a firm stand against employers that discriminate against Singaporeans. Just last week, the Minister for Manpower announced plans to update the Fair Consideration Framework and businesses that deliberately exclude qualified Singaporean job seekers will suffer stiffer penalties.

But Members will have to wait, unfortunately, because the Minister will announce more details next week. I think it is important that when it comes to job growth, we remind ourselves that we are squarely focused on Singaporeans. But we must not be blind to the needs of businesses as well and how good jobs are created today. So, I hope that Members in this House, too, will agree that we all need to be honest with our people that the competition for jobs and for investments is out there; it is international. We want to secure the best outcomes for Singaporeans by not shutting out foreigners but by giving our people the best available support to develop themselves and ensure that businesses practise fair employment and give Singaporeans a fair chance.

Mr Deputy Speaker, I just have four supplementary questions for Minister Chan. Firstly, on Total Factor Productivity (TFP), does MTI monitor the outliers of TFP – those countries which are performing above the OECD average on TFP – to look at patterns that we might possibly be able to learn from? For example, there is a fair bit of academic evidence – not conclusively, of course – to suggest possibly that the R&D share of GDP could actually be an indicator of TFP growth and high TFP contribution. Is that something that MTI looks at – the outliers of TFP and what we could learn from them?

Secondly, in terms of the health of the economy, which the Minister spoke about, what is MTI's sense looking at forward economic indicators, such as PMI, confidence indicators, the totality of forward-looking indicators in terms of whether the economic growth is going to improve or actually stagnate or decrease in the first quarter of this year, looking at the forward-looking indicators that we have?

Thirdly, the Minister also spoke about PMETs and I think one problem that many Members of the House do come across in our work is this phenomenon of under-employment of PMETs who lose their jobs for whatever reason in their 40s or 50s and end up taking a job at a substantially lower pay which may or may not fully utilise the qualifications they have. Would the Minister consider looking into creating an under-unemployment indicator to measure how we are doing in terms of under-employment? There is currently a time-based under-employment indicator, but that just measures part-time work. Will some thought be given to a measure of under-employment in terms of pay and qualifications, so that at least we know how well we are doing on this front, going forward, given that this may be a structural issue that Singapore and other economies face as well?

Lastly, the Minister spoke about youth unemployment. What is the Minister's sense of how we are trending in terms of the time taken for our youth who come out of Universities, Polytechnics, ITEs on the time that they take to find permanent employment, as opposed to contract employment, as opposed to internships? Anecdotally, we do hear that there are some challenges there. For example, one resident I encountered said that his daughter, who graduated from one of our Autonomous Universities six months ago, is still looking for a job. Of course, that is just one data point, but what is the trend that the Minister sees on this front, going forward?

Mr Deputy Speaker, Sir, if you do not mind, maybe let me complete the answers for Mr Patrick Tay's question, and then, I will go on to the four supplementary questions from the Member Mr Leon Perera.

Mr Patrick Tay asked whether the economic agencies will put Singaporeans front and centre in our search for investment and the creation of quality jobs. The answer is Y-E-S, in capital letters. Yes, we do that. We have always done, we are doing that and we will continue to do that. Yes.

Let me just share a bit about the work of EDB, ESG and so forth.

People have asked me, "Why do we not go and take all the investments that are queuing up at our doors?" And that is a simple way to do so. But for every investment that we take into Singapore today, we not only consider the land constraints, the carbon constraints, the energy usage and all that kind of things but, most importantly, as the Member has said, we ask ourselves – is this going to create a good job for Singaporeans? Can our Singaporeans take on this job? If not now, if not immediately, can it be in the near future? If not this generation, can it be the next generation, in the fastest possible time? And we have always abided by that principle. Because what is the point of creating the jobs in Singapore if Singaporeans do not have the chance of ever doing it? What is the point of having a good job in Singapore if Singaporeans never have a chance to do it? But how long will it take? It depends.

Edwards Lifesciences, making heart valves. When they wanted to make heart valves, they needed seamstresses. We do not have many seamstresses in Singapore anymore. We went out to search for many homemakers who at least still know how to sew. Train them. Heart valve is not a joke. Each one is $20,000 to $30,000, with high quality control. So, we look at the job and see whether Singaporeans can do it.

I will give Members another example on the other side of the spectrum. ExxonMobil and Shell, they have been in Singapore for decades. Today, we are very proud, the Heads of ExxonMobil and Shell operations in Singapore are both Singaporeans. But they did not get to the top job to head the ExxonMobil and Shell operations in Singapore in one step. Mr Gan Seow Kee and Ms Goh Swee Chen went around the world, took on various appointments in ExxonMobil and Shell, acquired the skills and experience and, today, these top jobs are helmed by Singaporeans. We are very proud of them.

But we never feared, because when ExxonMobil and Shell first came to Singapore, we were far away from taking any of those top jobs. But today, we have people there. So, that is my assurance to Mr Patrick Tay and all the brothers and sisters in the Labour Movement. You have an ex-Secretary General as Minister for Trade and Industry now.

To the four questions that Mr Leon Perera asked, first, outliers. Indeed, we look at all the outliers. We look at everyone that does better than us and ask ourselves: why are they doing better than us? But I want to caution against reading too much into some of the statistical anomalies. Because, statistically, the TFP is a residual, after you take away the capital and the labour inputs. In fact, as an example, during the Global Financial Crisis, when we rebounded from the Global Financial Crisis, that particular year, our TFP was over 9%. It cannot be accounted for by all the labour and input factors. It is probably accounted for, largely, by the growth momentum and economies of scale, not even just by R&D and so forth.

But we are highly cognisant of the fact that, going forward, for us to improve our productivity, we need to emphasise much more on research and development, and not just research and development but the translation of the outcomes of research and development into commercial enterprises. And we are going to do that. That is why I talked about, just now, the revamping of our business models, internationalisation and so forth. All these will add up to strengthen our Total Factor Productivity beyond a residual of what can be accounted for by capital and labour inputs. So, that is the answer to the first question.

The second question: do we look at forward indicators? Of course. MTI looks at all sorts of indicators and, definitely, forward indicators. But having said that, the Member asked what is the outlook for the economy this year. We can take a leaf from the economic performance last year. How did we avoid a recession last year? Last year, a large part of our economy was actually under the water. The downturn in the global electronics cycle has hit our Semiconductor and Electronics sectors. The structural and cyclical factors have also pulled down our performance in the Retail sector.

On the other hand, there are three sectors, three shining examples holding up the economy – Banking and Finance, Professional Services, ICT. By design – this is a design feature of our economy – we have diversified our economy. And because we have diversified our economy, we have avoided the extremes of either recession or very sharp ups and very sharp downs. That is how we have to continue to navigate carefully. Diversification gives us resilience but diversification also comes with a cost. When the global electronics cycle goes up, if we have just depended on the global electronics cycle, we might get a 20% growth in that sector. But that is not sustainable. So, we have diversified our economy as we matured over the years and, today, our performance is much more stable, providing a stable platform for us to continue to invest to create good jobs for Singaporeans tomorrow. That is the answer to the second question.

To the third question, let me amplify what I have just said. We spent 20 years of our life preparing for the first job. We spent 20 years of training and education preparing every Singaporean child for the first job. But let us ask ourselves, how much do we invest in the next 40, 50 years for the subsequent second, third, fourth, fifth job? This is a challenge which the whole world is waking up to, but not the whole world has the means and the organisation to tackle this. We will announce more plans to tackle this in the Budget.

We know that people in their 40s and 50s, including those in the ICT sector, they need a skills top-up, they need a refresh. In fact, when I was in Switzerland some years back as the NTUC Secretary-General, I learned one thing from the Swiss. They never plan to top up their skills at 55 and 60 years old to extend the career lifespan of their people. They told me it is too late. The correct approach is that every 10 years or so, if we can afford it and have the organisation, we should top up the skills of each and every one of our workers. This is the same thing I challenged the Public Service to do. Even if someone wants to join the Public Service for 50 years, we cannot assume that the same skill sets will be necessary and sufficient for the 50 years.

Continuous training must be in our DNA and then we can get into lifelong employability and not lifelong employment. So, we will do more because we understand and I would say that we would start with the 40s and 50s but, if we have the chance, to extend it to even the 30s, as time comes.

Youth unemployment. It is a theoretical argument as to how to calculate under-employment. But what is even most important is not how we calculate under-employment. What is most important to get people out of under-employment is to grow the job opportunities for them to go on and take on better-paying jobs. This is why, in MTI's strategy, we are spending so much effort to strengthen the mid-sized companies, so that they can create more and better-paying jobs, more opportunities, for the rest of Singaporeans who are not in such high-paying jobs to get into those jobs.

So, yes, we will look at how to get the statistics but I will go beyond what the Member suggested. And, in fact, we have done that. We will go beyond to make sure that we create those good jobs to pull Singaporeans out from the lower productivity sectors, so that they can enjoy the good wage growth that is commensurate with our economic growth. That is our promise to all Singaporeans.

Last question, Mr Pritam Singh.

Thank you, Mr Deputy Speaker. Sir, my original Parliamentary Question really was a question seeking data. The Minister for Trade and Industry spoke of the local PMET share going up from 54% to 57%. My question really is, can we expect in future, either by way of Parliamentary Question or by the Government on its own accord, dividing that into Singaporeans and PRs? If the Government's approach is, "No, we are not going to provide that data", can the Minister please share that detail with us here? Because it is pointless for us to keep asking for the data if the Government is not going to provide it.

Mr Deputy Speaker, Sir, I do not think we have anything to hide. We have just shared the data.

Mr Pritam Singh.

Sir, if that is the case, then for the 60,000 local jobs, how many were for Singaporeans and how many went to PRs?

We can get the Member the numbers but let me say this. What is the point behind the questions? First, has local unemployment increased with all these efforts? The answer is a resounding no. Our people are getting good jobs. Are our wages going up? Yes, and it is faster than many other countries. Those are the proof points to show that we are doing right by Singaporeans. I am always very cautious about this constant divide – Singaporeans versus PRs. The insinuation seems to be that somehow Singaporeans are not benefiting. I have just spent the last half an hour explaining and sharing with this House how we are working hard to make sure that Singaporeans do so.

It is not the data. It is the point of the question. And I would like to remind this House, the ultimate competition is not pitting Singaporeans against the PRs; it is about Team Singapore comprising Singaporeans and PRs, and even the foreign workforce complementing, competing to give Singaporeans the best chance possible.

How many of the increased jobs go to Singaporeans? Enough for us to keep the unemployment rate at the level which many countries would say it is fiction. And that is how we have done it.

5 Mr Zainal Sapari asked the Minister for Transport given the ban on users of personal mobility devices from all footpaths, whether there are plans to distinguish the different types of public paths so as to avoid confusion.

6 Mr Zainal Sapari asked the Minister for Transport whether there are plans to regulate the usage of electric bicycles on the roads in terms of age, insurance coverage, traffic rules and others.

7 Mr Ang Wei Neng asked the Minister for Transport (a) how many people have been warned for riding e-scooter on footpaths since 5 November 2019; (b) how many e-scooter riders have been summoned for speeding and other offences since 5 November 2019; (c) how many e-scooter riders have signed up for the trade-in grant to convert to e-bicycles or other personal mobility devices; and (d) how many more kilometres of cycling paths will be built by end-2020.

8 Mr Dennis Tan Lip Fong asked the Minister for Transport whether the Government has committed additional resources to police the ban of PMDs from footpaths from January 2020 such that the public will not witness the same level of day-to-day flagrant breaches of law by errant e-scooter users as seen prior to the announcement of the ban.

9 Mr Dennis Tan Lip Fong asked the Minister for Transport in light of some food delivery riders switching from e-scooters to electric bikes (a) whether the Government is putting in place additional measures to ensure that the increase in electric bike riders will not lead to more accidents or road traffic or active mobility offences; and (b) whether such riders will be given sufficient training sessions to encourage all to ride responsibly and considerately.

Mr Deputy Speaker, may I have your permission to take Question Nos 5 to 9 together?

Yes, please proceed.

The decision to ban e-scooters on footpaths is to restore footpath safety. Since the implementation of the ban on 5 November 2019, the number of accidents involving e-scooters on public paths has dropped by about 30%. As we step up enforcement, we can expect further reduction in such accidents. From a recent telephone poll commissioned by REACH, two out of three respondents agreed that safety on footpaths had improved since the ban. I believe Members of the House would have received similar feedback from friends and residents.

Till 31 December 2019, LTA had issued about 6,000 advisories to remind riders on the new regulations and more than 300 summons against reckless riders.

Since 1 January this year, LTA has imposed strict enforcement. Those caught riding an e-scooter on footpaths are liable for fines up to $2,000 and/or face imprisonment of up to three months, if convicted. LTA has expanded its team of active mobility enforcement officers, including Auxiliary Police Officers, from 100 to 182 officers. Recruitment efforts are underway and LTA targets to enlarge the team to 200 soon. LTA has also deployed technology trials using roving CCTVs to complement existing enforcement efforts. As of 5 January this year, 27 errant riders have been caught.

We are aware that the ban of e-scooters on footpaths has an immediate impact on the livelihoods of some riders. This is why we launched the Transition Assistance Package. This includes the e-scooter trade-in grant (eTG), to help food delivery riders switch to alternative devices. There are about 6,120 food delivery riders who have done at least one delivery over the 30-day period prior to the ban and are therefore eligible for the grant. Amongst them, about 34%, or 2,100 do four deliveries or more per day. As of 31 December 2019, LTA has received 3,550 applications from eligible riders and approved all applications after accounting for duplicates. Twenty percent of these applicants have already transited to alternative devices. To facilitate the transition, food delivery companies have offered free bicycle rentals to the riders who are waiting for their new devices.

Other partners have also leaned forward. Workforce Singapore and NTUC’s e2i are providing career placement support for riders who wish to transit to a different job. MSF and People’s Association have offered temporary financial assistance to affected riders in need.

As some e-scooter users may switch to using power-assisted bicycles (PABs), NTUC launched a fully subsidised safe riding programme to support food delivery riders in making such transition. As of end-December 2019, 130 riders have completed the NTUC programme. This is useful as on-road accidents involving PABs are not uncommon. From January to November last year, there were 21 such accidents. LTA is working with Traffic Police on greater public education and awareness efforts.

We are updating the regulatory regime for PABs. All PAB riders must comply with road traffic regulations such as travelling in the direction of traffic, wearing helmets and riding safely. Their PABs need to be registered and only LTA-approved models are allowed to be used in Singapore. These LTA-approved models are pedal-assisted PABs and without throttles, where gradual motor assistance is provided as the user pedals, but is gradually reduced and cut off as the PAB reaches a speed of 25 km/h. In addition, they have to comply with the EN15194 device safety standard for electrical and fire safety.

Since November 2019, we have caught 70 non-compliant PABs. Non-compliant PABs caught will be seized and forfeited. The offenders can face a maximum fine of $5,000 and/or imprisonment of three months.

Over the last few years, we have strengthened our active mobility regulatory regime, including mandating e-scooter registration. The Active Mobility Advisory Panel (AMAP) has been a great help. The Government has accepted the latest set of AMAP recommendations. I will shortly introduce a bill to amend the Active Mobility Act to strengthen the regulatory regime. This includes setting minimum riding ages, requiring third-party liability insurance coverage and introducing mandatory theory tests.

At the same time, we are upgrading the cycling infrastructure. First, we have implemented improved markings on footpaths to clearly distinguish them from cycling paths. There will be logos indicating "No PMD" at selected intersections of footpaths and cycling paths to indicate that e-scooters will not be allowed on footpaths.

Second, we are stepping up the construction of cycling paths to improve first-and-last-mile connectivity within towns. We had previously announced a plan to extend the network of cycling paths from 440 km to 750 km by 2025 and 1,300 km by 2030. We will accelerate the pace of implementation by a few years. We are discussing with HDB, NParks and the local Town Councils on a practical timeline. We are also discussing with our MOF colleagues to secure additional funding for this purpose. Our preliminary estimate is that we may have to spend more than $1 billion to complete the island-wide cycling path network. We will provide more details at the Committee of Supply.

Finally, Mr Deputy Speaker, let me take this opportunity to thank Members of this House for their advice and many suggestions. I look forward to their continued support.

Thank you, Deputy Speaker, Sir, and thank you, Senior Minister of State, for the comprehensive reply. I just want to ask a few supplementary questions. He mentioned about 3,000, if I can remember correctly, that have opted for the scheme to convert their e-scooters to other PMDs. Can I ask how many of these are for e-bicycles and others? The second supplementary question is about the bicycle lane that he had announced. He has not announced how many more kilometres; he has just announced that it is being accelerated. But what are the planned parameters? Are you going to increase another 100 km by the end of this year or is this something that is not sure as yet?

I thank Mr Ang for those supplementary questions. For the first one, out of those who have applied for the eTG – which is about 3,600 applicants – about 74% of them opted for e-bikes, about 25% opted for bicycles, and less than 1% for personal mobility aids. As to the exact number of kilometres of cycling path that we are going to develop by the end of this year, like I have mentioned, we will share more of these details during the Committee of Supply debate.

10 Ms Anthea Ong asked the Minister for Communications and Information (a) how is the public interest threshold of online statements of falsehoods determined and measured under the Protection From Online Falsehoods and Manipulation Act (POFMA); (b) whether the Ministry will consider recommending that Ministers state which public interest criteria under section 7(1b) of POFMA are met and how so, when requesting for a direction to be issued; and (c) whether the Ministry will consider creating a central listing of all issued directions on the POFMA website.

11 Ms Anthea Ong asked the Minister for Communications and Information (a) what is the Ministry's position on perceptions of a partisan political bias over the recent applications of POFMA and how this may impact public trust in objectivity and independence of the Government's instruments of combatting online falsehoods; and (b) what steps are being taken to maintain public trust in light of such perceptions, especially given the critical role of public trust in buttressing society against coordinated, malicious fake news.

Mr Deputy Speaker, Sir, may I have your consent to take Question Nos 10 and 11 together?

Yes, please proceed.

Thank you. In recent weeks, four Government Ministries have issued Correction Directions under POFMA to address false statements of fact made by various parties about issues of fundamental importance to Singaporeans. The falsehoods allege that the Government mismanaged public funds, abused police powers and discriminated against Singaporean citizens in favour of foreigners.

Failing to deal decisively with such falsehoods will erode and even undermine public trust in our institutions, with serious consequences for our democracy. The Government and indeed Members of this House have a duty to ensure that our citizens are not misled or misinformed by such falsehoods, and that is precisely why POFMA was enacted.

In all of the POFMA cases so far, Correction Directions have been issued. These Directions require that the facts be placed alongside the original posts so that Singaporeans can read both versions and draw their own conclusions.

Would the Member not agree that the best way to maintain public trust in Government and our institutions is to juxtapose the truth with the falsehood, and allow our citizens to decide what the facts are? And would the Member also not agree that the law should apply even if those who have put out the falsehoods thus far happen to have political affiliations?

Furthermore, POFMA requires that the Minister provide the basis in accordance with existing laws for her or his determination that a statement is a falsehood. In the recent cases, the falsehoods and the reasons for using POFMA were made clear in the clarifications that were issued by the respective Ministries. If the recipient of the POFMA Direction disputes the facts, quick and inexpensive recourse to the Courts is available. These provisions ensure transparency and accountability in the POFMA process.

Finally, the Nominated Member also asked if there are plans to create a central listing of POFMA Directions. All Government Corrections issued under POFMA are already compiled in a section of the Government’s fact-checking website, "Factually". In addition, the POFMA Office website has a list of the press releases issued together with the POFMA Directions.

Thank you, Mr Deputy Speaker. I thank the Minister for the very considered responses. The Minister had assured the House and the public in May last year when we were debating on the POFMA Bill that the Bill will not be far-reaching using the example of the 39 take-down orders under the Broadcasting Act since 1996. I think he mentioned that it was an average of one a year. POFMA has been used five times within a month, and just two months after coming into effect. Will the Minister please clarify if this considered far-reaching or not?

The second question I have is: the Minister has clarified that POFMA has a central listing on its website. But could I ask the Minister to clarify if the POFMA Office will provide a full description of the public interest rationale each time that POFMA is used according to section 7(1b) of POFMA. There are actually six specific public interest thresholds that are listed there in the Act.

Last but not least, could I ask the Minister: we all agree that we are seeing an alarming rise of fake news. Can the Minister enlighten us on the number of fake news that are monitored and flagged by the POFMA Office and the various Ministries every month? I know that Thailand's anti-fake news centre talked about 8,000 fake news that were monitored and flagged just within the month of November 2019 alone. Can the Minister assure the House and Singaporeans that the Ministries and the POFMA Office are also monitoring and flagging news to use POFMA on, whether non-partisan or partisan? For example, the fake NUS Facebook group ran for a while without being "POFMA-ed" until Facebook, itself, took it down.

Mr Deputy Speaker, the Member asked several questions. Let me try and deal with them. First, is the use of the legislation appropriate, measured and fit for purpose? And I think the question is yes. I do not think that you should go by the sheer number of times that it has been used in this period. I think it is a confluence of factors that has led to that. But if you look at the facts of the matter, it is very simple.

In each and every case, the Minister, advised by his officials, has had to ascertain that there was a falsehood in accordance with our existing law. Second, he or she has had to be satisfied that there is a public interest requirement. Third, they have explained clearly – each Ministry in each of its Directions, it has issued a clear clarification as to what the falsehood is and why POFMA is being used, and that includes, therefore, a broad explanation as to what is the public interest consideration, which is encompassed in there. And thereafter, avenues of appeal are available to the Minister, as indeed some have chosen to exercise and the recourse to Courts is also available.

So, if you look at it in its totality, I think there is proportionality, there is fit for purpose and we have taken actions according to the situation as warranted.

The Member has asked about the public interest rationale according to section 7. The fact of the matter is, and if you read the section carefully, it starts by saying "without detracting from the generality” of the point of “public interest", and then proceeds to list a few examples. Those are intended to be illustrative but they are not exhaustive. What that means therefore is when the Act is exercised, the clarification and the explanation given in that clarification notice by the Minister will have the evidence to support the public interest case. [Please refer to "Clarification by Minister for Communications and Information", Official Report, 6 January 2020, Vol 94, Issue No 115, Correction by Written Statement section.]

I think the final point is on tracking and numbers. We do track but I do not think we have the resources to go around policing this in great degree. But I would add, if indeed the numbers are anything like what the Member has cited for Thailand, if it runs into thousands, then four or five POFMA cases is, I think, quite proportional and not at all far-reaching.

Thank you, Mr Deputy Speaker. I thank the Minister. I just have two supplementary questions. The first one is: does the identity of the person making the false statement matter for the public interest test, that is independently of other factors? And I would hope that the Minister could make clear that it is virality, the damage that the statement causes that matters and not who says it. Otherwise, I am very worried that it might look as if the Government is setting up speed traps where perhaps Opposition politicians drive but not elsewhere. And that is a real concern, I think.

Second, would the Minister agree that for the falsehoods which are not viral or rapidly damaging – the slow drip problems – could it be more effective to combat these with education and information rather than a Correction Order? And Parliament had agreed that these powers under the POFMA were necessary to quickly correct falsehoods that might turn a spark into a flame. But those powers do not seem as well-suited for educating the public about our financial reserves or about our labour market policy.

Mr Deputy Speaker, I am concerned about the time.

Carry on. I think if you need an extension, the Leader of the House will move the extension. Leader, would you like to move the extension?

Not quite the response I had expected. [Laughter.]

Deputy Speaker, may I seek your consent and the general assent of Members present to move that Question Time at this day's sitting be exempted from the provisions of Standing Order No 22(1) so as to enable Question for Oral Answer Number 12 to be completed.

I give my consent. Does the Leader of the House have the general assent of hon Members present to move?

[(proc text) Hon Members indicated assent. (proc text)]

Leader, please proceed.

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

[(proc text) Resolved, "That notwithstanding Standing Order 22(1), Questions for Oral Answers set down on the Order Paper for today be taken until the completion of Question No 12 at this day's sitting." (proc text)]

The following questions were moved earlier —

Ms Anthea Ong asked the Minister for Communications and Information (a) how is the public interest threshold of online statements of falsehoods determined and measured under the Protection From Online Falsehoods and Manipulation Act (POFMA); (b) whether the Ministry will consider recommending that Ministers state which public interest criteria under section 7(1b) of POFMA are met and how so, when requesting for a direction to be issued; and (c) whether the Ministry will consider creating a central listing of all issued directions on the POFMA website.

Ms Anthea Ong asked the Minister for Communications and Information (a) what is the Ministry's position on perceptions of a partisan political bias over the recent applications of POFMA and how this may impact public trust in objectivity and independence of the Government's instruments of combatting online falsehoods; and (b) what steps are being taken to maintain public trust in light of such perceptions, especially given the critical role of public trust in buttressing society against coordinated, malicious fake news.

Much obliged, Mr Deputy Speaker.

I think the Member had a few questions on first the question was the identity of the person or entity who puts out the falsehood matter. As I have explained very clearly the process, and I think this was widely convassed during the debate on the Second Reading, the focus is on the fact, or falsehood as it were, in accordance, and do we have the existing legislation that backs that assessment and secondly, whether there is a public interest concerned that merits action. That is a judgement made by the Minister, the domain Minister advised by his officials.

Therefore, the answer is, and I think what the Member is alluding to, is the fact that the first few POFMA actions appear to have been issued against individuals who are either politicians or affiliated with political party or political parties. I would say that that is a convergence, some might say unfortunate convergence or coincidence, but also indicate to a certain pattern of communication that exists out there. But whatever the case may be that is the situation today but it does not mean that that is going to be the situation going forward. Because ultimately whether there is a falsehood, there is a public threshold and if so, then what is the appropriate course of action.

The point was also made about falsehoods that are not viral whether we can use alternative mechanisms. I think in talking about, in discussing this matter we have to look by virility, which was one of the points, but remember we also talked about the virulence of the falsehood. And you have to take both into account, because there will be instances where the nature of the falsehood is such that it goes to the core of the credibility and the standing of our institutions and it deserves a response under POFMA. And such a response has the additional impact of ensuring that future such commentary would be guided or advised by this action. So, there is a multiplicty of factors and I think it would be a too blunt to just look at it in terms of one criterion like virility.

Having said that I think the Member's point was do we have alternative mechanisms, and I want to assure him that we continue to be actively involved in the education of our citizens on this matter. In fact, both Ms Anthea Ong and Mr Walter Theseira have raised this point before during the Second Reading. It is an important point that we have an educated, discerning citizenry, we must ensure they are well informed.

I would add that we have also, if Members would have noticed, in some cases issued statements rather than a POFMA direction. And that has also occurred in the last several weeks. So, I think if you look at it in totality, we have to take into account the overall impact and then we have to consider what is the proportionate response and then, be prepared to take it and if it so happens that some of the people involved are politically affiliated, well, that is the consequence of their actions.

I thank the Minister again. In terms of the thousands of fake news that are possibly floating around the Internet – and you have turned my question around to answer my other question which is pretty brilliant, I must say – yes, it does not seem far reaching when you turned it around to say that way. But my question was actually given there are thousands of fake news floating around in the Web, does the POFMA Office monitor and flag the non-partisan news and statements that are made. Because there are so many out there, one of which that came to my mind was the fake NUS group and we did not do anything until Facebook took it down themselves. So, my concern is – and the Minister could be right it could just be a convergence of consequences and circumstances – but to have four or five directions POFMA that so partisan in nature, you would understand why there are really genuine concerns from the ground, especially like I said, there are actually thousands of fake news out there that could also be in the public interest to actually POFMA them.

Mr Deputy Speaker, I did not mean to turn it around. I was merely using the facts that the Member cited to make the case. But having said that I think the key point here is first do we monitor. As I said the resources are limited but yes there is some effort to monitor because we have to ensure that having set out this legislation and its intent, we do follow it through in practice. But in some ways it is no different for the other kinds of activities that we have too. If you take, for example, things to do with online gambling and so on, we try to do some pre-emptive, but we also have to to rely sometimes on reports or inputs coming in and our POFMA Office people combined with several other agencies make the assessment and so on.

So, the answer is yes there is some effort to monitor but, primarily, I think we are looking at those cases which are egregious and those that are egregious will pop up quite naturally and we know what they are and we can deal with it.

The other point was, what was it again? But I was not sure what you were getting to.

There are thousands of fake news out there that are non-partisan but actually are in the public interest to be POFMA-ed.

That is an interesting point because the Member seems to be making the argument that, if instead of four against the previous four cases, we now had eight and four were non-partisan, that would look better?

Well, I beg to differ. But I would say that I think basically we monitor. I think if the Member's point is, are we only training our sights on certain types of people or organisations, the answer is no. The Member can actually see that from the kind of actions that are being taken. And I think, as I have said and I am prepared to re-state this, which is that our response will be targeted and proportional. I think we have to look at it in the context of all that we have described and we have to take appropriate action.

12 Ms Sylvia Lim asked the Minister for Communications and Information what is the rationale for the obligations placed on digital advertising intermediaries and internet intermediaries under the Code of Practice for Transparency of Online Political Advertisements issued by the POFMA Office on 2 October 2019.

Mr Deputy Speaker, the Protection from Online Falsehoods and Manipulation Act (POFMA) Code of Practice for Transparency of Online Political Advertisements sets out measures that prescribed intermediaries, such as social media platforms, must implement to ensure the transparency of online political advertising.

The Code requires these prescribed intermediaries to ensure that online political advertisements carry disclosure notices to inform readers of the person or organisation that had placed or paid for the political advertisements. Intermediaries are also required to put in place other accountability measures, such as the maintenance of a database of online political advertisements, and the provision of channels for members of the public to report advertisements that are undisclosed.

In drafting the Code, the POFMA Office held consultations with the intermediaries and took reference from other jurisdictions, including the EU Code of Practice on Disinformation, and the transparency measures imposed on political advertising in France and Canada.

Today, digital advertising tools are used pervasively on social media platforms. Moreover, digital advertisements can be micro-targeted at specific groups using a variety of indicators. We believe that Singaporeans should know, and indeed that our citizens would want to know, who is behind the political advertisements that they see online.

The Code of Practice for Transparency of Online Political Advertisements will enhance the transparency of online political advertising, hold advertisers accountable and enable our citizens to make informed decisions on the information presented to them through political advertisements.

Thank you, Mr Deputy Speaker. A few Supplementary Questions for the Minister. First, let me clarify that I have no issue with public disclosure of the originator of any online advertisements and so I agree totally that the public deserves to know who is behind the advertisement.

My concerns are a few. One, the Code of Practice is issued under POFMA which presumably means that the concern is fake news but would the Minister confirm really that this Code of Practice will apply to all online advertisements whether or not the contents contain any news alleged to be fake or not. That is the first question.

The second question, if you look at the Code of Practice at 6(c), this is the part where the companies have to maintain records for viewing by the POFMA Office. That means not for public viewing but by the POFMA Office and the details of the information include copy of the advertisement, name of the originator, the amount paid for the advertisement, description of the advertisements' intended target audience or viewers reached, number of views and so on. So, my question is if the advertisement has nothing fake or alleged to be fake in it, what is the interest of the POFMA Office to know these things.

Mr Deputy Speaker, I thank the Member for agreeing that disclosure is important. I think that is a good starting point. The question is then whether this disclosure requirement applies to all advertisements because it is a code under the POFMA Act and the answer is yes, it does. And I think if the Member read the POFMA Bill, she would know that there is an over-arching coverage to the Bill which includes amongst other things a need to have disclosure and, or requiring disclosure in advertising because this is an important part of the way communication is conducted today. In the event that there is falsehood in the advertisement, POFMA can be potentially be applied as well.

Then, I think the Member asked about under 6(c), there is a list of details that are required and why the POFMA Office needs these. This is a requirement imposed on the intermediaries to keep the information. It does not mean that POFMA Office has to have access to this information but the information must be available so that in the event that action is required, the relevant information is available.

I would add that the Member might want to look at practices, for example, by Facebook which today in fact has the same kind of disclosure requirement and they make them publicly available and they have a register on it, including almost everything that the Member just described. So, our objective is to ensure the information is captured because if you do not spell out clearly, and then, if you want it after the fact it may not be available which may then thwart the intent of the legislation.

Order. End of question time.

Mr Deputy Speaker, may I ask a final Supplementary Question?

The last one. One. Go ahead.

Okay, one. I would like to ask the Minister despite his allusion to the fact that the POFMA Office will only go back if there is a suspected falsehood in the advertisement, the fact is that there is nothing in the Code that stops the POFMA Office from going back at any time to look at their record, even if the advertisement has no problems. And in that sense it is a good way to discover the election strategy of the political opponents of the ruling party.

Mr Deputy Speaker, the Member has a very active imagination, and I compliment her on it. But the fact of the matter is, if you think about today's, let us just take it in practical terms. Today, if you want to take out political advertising through, let us say, the English social media platforms. Google is not taking them; Twitter is not taking them; and it is a global policy not to take political ads; and Facebook is making full disclosure – more than the disclosure that we require through this Code.

So, I am not sure how this affords us greater intelligence. By the way, the intelligence will be available through Facebook's actions, for example. It is available for all to see. So, I think the Member might be barking up the wrong tree on this.

Order. End of Question Time. Introduction of Government Bills. Minister for Transport.

[Pursuant to Standing Order No 22(3), Written Answers to Question Nos 13-49 & 51-79 on the Order Paper are reproduced in the Appendix. Question No 50 has been postponed to the next available sitting of Parliament.]

[(proc text) "to amend the Merchant Shipping (Maritime Labour Convention) Act 2014 (Act 6 of 2014)", (proc text)]

[(proc text) presented by the Senior Minister of State for Transport (Dr Lam Pin Min) on behalf of the Minister for Transport; read the First time; to be read a Second time on the next available Sitting of Parliament, and to be printed. (proc text)]

[(proc text) "with respect to shared mobility services and to make consequential and related amendments to the Land Transport Authority of Singapore Act (Chapter 158A of the 1996 Revised Edition), the Parking Places Act (Chapter 214 of the 2014 Revised Edition) and the Insolvency, Restructuring and Dissolution Act 2018 (No. 40 of 2018)", (proc text)]

[(proc text) presented by the Senior Minister of State for Transport (Dr Lam Pin Min) on behalf of the Minister for Transport; read the First time; to be read a Second time on the next available Sitting of Parliament, and to be printed. (proc text)]

[(proc text) "to amend the Active Mobility Act 2017 (Act 3 of 2017) to deal with personal mobility devices and other vehicles in relation to public paths and to make related amendments to the Road Traffic Act (Chapter 276 of the 2004 Revised Edition)", (proc text)]

[(proc text) presented by the Senior Minister of State for Transport (Dr Lam Pin Min) on behalf of the Minister for Transport; read the First time; to be read a Second time on the next available Sitting of Parliament, and to be printed. (proc text)]

[(proc text) "to amend the Geographical Indications Act 2014 (Act 19 of 2014)", (proc text)]

[(proc text) presented by the Senior Minister of State for Law (Mr Edwin Tong Chun Fai) on behalf of the Minister for Law; read the First time; to be read a Second time on the next available Sitting of Parliament, and to be printed. (proc text)]

[(proc text) "to give effect to the United Nations Convention on International Settlement Agreements Resulting from Mediation, also known as the Singapore Convention on Mediation, opened for signature on 7 August 2019 in Singapore, and to make related amendments to certain other Acts", (proc text)]

[(proc text) presented by the Senior Minister of State for Law (Mr Edwin Tong Chun Fai) on behalf of the Minister for Law; read the First time; to be read a Second time on the next available Sitting of Parliament, and to be printed. (proc text)]

[(proc text) "to amend the Hazardous Waste (Control of Export, Import and Transit) Act (Chapter 122A of the 1998 Revised Edition), and to make consequential amendments to the Insolvency, Restructuring and Dissolution Act 2018 (Act 40 of 2018)", (proc text)]

[(proc text) presented by the Senior Minister of State for the Environment and Water Resources (Dr Amy Khor Lean Suan) on behalf of the Minister for the Environment and Water Resources; read the First time; to be read a Second time on the next available Sitting of Parliament, and to be printed. (proc text)]

[(proc text) "to amend the National Environment Agency Act (Chapter 195 of the 2003 Revised Edition)", (proc text)]

[(proc text) presented by the Senior Minister of State for the Environment and Water Resources (Dr Amy Khor Lean Suan) on behalf of the Minister for the Environment and Water Resources; read the First time; to be read a Second time on the next available Sitting of Parliament, and to be printed. (proc text)]

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

Mr Speaker, on behalf of the Minister for Law, I beg to move, "That the Bill be now read a Second time".

This Bill contains a number of amendments to several Acts. Most of the amendments are minor and technical in nature. One amendment, which I will seek to introduce at the Committee stage, is for the purpose of amending un-commenced legislation so that common law developments are not abolished once the legislation is brought into force. Let me take Members through the amendments.

First, Clause 2 of the Bill amends section 55(7)(b) of the Building Maintenance and Strata Management Act, or BMSMA for short, to correct a typographical error.

The existing section 55(7)(b) of the BMSMA provides that an individual cannot be appointed as a treasurer if he is already the chairperson or secretary; and the re-appointment would result in the individual holding office as a treasurer for three consecutive terms.

The two limbs of section 55(7)(b) should be disjunctive, and not conjunctive. Clause 2 of the Bill corrects this typographical error, by substituting the word "and " between the two limbs with the word "or ".

Next, let me touch on the amendment to the Control of Plants Act.

The existing definition of "prohibited pesticide" in section 2 of the Act refers to the Tenth Schedule to the Food Regulations. However, the Food Regulations have since been revised, and the previous Tenth Schedule is now the Ninth Schedule.

Clause 3 of the Bill introduces an amendment to the Control of Plants Act to update the existing reference from the Tenth Schedule to the Ninth Schedule.

Third, let me come to the amendments to the National Arts Council Act and the Singapore Sports Council Act.

Clauses 4 and 7 of the Bill amend each respective Act such that it will no longer be mandatory to appoint a Deputy Chairman for the National Arts Council or the Singapore Sports Council. Instead, the Minister will have the flexibility to appoint a Deputy Chairman in appropriate situations. This flexibility will allow MCCY to better address the needs of these two statutory boards. A savings provision has been included to preserve the appointment of existing members and office-holders of the NAC and the SSC.

The Singapore Sports Council Act will also be amended to provide that the Chief Executive Officer of the Singapore Sports Council may be appointed as a member of the Council, in an ex officio capacity.

Next, let me turn to the amendments to the Penal Code.

Clause 5(1) of the Bill rectifies a potential technical drafting gap that could arise once section 8 of the Criminal Law Reform Act 2019, or CLRA for short, comes into force. The amendment is for the sole purpose of removing this potential technical drafting gap, which I will explain to Members.

The existing section 40(2) of the Penal Code allows for the right of private defence to be raised as a defence to non-Penal Code offences. This right of private defence is currently set out in Chapter IV of the Penal Code.

The CLRA moves the provisions relating to the right of private defence to the new Chapter IVA of the Penal Code. Before this move can take effect, a new reference to "Chapter IVA " must be inserted into the existing section 40(2) of the Penal Code as a consequential amendment, to clarify that the provisions relating to the right of private defence will continue to apply for non-Penal Code offences.

This amendment is intended to preserve the status quo under the current Penal Code, so that the right to private defence can be raised as a defence for non-Penal Code offences.

I will also be proposing an amendment to the Bill during Committee stage, to amend section 26D of the Penal Code, which has not yet been brought into force. This amendment will ensure that when section 26D of the Penal Code is brought into force, there will be no change or deviation from the current law on wilful blindness, which was the intention when this House passed the CLRA.

Let me explain this to Members.

Section 26D of the Penal Code was introduced under the CLRA to codify the common law definition of knowledge. Its current form reflects the Penal Code Review Committee’s decision not to provide for the concept of "wilful blindness" as part of section 26D. The Committee had assessed the case law, and especially the Court of Appeal’s decision in 2011 in Nagaenthran a/l K Dharmalingam v Public Prosecutor [2011] 4 SLR 1156, and concluded that "wilful blindness" was simply an evidential tool used to infer that an accused had knowledge. The Committee concluded that there was thus no need to provide for the concept of "wilful blindness" in section 26D.

After the passage of the CLRA, however, the Court of Appeal delivered its decision in Adili Chibuike Ejike v Public Prosecutor [2019] 2 SLR 254. The Court of Appeal held that "wilful blindness" is properly described as a mental state falling short of knowledge but which is legally deemed to be equivalent to knowledge. The Court described this as an "extended conception of wilful blindness", where "it can almost be said" that the accused persons knew the fact in question. This position represents the law today.

Therefore, if section 26D is brought into force as it was originally drafted, this would abolish the "extended conception of wilful blindness" under this case authority. This outcome would be contrary to the policy intention of section 26D, which is to codify the law, rather than to change or narrow the position under the law.

I will therefore be proposing an amendment to section 26D to preserve the position under the current law, which includes the "extended conception of wilful blindness". The amendment does not in any way prejudice accused persons, as it does not expand the common law.

For completeness, Mr Deputy Speaker, I should point out that the Court of Appeal had explained that there are three elements to the "extended conception of wilful blindness", and these are namely: one, the accused must have had a clear, grounded and targeted suspicion of the fact to which he is said to have been wilfully blind; two, there must have been reasonable means of inquiry available to the accused person, which, if taken, would have led him to discovery of the truth, at least in the context of the fact of possession; and three, the accused must have deliberately refused to pursue the reasonable means of inquiry so as to avoid having such negative legal consequences as might arise in connection with his knowing that fact.

The Court of Appeal limited this "extended conception of wilful blindness" to the context of knowledge for the purpose of proving possession under section 18(1) of the Misuse of Drugs Act in this case, and recognised that it may be different with respect to knowledge of the nature of the drug under section 18(2) of the Misuse of Drugs Act.

However, Members would note that the proposed amendment to section 26D does not set out all these three elements. This is to allow for further development of the doctrine of "wilful blindness" by the common law. This is important because the Court of Appeal had suggested that the doctrine might apply slightly differently in practice, depending on what specific fact an accused is said to have been wilfully blind towards.

Next, let me turn to the Singapore Corporation of Rehabilitative Enterprises Act. Clause 6 of the Bill amends the Singapore Corporation of Rehabilitative Enterprises Act, or SCORE Act for short, such that SCORE’s financial year will run from 1st April of each year to 31st March of the following year. This will align SCORE’s financial year with that of the Government and other MHA agencies.

Finally, as part of SCORE’s rebranding exercise, an amendment will be introduced to the SCORE Act to allow SCORE to perform its functions or carry out its duties under one or more business names specified by the Minister for Home Affairs by notification in the Gazette.

SCORE’s new name will be announced once the rebranding exercise is complete.

Sir, in conclusion, this Bill amends the six Acts in the manner that I have just described, including the amendment at the Committee stage, for the reasons I have outlined. Sir, I beg to move.

[(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. – [Mr Edwin Tong Chun Fai]. (proc text)]

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

[Deputy Speaker (Mr Charles Chong) in the Chair]

[(proc text) Clauses 1 to 4 inclusive ordered to stand part of the Bill. (proc text)]

[(proc text) Clause 5 – (proc text)]

Clause 5. Senior Minister of State for Law.

Mr Deputy Speaker, there are two amendments, as I have outlined earlier, to clause 5, as indicated in the Order Paper Supplement. As the amendments are related, may I seek your permission to move them together?

Yes, please proceed.

Mr Deputy Speaker, I beg to move that the amendments* standing in the name of the Minister for Law, as indicated in the Order Paper Supplement, on the grounds on which I have outlined earlier in my opening speech.

[(proc text) *The amendments read as follows: (proc text)]

[(proc text) In page 4, line 17: after "5.", to insert " —

[(proc text) In page 4, after line 18: to insert — (proc text)]

[(proc text) "(2) The Penal Code as amended by the Criminal Law Reform Act 2019 (Act 15 of 2019) is amended by inserting, immediately after the word 'intentionally' in section 26D(3), the words 'or with wilful blindness'.". (proc text)]

[(proc text) Amendments agreed to. (proc text)]

[(proc text) Clause 5, as amended, ordered to stand part of the Bill. (proc text)]

[(proc text) Clauses 6 and 7 inclusive ordered to stand part of the Bill. (proc text)]

[(proc text) Bill reported with amendments; read a Third time and passed. (proc text)]

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

Mr Deputy Speaker, on behalf of the Senior Minister and Minister-in-charge of MAS, I beg to move, "That the Bill be now read a Second time".

Mr Deputy Speaker, in a constantly changing environment, our legislation needs to be reviewed regularly to keep pace with changes. The Monetary Authority of Singapore (MAS) therefore reviews the Banking Act from time to time to ensure that the regulatory framework for banks continues to foster safety and soundness in Singapore's banking system while making sure that requirements are not unduly burdensome.

In this round of amendments, MAS is changing two long-standing regulatory practices which have lost relevance over time.

First, the Bill will remove the requirement for banks to segregate their accounting books into the Domestic Banking Unit (DBU) and the Asian Currency Unit (ACU). This DBU-ACU divide has traditionally been used to distinguish the domestic and offshore operations of banks and merchant banks.

The second change, the Bill will rationalise and consolidate the regulation of merchant banks under the Banking Act and subject them to a licensing regime, under which they will be licensed as a class of financial institutions distinct from banks.

The Bill will also makes other amendments to enhance MAS' regulatory and supervisory powers to tackle new and emerging risks. These include expanding the grounds for revoking bank licences, and introducing new powers for MAS to impose requirements on outsourcing arrangements of banks and merchant banks.

I will now go through the main amendments in the Bill.

First, the removal of DBU-ACU divide. MAS has engaged the industry extensively on the proposed amendments and has taken into consideration their feedback on the implementation timeline.

The divide has existed since 1968. DBU and ACU have their origins in the creation of the Asian Dollar Market in Singapore. Like the Euro market located in London, the Asian Dollar Market served as a major source of funding for investment, trading and risk-management needs for the region and beyond.

The DBU is used to book domestic transactions, which are mostly denominated in Singapore dollar. The ACU is used to book offshore transactions and these are denominated in foreign currency.

MAS' regulatory requirements for banks and merchant banks in turn apply depending on whether the activity was booked in the DBU or the ACU.

Foreign banks that wished to participate in the Asian Dollar Market through their ACU had to meet high standards of admission and have reputable home regulators exercising oversight of their global operations. Those that also engaged in domestic businesses in Singapore through the DBU were then subject to additional prudential requirements from MAS, such as limits on large exposure and equity investment.

The DBU-ACU divide provided a way to safeguard domestic financial stability, without unduly impinging on the growth of offshore banking activities conducted out of Singapore.

It also provided a simple basis for awarding developmental incentives to encourage the growth of offshore banking activities out of Singapore.

While the DBU-ACU divide has served us well for decades, it is no longer relevant and will be removed because of the following reasons:

First, regulatory reforms since the Global Financial Crisis have put all banks around the world on a sounder footing. These developments mean that there is less need to distinguish between banks' offshore and domestic banking activities. All home regulators including Singapore will now require their banks to meet enhanced standards on a group-wide and global basis, which includes their branches and subsidiaries in Singapore. So, for example, new global rules have raised the amount and quality of capital with the introduction of a minimum 4.5% Common Equity Tier 1 capital adequacy ratio requirement, and have introduced minimum standards on the amount of liquidity buffers that banks need to hold. Global regulators have also agreed on a common framework to control large exposures to a single counterparty or a group of connected counterparties, limiting these exposures to 25% of Tier 1 capital.

Second, MAS has also enhanced its regulatory framework over time which has made the divide less meaningful. For example, banks in Singapore are required to meet liquidity requirements based on all-currency and Singapore dollar criteria, rather than DBU or ACU. MAS has also introduced the framework for domestic systemically important banks. Designated banks are subject to additional supervisory measures covering both their domestic and offshore businesses. So, a lot has changed in terms of the regulatory environment.

Globally, you have higher standards now after GFC that covers all banks, offshore as well as onshore. Secondly, within domestic regulation, standards have risen and also blurred the lines between what is DBU and what is traditionally ACU. And the third reason is MAS' developmental incentives have also broadened. In the past, MAS' incentives were focused on the ACU to encourage the growth of offshore banking activities out of Singapore.

Today, MAS assesses the developmental merits of an activity much more broadly, and no longer based on domestic versus offshore distinction. As a result, the DBU-ACU divide is no longer useful, and will impose a compliance burden on banks with little benefits to prudential soundness or systemic stability.

Therefore, the Bill will remove DBU-ACU divide and make corresponding consequential amendments to the relevant provisions in the Banking Act. These include amendments to –

The second amendment is the consolidation of merchant banks' regulation into the Banking Act.

Merchant banks are a class of financial institutions approved under the MAS Act. Unlike banks, merchant banks are not allowed to accept deposits or raise funds in Singapore dollar, from the public.

Hence, when merchant banks were first introduced in Singapore in the 1970s, they engaged primarily in capital market services, such as corporate finance and fund management. They were therefore subject to a less stringent approval regime under the MAS Act.

Subsequently, we encouraged merchant banks to participate in the Asian Dollar Market, by allowing them to apply to operate an ACU for their foreign currency activities. They were then subject to certain requirements in the Banking Act.

Merchant banks have since been subject, therefore, to two pieces of legislation, namely, the MAS Act as an approved financial institution and then by the Banking Act by virtue of their ACU activities.

As we remove the DBU-ACU divide, we are taking the opportunity to have the Bill also streamline the regulatory framework for merchant banks by consolidating them under the Banking Act. The Bill will introduce a new Part VIIB in the Banking Act to set out a new licensing framework for merchant banks as a class of financial institutions distinct from banks.

The third amendment, the Bill will also introduce new or revised provisions to strengthen MAS' regulatory oversight of banks and merchant banks. As these rules apply to both banks and merchant banks, I will refer to them collectively as banks in this section. The key highlights are as follows:

First, expand grounds for revocation of bank licence. In line with the international regulatory standards and practice, MAS has the power to revoke bank licences under certain circumstances, such as when a bank –

As our banking landscape changes, new risks emerge, and our regulatory framework has to evolve to better manage these risks. As a result, it becomes necessary to expand the grounds for MAS to revoke a bank licence to better protect depositors, enhance MAS' enforcement powers over banks and uphold trust and confidence in our financial system.

So, the three new grounds are as follows.

First, contraventions of provisions of the MAS Act. The MAS Act contains important regulatory requirements such as those relating to anti-money laundering and countering the financing of terrorism, of which non-compliance is regarded as a very severe breach of our regulatory requirements;

Two, in the case of a foreign-owned bank incorporated in Singapore, when the parent bank's licence is withdrawn by the parent supervisory authority. This is in recognition that foreign banks are increasingly operating in Singapore through subsidiaries instead of just branches. It mirrors the current power MAS has over foreign bank branches today.

Three, when MAS regards that it is in the public interest to do so. This is a ground that is currently available for revocation for most other financial institutions regulated by MAS, but not for banks. This additional ground is also in line with practices in other international jurisdictions such as Australia and Hong Kong.

Next, the Bill enhances MAS’ oversight of certain services such as outsourcing services obtained by banks.

When banks enter into outsourcing arrangements, MAS expects the bank to maintain the same risk management standards as if the services were performed by the bank itself. This includes similar standards and practices in ensuring customer information is safeguarded.

The Bill will enhance MAS' oversight over outsourcing arrangements by introducing a new section 47A in the Banking Act. The new section will empower MAS to impose on such arrangements, risk-proportionate, legally binding requirements, such as requiring a bank to include in its agreements with the service providers: the right of MAS to audit the service provider; the obligations of the service providers to protect the customer information against unauthorised disclosure, retention or use; and the bank’s right to terminate the arrangement under specified circumstances.

MAS has considered the practices in other leading jurisdictions in setting out these requirements.

These powers are practised in Australia and the EU. They are timely in light of the increased prevalence and complexity of banks' outsourcing arrangements today.

The Bill will provide for the powers and MAS will be consulting on the detailed regulations in due course.

Finally, the Bill will also introduce several other amendments to support MAS’ regulation and supervision of banks. These are:

First, in line with global regulatory standards, some of the key prudential requirements imposed by MAS include requiring banks to have a stable and sustainable funding structure for their activities and to address risks arising from related party transactions. These requirements are currently issued under a general provision in the Banking Act, unlike other important requirements, such as minimum capital requirements which are issued under specific Banking Act provisions. The Bill will formalise MAS' current powers and raise the signature of these two requirements.

Second, banks in Singapore are permitted to disclose customer information only in certain specified circumstances, such as when the customer has provided written consent, pursuant to Court orders, or to the bank's external auditor.

Banks are audited by external auditors but external auditors are, in turn, assessed by ACRA, which evaluates the quality of the audits performed by the auditors. So, ACRA is the auditor of the auditor. So, we are amending the Third Schedule of the Banking Act to allow ACRA access to complete bank audit working papers, which includes customer information, and that would enable ACRA to review the auditors more effectively. For example, ACRA can evaluate if the external auditor has assessed the credit quality of customers and the adequacy of provisions appropriately, against market information. This amendment will help raise the quality of bank audits and support MAS' supervision of banks. ACRA officers with access to the information will be subject to confidentiality requirements.

Sir, this Bill will rationalise and streamline the regulatory frameworks for banks and merchant banks, and strengthen MAS' regulation and supervisory oversight of both classes of financial institutions. Mr Deputy Speaker, Sir, I beg to move.

[(proc text) Question proposed. (proc text)]

Sir, I stand in support of the Bill. The amendments, which update the Banking Act, have been through two rounds of public consultation. The MAS has also published a detailed response to the feedback received on the proposed amendments. I commend the transparency and rigour of MAS' consultation process. I am heartened that, increasingly, we not just see public consultations on Bills but also detailed responses on the feedback we received.

Sir, I would like to seek some clarifications on the Bill and also offer some suggestions.

The amended section 20(1) will expand the grounds for revocation of bank licences, allowing MAS to revoke a bank licence if it "is satisfied that it is in the public interest to do so" under section 20(1)(d).

In response to a question on when MAS would consider it to be in the public interest to revoke a bank licence, MAS responded that it will consider the factors set out in the MAS' Enforcement Monograph. This includes whether there was ineffective governance, widespread control failures, pervasive non-compliance, gross misconduct, or serious breaches of applicable law.

The Enforcement Monograph is a guidance document that is not strictly legally binding. Revoking a bank licence is a very drastic step and, yet, the considerations stated in the Enforcement Monograph are not legally binding. Why?

Can the Minister also confirm it will only revoke bank licences on the ground of "public interest" for the most serious cases of ineffective governance, widespread control failures, pervasive non-compliance, gross misconduct, or serious breaches of applicable law, as stated in the Enforcement Monograph?

Next, under the new section 57FD, key appointment holders and 20% controllers of credit card or charge card licensees are to be approved as "fit and proper" by MAS before being officially appointed. The definition of "fit and proper" is set out in MAS' Guidelines on Fit and Proper Criteria.

Can the Minister clarify why, compared to section 15B where key appointment holders, 20% controllers, 12% controllers and indirect controllers of designated financial institutions have to be approved by MAS but under the new section 57FD, only key appointment holders and 20% controllers of credit card or charge card licensees have to be approved by MAS?

Can the Minister also share how actively the "fit and proper" requirement is enforced? Have there been individuals that have been denied appointment or removed from their roles for not meeting the "fit and proper" requirement?

Lastly, the new section 27(2) sets out a list of related parties that are subject to MAS' requirements on related-party transactions. This includes at section 27(2)(e) "any person in a senior management group of the bank".

MAS has also stated that "senior management group" will include "family members of the executive officers". In response to a question on the definition of an "executive officer", MAS replied that the definition of an "executive officer" is not meant to be descriptive. Instead, MAS expects banks to assess and identify their executive officers. It also stated that it is good practice for the bank to document how it determines the list of "executive officer(s)".

MAS is seeking to increase its oversight of banks; yet, the strengthened regulations could very easily be circumvented by the banks' own definition of "executive officer". It seems strange that we have gone to the effort of strengthening our regulations only to leave the final necessary step in the hands of the banks.

Will MAS consider requiring in subsidiary legislation that banks document how they determine the list of "executive officer(s)" given that it is currently already recommended that banks do so but only as good practice? This would be preferable to leaving it open-ended and subjected to interpretation.

Sir, notwithstanding these clarifications and suggestions, I stand in support of the Bill.

Mr Deputy Speaker, I stand in support of this Bill that seeks to remove the two-tiered banking system that has been in place since 1968. It also seeks to consolidate the licensing and regulation of merchant banks under the Banking Act, in an effort to update and strengthen our regulatory framework in light of international and industry developments.

Yet, there is one significant and glaring development that we must talk about in updating the Banking Act. As we speak, ongoing wildfires in Australia have burnt through five million hectares of land costing A$240 million in claims so far. Severe floods have ravaged much of Jakarta last week. With the growing prevalence of the climate-induced events in the world and specifically to our region, there is an urgent need to safeguard financial assets, yet be innovative in legislative interventions to reduce future risks to Singapore's banking industry.

Do not take my word for it, Mr Deputy Speaker. The Network for Greening our Financial System (NGFS) formed by a group of central bankers and supervisors worldwide, noted that climate risks, I quote, "could be larger, more widespread and diverse" than any other structural change. Given that it will come from all sectors and geographies, it is clear our financial system is exposed. Regulatory frameworks around climate-related risk management will allow for a systematic adoption of practices for the accelerated transition towards a sustainable banking sector. As a founding member of the NGFS, MAS must lead and contribute in this area.

In his speech on "Green Finance for a Sustainable World" last November, Minister Ong highlighted three key areas to build a financial industry resilient to climate change risks, namely: measuring, mitigating and disclosing these risks. I agree broadly with the identified areas but the devil, as we know, is in the details.

First, measuring risks. We know that bookkeeping carbon emissions produced by assets on a bank' balance sheet is always a challenge. However, here in Singapore, existing avenues, such as the Carbon Pricing Act, already allows banks to obtain carbon emissions-related data and estimate their borrower's exposure to carbon regulation and transition risks. Facilities with higher than 2,000 tCO2 emissions report their emissions to NEA. Such data should be used for carbon risk assessment and be mandated for reporting by SGX-listed companies. Jurisdictions like Hong Kong already require this. We should institute this so that our banks have clear and comparable data to measure the risk exposure of their public-listed clients.

As a former corporate banker myself, I would even push for data collection beyond just carbon emissions data. Our bankers must also obtain information from borrowers to understand where business value could be at risk. The 2011 floods in Thailand are a critical example of how risks could be embedded in the supply chain and may not be obvious through a carbon data metric. Operating loss from the floods incurred by Toyota and Honda increased by 37% and 55% respectively in 2011.

Metric selection is also critical. Climate change risk has a long-tail and is widespread. Credit risk metrics have historically been insufficient in addressing tail-end risks. Metrics that simply average potential risk across multiple years underestimate potential impact. Solely focusing on high-carbon assets is a good first step but still insufficient. Stress testing portfolio risk is also an important part of risk management. Stress test scenarios should be centrally-developed, not individually designed, to ensure that there is alignment to the Paris Agreement target and geographically-relevant worst-case scenarios.

Second, mitigating risks. We must applaud Singapore banks for moving quickly in announcing policies to cease financing new coal power plants. Two out of three banks will not be increasing their exposure to the transition risks of this industry. As more large banks and insurers decide to divest from coal power development, banks that continue to consider such projects are exposed to increasing risks that will be harder to mitigate.

While The Association of Banks in Singapore (ABS) has Responsible Banking Guidelines and a haze toolkit, these are voluntary standards. Bangladesh already has a mandatory environmental risk management guideline for Bangladeshi banks. In terms of international alignment, we note that only one Singapore bank is a signatory to the Equator Principles and none has signed the UN Principles of Responsible Banking. Mandatory standards in Singapore and international alignment are key signposts that our banking industry is robustly equipped to mitigate environmental, social and governance risks, particularly around climate change.

Lastly, disclosing climate risks. As this Bill considers the publication requirements of banks under clause 12, we should also consider the disclosure of climate risks. The Governor of the Bank of England said that "to bring climate risks and resilience into the heart of financial decision making, climate disclosure must become comprehensive". Investors are demanding more. Commonwealth Bank of Australia was sued for misleading investors by failing to disclose climate-related risks in its 2016 annual report .

According to WWF Singapore's recent review of ASEAN Sustainable Banking Regulations, only Malaysia has firmly expected banks to assess, mitigate and publicly disclose their portfolio-level exposure to material environmental and social (E&S) risks, including climate risk and information on transactions assessed/escalated/approved with conditions. Singapore should be requiring our banks to do the same. Accounting for climate risks is hard work, but there are existing networks like the Pilot Project by UN Environment Programme Finance Institute (UNEP-FI) on Implementing Recommendations by the Taskforce for Climate Financial Disclosures (TCFD) as well as the Partnership for Carbon Accounting Financials (PCAF) that can support our banks in this process.

Mr Deputy Speaker, given the above, I would like to seek the Minister's clarifications on the following.

Will we consider a timeline for mandatory TCFD disclosures for financial industries as well as listed companies, since voluntary regimes are typically not useful in generating comparable and usable industry-wide information? Is the Minister looking at a supervisory engagement roadmap on climate change? Will MAS support the banking industry with centrally-developed stress test scenarios that incorporate the views of experts and civil society? Will the Minister consider leading an ASEAN taskforce that embarks on a bottom-up modelling of business risks from climate change across our region, including the supply chain impacts across borders?

Mr Deputy Speaker, the UNEP and DBS released a report called "Green Finance Opportunities in ASEAN" in 2017. Green investments needed in the ASEAN region amounted to US$3 trillion between 2016 and 2030. Beyond this being a business opportunity, accelerating the growth of green finance reduces instability to our financial system in the future. As NGFS has noted, "the impacts of climate change could be irreversible, if not mitigated."’

According to their 2018 Sustainability Report, DBS provided S$2.4 billion of sustainable funding. While our banks have been highly positive on the green finance opportunities, there is still much we can do.

A number of countries have established national green banks to provide initial funding to develop clean energy, transport, energy-efficient markets. The Green Bank Network, based out of Washington DC, currently consists of 15 national, state or city level member banks that aim to catalyse green financing. This includes the Clean Energy Finance Corporation (CEFC) of Australia. The UK government seeded the UK Green Investment Bank in 2012 that continues to deploy green capital successfully.

Mr Deputy Speaker, as we debate today on improving and strengthening our banking industry with this Bill, I would like to seek the Minister's clarification on our plans for national green banks and green financing, including the standards for green loans, much like we have in ASEAN Green Bond Standards which recommends disclosure and external review of impact.

The financial industry has been all abuzz with the opening of five digital bank licences by MAS. In our licensing considerations for these digital banks, we have made provisions to enable new players that have regional reach and diverse customer bases. We must, therefore, incentivise and harness the innovative essence of these new digital partnerships not only to encourage the collection and use of new data but also to create new sustainable financing solutions.

For example, ING Real Estate Finance and a partner launched ING REF Sustainable App in 2016. Within two years, it helped identify €35 million of potential energy cost savings within its real estate portfolio. Can the Minister please clarify if sustainable finance will be a key component of our digital bank roadmap for Singapore?

Prime Minister Lee noted in his recent New Year message that "A Singapore turned inward cannot survive". Indeed, we are and always will be an open economy. Financial services directly contribute a significant 13% to our GDP in 2018 or S$64 billion. Its indirect contribution fuelling the rest of the economy is clearly way more.

Mr Deputy Speaker, the eminent economist Prof Hyman Minsky, famous for predicting the subprime crisis and the "Minsky Moment", noted that financial crises are caused by hidden risks building up on balance sheets. Given what we now know of climate change and its impact from science and data, we absolutely cannot let such risks build up with little or no visibility.

Large institutional investors like Aviva Investors share the same view. Its Chief Investment Officer said recently, quote "understanding climate risk isn’t an exercise in trying to save species and habitats – this is also about protecting people's retirement income and their investments."

Smart regulation has allowed MAS to be nimble and adaptable as a world-class regulator and central bank. MAS is also known for its "regulatory sandbox" approach, or sometimes described as "regulation running alongside innovation". I am aware MAS is planning a public consultation exercise in 2020 – earlier than later, I hope – to inform the upcoming, finally, guidelines for Environmental Risk Assessment.

We must act with the fierce urgency of now. I look forward to the Minister's clarifications on what I have outlined above and his assurance that MAS' regulatory roadmap is running alongside, if not ahead of, this climate crisis so as to build a climate-change resilient, robust and responsible financial industry for Singapore.

Mr Deputy Speaker, on behalf of the Senior Minister and Minister-in-charge of MAS, let me now address the questions of the Members.

Mr Louis Ng asked why the considerations for revoking a bank licence on the ground of public interest are not set out in legislation, given that revocation is a drastic step. Mr Ng also sought confirmation that MAS would only revoke bank licences on the ground of public interest for the most serious of cases.

Revoking a bank licence is, indeed, a very drastic measure. MAS is very cognisant that it is the most severe regulatory action that it can take with respect to a bank. MAS, therefore, has a strong and inherent incentive to use this power judiciously, as a licence revocation means the bank will have to stop business, affecting its customers as well as other stakeholders, such as shareholders and employees. If it is not done right, or not based on strong grounds, it will affect our credibility and reputation as a global financial centre.

Therefore, as far as possible, MAS has set out specific grounds on which it may revoke a bank licence in the Banking Act. These include situations where a bank has contravened the Banking Act or is carrying on its business in a manner likely to be detrimental to its depositors' interest.

In all cases, MAS will consider the circumstances for licence revocations set out in the Enforcement Monograph, which provides guidance to the industry on the underlying principles guiding MAS' use of enforcement actions.

That said, as the banking sector will continue to evolve, it is not possible to anticipate all circumstances under which MAS may revoke a bank licence. The ground of public interest thus provides MAS with the option to take timely action in unanticipated circumstances to protect the public interest.

Let me cite an example. In 2016, MAS withdrew the merchant bank status of BSI Bank and Falcon Bank – both were merchant banks – because both banks had committed serious breaches of MAS' anti-money laundering requirements and there was gross misconduct by their management and staff.

MAS also considered at that time the wider public interest in closing these banks in order to safeguard Singapore's reputation as a clean and trusted financial centre and to send a strong deterrent message that such breaches and misconduct will not be tolerated. Those powers were provided under the MAS Act in relation to merchant banks. This latest amendment to the Banking Act will extend the use of the public interest ground to the revocation of bank licences.

I have mentioned earlier that the public interest ground is in line with practices in other jurisdictions, such as Australia and Hong Kong. This ground is also not unique to banks, as MAS already has the same revocation power on public interest grounds for other classes of financial institutions it currently supervises. Mr Ng can be assured that the proposed public interest ground for bank licence revocations will be reserved for the most serious of cases.

The next set of questions relates to the powers for MAS to approve 20% controllers and key appointment holders, and to remove key appointment holders, of credit card or charge card licensees. Mr Louis Ng asked why the approval requirements for credit card or charge card licensees differ from that of banks.

MAS calibrates its licensing and regulatory requirements to be commensurate with the risks posed by financial institutions. Credit and charge card licensees conduct limited business activities, while banks conduct a wider range of activities, such as deposit-taking and lending, in addition to credit and charge card issuance. Hence, the thresholds for MAS to approve controllers and key appointment holders are tiered accordingly.

Mr Ng also requested more information on the enforcement of the "fit and proper" requirement by MAS. The requirement is an essential component of MAS' regulatory framework. Applicants must declare their fitness and propriety when they apply for MAS' approval. MAS conducts checks on these individuals before approval and may take action to remove such individuals where necessary. So, it is actually actively being implemented.

Mr Louis Ng also asked whether MAS would consider prescribing a list of executive officers in subsidiary legislation to prevent banks from circumventing MAS' requirements on related party transactions. As Mr Ng has rightly pointed out, an executive officer of a bank in Singapore and his or her family members would be considered as related parties of the bank. "Executive officer", in relation to a bank, is already defined in section 2 of the Banking Act. This qualitative definition is familiar to the industry. The term is also used in other sections of the Banking Act as well as other MAS-administered legislation.

This approach is preferred to a listing of job titles or designations as it is able to better capture persons holding managerial roles and responsibilities and is less likely to be affected by differences in nomenclature among banks or changes in specific designations over time. In fact, if we are too definitive in spelling out all the designations, our worry is, it makes it even easier to circumvent. It is much better that the industry, which already understand the definition, live by the definition and the spirit of the definition. MAS assesses that the risk of circumvention now, based on the banking industry's understanding of the definition, is low, given the common understanding of the scope of an executive officer.

Lastly, Ms Anthea Ong raised a few points on building a sustainable and resilient financial system, such as developing standards for green finance and leveraging technology and innovation to enhance sustainable finance efforts.

These issues are actually not within the scope of this Bill. I will, nevertheless, respond briefly to them in this session. I will be happy to address them in greater detail on other suitable occasions, such through a Parliamentary Question or the upcoming Committee of Supply debate.

MAS announced its green finance action plan in November 2019, at a FinTech festival with big international audience. Singapore's financial sector can play a decisive role in promoting sustainable development opportunities and powering this transition, especially in Asia. Finance, innovation and technology together can be a force for good, to overcome challenges and address climate change. To be a leading centre for Green Finance in Asia and globally, MAS is taking steps that are very in line with what Ms Anthea Ong has spoken about, namely: first, build financial system resilience to environmental risk; and second, develop green finance solutions and markets.

To answer Ms Ong's question, we are not looking to specifically set up national green banks which are probably not necessary. But green financing has the potential to be a mainstream activity of all traditional banks; and

Third, leverage innovation and technology.

For a start, MAS will be issuing environmental risk management guidelines to set out its supervisory expectations on governance, risk management and disclosure across the banking, insurance and asset management sectors. The consultation paper, as alluded by Ms Anthea Ong, will be published in the first quarter of 2020. So, yes, we are embarking on an engagement process with the industry and the public starting with this consultation paper in the first quarter of this year.

MAS is also working to anchor green expertise in Singapore, such as Environment, Social and Governance (ESG) researchers and investment analysts from asset managers, through mandates under the Green Investment Programme, as well as professional service providers that conduct ESG rating, assurance and certification of green financing solutions, through various grants. MAS will promote the adoption of green financing solutions, such as green bonds and loans, through all these measures.

In assessing the digital bank applications, MAS will be looking at how they can contribute to sustainable financing, which is a key growth strategy for Singapore's financial sector. Looking at the potential tenderers, I am sure many of them will also be eager to portray and present their green credentials to MAS.

These initiatives will support the mobilisation of resources to activities that promote sustainable development in Asia and globally.

Mr Deputy Speaker, let me conclude by reiterating the purpose of this Bill, which is to rationalise and streamline the regulatory frameworks for banks and merchant banks, and strengthen MAS' regulatory and supervisory oversight of both classes of financial institutions.

With that, Mr Deputy Speaker, I beg to move.

[(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. – [Mr Ong Ye Kung]. (proc text)]

[(proc text) Bill considered in Committee; reported without amendment; read a Third time and passed. (proc text)]

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

Mr Deputy Speaker, on behalf of the Minister for Health, I beg to move, "That the Bill be now read a Second time."

Sir, the objectives of the Healthcare Services Bill are to safeguard the safety, welfare and continuity of care for patients. These are all matters of paramount importance. Today, premises which are used as hospitals, medical clinics, nursing homes and clinical laboratories in Singapore are licensed under the Private Hospitals and Medical Clinics Act (PHMCA). The PHMCA was enacted in 1980 and sets minimum standards for licensees' premises, personnel as well as processes to safeguard patient safety and welfare. The PHMCA was last amended in 1999 and the regulatory framework needs to be refreshed and updated to address today's rapidly-evolving healthcare landscape.

While Singapore has one of the longest life expectancies in the world, there has also been a rise in the number of unhealthy years lived because of ageing-related illnesses and chronic diseases. Hence, to provide more appropriate and accessible healthcare to our ageing population, there needs to be a shift in care models to align ourselves with one of my Ministry's "Three Beyonds" – "Beyond Hospital to Community". There will, therefore, be more vertical and also horizontal integration across traditional healthcare settings. For example, nursing homes may now be able to also provide dementia care and geriatric clinical services within one location. And that is for the better, because it puts the related and complementary services under one umbrella.

These integrated models of care are difficult to license under the present premises-based licensing framework of the PHMCA, and therefore, the licensing framework will need to be improved to accommodate such new and also evolving models of care.

Secondly, patients, especially the aged sick, may want more convenience and cost savings in their clinical care for some minor ailments or follow-ups to their chronic conditions. This may be possible today when hospitals or medical clinics provide telemedicine or mobile medical services, on top of their premises-based care. In other words, they provide premises-based care and, on top of that, also provide telemedicine or other mobile medical services. There is, therefore, a need to move beyond just regulating premises or to be premises-based in the regulation framework, to also be able to look at regulating services delivered beyond the premises, if we want to ensure the safe delivery of such services into the community or done remotely, as I have mentioned, through telemedicine.

At the same time, we also need to ensure that the welfare and well-being of vulnerable individuals or patients can be enhanced, and that the elderly and the frail patients are well looked after. This will include the assurance for the continuity of care for patients, and the introduction of additional safeguards to prevent abuse.

Finally, there are new scientific and technological advancements leading to the emergence of innovative diagnostic methods and also therapies, such as cell, tissue and gene therapy, clinical genomic testing, and proton beam therapy. There is, therefore, a need to have an enhanced governance structure to more closely monitor and also track the delivery of such newer services, including looking after the appropriateness of care and the information that is being provided to patients.

Taking into consideration the above issues with the changes that are needed in the evolving healthcare landscape that I have mentioned, it is timely that the Ministry is now introducing the Healthcare Services Bill to replace the existing PHMCA, so as to have better levers to regulate the safety and care provided by the existing, and also the evolving and newer, healthcare services providers. This Bill will, therefore, seek to achieve a few objectives.

First, to provide greater flexibility and modularity in licensing, to enable the development of new care models that centre around patient needs. Second, to better protect patient safety and welfare by strengthening licensee governance and also introducing additional safeguards. Third, to strengthen continuity of care and ensure more appropriate and robust licensee accountability.

In putting up this Bill, MOH conducted extensive public and stakeholder consultations between 2017 and 2018, and also studied developments in the local landscape, as well as the regulatory regime that exists in several overseas jurisdictions. We received a lot of useful feedback from licensees, patients and the public, and some of these ideas have been incorporated into the new regulatory regime that now finds its way into this Bill.

Some examples include the bundling of specific licences for GPs to accommodate their core work, as well as allowing licensees to co-locate with certain registered healthcare professionals to facilitate the provision of complementary healthcare services. I would like to take the opportunity here to thank all those who contributed actively throughout this process in the consultation exercises, helping with ideas, with suggestions to jointly shape and create the new healthcare services regime.

Sir, let me now go through the key features of the Healthcare Services Bill and highlight the areas of changes from the existing legislation.

First, let me start with the scope. We will clearly define the scope of the regulatory regime and the move towards a services-based licensing framework.

The scope of the Healthcare Services Bill extends to the regulation of any service by direct providers of "healthcare services" as defined in clause 3. This includes services that diagnose, assess or treat diseases or illnesses; provide nursing or rehabilitative care; or assess the health of individuals. Services that will require licensing will be set out in the First Schedule.

Licensable services are largely similar to the services already provided by the premises-based licensing regime currently under the PHMCA. In addition, however, the Bill will introduce licensing requirements for certain non-premises-based services, such as telemedicine, emergency ambulances, and new specialised services, such as cell, tissue and gene therapy and clinical genetic testing.

While the scope of the Bill is broad enough to include standalone allied health, nursing, traditional medicine and also complementary and alternative medicine services, we will not, at this stage, be licensing these services for the time being. However, my Ministry will continue to closely assess these services, particularly from the perspective of risks to patient safety and welfare. If sufficiently serious concerns arise, these services can then be licensed by including them in the First Schedule. In that case, the same regulatory regime as is now set out in the Bill would then apply.

Government entities, such as SAF medical centres and SCDF ambulances, are exempted from this Bill. They are bound by internal Government standards and rules, which are generally equivalent to or more stringent than the current licensing standards. There are also staff disciplinary frameworks to deal with errant personnel in the case of such Government services.

The Bill's scope also does not include beauty and wellness services as these services do not diagnose, assess or treat diseases or illnesses and are of minimal patient safety risk. Entities that do not provide direct patient care, such as Third Party Agents referring patients to healthcare services licensees for their care, will also not be regulated as licensees under the Bill. But this would be an area that we will review, and at the appropriate juncture, if necessary, can always include into the Bill through suitable amendments.

As we transit into the Healthcare Services Act, we will move away from the current premises-based licensing framework, which, as I have mentioned at the outset, is a lot more rigid and inflexible, confined only to one licence per premises and also limited to those in physical brick-and-mortar premises. Hence, Part 2 of the Bill introduces a services-based licensing framework which is more flexible and also more modular.

This approach will better suit the business models of providers, who would just have to take the licences based on the services that they wish to provide. For example, a provider can decide if he wants to hold a suite of service licences for a nursing home, a clinic, telemedicine and health screening.

Secondly, as we move towards regulating new services and care models, we will enhance institutional governance and institute additional safeguards to ensure patient safety and welfare. That, ultimately, is the raison d'etre behind this Bill. The strengthening starts first from our licensing regime and under clause 11 of the Bill, the Director of Medical Services, who is defined as the "Director", will be required to consider multiple factors in deciding whether to grant or to renew a licence. This includes, but is not limited to, whether the applicant is a suitable person and his ability to provide clinically, as well as ethically, appropriate patient care.

Other factors that may also be considered include the applicant's prior conduct when participating in various public schemes, such as the Community Health Assist Scheme (CHAS), MediSave or MediShield Life schemes, as well as the track record of compliance with regulatory requirements under the Bill and also under other laws relevant to the provision of healthcare services in a safe and appropriate manner.

Clause 23 also requires the key appointment holders of a licensee, such as its governing board or key management, to be suitable persons. Key appointment holders must possess the appropriate skills and competencies to carry out effective governance functions.

While the licensee is ultimately accountable for overall compliance to the Bill, clause 24 requires the licensee to appoint a suitably qualified individual as the licensee's Principal Officer – defined as the PO – or the Clinical Governance Officer (CGO), to strengthen accountability as well as clinical oversight at the different layers of its management.

However, even as powers and responsibilities are set out under the different layers of governance under the Bill, healthcare professionals will be given autonomy to exercise discretion in the execution of clinical decisions for patient care, to serve the patient's best interests and also in accordance with professional ethics and considerations. We will, therefore, introduce provisions in the regulations for due consideration to be given to the views of practising professionals for clinical care matters.

Clause 25 of the new Bill will also require certain licensees providing higher patient risk services, for example acute hospitals, to set up specific internal committees to monitor the quality as well as the ethics of the services. These specified committees include the Quality Assurance Committees, the Service Review Committees and the Clinical Ethics Committees, each dealing with different aspects of clinical, ethical and quality considerations. Procedural details for these committees will be carried in the Regulations.

Stakeholders had raised concerns on whether these governance requirements impose additional burden on smaller licensees, such as the GP clinics. This is a relevant concern, but this will not be the case, as the requirements that are set out are appropriately calibrated to the scale and also to the complexity of the licensee's operations.

In addition to setting up proper governance structures and imposing standards on key appointment holders, we also need to ensure that the employment of healthcare workers – those who work or who are employed by the licensees and who deal with patients on a day-to-day basis – are also properly managed and there is appropriate oversight. This, I would say, is especially so when catering to the vulnerable patient groups. Such patients may be at risk of abuse, particularly when they require substantially long stays at a healthcare institution.

Therefore, this Bill introduces safeguards in this area at clause 28 to impose employment restrictions on certain licensees. Let me explain that. Such licensees will be prohibited from employing any individual convicted of prescribed egregious criminal offences involving violent acts, and must provide the information of all prospective staff to the Ministry for screening with the Criminal Records Office. We understand that we should not treat all past offenders in the same way, or to assume that they are automatically recalcitrant. Employers who wish to employ past offenders of prescribed offences in the appropriate case may apply to seek the approval of the Director, who will consider each such case on its own merits. I would add that this employment restriction is not new. It is similar in nature to the approach taken under the Early Childhood Development Centres Act.

Additionally, the employment restrictions will be limited only to settings where patients are at higher risk if they require, for instance, substantially long stays or are mentally and physically vulnerable. This would include long-term residential care services like nursing homes, inpatient palliative care services, and the Institute of Mental Health.

Next, the Bill will also introduce a number of measures to ensure that patients are well-informed and are aware and not misled by errant healthcare providers.

Clause 29 will enhance naming restrictions to provide better clarity to patients on the healthcare services provided. Hence, non-licensees will not be able to use names that create a misimpression of providing licensable healthcare services when they either are not or should not be doing so. Likewise, licensees will also be prohibited from using names of services that they are not licensed to provide.

Clause 30 will disallow unrelated, unlicensed services to co-locate with or within a licensed service, unless MOH approves. The intent behind this is to prevent or, as far as possible, mitigate public misperception that such unlicensed services, such as wellness and spa services, are either endorsed or licensed, because of their close physical proximity and association with the licensed healthcare services.

Clause 31 will strengthen the advertisement controls under the Bill to prevent non-licensees from advertising licensable healthcare services. Therefore, only licensees and authorised persons appointed by a licensee will be allowed to advertise licensable healthcare services and, in doing so, will have to comply with the prescribed requirements to prevent advertisements that are false, misleading, or laudatory and lead to a consumption of unwarranted treatments; and also those that cause a mismatch of expectation between the advertisement and what the public sees.

Besides having levers to regulate the licensees, the Bill will also enhance existing powers of the Ministry, carried at clause 36, to gather data for patient safety, welfare and public interest purposes.

Clause 37 will then empower the Ministry to publish information acquired in the course of administering this Act. In this regard, we intend to publish a list of non-compliant licensees and unlicensed providers, and we hope that by making such information available to the public, we can help patients make more informed decisions.

Thirdly, we will put in place rules and powers to ensure the safety and continuity of care for patients through the introduction of "step-in" arrangements.

Part 4 of the Bill will specifically introduce provisions to achieve this by empowering MOH to directly "step-in" or appoint a "step-in" operator to take over the operations of a licensee who is in serious financial trouble, or is contravening or is not complying with the provisions of the Bill, or is otherwise carrying on its operations in a manner that is detrimental to the interests of patients or customers, but nonetheless wants to or persists in carrying on these operations. The primary purpose is to protect patients’ safety and welfare against a recalcitrant provider endangering patients and also preventing an abrupt discontinuation of residential healthcare services.

For this reason, the "step-in" provisions will only apply to a list of designated residential healthcare entities that will be prescribed in the regulations. These will include nursing homes, hospitals and inpatient palliative care centres. "Stepping-in" will also be a temporary arrangement until the service has been stabilised, and the patient's safety and welfare are no longer compromised.

I would add that "step-in" powers are not unique to this Bill. Other regulatory frameworks for essential services, such as those in the financial services or transport sector or the like, also provide similar powers. And I would argue that the case for this is perhaps even more compelling in the healthcare setting given that lives as well as the continued delivery of care to patients, whose welfare and interests are at risk, remain at stake.

The Bill will also ensure licensee accountability by broadening our range of regulatory sanctions and strengthening our regulatory toolkit.

Clause 39 provides powers to stop the provision of services that are detrimental to patients. While such powers presently exist in the PHMCA, they are limited to cases where the service endangers the health, safety and welfare of patients. Under the Bill, we will also be able to stop services that go against the rules of professional conduct and ethics. So, for instance, if a disciplinary tribunal under the Singapore Medical Council has found that a particular treatment should not be provided for specific indications as there is insufficient clinical basis or evidence, MOH can issue stop orders for all licensees to cease any provision of such treatment accordingly.

To exercise oversight and control over non-compliant licensees, we will have a wider range of regulatory actions and higher penalties for offences in the Bill. Clause 20, therefore, allows various regulatory actions to be taken against non-compliant licensees, as opposed to the PHMCA, where we could only revoke or suspend the licence. So, there is a broader range in the toolkit which allows for more flexible arrangements, given the nature of each particular situation. Penalties for offences have also been updated and aligned with comparable offences under other more recently enacted legislation.

Next, let me turn to the proposed implementation of this new regime. MOH intends to take a phased approach on the Bill, targeted to be from early 2021 through to the end of 2022 – a phased, graduated implementation of the regime under this Bill. Regulation of licensable healthcare services will be effected, therefore, in three phases, so that providers will be given sufficient time to understand the regulations and also, in some cases, to ramp up its own resources to meet the relevant regulatory requirements. The first phase will bring PHMCA laboratory licensees under the Bill’s regulatory regime. The second phase will involve medical clinics and other ambulatory care services, as well as ambulance services. In the third and final phase, hospital and long-term care services, as well as other new licensable services, will be regulated by the Bill.

MOH will assist all licensees and ensure a seamless transition to the new licensing regime. We will also continue streamlining our regulatory processes to reduce the burden on licensees as far as possible.

Sir, let me conclude by making the point that in implementing the regulatory regime under this Bill, MOH will continue to engage licensees in the same manner as it had done in coming up with the rubric under this Bill to ensure that they will have a seamless transition from the PHMCA into the regime under this Bill. We strive to enable new and innovative healthcare service models as well as the use of technology to develop within safe and reasonable boundaries.

The Healthcare Services Bill will allow my Ministry to evolve its regulatory framework in tandem with the changing needs of healthcare demands and also the changing healthcare landscape. Together, we can achieve the key objectives of protecting patient safety, welfare and also assuring continuity of care. My Ministry remains committed to ensure that healthcare in Singapore is safe, of good quality, affordable, as well as accessible.

As we continue to build on our regulatory transformation journey to enable new healthcare services and care models to support our ageing population, I would like to urge the Members of this House to give your support to the Healthcare Services Bill. Mr Deputy Speaker, I beg to move.

[(proc text) Question proposed. (proc text)]

Mr Deputy Speaker, Sir, I rise in support of this Bill, which is timely, given the vast changes in the way that healthcare is organised and delivered.

As the Senior Minister of State has just elaborated, a key feature of this Bill is the change from the current fixed-type licensing framework, which is based on physical premises, to a framework which is modular, with the flexibility of customisation based on the services provided. This is a major and necessary transition, which will accommodate newer healthcare services and also healthcare delivery modes. Not only will this new licensing structure enable the Ministry to better regulate and govern our growing healthcare sector, it also facilitates innovation while offering patients better protection.

As with any major transition, the process of porting over will involve some work for current licensees. So, my first question is to ask if the Ministry would share how it will help existing medical service providers, especially the smaller players, with this conversion to the new licensing regime. Will the overall licensing revenue be increased with the enactment of the Bill? And how are we helping our licensees to meet the expected costs?

Is there also a significant difference between the regulatory costs to MOH and the licence fees and, if so, who is paying for this gap? I seek the Minister’s assurance that costs for healthcare providers will not be increased inordinately such that patients are the ones that end up paying for this shortfall. And if for some reason under the new structure, certain licensees’ fees are, in fact, reduced, would the Ministry consider measures which will encourage such savings to be passed on to patients?

In regard to co-location of services, I would like to seek clarifications over what determines whether co-location with non-licensees will be permitted. With the continuing push from healthcare to health, I think the demarcation between health and wellness services continues to be blurred. And what about beauty and aesthetic services?

Since we are talking about new paradigms in healthcare, what about digital providers? For example, if you provide a telemedicine platform, how do we regulate how these services co-exist in the digital sphere?

Next, I would also like to ask how the Ministry intends to deal with certain service entities, such as ambulances and also standalone telemedicine providers, under this new regulatory framework.

I had previously voiced my concerns about the costs and level of expertise of private ambulance providers. So, will there be stipulations regarding the construct and equipment on board medical transport and emergency ambulance vehicles? How about the training qualifications and expertise of the personnel providing such services? Will the Government regulate the range of their charges and also their fees? Users of such services, we note, are usually in a vulnerable state and are in an unfavourable position to research, compare and negotiate fees.

As for telemedicine, it is a service which can be provided from anywhere to anyone so long as there is an Internet connection. This remote medical service will attract many new providers and big IT conglomerates to this sector. How will the Ministry ensure the quality and integrity of such services so as to safeguard our patients? There are so many aspects which have to be considered and made clear. For example, under which circumstances would a medical professional be permitted to make a diagnosis and prescription remotely, and when should such face-to-face interactions be required? What about the liability risks for practitioners in telemedicine? And would inter-country services be allowed and under what sort of regulatory framework?

Another area of concern which has been brought up in the past is how this Bill would deal with Third Party Administrators (TPAs) and medical concierges, although I do note that these do not fall within the scope of this particular Bill. However, both provide some form of healthcare-related services by referring patients to designated or to preferred providers. Currently, this is discouraged under the Code of Ethics, which also limits their application, but there is presently no law which specifically regulates their use. I would like to seek clarifications regarding these services either under the current proposed framework or future frameworks.

Last, it should be remarked that one notable aspect of this Bill is what it omits, and the elephant in the room is that the setting out of the legal framework for a National Electronic Health Record system is not included in this Bill. As we strive to become a Smart Nation, a unified electronic health record is a critical step towards a truly future-ready healthcare system. The hacking of the SingHealth computer system has understandably led to a pause in this regard, but it should not inflict a mortal blow to our efforts to have a robust and comprehensive digital health record system which will have many benefits for all Singaporeans, both in sickness and in health.

On this note, would the Minister share an update on the measures MOH will implement to ensure that licensees protect health information in medical records?

Going digital and implementing the National Electronic Health Records will enhance continuity of care for patients and boost productivity, but patients understandably are also more concerned about their data privacy and their data protection. In the past, one had to physically break into a clinic or hospital to steal patient data. Today, these crimes can be conducted far, far away from their targeted victims and many more patients’ data can be obtained in one fell swoop.

At the macro level, how then are we fortifying our digital defences to keep up with and keep out fast-evolving cyber attacks on our databases? On the ground, how is MOH working with individual licensees to boost their cybersecurity? What kind of technical assistance, funding and resources are available to help them set up secure systems and maintain their digital systems? I look forward to these clarifications and I support the Bill.

Mr Deputy Speaker, this Bill was first enacted in 1980 and amended in 1999. Thus, it is, indeed, time to review and update to ensure patient safety through licensure, provision of more safeguards and, of course, keeping abreast of the new healthcare landscape and modalities we have today. Moreover, there are a variety of new services since then on offer and things have changed, for example, medical transportation, video conferencing, tele-conferencing and even tissue and bone banking. The migration from a premises-based to a service-based model makes sense because we are trying to integrate a lot of our healthcare services. I have a few clarifications.

Firstly, for cord blood and stem cells, how will these products be tagged? As it will usually be identified or linked to an individual, will it be under the name of the mother or the baby or the fetus?

Secondly, under Part 2, licensing of healthcare services, clause 9, it is stated and I quote, "it is an offence for a licencee to provide a licensable healthcare service at any premises other than licensed premises, or using any conveyance other than a licensed conveyance". Can the Minister comment and elaborate on the offering of House Visits services by GP and Family Practitioner colleagues, for example, as well as home care services by hospice doctors and nurses? In that same context, are there any requirements for locum healthcare services staff who move from premises to premises offering services and taking care of patients with consultations?

Thirdly, pertaining to telemedicine, can the Minister also clarify with some details? Does this apply to only within Singapore? How about when our medical staff are consulted on the regional and international platforms? At Singapore General Hospital, for example, we provide Maritime Medical Advice or Radio Medical Advice to ships in the waters around Singapore and even as far as the coverage of parts of the Pacific and Indian Oceans. Please advise on the definition and coverage of these services as well.

Fourthly, on clause 26, pertaining to the Clinical Ethics Committee (CEC), can we understand a bit more on this and also the component members and how many members will the CEC have? What are their other terms of reference? Also, will there be any difference in the components and also job scope as compared to the Ethics Committee that our institutions already have today?

Fifth, how fast can the "step in order" or the "expedited step in order" be approved and obtained in the event that it is required?

Sixth, can the Minister also explain with some details of the Quality Assurance Committee? How is it going to work? What are the main objectives and desired goals and how will they function?

Seventh, with the move from premises-based to service-based licencing, many are concerned with the rise in the costs they have to pay. What will be the framework or formula for this conversion and can the Minister ensure that the hike will be within reasonable limits? This is especially so with the current economic climate, as we update this Bill to execution.

Eighth, pertaining to the process of mapping services at the healthcare premises, how fast can the request for new services be processed? Also, will the spectrum of point of care tests permissible be reviewed from time to time to incorporate the latest and the updated?

Finally, the ninth point, on the co-location of licensed and unlicensed services within the same premises, can the guidelines be made clear and succinct? This is because I feel that this can be a potential area for abuse and also misinterpretation. Take, for example, the beauty and wellness industry. It is not within the scope of this Bill. Neither is Traditional Medicine and Complementary Medicine. But these are exactly some of the services which may potentially co-exist on the same premises as a licensed service. So, therefore, there could be some loopholes there. Notwithstanding these clarifications, Sir, I do support this Bill.

Deputy Speaker, Sir, I note that MOH has proceeded cautiously in presenting this Bill. According to the MOH website, it started consulting on this matter in 2016 and published a draft Bill two years ago for scrutiny and feedback.

The Bill today is quite different from the draft Bill in some respects, which the Senior Minister of State explained briefly earlier.

While I agree that Government oversight of healthcare services is necessary to protect patient welfare, I have some queries and concerns about the Bill. These concerns relate to the Bill's phased coverage, price transparency, quality assurance and the National Electronic Health Records System (NEHR).

First, the Bill's phased coverage. Clause 5 states that the Bill does not apply to any healthcare service provided by the Government. And earlier, the Senior Minister of State did explain that Government-provided services included those under the Singapore Armed Forces and the Singapore Civil Defence Force. So, I take it that restructured hospitals, polyclinics and also primary care providers will be covered under the Bill. It is a question of at which phase they are included.

Again, related to the issue of coverage, I was originally a little puzzled by the First Schedule because it stated only certain specific types of healthcare services which will be required to licensable, particularly clinical support services and some specialised laboratory-type services. I was puzzled because I had previously raised concerns about the private ambulance services used by consumers and also the feedback from residents about poor quality service and also hidden charges not being feasible at the time of booking. But I believe that, if I heard the Senior Minister of State correctly, he mentioned that this would come under phase 2 of the implementation. So, I would like him to confirm that emergency ambulance services and such related conveyance services would be actually included for regulation under phase 2.

Related to that, in last year's Committee of Supply when I raised this issue, the Senior Minister of State mentioned about price transparency that the Healthcare Services Bill would include this issue in its regulation and it would mandate the publication of common fees charged, as well as give more transparency to the bill components to be paid by consumers so that they would know upfront what those costs would be. So, do I take it then that with regard to private ambulance services, this would be actually done under phase 2? If that is the case, then when would that be done? And in the meantime, would there be anything put in place to protect consumers? For example, are we still relying on the Voluntary Accreditation Scheme to try to get some standards into that industry?

Next, Sir, I move on to the important issue of quality assurance for consumers. The Bill states upfront in the explanatory statement and the Minister also mentioned earlier that one of the Bill's aims is to strengthen safeguards for the safety and welfare of patients who receive healthcare services.

Since the day I became an elected Member of Parliament nine years ago, I have, from time to time, come across families who have been devastated by unsuccessful medical procedures. Some of their family members died unexpectedly while others sustained permanent disability in their prime and have been lying in rehabilitation hospitals for years. Of course, it must be said that the cause of such tragic outcomes may not be the inadequacy of healthcare services but other causes, such as the nature of the illness itself or inherent risks of certain medical procedures. Nevertheless, healthcare is an area where there is asymmetry of knowledge, with patients placing high trust in professionals. It is critical that the public must be assured that investigations into complaints are fair to the consumer and independent of professional and institutional interests. At the same time, professionals need justice as well. And we recall the High Court's decision in July last year to reverse the conviction on an orthopaedic specialist by the Singapore Medical Council. To this end, can the Senior Minister of State elaborate on how this Bill will enhance confidence in the fairness of the quality assurance processes for all parties?

My final point, Sir, concerns the implementation of the NEHR system. I note that during the public consultation on the Bill, a lot of time was spent dealing with the issue of potential data leaks. This is understandable in view of recent incidents.

In responding to the feedback, the Ministry stated that patients concerned about the confidentiality of their medical data could possibly opt out of having their data inputed into the NEHR by healthcare service providers. Could the Ministry please update the House on the status of this opt-out option.

Sir, I look forward to the clarifications from the Ministry on the points I have raised.

Order. I propose to take a break now. I suspend the Sitting and will take the Chair again at 5.15 pm. Order. Order.

Sitting accordingly suspended

at 4.55 pm until 5.15 pm.

Sitting resumed at 5.15 pm

[Deputy Speaker (Mr Lim Biow Chuan) in the Chair]

HEALTHCARE SERVICES BILL

[(proc text) Debate resumed. (proc text)]

Sir, I stand in support of the Bill. The update is timely. In the 39 years since the Private Hospitals and Medical Clinics Act was enacted, the healthcare landscape has seen significant changes, including a shift toward digital and online services.

At the same time, Singapore faces an ageing population and an increased prevalence of chronic diseases. The demand for healthcare services is set to increase. Furthermore, there is a growing need for alternative models of care beyond face-to-face consultations or healthcare provision at physical, brick-and-mortar locations.

We cannot take for granted Singapore's high quality healthcare infrastructure. The service-based licensing model will help ensure that people in Singapore continue to have access to safe and well-regulated healthcare services, even as the services take on alternative forms.

The mandatory nationwide healthcare records database will also ensure continuity of care for patients across service providers. Sir, I have four clarifications.

First, plans to mandate the contribution of data to NEHR have been in the news as early as 2017. However, these plans were deferred in the wake of the SingHealth cyber attack in 2018, which highlighted the risks posed by weak spots in the system.

Since then, disciplinary action has been taken against top management and key individuals, the NEHR has been subject to reviews, and Minister Gan has assured this House that the Ministry is "taking many precautions" to ensure that the system is "robust before everyone is required to submit (data)".

Under the Bill, NEHR data can only be accessed for the provision of healthcare services, or with the approval of the Government. Third parties such as employers and insurance providers cannot access the data unless the patient permits.

The Ministry has also said it will implement safeguards to ensure the confidentiality of patients' NEHR records. These include the provision of access logs to patients, regular audits on NEHR access and penalties for unauthorised access. However, as with all electronic databases, the NEHR faces a risk of data breach. From a national security perspective, it would also be dire should NEHR data fall into the wrong hands. This was demonstrated by the Singhealth cyber attack. On an individual level, patients may fear having their sensitive medical information leaked since this could have repercussions on their employment prospects or social lives.

Can the Minister clarify how the use, access and transfer of patient data will be monitored by the system? Furthermore, how will the Ministry seek to prevent abuse of authority by healthcare professionals who have access to the system?

Can the Minister also share what recourse is available for a patient who suspects that there was unauthorised access to their records?

If that patient subsequently suffers perceived injustice at his or her workplace or discrimination by his or her insurer, what recourse is available then and on whom does the burden of proof fall? Who would bear the costs of any follow-up action?

Finally, would a patient be responsible for probing or proving any alleged system abuse, or will the Ministry be actively monitoring the system and taking enforcement steps against breaches identified?

Second, given the concerns with data privacy and protection, there are understandable reasons why certain patients may not want their data uploaded onto the NEHR. These patients must submit a request to the Ministry, and requests will be assessed on a case-by-case basis. Can the Minister share the criteria for assessing these requests? Would it be possible for Minister to decline a patient’s request and if so, on what grounds?

I understand that there must be a balance and must be struck between encouraging participation in the NEHR and upholding patient choice and confidentiality. Can the Minister provide assurance that the opt-out process will not be unduly difficult for patients? Can the Minister share what measures are in place to ensure that the opt-out process is relatively quick and easy for patients?

Can Minister also provide an estimate of how long the review and opt-out process might take?

Third, under the Bill, the licensing regime for healthcare service providers will transition from a premise-based to service-based one. As such, an establishment might require multiple licences depending on the services provided.

Can Minister provide some details about the projected costs for this transition? Would establishments who offer more than one type of healthcare services now have to foot higher administrative costs because they will need to hold more licences?

If there are any increase in costs, can the Minister clarify the proportion of the burden that will be borne by the end-user, the service provider, and the Ministry?

Can Minister also clarify whether there will be efforts to streamline the licence application process for establishments that might require multiple licences?

Lastly, the Bill has step-in provisions relating to residential care services such as hospitals, nursing homes and in-patient palliative care services. The step-in provisions allow the Ministry to take over the operations of providers at the risk of insolvency, or who are unable to resolve systemic patient safety or welfare concerns.

In particular, section 33 provides that the Minister has the power to issue a step-in order. Can Minister clarify how and when this power will be exercised? Will the Minister have access to a committee of industry experts who may be able to advise him on such matters?

Sir, I stand in support of the Bill. It is a necessary move to adapt our legal framework to the rapidly evolving healthcare landscape, so as to continue ensuring the well-being and care of people in Singapore. Moreover, it places us in a better position to embrace even more novel models of care.

I hope the above queries will aid in sharpening Singapore’s approach to the provision of healthcare services, thus securing Singapore’s continued leadership in healthcare globally.

Mr Deputy Speaker, I stand in support of the Bill, which seeks to strengthen governance in the healthcare sector amidst the rapid evolution in the industry, to ensure better patient safety and continuity of care. However, I do have a few questions and suggestions.

First, I support the proposed services-based licensing framework, as it addresses the limitations of the current Private Hospitals and Medical Clinics Act, which only regulates services provided at brick-and-mortar healthcare facilities. The introduction of Industry 4.0 and 5G telecommunications is already beginning to disrupt existing modes of healthcare delivery. New healthcare services can now be delivered entirely through mobile and online channels. The Bill’s new licensing framework is therefore timely as it will provide healthcare providers with the flexibility to "modularise" and apply for relevant licenses based on the services that they provide, rather than be confined to a physical premise.

However, while the new framework provides much needed flexibility, I am concerned with the corresponding licensing costs – how will they be impacted under the new regulatory regime? Can the Ministry provide licensees with a way to cluster and package their applications, to help them manage their licensing costs? We should bear in mind that the end-consumers would inevitably bear the brunt of any cost increase, and businesses often have an easy excuse to raise prices once regulatory costs increase. Even if the switch to the new framework will only result in an increase in licensing costs for a small number of operators, there is still a strong case to be made for the Ministry to consider absorbing the increase, as it is not uncommon to see prices increase across the industry just because someone in the market has raised their charges.

Mr Deputy Speaker, I am glad to note that the Ministry will provide ample flexibility in the Bill to help with the on-boarding of newly regulated services, such as the creation of a regulatory sandbox for telemedicine services. The sandbox will be beneficial to help us in adapting our regulations as telemedicine technologies evolve.

The introduction of 5G technology will see telemedicine and tele-surgical services become the next key growth drivers in the healthcare sector. Already, news reports out of China have emerged, claiming that doctors in the Chinese PLA General Hospital have carried out China's first 5G-based remote surgery on a patient 3,000 km away. I am sure that it is only a matter of time before such technologies are trialled here in Singapore, and having our own telemedicine regulatory sandbox will help strengthen our position as one of the leading healthcare hubs in the region.

However, new technologies will also bring about new questions pertaining to liability. Will the scope of the telemedicine regulatory sandbox be wide enough to provide a sandbox liability regime? With the introduction of artificial intelligence revolutionising how illnesses are diagnosed, will our sandbox regulations differentiate between decisions made by human doctors and those made by Artificial Intelligence? If so, who will be liable for decisions made by AI? With this sandbox, we have the opportunity to actively shape telemedicine regulations and answer the tough questions surrounding AI-related liability questions in the healthcare sector. I urge the Ministry to do so, so that we can pave the way for our businesses to remain as innovative leaders in the region.

Another opportunity for adaptive regulations under this Bill is to create a sandbox for the regulation of the entire spectrum of professions who provide Mental Healthcare Services. Industry practitioners within the mental healthcare space, such as psychologists and psychotherapists, have been providing me with feedback on their wish for the entire industry to be fully regulated as a healthcare service.

From what I can understand, only psychiatrists are fully regulated today, as they are considered doctors. But mental healthcare services span across a wide spectrum of professions, many of which lack full regulations. An example of this are psychologists. Although classified by the Ministry as allied health professionals, psychologists are yet to be regulated under the Second Schedule of the Allied Health Professionals Act which was passed in 2011. Other professions within this industry that are unregulated include counsellors and psychotherapists. The lack of regulation among the many professions within the industry is troubling, as members of the public do not know the differences between counsellors and psychologists, and may seek treatment from someone without the proper certification and expertise.

We should support the industry's call for fuller regulations. Perhaps the Ministry could consider regulating the entire industry as an allied health service under a sandbox, to be implemented in the final phase of the Act's implementation. The Labour Movement stands ready to work with the Ministry to engage mental healthcare practitioners working across the entire spectrum of the mental healthcare industry, and work towards drafting the implementation and regulatory details, and to park this under a sandbox regime to provide all parties with the necessary flexibility.

Mr Deputy Speaker, I support the Bill's proposal to strengthen governance over licensees by ensuring that they have competent and effective governing bodies. This is especially vital for medium and large corporations who are responsible for the healthcare delivery of tens and hundreds of thousands of patients every year.

However, while bigger companies will be able to easily adapt to the new governance measures, smaller players, such as our local General Practitioners (GPs) will find it much harder to comply. Under the new measures, licensees must appoint those with the appropriate skills and competencies in the areas of finance and business management. How will this new regulatory requirement affect the operations of our 1,700 GP clinics, many of whom might just be a small team of one doctor and a few clinical assistants? Will GPs be allowed to double, or even triple-hat, as the Licensee, Principal Officer and Clinical Governance Officer?

Another new area of regulation which may impact smaller players more disproportionately than larger players, is in private ambulance services. Under the Bill, private ambulance services will have to classify themselves either as Emergency Ambulance Services or Medical Transport Services and comply with the respective sets of requirements. Medical transport ambulances, for example, will not be allowed to be fitted with sirens and blinkers, while emergency ambulance services will be held to higher standards of emergency care.

While I commend the Ministry's on-going efforts to provide a voluntary accreditation scheme to facilitate a seamless transition to the new licensing framework, how will the introduction of the new regulation affect the supply of ambulance services in Singapore? Will regulations be too onerous for smaller players to invest and upgrade their existing fleet of ambulances to serve as emergency ambulances? What will happen in cases where someone calls for a medical transport service, but the patient’s condition worsens along the way and it becomes an emergency?

Finally, I would like to voice my support for the Bill's proposed safeguards to apply background checks for certain licensees, to protect vulnerable patients and those who require long-term stay. This is certainly important, as any case of patient abuse would severely damages the trust that the public has for our healthcare industry. I would like to clarify if the provisions under section 28 will apply to all professions of workers employed or hired by the licensee, or will the safeguards only apply to those directly involved in the delivery of healthcare services. Also, how will the background checks be conducted if the worker in question is a foreigner?

Mr Deputy Speaker, the healthcare sector is poised to undergo disruptions, brought about by the advent of new technologies. The proposed licensing framework and measures under the Bill are timely and will help to strengthen Singapore's position as the premier healthcare hub of the region. However, as we transit to the new framework, it is important that we ensure that we keep regulatory costs low and not overly onerous to smaller players. We should use this as an opportunity to ambitiously widen our regulatory sandbox and tackle the tough questions on liability that will inevitably arise. With that, I support the Bill.

Mr Deputy Speaker, Sir, with the rise in demand for various healthcare services and the rapidly changing landscape in medicine, it is indeed timely that this Bill is introduced. This is especially with the growing number of elderly persons in our population which would increase the demand for certain services.

I note that the Bill would introduce a services-based licensing regime to replace the one that is premises-based licensing. Overall, I hope Minister can tell this House how these changes will impact on healthcare services in terms of operating cost, because invariably this cost may be passed on the consumers?

I would like to ask if the Ministry is reviewing all persons who are current key appointment holders in the private healthcare setting to ensure that they are qualified persons under the new Bill? Since the licensing will be services-based, should the Ministry require all licensed persons in a healthcare premise to display a photograph alongside their licence so that patients know who is who?

With the proliferation of new healthcare services, how do we ensure that patients are only treated by qualified persons? Should we educate patients to always ask to see a license? For example, if they are doing medical consultations online, or if they are being treated by someone other than a doctor or nurse such as a technician operating certain equipment. Or if they are getting their blood drawn by someone who goes clinic to clinic, whose responsibility is it to check for a valid licence – the clinic or the patient?

I would also like to ask how the Ministry views someone who, for example, holds a doctorate in liberal arts but subsequently takes up say physiotherapy but uses his title Dr so and so. This may create a mis-impression that he is a medical doctor. How do we prevent such misconceptions? In Chinese, please.

(In Mandarin): [Please refer to Vernacular Speech.] Medical Services these days are getting more and more complicated. Hence, to introduce a services-based licensing regime to replace the current premises-based one is a step towards the right direction. May I know how these changes will affect healthcare services in terms of operating costs? Because quite often, these costs will be passed on to the patients.

In addition, how can we ensure that patients know whether the medical personnel who treat them are licensed or not? Should all medical personnel display a photograph alongside their licence? If the patient is doing online consultation, or if he is not treated by a doctor or a nurse, should the patient check the person’s licence first?

I look forward to the Minister's replies. I support this Bill. Thank you.

Mr Deputy Speaker, Sir, the Healthcare Services Bill seeks to accomplish a number of things. To introduce a services-based licensing regime for providers of healthcare services replacing the old premises-based licencing regime; to strengthen the safeguards for the safety and welfare of patients; to improve the governance requirements for providers of healthcare services; to enhance regulatory powers in relation to providers of healthcare services, including allowing intervention in failing providers in order to stabilise operations and ensure continued patient care.

These are all steps in the right direction. Member of Parliament Ms Sylvia Lim, my party Chair, has made a number of points about the Bill with which I agree and which I shall not repeat here. My speech will focus on what else can be done to contain healthcare inflation.

Part 57 2(R) of the Bill empowers the Minister to regulate the sector so as to require price transparency towards patients and customers. Mr Deputy Speaker, Sir, according to Mercer Marsh Benefits 2019 Medical Trends Around the World Report, based on surveys of insurers regarding types costs and frequency of medical conditions that were claimed for by company employees in 2018. Singapore's medical Trend rate, which measures medical cost inflation was 10% in 2018, 10 times the Singapore economy's estimated 2018 inflation rate of 1% at that time.

In a parliamentary reply from 2018, the Government figure for healthcare inflation measuring the growth rate of prices for healthcare related goods and services paid by patients after Government subsidies was about 1.2% between 2013 and 2016. A media report from late 2018 quoted the Life Insurance Association of Singapore (LIA), have been found that average private hospital bills were increasing by 8% a year compared to less than 3% for public hospital bills. Though I note, that the 3% figure is still far higher than general inflation.

Medical or healthcare inflation is a challenge faced by many countries around the world. It is partly driven by the increasing availability of advanced, cutting edge drugs, treatments and diagnostic techniques, which are expensive. How do we control medical inflation and curb any tendency towards over-treatment and over-prescription without shutting the door to Research and Development and innovation in the medical sphere? So, the rest of my speech will focus on ideas to answer this question. I will speak on several themes related to this question.

Firstly, I would like to speak on price transparency, which is one thrust being explored around the world. The movement towards price transparency aims to make market mechanisms work to curb healthcare inflation through market competition. In November 2018, MOH started publishing fee benchmarks for private sector professional fees, which are not mandatory caps, but which place some onus on healthcare service providers to justify their fees. And prior to this, MOH has been providing similar guidance to public hospitals since – I believe – 2017. MOH now publishes information on 222 common surgical procedures like hip replacement and colonoscopy, comprising 85% of all procedures. Details include, depending on the type of data set, the public or private setting, hospital wards type, bill size, operation fee, surgeon fee, anesthetist fee, facility, average length of stay and implant breakdown.

Data is in some cases published according to the 25th, 50th and 75th percentile. However, it is not clear what causal effect these measures have had to date – this publishing. I would like to ask, since MOH started the publication of this data, does MOH have any evidence or indications as to what the effect has been to assess the return on that investment.

At the level of theory, a few observations can be made. Not all patients would have the skills, time and inclination to study prices and make informed decisions on that basis. This problem gets compounded when that patient is faced with a medical emergency or pressing problem where familiarity with one healthcare provider or physical proximity may weigh on the decision more than any prior study of pricing.

Moreover, many patients may be confused as to the link between pricing and quality. That may not only be willing to pay more for better quality but may misunderstand higher pricing to mean higher quality. Many patients who are more broadly consumers may use price as a surrogate for quality in the absence of other information. Would the MOH consider the following further measures? Firstly, publishing data by hospital, but also with data on the outcomes for those procedures at those hospitals where relevant and where there are sufficient data points. By outcome measures, I mean for example, but not necessarily, re-admission rates, safety of care, mortality, patient experience, waiting times and so on and so forth. This will help patients make the link between price and quality.

I am aware that this needs an investment in data systems and expertise to capture data well and risk adjust to take into account the differential complexity of patients. This will take time. Doctors need to be reassured the system is fair or everyone will start to turn away or decline to treat complex or poor pre-morbid patients. But it could well be worth the investment and at the very least should be studied since what we want is value and this means price or fees as a function of outcomes.

Secondly, can MOH consider creating a simple app or website for patients to key in the counselled projected charges broken down by facility, doctor and so on, so that patients can see in simple charts the variation from norms and can such price comparisons be made a mandatory part of the financial counselling? Under pressure of time or stress a patient may not shop around when initially choosing a healthcare service provider, but this idea may give them some food for thought for considering their healthcare service provider the next time they have the same complaint.

Next, I turn to mechanisms to curb over-treatment and over-testing. There may be a natural tendency to over-prescribe, over-treat or over-test, in lieu of strong controls and pressures from customers and regulators. Earlier, I touched on how patients, as customers, may not always be in the best position, be well-incentivised or sufficiently resourced to exert pressure on healthcare providers to keep prices in check in a skillful way. Insurance coverage may also distort choices by both providers and patients.

What can regulators do? MOH's Agency of Care Effectiveness has been issuing care and drug guidance since 2017. However defining over-treatment is notoriously complex, as some cases require more extensive – and expensive – testing and treatment than others. Having said that, can we do more to monitor and publish trends relevant to curbing unnecessary treatment by focusing on specific kinds of procedures?

For example, according to the "Health at a Glance: Europe 2018" report by the OECD and European Commission, Portugal created a national commission to monitor C-section rates and indexed funding to hospitals partly to C-section rates. Italy has similar financial incentives to hospitals with lower C-section rates and publishes information on C-section rates at different hospitals.

The same report details how Denmark, Sweden, the UK and Finland have high day surgery rates for a number of common procedures. Studies have shown that day surgery can reduce the cost of surgical procedures substantially compared to in-patient surgery.

The report states: "In Sweden, one of the main factors that has contributed to the expansion of day surgery over the past few decades has been clinical leadership in the adoption of evidence-based guidelines to streamline pre- and post-operative surgical procedures and promote safe and effective use of day surgery. Nationwide collaboration and support from national authorities have helped to set up and disseminate new standards, while leaving sufficient autonomy to enable adaptation to local circumstances. The expansion of day surgery has helped achieved substantial savings...A 2016 review by the National Board of Health and Welfare showed that the costs of the 11 most common types of procedures would have been 14% higher if the share of day surgery had not increased between 2005 and 2013.”

Sir, I would like to ask if the government could consider publishing data on lower cost procedures at major healthcare service providers and perhaps even making tweaks to funding models to incentivise these lower cost approaches where relevant. This can be done initially by focusing on procedures where there is the most volume vis-à-vis potential to impact on cost.

The issue of day-surgery or outpatient surgery is a good case in point. It would seem that only medical care is covered by insurance and patients then have to pay out-of-pocket for transport, home nurse visits, perhaps some tele-monitoring and even meals. Can insurance funding models be changed such that cash is paid to cover these costs pegged to but not equal to what it would have cost to do this on an inpatient basis, so as to incentivise outpatient surgery?

Also, ambulatory or outpatient surgery centres need a formal arrangement with the hospital for transfer in case of adverse events. In terms of the regulatory regime, is there a sufficient nudge for hospitals to embrace ambulatory care for surgery?

I would also like ask if the MOH's Agency for Care Effectiveness (ACE) looks into flagging out cases that, for want of a better term, can be termed "unnecessary innovation". For example, an NPR article from 2017 in the US recounts how one pharmaceutical producer marketed a single pill that combined two over-the-counter (OTC) drugs as an innovation because it was easier to take one pill than two. A month's supply of the two inexpensive drugs cost about $40. The company billed insurance $3,252 for the new pill.

Thirdly, Mr Deputy Speaker, Sir, I will turn to the promotion of generics and biosimilars. In the Mercer Marsh study quoted earlier, it was noted that Singapore's medical inflation is partially driven up by supply-led factors such as high-cost pharmaceuticals and biologics. I ask a Parliamentary Question on the use of generics in the public healthcare system last year. The reply stated that, and I quote, "in 2017, to better guide institutions and doctors in use of generic drugs, we introduced a basket of clinically and cost-effective generic drugs, which can replace a more expensive branded equivalence. MOH and the Health Sciences Authority monitor new generic drugs that enter the local market and add them to the basket on a regular basis."

I have two suggestions. Firstly, can healthcare providers be required to include in bills information about the cost of treatment, had a generic been used? Alternatively, a simple app or website could provide information on HSA-approved generics in respect of differential pricing. Secondly, can the proportion of use of ACE-endorsed bio-equivalent, lower cost alternative drugs for key conditions and procedures, be these generics or biosimilars, also be made public, broken down by healthcare provider?

Fourthly, on waste reduction. One expert at an event in Singapore on healthcare costs said that waste in OECD countries amounts to as much as one-fifth of healthcare expenditure. I would like to discuss one example. The US FDA has long known that many drugs remain safe and potent for years longer than their published expiration dates. The FDA and the US Department of Defense created the Shelf Life Extension Program (SLEP) to test the stability of drugs in the federal government stockpiles and then extend their expiration dates where justifiable. A 2006 study of 122 drugs tested by the programme showed that two-thirds of them were stable every time a lot was tested. Each of them had their expiration dates extended on average by more than four years. But the same type of drugs in hospitals or pharmacies get thrown away when they expire.

Does our healthcare system destroy significant quantities of drugs due to expiry? If so, could we consider something like that US Shelf Life Extension Program, to use clinical data to extend the life of drugs.

Mr Deputy Speaker, Sir, I laud MOH's move to repeal the current PHMC Act and replace it with the upcoming Healthcare Services (HCS) Bill, which aims to transit from a premises-based licensing framework to a service-based one.

This is a progressive move which will cater to new models of healthcare delivery, in tandem with medical technology advancement, the growing needs of an ageing population and increased chronic disease concerns.

This augmented Bill will provide improved patient safety in the changing healthcare landscape through more efficient governance while allowing for new and innovative healthcare services to be deployed on online and mobile platforms.